Document:

[FORM
      OF SENIOR UNSECURED CONVERTIBLE NOTE]

     

    NEITHER
      THE ISSUANCE AND SALE OF THIS NOTE NOR ANY SHARES OF COMMON STOCK ISSUABLE
      UPON
      CONVERSION OF THIS NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
      AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE OR PROVINCIAL SECURITIES
      LAWS. THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
      THIS
      NOTE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
      ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THIS NOTE OR THE SHARES
      OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE UNDER THE SECURITIES
      ACT,
      OR (B) AN OPINION OF COUNSEL (SELECTED BY THE HOLDER AND REASONABLY ACCEPTABLE
      TO THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT THIS
      NOTE
      AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY BE
      OFFERED FOR SALE, SOLD, ASSIGNED OR TRANSFERRED PURSUANT TO AN EXEMPTION FROM
      REGISTRATION; PROVIDED THAT SUCH OPINION OF COUNSEL SHALL NOT BE REQUIRED IN
      CONNECTION WITH ANY SUCH SALE, ASSIGNMENT OR TRANSFER TO AN INSTITUTIONAL
      ACCREDITED INVESTOR THAT IS PRIOR TO SUCH SALE, ASSIGNMENT OR TRANSFER A HOLDER
      OF ADDITIONAL NOTES (AS SUCH TERM IS DEFINED IN THIS NOTE) OR AN AFFILIATE
      OF
      THE HOLDER OF THIS NOTE, OR (C) IN THE CASE OF A HOLDER RESIDENT IN CANADA
      OR
      OTHERWISE SUBJECT TO THE PROVINCIAL SECURITIES LAWS OF CANADA, A PROSPECTUS
      QUALIFIYING THE DISTRIBUTION OF THIS NOTE OR THE SHARES OF COMMON STOCK ISSUABLE
      UPON CONVERSION OF THIS NOTES OR AN EXEMPTION THEREFROM, OR (II) THE HOLDER
      PROVIDES THE COMPANY WITH ASSURANCE (REASONABLY SATISFACTORY TO THE COMPANY)
      THAT SUCH NOTE OR THE SHARES OF COMMON STOCK ISSUABLE UPON THE CONVERSION OF
      THE
      NOTE CAN BE SOLD, ASSIGNED OR TRANSFERRED PURSUANT TO RULE
      144.

     

    ANY
      TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE,
      INCLUDING, WITHOUT LIMITATION, SECTIONS 3(c)(iii) AND 17(a) HEREOF. THE
      PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES
      ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE
      FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.

     

    THIS
      NOTE HAS BEEN ISSUED PURSUANT TO THE NOTE EXCHANGE AGREEMENT (AS SUCH TERM
      IS
      DEFINED IN THIS NOTE), ARTICLE FOUR OF WHICH CONTEMPLATES CERTAIN RESTRICTIONS
      ON SALES, PURCHASES, HEDGING TRANSACTIONS, VOTING WITH RESPECT TO BOARD OF
      DIRECTOR NOMINEES AND CERTAIN OTHER TRANSACTIONS RELATING TO THE COMPANY’S
      SECURITIES. ANY ASSIGNEE OR TRANSFEREE OF THIS NOTE SHALL BE SUBJECT TO THE
      RESTRICTIONS SET FORTH IN ARTICLE FOUR OF THE NOTE EXCHANGE AGREEMENT.

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    

      PHARMATHENE,
        INC.

    

    

      SENIOR
        UNSECURED
        CONVERTIBLE
        NOTE

    

     

    
      	
              Issuance
                Date:
                [Month] ●, 2007

            	
              Principal:
                U.S. $[●]

            
	
              No.
                [●]

            	
              (subject
                to Section 3(c)(iii) hereof)

            

    

     

    FOR
      VALUE RECEIVED,
      PharmAthene, Inc., a Delaware corporation (the “Company”),
      hereby promises to pay to [NAME OF HOLDER] or registered assigns (“Holder”)
      the
      amount set out above as the Principal (as reduced pursuant to the terms hereof
      pursuant to redemption, conversion or otherwise, the “Principal”)
      when
      due, whether upon the Maturity Date (as defined below), acceleration, redemption
      or otherwise (in each case in accordance with the terms hereof) and to accrue
      interest (“Interest”)
      on any
      outstanding Principal at the Interest Rate (as defined below), from [Month]
●,
      2007 (the “Initial
      Issuance Date”)
      until
      the same becomes due and payable, whether upon the Maturity Date, acceleration,
      conversion, redemption or otherwise (in each case, in accordance with the terms
      hereof). This Senior Unsecured Convertible Note (including all Senior Unsecured
      Convertible Notes issued in exchange, transfer or replacement hereof, this
      “Note”
and
      such other Senior Unsecured Convertible Notes, the “Additional
      Notes”)
      is one
      of an issue of Senior Unsecured Convertible Notes issued pursuant to the Note
      Exchange Agreement (as defined below) (collectively, the “Notes”).
      Certain capitalized terms used herein are defined in Section 27.

     

    (1)  MATURITY.
      On the
      Maturity Date, the Holder shall surrender the Note to the Company and the
      Company shall pay to the Holder an amount in cash representing all outstanding
      Principal, accrued and unpaid Interest and accrued and unpaid Late Charges
      (as
      defined below), if any. The “Maturity Date”
shall
      be [Month] ●, 2009 [INSERT Two year anniversary of Initial Issuance
      Date].

     

    (2)  INTEREST;
      INTEREST RATE.
      Interest on this Note shall commence accruing on the Initial Issuance Date
      and
      shall be computed on the basis of a 360-day year comprised of twelve 30-day
      months and shall be payable entirely in cash with respect to the unpaid balance
      of any Principal upon the repayment thereof. Prior to the payment of Interest
      upon repayment, Interest on this Note shall accrue at the Interest Rate and
      be
      payable by way of inclusion of the Interest in the Conversion Amount in
      accordance with Section 3(b)(i). If an Event of Default occurs and such Event
      of
      Default is subsequently cured, the adjustment referred to in Section 27(xviii)
      shall cease to be effective as of the date of such cure; provided
      that the
      Interest as calculated at such increased rate during the continuance of such
      Event of Default shall continue to apply to the extent relating to the days
      after the occurrence of such Event of Default through and including the date
      of
      cure of such Event of Default. All payments of Interest on the Notes shall
      be
      made on a pro rata basis in accordance with each holder’s percentage ownership
      of then outstanding Notes.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    (3)  CONVERSION
      OF NOTES.
      This
      Note shall be convertible into shares of Common Stock, on the terms and
      conditions set forth in this Section 3.

     

    (a)  Conversion
      Right.
      At any
      time or times on or after the date first set forth above as the Issuance Date
      (the “Issuance
      Date”),
      the
      Holder shall be entitled to convert any portion of the outstanding and unpaid
      Conversion Amount (as defined below) into fully paid and nonassessable shares
      of
      Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined
      below). The Company shall not issue any fraction of a share of Common Stock
      upon
      any conversion. If the issuance would result in the issuance of a fraction
      of a
      share of Common Stock in excess of one half of one share, the Company shall
      round such fraction of a share of Common Stock up to the nearest whole share.
      The Company shall pay any and all stock transfer, stamp, documentary and similar
      taxes (excluding any taxes on the income or gain of the Holder) that may be
      payable with respect to the issuance and delivery of shares of Common Stock
      to
      the Holder upon conversion of any Conversion Amount. 

     

    (b)  Conversion
      Rate.
      The
      number of shares of Common Stock issuable upon conversion of any Conversion
      Amount pursuant to Section 3(a) shall be determined by dividing (x) such
      Conversion Amount by (y) the Conversion Price (the “Conversion
      Rate”).

     

    (i)  “Conversion
      Amount”
means
      the sum of (A) the portion of the Principal to be converted, redeemed or
      otherwise with respect to which this determination is being made, (B) accrued
      and unpaid Interest with respect to such Principal and (C) accrued and unpaid
      Late Charges with respect to such Principal and Interest.

     

    (ii)  “Conversion
      Price”
means,
      as of any Conversion Date (as defined below) or other date of determination,
      $10.00, subject to adjustment as provided herein (including, without limitation,
      adjustment pursuant to Section 6). 

     

    (c)  Mechanics
      of Conversion.

     

    (i)  Optional
      Conversion.
      To
      convert any Conversion Amount into shares of Common Stock on any date (a
“Conversion
      Date”),
      the
      Holder shall (A) transmit by facsimile (or otherwise deliver), for receipt
      on or
      prior to 4:00 p.m., New York Time, on such date, a copy of an executed notice
      of
      conversion in the form attached hereto as Exhibit
      I
      (the
“Conversion
      Notice”)
      to the
      Company and (B) if required by Section 3(c)(iii), cause this Note to be
      delivered to the Company as soon as practicable on or following such date.
      On or
      before 4:00 p.m., New York Time, on the first (1st)
      Business Day following the date of receipt of a Conversion Notice, the Company
      shall transmit by facsimile a confirmation of receipt of such Conversion Notice
      to the Holder (at the facsimile number provided in the Conversion Notice) and
      the Company’s transfer agent, if any (the “Transfer
      Agent”).
      On or
      before 4:00 p.m., New York Time, on the third (3rd)
      Business Day following the date of receipt of a Conversion Notice (the
“Share
      Delivery Date”),
      the
      Company shall issue and deliver to the address as specified in the Conversion
      Notice, a certificate, registered in the name of the Holder or its designee,
      for
      the number of shares of Common Stock to which the Holder shall be entitled.
      If
      this Note is physically surrendered for conversion as required by Section
      3(c)(iii) and the outstanding Principal of this Note is greater than the
      Principal portion of the Conversion Amount being converted, then the Company
      shall as soon as practicable and in no event later than three (3) Business
      Days
      after receipt of this Note and at its own expense, issue and deliver to the
      holder a new Note (in accordance with Section 17(d)), representing the
      outstanding Principal not converted. The Person or Persons entitled to receive
      the shares of Common Stock issuable upon a conversion of this Note shall be
      treated for all purposes as the record holder or holders of such shares of
      Common Stock on the Conversion Date. 

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (ii)  Company’s
      Failure to Timely Convert.
      If, at
      any time, the Company shall fail to issue a certificate to the Holder upon
      conversion of any Conversion Amount on or prior to the date which is seven
      (7)
      Business Days after the Conversion Date (a “Conversion
      Failure”),
      then
      (A) the Company shall pay damages to the Holder for each day of such Conversion
      Failure in an amount equal to 1.5% of the product of (I) the sum of the number
      of shares of Common Stock not issued to the Holder on or prior to the Share
      Delivery Date and to which the Holder is entitled, and (II) the Closing Sale
      Price of the Common Stock on the Share Delivery Date and (B) the Holder, upon
      written notice to the Company, may void its Conversion Notice with respect
      to,
      and retain or have returned, as the case may be, any portion of this Note that
      has not been converted pursuant to such Conversion Notice; provided
      that the
      voiding of a Conversion Notice shall not affect the Company’s obligations to
      make any payments which have accrued prior to the date of such notice pursuant
      to this Section 3(c)(ii) or otherwise. 

     

    (iii)  Book-Entry.
      Notwithstanding anything to the contrary set forth herein, upon conversion
      of
      any portion of this Note in accordance with the terms hereof, the Holder shall
      not be required to physically surrender this Note to the Company unless (A)
      the
      full Conversion Amount represented by this Note is being converted or
      (B) the Holder has provided the Company with prior written notice (which
      notice may be included in a Conversion Notice) requesting physical surrender
      and
      reissue of this Note. The Holder and the Company shall maintain records showing
      the Principal, Interest and Late Charges converted and the dates of such
      conversions or shall use such other method, reasonably satisfactory to the
      Holder and the Company, so as not to require physical surrender of this Note
      upon conversion.

     

    (iv)  Pro
      Rata Conversion; Disputes.
      In the
      event that the Company receives a Conversion Notice from more than one holder
      of
      Notes for the same Conversion Date and the Company can convert some, but not
      all, of such portions of the Notes submitted for conversion, the Company shall
      convert from each holder of Notes electing to have Notes converted on such
      date
      a pro rata amount of each such holder’s portion of its Notes submitted for
      conversion based on the principal amount of Notes submitted for conversion
      on
      such date by such holder relative to the aggregate principal amount of all
      Notes
      submitted for conversion on such date. In the event of a dispute between the
      Company and any holders of Notes that are subject to any such Conversion Notice
      or among any holders of Notes that are subject to any such Conversion Notice
      as
      to the number of shares of Common Stock issuable to the Holder in connection
      with a conversion of this Note, the Company shall issue to the Holder the number
      of shares of Common Stock not in dispute and resolve such dispute in accordance
      with Section 22.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (4)  RIGHTS
      UPON EVENT OF DEFAULT.

     

    (a)  Event
      of Default.
      Each of
      the following events shall constitute an “Event
      of Default”:
      

     

    (i)  the
      Company’s failure to pay to the Holder any amount of Principal when and as due
      under this Note (including, without limitation, the Company’s failure to pay any
      Redemption Price);

     

    (ii)  the
      Company’s failure to pay to the Holder any amount of Interest, Late Charges or
      other amounts (other than the amounts specified in clause (i)) when and as
      due
      under this Note if such failure continues for a period of at least thirty (30)
      Business Days;

     

    (iii)  any
      acceleration prior to maturity of any Indebtedness referred to in clause (a)
      or
      (b) of the definition thereof of the Company or any of its Subsidiaries which
      individually or in the aggregate is equal to or greater than $250,000 principal
      amount of Indebtedness (following the expiration of all applicable grace
      periods);

     

    (iv)  the
      Company or any of its Material Subsidiaries, pursuant to or within the meaning
      of Title 11, U.S. Code, or any similar Federal, foreign or state law for the
      relief of debtors (collectively, “Bankruptcy
      Law”),
      (A)
      commences a voluntary case, (B) consents to the entry of an order for relief
      against it in an involuntary case, (C) consents to the appointment of a
      receiver, trustee, assignee, liquidator or similar official (a “Custodian”),
      (D)
      makes a general assignment for the benefit of its creditors or (E) admits in
      writing that it is generally unable to pay its debts as they become
      due;

     

    (v)  a
      court
      of competent jurisdiction enters an order or decree under any Bankruptcy Law
      that is not vacated, set aside or reversed within sixty (60) days that (A)
      is
      for relief against the Company or any of its Material Subsidiaries in an
      involuntary case, (B) appoints a Custodian of the Company or any of its Material
      Subsidiaries or (C) orders the liquidation of the Company or any of its Material
      Subsidiaries;

     

    (vi)  a
      final
      judgment or judgments for the payment of money aggregating in excess of
      $5,000,000 are rendered against the Company or any of its Subsidiaries and
      which
      judgments are not, within sixty (60) days after the entry thereof, bonded,
      discharged or stayed pending appeal, or are not discharged within sixty (60)
      days after the expiration of such stay; provided, however, that any judgment
      which is covered by insurance or an indemnity from a credit worthy party shall
      not be included in calculating the $5,000,000 amount set forth above so long
      as
      the Company provides the Holder a written statement from such insurer or
      indemnity provider (which written statement shall be reasonably satisfactory
      to
      the Holder) to the effect that such judgment is covered by insurance or an
      indemnity and the Company will receive the proceeds of such insurance or
      indemnity within sixty (60) days of the issuance of such judgment; 

     

    (vii)  the
      Company breaches any covenant or agreement or materially breaches any
      representation or warranty in any Transaction Document (except for Section
      14(f)
      of the Notes and Section 5.3 of Note Exchange Agreement), and such breach
      continues for a period of at least thirty (30) days after written notice thereof
      from one or more Holders to the Company; or

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    (viii)  if
      at any
      time while at least thirty percent (30%) of the aggregate Principal amount
      of
      the Notes outstanding on the date hereof remain outstanding (x) the Board of
      Directors fails to include three (3) Directors designated pursuant to Section
●
of the Company’s Certificate of Incorporation (“Noteholder Directors”),
      provided that the Company shall have thirty (30) Business Days following the
      resignation, removal or death or disability of a Noteholder Director to appoint
      a successor Noteholder Director, unless such failure is the result of the
      failure by the Holders to notify the Company of the name of the replacement
      Noteholder Directors, in which event the thirty (30) Business Day period shall
      be extended until a date which is ten (10) Business Days after notice of the
      name and background of the replacement Noteholder Directors is given to the
      Company, or (y) without the consent of the persons then serving as Noteholder
      Directors, the Board of Directors exceeds seven (7) directors, or the
      Compensation Committee or Nominating Committee (or other committees serving
      similar functions) exceeds three (3) members, or (z) the Noteholder Directors
      are not afforded the right to appoint two (2) members of each of the
      Compensation Committee and Nominating Committee (or committees serving similar
      functions). 

     

    (b)  Rights
      Upon Event of Default.
      Promptly after the occurrence of an Event of Default with respect to this Note,
      the Company shall deliver written notice thereof (an “Event
      of Default Notice”)
      to the
      Holder. If an Event of Default with respect to the Company described in Sections
      4(a)(iv), 4(a)(v) or 4(a)(viii) has occurred, all the Notes then outstanding
      shall automatically become immediately due and payable. If any Event of Default
      described in Sections 4(a)(i), 4(a)(ii), 4(a)(iii), 4(a)(vi) or 4(a)(vii) has
      occurred and is continuing, holders of not less than two-thirds of the aggregate
      Principal amount of the Notes then outstanding (the “Required
      Holders”)
      may at
      any time at its or their option, by notice or notices to the Company (an
“Event
      of Default Payment Notice”),
      declare all the Notes then outstanding to be immediately due and payable. Upon
      any Notes becoming due and payable under this Section 4(b), whether
      automatically or by declaration, such Notes will forthwith mature and the the
      entire unpaid Principal, plus all accrued and unpaid Interest and Late Charges,
      shall become immediately due and payable (the “Event
      of Default Price”).
      Payments required by this Section 4(b) shall be made in accordance with the
      provisions of Section 12.

     

    (5)  RIGHTS
      UPON FUNDAMENTAL TRANSACTION AND CHANGE OF CONTROL.

     

    (a)  Assumption.
      The
      Company shall not enter into or be party to a Fundamental Transaction unless
      the
      Successor Entity assumes in writing all of the obligations of the Company under
      this Note and the other Transaction Documents in accordance with the provisions
      of this Section 5(a) pursuant to written agreements on or prior to such
      Fundamental Transaction, including the agreement to deliver to each holder
      of
      Notes in exchange for such Notes a security of the Successor Entity evidenced
      by
      a written instrument substantially similar in form and substance to the Notes,
      including, without limitation, having a principal amount and interest rate
      equal
      to the principal amounts and the interest rates of the Notes held by such holder
      (the “Successor
      Note”).
      Upon
      the occurrence of any Fundamental Transaction, the Successor Entity shall
      succeed to, and be substituted for (so that from and after the date of such
      Fundamental Transaction, the provisions of this Note referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right
      and
      power of the Company and shall assume all of the obligations of the Company
      under this Note with the same effect as if such Successor Entity had been named
      as the Company herein, until such time as the Successor Note is delivered.
      Upon
      consummation of a Reclassification or Fundamental Transaction as a result of
      which holders of Common Stock shall be entitled to receive stock,
      securities, cash, assets or any other property with respect to or in exchange
      for such Common Stock,
      the
      Company or Successor Entity, as the case may be, shall deliver to the Holder
      confirmation that there shall be issued upon conversion or redemption of this
      Note at
      any
      time after the consummation of such Reclassification
      or Fundamental
      Transaction, in lieu of the shares of Common Stock (or
      other
      securities, cash, assets or other property) issuable
      upon the conversion or redemption of the Notes prior to such Reclassification
      or Fundamental
      Transaction,
      such
      shares of stock, securities, cash, assets or any other property whatsoever
      (including warrants or other purchase or subscription rights) which the Holder
      would have been entitled to receive upon the happening of such Reclassification
      or Fundamental
      Transaction had this Note been converted immediately prior to such Reclassification
      or Fundamental
      Transaction, as adjusted in accordance with the provisions of this Note.
The
      provisions of this Section shall apply similarly and equally to successive
      Fundamental Transactions and shall be applied without regard to any limitations
      on the conversion or redemption of this Note.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    (b)  Redemption
      upon Change of Control.
      No
      sooner than fifteen (15) days nor later than ten (10) days prior to the
      consummation of a Change of Control (but not prior to the public announcement
      of
      such Change of Control), the Company shall deliver written notice thereof to
      the
      Holder (a “Change
      of Control Notice”).
      If at
      any time during the period (the “Change
      of Control Measuring Period”)
      beginning after the Holder’s receipt of a Change of Control Notice and ending on
      the date of the consummation of such Change of Control (or, in the event a
      Change of Control Notice is not delivered at least ten (10) days prior to a
      Change of Control, at any time on or after the date which is ten (10) days
      prior
      to a Change of Control and ending ten (10) days after the consummation of such
      Change of Control), the Holder may require the Company to redeem all (but not
      less than all) of this Note (“Optional
      Change of Control Redemption”)
      by
      delivering written notice thereof (“Optional
      Change of Control Redemption Notice”)
      to the
      Company, provided,
      however,
      the
      Company shall not be required to redeem any amount pursuant to such notice
      unless Holders of not less than two-thirds of the aggregate Principal amount
      of
      the Notes then outstanding submit Optional Change of Control Redemption Notices.
      An Optional Change of Control Redemption required by this Section 5 shall be
      made in accordance with the provisions of Section 12. If this Note is subject
      to
      redemption pursuant to this Section 5 it shall be redeemed by the Company at
      a
      price equal to the Conversion Amount (“the
      Change of Control Redemption Price”). Notwithstanding
      anything to the contrary in this Section 5, until the Change of Control
      Redemption Price (together with any interest thereon) is paid in full, the
      Conversion Amount submitted for redemption under this Section 5(b) (together
      with any interest thereon) may be converted, in whole or in part, by the Holder
      into shares of Common Stock pursuant to Section 3.

     

    (c)  Redemption
      of Illiquid Consideration After Conversion.
      Following the Company’s entry into a definitive agreement relating to a
      Fundamental Transaction, the Company will notify each Holder not later than
      the
      10th
      day
      following the effective date of such Fundamental Transaction of the
      determination by the Company’s board of directors, made in good faith, of the
      fair market value of the Illiquid Consideration at the time of such Fundamental
      Transaction, and each Holder shall have the right, exercisable for thirty (30)
      days following the delivery of such notice, to require the Company to redeem
      all
      or any part of the Illiquid Consideration received upon conversion of its Notes
      for cash in the amount of such fair market value; provided
      that
      such notice shall specify in reasonable detail the basis for such determination.
      In the event that the Holder disagrees with such determination of fair market
      value, the Holder may require that such fair market value be determined in
      accordance with the provisions of Section 22.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    (6)  RIGHTS
      UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

     

    (a)  Purchase
      Rights.
      If the
      Company at any time, or from time to time, grants, issues or sells any (i)
      Options, (ii) Convertible Securities or (iii) rights to purchase stock,
      warrants, securities or other property, pro rata to all record holders of any
      class of Common Stock (the “Purchase
      Rights”),
      then
      the person who is the Holder as of the Stock Record Date (as defined below)
      will
      be entitled to acquire, upon the terms applicable to such Purchase Rights,
      the
      aggregate Purchase Rights which the Holder could have acquired if the Holder
      had
      held the number of shares of Common Stock acquirable upon complete conversion
      of
      this Note (without taking into account any limitations or restrictions on the
      convertibility of this Note) immediately before the date on which a record
      is
      taken for the grant, issuance or sale of such Purchase Rights, or, if no such
      record is taken, the date as of which the record holders of Common Stock are
      to
      be determined for the grant, issue or sale of such Purchase Rights (the
“Stock
      Record Date”).

     

    (b)  Other
      Corporate Events.
      In
      addition to and not in substitution for any other rights hereunder, prior to
      the
      consummation of any Reclassification or Fundamental Transaction pursuant to
      which holders of shares of Common Stock are entitled to receive securities
      or
      other assets with respect to or in exchange for shares of Common Stock (a
“Corporate
      Event”),
      the
      Company shall make appropriate provision to ensure that the Holder will
      thereafter have the right to receive upon a conversion of this Note, (i) in
      the
      event that the Common Stock remains outstanding after any such Corporate Event,
      in addition to the shares of Common Stock receivable upon such conversion,
      such
      securities or other assets to which the Holder would have been entitled with
      respect to such shares of Common Stock had such shares of Common Stock been
      held
      by the Holder upon the consummation of such Corporate Event (without taking
      into
      account any limitations or restrictions on the convertibility of this Note)
      or
      (ii) in the event that the Common Stock is no longer outstanding after any
      such
      Corporate Event, in lieu of the shares of Common Stock otherwise receivable
      upon
      such conversion, such securities or other assets received by the holders of
      shares of Common Stock in connection with the consummation of such Corporate
      Event in such amounts as the Holder would have been entitled to receive had
      such
      shares of Common Stock been held by the Holder upon the consummation of such
      Corporate Event (without taking into account any limitations or restrictions
      on
      the convertibility of this Note). The provisions of this Section shall apply
      similarly and equally to successive Corporate Events and shall be applied
      without regard to any limitations on the conversion or redemption of this Note.
      Notwithstanding this Section (6)(b), in no event shall the Company be obligated
      to distribute any Purchase Rights pursuant to this Section (6)(b) if and to
      the
      extent that it has distributed such Purchase Rights to the Holder pursuant
      to
      Section (6)(a).

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    (7)  RIGHTS
      UPON ISSUANCE OF OTHER SECURITIES.

     

    (a)  Record
      Date.
      If the
      Company takes a record of the holders of Common Stock for the purpose of
      entitling them (A) to receive a dividend or other distribution payable in Common
      Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
      Common Stock, Options or Convertible Securities, then such record date will
      be
      deemed to be the date of the issue or sale of the 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.

     

    (b)  Adjustment
      of Conversion Price upon Subdivision or Combination of Common Stock; Stock
      Dividends.
      If, on
      or after the Merger Agreement Date, the Company at any time, or from time to
      time, subdivides (by any stock split, stock dividend, recapitalization or
      otherwise) one or more classes of its outstanding shares of Common Stock into
      a
      greater number of shares, the Conversion Price in effect immediately prior
      to
      such subdivision will be proportionately reduced. If the Company at any time
      on
      or after the Merger Agreement Date combines (by combination, reverse stock
      split
      or otherwise) one or more classes of its outstanding shares of Common Stock
      into
      a smaller number of shares, the Conversion Price in effect immediately prior
      to
      such combination will be proportionately increased. Any adjustment under this
      Section 7(b) shall become effective at the close of business on the date the
      subdivision or combination becomes effective or, in the case of a stock dividend
      or distribution, the date of such event. 

     

    (c)  (i)Adjustment
      of Conversion Price upon Cash Dividends and Distributions.
      If the
      Company at any time, or from time to time, pays a dividend or makes a
      distribution in cash to the record holders of any class of Common Stock, then
      immediately after the close of business on the day that the Common Stock trades
      ex-distribution, the Conversion Price then in effect shall be reduced to an
      amount equal to the product of (i) the Conversion Price in effect immediately
      prior to such dividend or distribution and (ii) the quotient determined by
      dividing (A) the Closing Sale Price of the Common Stock on the day that the
      Common Stock trades ex-distribution by (B) the sum of (1) the Closing Sale
      Price
      of the Common Stock on the day that the Common Stock trades ex-distribution
      plus
      (2) the amount per share of such dividend or distribution. The Company shall
      not
      be required to give effect to any adjustment in the Conversion Price pursuant
      to
      this Section 7(c) unless and until the net effect of one or more adjustments
      (each of which shall be carried forward until counted toward an adjustment),
      determined in accordance with this Section 7(c), shall have resulted in a change
      of the Conversion Price by at least 1%, and when the cumulative net effect
      of
      more than one adjustment so determined shall be to change the Conversion Price
      by at least 1%, such change in the Conversion Price shall thereon be given
      effect.

     

    (ii) Adjustment
      of Conversion Price upon Distributions of Capital Stock, Indebtedness or Other
      Non-Cash Assets.
      If the
      Company at any time, or from time to time, distributes any shares of capital
      stock of the Company (other than Common Stock), evidences of indebtedness or
      other non-cash assets (including securities of any person other than the Company
      but excluding (1) dividends or distributions paid exclusively in cash or (2)
      dividends or distributions referred to in Section 7(b)) to the record holders
      of
      any class of Common Stock, then the Conversion Price then in effect shall be
      reduced to an amount equal to the product of (A) the Conversion Price then
      in
      effect and (B) a fraction of which the numerator shall be the Closing Sale
      Price
      share of the Common Stock on the record date fixed for determination of
      stockholders entitled to receive such distribution less the fair market value
      on
      such record date (as determined by the Board of Directors) of the portion of
      the
      capital stock, evidences of indebtedness or other non-cash assets so distributed
      applicable to one share of Common Stock (determined on the basis of the number
      of shares of Common Stock outstanding on the record date) and of which the
      denominator shall be the Closing Sale Price per share of the Common Stock on
      such record date. Notwithstanding the foregoing, if the securities distributed
      by the Company to the record holders of any class of Common Stock consist of
      capital stock of, or similar equity interests in, a Subsidiary or other business
      unit, the Conversion Price shall be decreased so that the same shall be equal
      to
      the rate determined by multiplying the Conversion Price in effect on the record
      date with respect to such distribution by a fraction the numerator of which
      shall be the average Closing Sale Price of one share of Common Stock over the
      Spinoff Valuation Period and of which the denominator shall be the sum of (x)
      the average Closing Sale Price of one share of Common Stock over the ten
      consecutive Trading Day period (the “Spinoff
      Valuation Period”)
      commencing on and including the fifth Trading Day after the date on which
“ex-dividend trading” commences on the Common Stock on the Eligible Market or
      such other national or regional exchange or market on which the Common Stock
      is
      then listed or quoted and (y) the average Closing Sale Price over the Spinoff
      Valuation Period of the portion of the securities so distributed applicable
      to
      one share of Common Stock, such adjustment to become effective immediately
      prior
      to the opening of business on the fifteenth Trading Day after the date on which
      “ex-dividend trading” commences.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    (d)  Other
      Events; Other Dividends and Distributions.
      If any
      event occurs of the type contemplated by the provisions of this Section 7 but
      not expressly provided for by such provisions (including, without limitation,
      the granting of stock appreciation rights, phantom stock rights or other rights
      with equity features), then the Company’s board of directors shall make in good
      faith an adjustment in the Conversion Price so as to protect the rights of
      the
      Holder under this Note; provided that no such adjustment will increase the
      Conversion Price as otherwise determined pursuant to this Section 7.

     

    (e)  Notice
      of Adjustment.
      Whenever the Conversion Price is adjusted pursuant to this Section 7, the
      Company shall promptly mail notice of such adjustment to each Holder, which
      notice shall set forth the Conversion Price after adjustment, the date on which
      such adjustment became effective and a brief statement of the facts resulting
      in
      such adjustment.

     

    (8)  COMPANY’S
      RIGHT OF REDEMPTION.

     

    (a)  Call
      Redemption.
      At any
      time from and after the first anniversary of the Initial Issuance Date (the
      “Call
      Redemption Eligibility Date”),
      the
      Company shall have the right to redeem, from time to time, all or any portion
      of
      the Conversion Amount then remaining under this Note, as designated in the
      Call
      Redemption Notice, as of the Call Redemption Date (a “Call
      Redemption”).
      The
      portion of this Note subject to redemption pursuant to this Section 8(a) shall
      be redeemed by the Company at a price equal to the Conversion Amount being
      redeemed (the “Call Redemption
      Price”,
      and
      together with the Change of Control Redemption Price and Significant Transaction
      Redemption Price, “Redemption
      Prices”)
      on the
      date specified by the Company in the Call Redemption Notice (the “Call
      Redemption Date”),
      which
      date shall not be less than thirty (30) nor more than sixty (60) days after
      the
      Call Redemption Notice Date. The Company may exercise its right to require
      redemption under this Section 8(a) by delivering a written notice thereof to
      all
      of the holders of Notes and the Transfer Agent (the “Call
      Redemption Notice”
and
      the
      date such notice is sent is referred to as the “Call
      Redemption Notice Date”).
      Each
      such Call Redemption Notice shall be irrevocable. The Call Redemption Notice
      shall state the aggregate Conversion Amount of the Notes which the Company
      has
      elected to be subject to Call Redemption from all of the holders of the Notes
      pursuant to this Section 8(a) (and analogous provisions under the Additional
      Notes). All Conversion Amounts converted by the Holder after the Call Redemption
      Notice Date shall reduce the Conversion Amount of this Note required to be
      redeemed on the Call Redemption Date. Redemptions made pursuant to this Section
      8(a) shall be made in accordance with Section 12. 

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    (b)  Pro
      Rata Redemption Requirement.
      If the
      Company elects to cause a redemption of all or any portion of the Conversion
      Amount of this Note pursuant to Section 8(a), then it must simultaneously take
      the same action with respect to the Additional Notes and the payment in respect
      of such redemption shall be made on a pro rata basis in accordance with each
      holder’s percentage ownership of then outstanding Notes. 

     

    (9)  HOLDER’S
      RIGHT OF OPTIONAL REDEMPTION.
      No
      sooner than fifteen (15) days nor later than ten (10) days prior to the
      consummation of a Significant Transaction (but not prior to the public
      announcement of such Significant Transaction), the Company shall deliver written
      notice thereof to the Holder (a “Significant
      Transaction Notice”).
      If at
      any time during the period (the “Significant
      Transaction Measuring Period”)
      beginning after the Holder’s receipt of a Significant Transaction Notice and
      ending on the date of the consummation of such Significant Transaction (or,
      in
      the event a Significant Transaction Notice is not delivered at least ten (10)
      days prior to a Significant Transaction, at any time on or after the date which
      is ten (10) days prior to a Significant Transaction and ending ten (10) days
      after the consummation of such Significant Transaction), the Holder may require
      the Company to redeem all (but not less than all) of this Note (“Optional
      Significant Transaction Redemption”)
      by
      delivering written notice thereof (“Optional
      Significant Transaction Redemption
      Notice”)
      to the
      Company. An Optional Significant Transaction Redemption required by this Section
      8 shall be made in accordance with the provisions of Section 12. If this Note
      is
      subject to redemption pursuant to this Section 9 it shall be redeemed by the
      Company at a price equal to the Conversion Amount (“Significant
      Transaction Redemption Price”).
      Notwithstanding anything to the contrary in this Section 9, until the
      Significant Transaction Redemption Price (together with any interest thereon)
      is
      paid in full, the Conversion Amount submitted for redemption under this Section
      9 (together with any interest thereon) may be converted, in whole or in part,
      by
      the Holder into shares of Common Stock pursuant to Section 3.

     

    (10)  NONCIRCUMVENTION.
      The
      Company hereby covenants and agrees that the Company will not, by amendment
      of
      its Certificate of Incorporation, Bylaws or through any reorganization, transfer
      of assets, consolidation, merger, scheme of arrangement, dissolution, issue
      or
      sale of securities, or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms of this Note, and will at all
      times in good faith carry out all of the provisions of this Note and take all
      action as may be required to protect the rights of the Holder of this
      Note.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    (11)  RESERVATION
      OF AUTHORIZED SHARES.

     

    (a)  Reservation.
      The
      Company shall initially reserve out of its authorized and unissued shares of
      Common Stock a number of shares of Common Stock for each of the Notes equal
      to
      120% of the Conversion Rate with respect to the Conversion Amount of each such
      Note as of the applicable Issuance Date. So long as any of the Notes are
      outstanding, the Company shall take all action necessary to reserve and keep
      available out of its authorized and unissued shares of Common Stock, solely
      for
      the purpose of effecting the conversion of the Notes, 120% of the number of
      shares of Common Stock as shall from time to time be necessary to effect the
      conversion of all of the Notes then outstanding; provided that at no time shall
      the number of shares of Common Stock so reserved be less than the number of
      shares required to be reserved by the previous sentence (without regard to
      any
      limitations on conversions) (the “Required
      Reserve Amount”).
      The
      initial number of shares of Common Stock reserved for conversions of the Notes
      and each increase in the number of shares so reserved shall be allocated pro
      rata among the holders of the Notes based on the Principal amount of the Notes
      held by each holder at the Closing (as defined in the Note Exchange Agreement)
      or increase in the number of reserved shares, as the case may be (the
“Authorized
      Share Allocation”).
      In
      the event that a holder shall sell or otherwise transfer any of such holder’s
      Notes, each transferee shall be allocated a pro rata portion of such holder’s
      Authorized Share Allocation. Any shares of Common Stock reserved and allocated
      to any Person which ceases to hold any Notes shall be allocated to the remaining
      holders of Notes, pro rata based on the outstanding Principal amount of the
      Notes then held by such holders.

     

    (b)  Insufficient
      Authorized Shares.
      If at
      any time while any of the Notes remain outstanding the Company does not have
      a
      sufficient number of authorized and unreserved shares of Common Stock to satisfy
      its obligation to reserve for issuance upon conversion of the Notes at least
      a
      number of shares of Common Stock equal to the Required Reserve Amount (an
“Authorized
      Share Failure”),
      then
      the Company shall take all action necessary to increase the Company’s authorized
      shares of Common Stock to an amount sufficient to allow the Company to reserve
      the Required Reserve Amount for the Notes then outstanding. Without limiting
      the
      generality of the foregoing sentence, as soon as practicable after the date
      of
      the occurrence of an Authorized Share Failure, but in no event later than
      seventy-five (75) days after the occurrence of such Authorized Share Failure,
      the Company shall hold a meeting of its stockholders for the approval of an
      increase in the number of authorized shares of Common Stock. In connection
      with
      such meeting, the Company shall provide each stockholder with a proxy statement
      and shall use its commercially reasonable efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and to cause
      its
      board of directors to recommend to the stockholders that they approve such
      proposal.

     

    (12)  PAYMENT
      OF EVENT OF DEFAULT PRICE / HOLDER’S REDEMPTIONS.

     

    (a)  Mechanics.
      The
      Company shall deliver the applicable Event of Default Price to the Holder (x)
      in
      the case of an Event of Default under Section 4(a)(iv), 4(a)(v), or 4(a)(viii)
      immediately and (y) in the case of any other Event of Default, within five
      (5)
      Business Days after the Company’s receipt of the Event of Default Payment
      Notice. If the Holder has submitted an Optional Change of Control Redemption
      Notice or Optional Significant Transaction Redemption Notice in accordance
      with
      Section 5(b) or Section 9, respectively, the Company shall deliver the
      applicable Redemption Price to the Holder concurrently with the consummation
      of
      the applicable transaction if such notice is received by the Company on or
      prior
      to the third (3rd)
      Business Day preceding the consummation of such transaction and otherwise within
      five (5) Business Days after the Company’s receipt of such notice (assuming the
      applicable transaction is consummated). The Company shall deliver the Call
      Redemption Price to the Holder on or before the Call Redemption Date. In the
      event that the Company receives an Event of Default Payment Notice, Optional
      Significant Transaction Redemption Notice or Optional Change of Control
      Redemption Notice (each a “Redemption
      Notice”)
      and
      does not pay the applicable Redemption Price to the Holder within the time
      period required, at any time thereafter and until the Company pays such unpaid
      Redemption Price in full, the Holder shall have the option, in lieu of
      redemption, to require the Company to promptly return to the Holder all or
      any
      portion of this Note representing the Conversion Amount that was submitted
      for
      redemption and for which the applicable Redemption Price (together with any
      Late
      Charges thereon) has not been paid by delivery of a written notice (a
“Redemption
      Voiding Notice”)
      to the
      Company at any time prior to such payment in full. Upon the Company’s receipt of
      such Redemption Voiding Notice, (x) the Redemption Notice to which such
      Redemption Voiding Notice applies shall be null and void with respect to such
      Conversion Amount, (y) the Company shall immediately return this Note, or issue
      a new Note (in accordance with Section 17(d)) to the Holder representing such
      Conversion Amount and (z) the Conversion Price of this Note or such new Notes
      shall be adjusted to the lesser of (A) the Conversion Price as in effect on
      the
      date on which the Redemption Notice is voided and (B) the lowest Closing Bid
      Price of the Common Stock during the period beginning on and including the
      date
      on which the Redemption Notice is delivered to the Company and ending on and
      including the date on which the Redemption Notice is voided. The Holder’s
      delivery of a Redemption Voiding Notice and exercise of its rights following
      such notice shall not affect the Company’s obligations to make any payments of
      Late Charges which have accrued prior to the date of such notice with respect
      to
      the Conversion Amount subject to such notice.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    (b)  Redemption
      by Other Holders.
      Upon
      the Company’s receipt of notice from any of the holders of the Additional Notes
      for redemption or repayment as a result of an event or occurrence substantially
      similar to the events or occurrences described in Section 4(b), Section 5(b)
      or
      Section 9 (each, an “Other
      Redemption Notice”),
      the
      Company shall promptly forward to the Holder by facsimile a copy of such notice.
      If the Company receives a Redemption Notice and one or more Other Redemption
      Notices during the seven (7) Business Day period beginning on and including
      the
      date which is three (3) Business Days prior to the Company’s receipt of the
      Holder’s Redemption Notice and ending on and including the date which is three
      (3) Business Days after the Company’s receipt of the Holder’s Redemption Notice
      and the Company is unable to redeem all Principal, interest and other amounts
      designated in such Redemption Notice and such Other Redemption Notices received
      during such seven (7) Business Day period, then the Company shall redeem a
      pro
      rata amount from each holder of the Notes (including the Holder) based on the
      Principal amount of the Notes submitted for redemption pursuant to such
      Redemption Notice and such Other Redemption Notices received by the Company
      during such seven Business Day period.

     

    (13)  VOTING
      RIGHTS.
      The
      Holder shall have no voting rights as the holder of this Note, except as
      required by law, including, but not limited to, the General Corporation Law
      of
      the State of Delaware, and as expressly provided in this Note, the Company’s
      Certificate of Incorporation or any other Transaction Documents.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    (14)  OTHER
      COVENANTS.
      

     

    (a)  Corporate
      Existence. Subject
      to Section 5, the Company will do or cause to be done all things necessary
      to
      preserve and keep in full force and effect its corporate existence, rights
      and
      franchises; provided that the Company shall not be required to preserve its
      corporate existence or any such right or franchise if the Company shall
      determine that the preservation thereof is no longer desirable in the conduct
      of
      its business and that the loss thereof is not disadvantageous in any material
      respect to the Holders of the Notes.

     

    (b)  Dilutive
      Issuances.
      For one
      year after the Initial Issuance Date, the Company shall not, in any manner
      issue
      or sell any rights, warrants or options to subscribe for or purchase Common
      Stock or directly or indirectly convertible into or exchangeable or exercisable
      for Common Stock at a price which varies or may vary with the market price
      of
      the Common Stock, including by way of one or more resets to any fixed price
      unless the conversion, exchange or exercise price of any such security cannot
      be
      less than the then applicable Conversion Price with respect to the Common Stock
      into which any Note is convertible, except the foregoing shall not apply to
      (x)
      grants of employee stock options under an Approved Stock Plan and (y) any
      rights, warrants or options to subscribe for or purchase Common Stock or
      directly or indirectly convertible into or exchangeable or exercisable for
      Common Stock that issued in connection with a strategic transaction unanimously
      approved by the Board of Directors. 

     

    (c)  Listing.
      The
      Company shall promptly secure the listing of all of the Registrable Securities
      (as defined in the Registration Rights Agreement) upon each national securities
      exchange and automated quotation system, if any, upon which the Common Stock
      is
      then listed (subject to official notice of issuance) and shall maintain such
      listing of all Registrable Securities from time to time issuable under the
      terms
      of the Transaction Documents. The Company shall maintain the Common Stock’s
      authorization for quotation on the principal exchange or market in which it
      is
      listed. Neither the Company nor any of its Subsidiaries shall take any action
      which would be reasonably expected to result in the delisting or suspension
      of
      the Common Stock on the principal market in which it is listed. The Company
      shall pay all fees and expenses in connection with satisfying its obligations
      under this Section 14(c).

     

    (d)  Reports
      by the Company.
      The
Company
      covenants to make available to the Holder, within 15 days after the Company
      is
      required to file the same with the SEC, copies of the annual reports and of
      the
      information, documents, and other reports (or copies of such portions of any
      of
      the foregoing as the SEC may from time to time by rules and regulations
      prescribe) which the Company may be required to file with the SEC pursuant
      to
      Section 13 or Section 15(d) of the Exchange Act, or if the Company is not
      required to file information, documents, or reports pursuant to either of such
      sections, then to deliver to the Holder, in accordance with rules and
      regulations prescribed from time to time by the SEC, such of the supplementary
      and periodic information, documents, and reports which may be required pursuant
      to Section 13 of the Exchange Act; or, in respect of a security listed and
      registered on a national securities exchange or on NASDAQ as may be prescribed
      from time to time in such rules and regulations. At any time when the Company
      is
      not subject to Section 13 or 15(d) of the Exchange Act, upon request of Holder
      and prospective purchasers of Note or the Conversion Shares issuable upon
      conversion thereof, the Company will promptly furnish or cause to be furnished
      to such Holder and prospective purchasers, copies of the information required
      to
      be delivered to such Holder and prospective purchasers of such securities
      pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision
      thereto) in order to permit compliance with Rule 144A in connection with resales
      by such holders of such securities. The Company will pay the expenses of
      printing and distributing to such holders and prospective purchasers all such
      documents. Delivery of such reports, information and documents to the Holder
      is
      for informational purposes only and the Holder’s receipt of such shall not
      constitute constructive notice of any information contained therein or
      determinable from information contained therein, including the Company’s
      compliance with any of its covenants hereunder.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    (e)  Waiver
      of Usury Defense. The
      Company covenants (to the extent that it may lawfully do so) that it shall
      not
      assert, plead (as a defense or otherwise) or in any manner whatsoever claim
      (and
      shall actively resist any attempt to compel it to assert, plead or claim) in
      any
      action, suit or proceeding that the interest rate on the Notes violates present
      or future usury or other laws relating to the interest payable on any
      Indebtedness and shall not otherwise avail itself (and shall actively resist
      any
      attempt to compel it to avail itself) of the benefits or advantages of any
      such
      laws.

     

    (f)  Registration
      Rights.
      The
      Company agrees that the Holders from time to time of Registrable Securities
      (as
      defined in Registration Rights Agreement, dated ●, by and among investor
      signatories thereto (the “Registration
      Rights Agreement”)
      are
      entitled to the benefits of the Registration Rights Agreement. Further, if
      (i)
      the Registration Statement (as defined in Registration Rights Agreement),
      covering all of the Registrable Securities required to be covered thereby is
      (A)
      not filed with the SEC on or before sixty (60) days after the Closing Date
      (as
      defined in Registration Rights Agreement) (a “Filing
      Failure”)
      or (B)
      not declared effective by the SEC on or before the date that is six (6) months
      after the Closing Date (an “Effectiveness
      Failure”)
      or
      (ii) after the effective date of such Registration Statement, after the second
      (2nd) consecutive Business Day (other than during an allowable blackout period
      pursuant to Section 3(g) of the Registration Rights Agreement (“Blackout
      Period”))
      on
      which sales of all of the Registrable Securities required to be included on
      such
      Shelf Registration Statement cannot be made pursuant to such Registration
      Statement or otherwise (including, without limitation, because of a failure
      to
      keep such Registration Statement effective, to disclose such information as
      is
      necessary for sales to be made pursuant to such Registration Statement or to
      maintain the listing of the Common Stock) (a “Maintenance
      Failure”),
      then,
      as relief for the damages to any Holder by reason of any such delay in or
      reduction of its ability to sell the Registrable Securities, the Company shall
      pay to each Holder of Registrable Securities relating to such Registration
      Statement an amount in cash equal to (A) one percent (1.0%) of the aggregate
      principal amount of such Holder’s Notes relating to the Registrable Securities
      included in such Registration Statement on each of the following dates: (i)
      the
      day of a Filing Failure; (ii) the day of an Effectiveness Failure; and (iii)
      the
      initial day of a Maintenance Failure, and (B) one percent (1.0%) of the
      aggregate principal amount of such Holder’s Notes relating to the Registrable
      Securities included in such Registration Statement on each of the following
      dates: (i) on every thirtieth (30th) initial day after the day of a Filing
      Failure and thereafter (prorated for periods totaling less than thirty (30)
      days) until such Filing Failure is cured; (ii) on every thirtieth (30th) day
      after the initial day of an Effectiveness Failure and thereafter (prorated
      for
      periods totaling less than thirty (30) days) until such Effectiveness Failure
      is
      cured; (iii) on every thirtieth (30th) day after the initial day of a
      Maintenance Failure and thereafter (prorated for periods totaling less than
      thirty (30) days) until such Maintenance Failure is cured. The payments to
      which
      a Holder shall be entitled pursuant to this Section 14(f) are referred to herein
      as “Registration
      Default Payments.”
      Registration Default Payments shall be paid on the earlier of (I) the last
      day
      of the calendar month during which such Registration Default Payments are
      incurred and (II) the third (3rd) Business Day after the event or failure giving
      rise to the Registration Default Payments is cured. In the event the Company
      fails to make Registration Default Payments in a timely manner, such
      Registration Default Payments shall bear interest at the rate of one and
      one-half percent (1.5%) per month (prorated for partial months) until paid
      in
      full. If the Company has declared a Blackout Period, a Maintenance Failure
      shall
      be deemed not to have occurred and be continuing in relation to the Registration
      Statement during the period specified in Section 3(g) of the Registration Rights
      Agreement. Registration Default Payments shall be payable from the first day
      any
      Blackout Period exceeds the period specified in Section 3(g) of the Registration
      Rights Agreement. Registration Default Payments shall cease to accrue at the
      end
      of the Effectiveness Period (as defined in Registration Rights Agreement);
      provided
      that the
      foregoing shall not affect the Company’s obligation to make Registration Default
      Payments for any period prior to such time. Whenever in this Note there is
      mentioned, in any context, the payment of interest on, or in respect of, any
      Note, such mention shall be deemed to include mention of the payment of
      liquidated damages on Notes constituting Registrable Securities as contemplated
      in the Registration Rights Agreement to the extent that, in such context, such
      liquidated damages are, were or would be payable in respect thereof pursuant
      to
      this Section 14(f).

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    (g)  Compliance
      With Laws.
      The
      Company and its Subsidiaries shall at all times be in compliance with the
      Foreign Corrupt Practices Act; the PATRIOT Act, and all other applicable U.S.
      and non-U.S. anti-money laundering laws and regulations; and the laws,
      regulations and Executive Orders and sanctions programs administered by the
      OFAC, including, without limitation, the Anti-Money Laundering/OFAC
      Laws.

     

    (15)  VOTE
      TO ISSUE, OR CHANGE THE TERMS OF, NOTES.
      The
      affirmative vote at a meeting duly called for such purpose, or the written
      consent without a meeting, of the Required Holders shall be required for any
      change, amendment or waiver of any provision of this Note or the Additional
      Notes. Neither the Company nor any of its Subsidiaries will, directly or
      indirectly, pay or cause to be paid any consideration, whether by way of
      Interest, fees or otherwise, to any holder for or as inducement to any consent,
      waiver or amendment of any of the terms or provisions of the Notes unless such
      consideration is offered to be paid or is paid to all holders (on a pro rata
      basis in accordance with each holder’s percentage ownership of then outstanding
      Notes). So long as any Notes remain outstanding, at no time shall the Company
      or
      any of its Subsidiaries, directly or indirectly, purchase or offer to purchase
      any of the outstanding Notes or exchange or offer to exchange for any
      consideration (including, without limitation, for cash, securities, property
      or
      otherwise) any outstanding Notes unless the Company or such Subsidiary, as
      applicable, purchases, offers to purchase, exchanges or offers to exchange
      the
      outstanding Notes of all of the holders for the same consideration (on a pro
      rata basis in accordance with each holder’s percentage ownership of then
      outstanding Notes) and on identical terms.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    (16)  TRANSFER.
      This
      Note and the shares of Common Stock issuable upon conversion of this Note may
      not be offered for sale, sold, transferred or assigned (i) in the absence of
      (a)
      an effective registration statement for this Note or the shares of Common Stock
      issuable upon conversion of this Note, or (b) an opinion of counsel (selected
      by
      the Holder and reasonably acceptable to the Company), in a form reasonable
      acceptable to the Company, that this Note and the shares of Common Stock
      issuable upon conversion of this Note may be offered for sale, sold, assigned
      or
      transferred pursuant to an exemption from registration; provided
      that
      such opinion of counsel shall not be required in connection with any such sale,
      assignment or transfer to an institutional accredited investor that is
      prior
      to such sale, assignment or transfer is
      a
      holder of Additional Notes or an affiliate of the Holder, or (c) in the case
      of
      a Holder resident in Canada or otherwise subject to the provincial securities
      laws of Canada, a prospectus qualifying the distribution of this Note or the
      shares of Common Stock issuable upon conversion of this Note or an exemption
      therefrom, or (ii) the Holder provides the Company with assurance (reasonably
      satisfactory to the Company) that such Note or the shares of Common Stock
      issuable upon the conversion of the Note can be sold, assigned or transferred
      pursuant to Rule 144; provided,
      however,
      that no
      event may this Note be offered for sale, sold, assigned or transferred to a
      Competitor This
      Note has been issued pursuant to the Note Exchange Agreement, Article Four
      of
      which contemplates certain restrictions on sales, purchases, hedging
      transactions, voting with respect to director nominees and certain other
      transactions relating to the Company’s securities.  Any
      assignee or transferee of this Note shall be subject to the restrictions set
      forth in Article Four of the Note Exchange Agreement.
      

     

    (17)  REISSUANCE
      OF THIS NOTE.

     

    (a)  Transfer.
      This
      Note is issued in registered form pursuant to Treasury Regulations section
      1.871-14(c)(1). The Company (or its agent) will maintain a record of the holders
      of the Notes, and of Principal and Interest thereon as required by that
      regulation. The Note may be transferred or otherwise assigned only by surrender
      of this Note and issuance of a new Note in accordance with this Section 18,
      and
      neither this Note nor any interests therein may be sold, transferred or assigned
      to any Person except upon satisfaction of the conditions specified in this
      Section 17. If this Note is to be transferred or assigned, the Holder shall
      surrender this Note to the Company, whereupon the Company will forthwith issue
      and deliver upon the order of the Holder a new Note (in accordance with Section
      17(d)), registered as the Holder may request, representing the outstanding
      Principal being transferred by the Holder and, if less than the entire
      outstanding Principal is being transferred, a new Note (in accordance with
      Section 17(d)) to the Holder representing the outstanding Principal not being
      transferred. The Holder and any assignee, by acceptance of this Note,
      acknowledge and agree that, by reason of the provisions of Section 3(c)(iii)
      following conversion or redemption of any portion of this Note, the outstanding
      Principal represented by this Note may be less than the Principal stated on
      the
      face of this Note.

     

    (b)  Lost,
      Stolen or Mutilated Note.
      Upon
      receipt by the Company of evidence reasonably satisfactory to the Company of
      the
      loss, theft, destruction or mutilation of this Note, and, in the case of loss,
      theft or destruction, of any indemnification undertaking by the Holder to the
      Company in customary form and, in the case of mutilation, upon surrender and
      cancellation of this Note, the Company shall execute and deliver to the Holder
      a
      new Note (in accordance with Section 17(d)) representing the outstanding
      Principal.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    (c)  Note
      Exchangeable for Different Denominations.
      This
      Note is exchangeable, upon the surrender hereof by the Holder at the principal
      office of the Company, for a new Note or Notes (in accordance with Section
      17(d)
      and in Principal amounts of at least $100,000) representing in the aggregate
      the
      outstanding Principal of this Note, and each such new Note will represent such
      portion of such outstanding Principal as is designated by the Holder at the
      time
      of such surrender.

     

    (d)  Issuance
      of New Notes.
      Whenever the Company is required to issue a new Note pursuant to the terms
      of
      this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall
      represent, as indicated on the face of such new Note, the Principal remaining
      outstanding (or in the case of a new Note being issued pursuant to Section
      17(a)
      or Section 17(c), the Principal designated by the Holder which, when added
      to
      the principal represented by the other new Notes issued in connection with
      such
      issuance, does not exceed the Principal remaining outstanding under this Note
      immediately prior to such issuance of new Notes), (iii) shall have an
      issuance date, as indicated on the face of such new Note, which is the same
      as
      the Issuance Date of this Note, (iv) shall have the same rights and conditions
      as this Note, and (v) shall represent accrued Interest and Late Charges on
      the Principal and Interest of this Note, from the Initial Issuance
      Date.

     

    (18)  REMEDIES,
      CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
      RELIEF.
      The
      remedies provided in this Note shall be cumulative and in addition to all other
      remedies available under this Note and any of the other Transaction Documents
      at
      law or in equity (including a decree of specific performance and/or other
      injunctive relief), and nothing herein shall limit the Holder’s right to pursue
      actual and consequential damages for any failure by the Company to comply with
      the terms of this Note. Amounts set forth or provided for herein with respect
      to
      payments, conversion and the like (and the computation thereof) shall be the
      amounts to be received by the Holder and shall not, except as expressly provided
      herein, be subject to any other obligation of the Company (or the performance
      thereof). The Company acknowledges that a breach by it of its obligations
      hereunder will cause irreparable harm to the Holder and that the remedy at
      law
      for any such breach may be inadequate. The Company therefore agrees that, in
      the
      event of any such breach or threatened breach, the Holder shall be entitled,
      in
      addition to all other available remedies, to an injunction restraining any
      breach, without the necessity of showing economic loss and without any bond
      or
      other security being required.

     

    (19)  PAYMENT
      OF COLLECTION, ENFORCEMENT AND OTHER COSTS.
      If (a)
      this Note is placed in the hands of an attorney for collection or enforcement
      or
      is collected or enforced through any legal proceeding or the Holder otherwise
      takes action to collect amounts due under this Note or to enforce the provisions
      of this Note or (b) there occurs any bankruptcy, reorganization, receivership
      of
      the Company or other proceedings affecting Company creditors’ rights and
      involving a claim under this Note, then the Company shall pay the costs incurred
      by the Holder for such collection, enforcement or action or in connection with
      such bankruptcy, reorganization, receivership or other proceeding, including,
      but not limited to, reasonable attorneys’ fees and disbursements.

     

    (20)  CONSTRUCTION;
      HEADINGS.
      This
      Note shall be deemed to be jointly drafted by the Company and the initial
      holders of this Note and shall not be construed against any person as the
      drafter hereof. The headings of this Note are for convenience of reference
      and
      shall not form part of, or affect the interpretation of, this Note.

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    (21)  FAILURE
      OR INDULGENCE NOT WAIVER.
      No
      failure or delay on the part of the Holder in the exercise of any power, right
      or privilege hereunder shall operate as a waiver thereof, nor shall any single
      or partial exercise of any such power, right or privilege preclude other or
      further exercise thereof or of any other right, power or privilege.

     

    (22)  DISPUTE
      RESOLUTION.
      In the
      case of a dispute as to the determination of the Closing Bid Price, the Closing
      Sale Price, the fair market value of Illiquid Consideration, or, the arithmetic
      calculation of the Conversion Rate or the Redemption Price, the Company shall
      submit the disputed determinations or arithmetic calculations via facsimile
      within three (3) Business Days of receipt, or deemed receipt, of the Conversion
      Notice or Redemption Notice or other event giving rise to such dispute, as
      the
      case may be, to the Holder. If the Holder and the Company are unable to agree
      upon such determination or calculation within five (5) Business Days of such
      disputed determination or arithmetic calculation being submitted to the Holder,
      then the Company shall, within one Business Day submit via facsimile (a) the
      disputed determination of the Closing Bid Price, the Closing Sale Price, or
      fair
      market value of Illiquid Consideration, to an independent, reputable investment
      bank selected by the Company or (b) the disputed arithmetic calculation of
      the
      Conversion Rate or the Redemption Price to the Company’s independent, outside
      accountant. The Company, at the Company’s expense, 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 (10) Business Days from the time it receives the disputed determinations
      or
      calculations. Such investment bank’s or accountant’s determination or
      calculation, as the case may be, shall be binding upon all parties absent
      demonstrable error.

     

    (23)  NOTICES;
      PAYMENTS.

     

    (a)  Notices.
      Whenever notice is required to be given under this Note, unless otherwise
      provided herein, such notice shall be given in accordance with the Note Exchange
      Agreement. The Company shall provide the Holder with prompt written notice
      of
      all actions taken pursuant to this Note, including in reasonable detail a
      description of such action and the reason therefore. Without limiting the
      generality of the foregoing, the Company will give written notice to the Holder
      of any adjustment of the Conversion Price, setting forth in reasonable detail,
      and certifying, the calculation of such adjustment.

     

    (b)  Payments.
      Whenever any payment of cash is to be made by the Company to any Person pursuant
      to this Note, such payment shall be made in lawful money of the United States
      of
      America by a check drawn on the account of the Company and sent via overnight
      courier service to such Person at such address as previously provided to the
      Company in writing (which address, in the case of each of the initial holders
      of
      this Note, shall initially be as set forth on the Schedule of Holders attached
      to the Note Exchange Agreement); provided that the Holder may elect to receive
      a
      payment of cash via wire transfer of immediately available funds by providing
      the Company with prior written notice setting out such request and the Holder’s
      wire transfer instructions. Whenever any amount expressed to be due by the
      terms
      of this Note is due on any day which is not a Business Day, the same shall
      instead be due on the next succeeding day which is a Business Day and, in the
      case of any Interest Date which is not the date on which this Note is paid
      in
      full, the extension of the due date thereof shall not be taken into account
      for
      purposes of determining the amount of Interest due on such date. Any amount
      of
      Principal or other amounts due under the this Note or the Transaction Documents,
      other than Interest, which is not paid when due shall result in a late charge
      being incurred and payable by the Company in an amount equal to interest on
      such
      amount at the rate of five percent (5%) per annum from the date such amount
      was
      due until the same is paid in full (“Late
      Charge”).

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    (24)  CANCELLATION.
      After
      all Principal, accrued Interest and other amounts at any time owed on this
      Note
      have been paid in full, this Note shall automatically be deemed canceled, shall
      be surrendered to the Company for cancellation and shall not be
      reissued.

     

    (25)  WAIVER
      OF NOTICE.
      To the
      extent permitted by law, the Company hereby waives demand, notice, presentment,
      protest and all other demands and notices (other than the notices expressly
      provided for in this Note) in connection with the delivery, acceptance, default
      or enforcement of this Note and the Note Exchange Agreement. 

     

    (26)  GOVERNING
      LAW.
      This
      Note shall be construed and enforced in accordance with, and all questions
      concerning the construction, validity, interpretation and performance of this
      Note shall be governed by, the internal laws of the State of Delaware, without
      giving effect to any choice of law or conflict of law provision or rule (whether
      of the State of Delaware or any other jurisdictions) that would cause the
      application of the laws of any jurisdictions other than the State of
      Delaware.

     

    (27)  CERTAIN
      DEFINITIONS.
      For
      purposes of this Note, the following terms shall have the following
      meanings:

     

    (i)  “Approved
      Stock Plan”
means
      any employee benefit plan which has been approved by the board of directors
      of
      the Company and the Noteholder Directors and which satisfies the stockholder
      approval requirements for equity compensation plans of the Eligible Market
      on
      which the Common Stock is then listed or quoted, pursuant to which the Company’s
      securities may be issued to any employee, consultant, supplier, officer or
      director for services provided to the Company.

     

    (ii)  “Bloomberg”
means
      Bloomberg Financial Markets.

     

    (iii)  “Business
      Day”
means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      The City of New York are authorized or required by law to remain
      closed.

     

    (iv)  “Change
      of Control”
means
      any Fundamental Transaction other than (A) a consolidation or merger with or
      into another Person in which the beneficial owners of the Company’s then
      outstanding voting securities immediately prior to such transaction beneficially
      own securities representing fifty percent (50%) or more of the aggregate voting
      power of then outstanding voting securities of the resulting or acquiring
      corporation (or any parent thereof), or their equivalent if other than a
      corporation, in such transaction, or (B) pursuant to a migratory merger effected
      solely for the purpose of changing the jurisdiction of incorporation of the
      Company.

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    (v)  “Closing
      Bid Price”
and
      “Closing
      Sale Price”
mean,
      for any security as of any date, the last closing bid price and last closing
      trade price, respectively, for such security on the Principal Market, as
      reported by Bloomberg, or, if the Principal Market begins to operate on an
      extended hours basis and does not designate the closing bid price or the closing
      trade price, as the case may be, then the last bid price or last trade price,
      respectively, of such security prior to 4:00 p.m., New York Time, as reported
      by
      Bloomberg, or, if the Principal Market is not the principal securities exchange
      or trading market for such security, the last closing bid price or last trade
      price, respectively, of such security on the principal securities exchange
      or
      trading market where such security is listed or traded as reported by Bloomberg,
      or if the foregoing do not apply, the last closing bid price or last trade
      price, respectively, of such security in the over-the-counter market on the
      electronic bulletin board for such security as reported by Bloomberg, or, if
      no
      closing bid price or last trade price, respectively, is reported for such
      security by Bloomberg, the average of the bid prices, or the ask prices,
      respectively, of any market makers for such security as reported in the “pink
      sheets” by Pink Sheets LLC (formerly the National Quotations Bureau, Inc.). If
      the Closing Bid Price or the Closing Sale Price cannot be calculated for a
      security on a particular date on any of the foregoing bases, the Closing Bid
      Price or the Closing Sale Price, as the case may be, of such security on such
      date shall be the fair market value 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, then such dispute shall be resolved pursuant
      to
      Section 23. All such determinations to be appropriately adjusted for any stock
      dividend, stock split, stock combination or other similar transaction during
      the
      applicable calculation period.

     

    (vi)  “Common
      Stock”
means
      the shares of the Company’s common stock, par value $0.01 per
      share, and any other securities of the Company which may be issued or issuable
      with respect to, in exchange for, or in substitution of, such shares of common
      stock (including without limitation, by way of recapitalization,
      reclassification, reorganization, merger or otherwise).

     

    (vii)  “Common
      Stock Deemed Outstanding”
means,
      at any given time, the number of shares of Common Stock actually outstanding
      at
      such time, plus the number of shares of Common Stock deemed to be outstanding
      pursuant to Sections 7(a)(i) and 7(a)(ii) hereof regardless of whether the
      Options or Convertible Securities are actually exercisable at such time, but
      excluding any Common Stock owned or held by or for the account of the Company
      or
      issuable upon conversion of the Notes.

     

    (viii)  “Competitor”
means
      any company, however organized, conducting business anywhere in the world that
      is directly competitive with the business of the Company.

     

    (ix)  “Contingent
      Obligation”
means,
      as to any Person, any direct or indirect liability, contingent or otherwise,
      of
      that Person with respect to any indebtedness, lease, dividend or other
      obligation of another Person if the primary purpose or intent of the Person
      incurring such liability, or the primary effect thereof, is to provide assurance
      to the obligee of such liability that such liability will be paid or discharged,
      or that any agreements relating thereto will be complied with, or that the
      holders of such liability will be protected (in whole or in part) against loss
      with respect thereto.

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    (x)  “Continuing
      Directors”
means,
      as of any date of determination, any member of the Board of Directors who (i)
      was a member of such Board of Directors on the date of this Note or (ii) becomes
      a member of such Board of Directors subsequent to that date and was appointed,
      nominated for election or elected to such Board of Directors with the approval
      of a majority of the Continuing Directors who were members of such Board of
      Directors at the time of such appointment, nomination or election.

     

    (xi)  “Convertible
      Securities”
means
      any stock or securities (other than Options) directly or indirectly convertible
      into or exercisable or exchangeable for Common Stock.

     

    (xii)  “Eligible
      Market”
means
      The New York Stock Exchange, Inc., the American Stock Exchange or the Nasdaq
      Global Market.

     

    (xiii)  “Exchange
      Act”
means
      the United States Securities Exchange Act of 1934, as amended, and the rules
      and
      regulations thereunder.

     

    (xiv)  “Fundamental
      Transaction”
means
      (1) that the Company shall, directly or indirectly, in one or more related
      transactions, (a) consolidate or merge with or into (whether or not the Company
      is the surviving corporation) another Person or Subsidiary of another Person,
      or
      (b) sell, assign, transfer, convey or otherwise dispose of all or substantially
      all of the properties or assets of the Company to another Person, or (c) be
      the
      subject of a purchase, tender or exchange offer that is accepted by the holders
      of more than the 50% of the outstanding shares of Common Stock (not including
      any shares of Common Stock held by the Person or Persons making or party to,
      or
      associated or affiliated with the Persons making or party to, such purchase,
      tender or exchange offer), or (d) consummate a stock purchase agreement or
      other
      business combination (including, without limitation, a reorganization,
      recapitalization, spin-off or scheme of arrangement) with another Person whereby
      such other Person or parent of such other Person acquires more than the 50%
      of
      the outstanding shares of Common Stock (not including any shares of Common
      Stock
      held by the other Person or other Persons making or party to, or associated
      or
      affiliated with the other Persons making or party to, such stock purchase
      agreement or other business combination), (2) any time the Company’s Continuing
      Directors do not constitute a majority of the Company’s board of directors (or,
      if applicable, a Successor Entity”), or (3) a Termination of
      Trading.

     

    (xv)  “GAAP”
means
      United States generally accepted accounting principles, consistently
      applied.

     

    (xvi)  “Illiquid
      Consideration”
means
      any non-cash consideration issuable upon conversion of the Notes following
      a
      Fundamental Transaction that does not have a readily-ascertainable market
      value.

     

    (xvii)  “Indebtedness”
of
      any
      Person means, without duplication (a) all indebtedness for borrowed money,
      (b)
      all obligations issued, undertaken or assumed as the deferred purchase price
      of
      property or services including, without limitation, “capital leases” in
      accordance with GAAP (other than trade payables entered into in the ordinary
      course of business), (c) all reimbursement or payment obligations with respect
      to letters of credit, surety bonds and other similar instruments, (d) all
      obligations evidenced by notes, bonds, debentures or similar instruments,
      including obligations so evidenced incurred in connection with the acquisition
      of property, assets or businesses, (e) all indebtedness created or arising
      under
      any conditional sale or other title retention agreement, or incurred as
      financing, in either case with respect to any property or assets acquired with
      the proceeds of such indebtedness (even though the rights and remedies of the
      seller or bank under such agreement in the event of default are limited to
      repossession or sale of such property), (f) all monetary obligations under
      any
      leasing or similar arrangement which, in connection with GAAP, consistently
      applied for the periods covered thereby, is classified as a capital lease,
      (g)
      any amount raised by acceptance under any acceptance credit facility;
      (h) receivables sold or discounted (other than within the framework of
      factoring, securitization or similar transaction where recourse is only to
      such
      receivables or proceeds); (i) any derivative transaction;
      (j) any
      counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby
      or documentary letter of credit
      or any
      other instrument issued by a bank or financial institution (excluding commercial
      letters of credit issued in the ordinary course of business); (k) all
      indebtedness referred to in clauses (a) through (j) above secured by (or for
      which the holder of such Indebtedness has an existing right, contingent or
      otherwise, to be secured by) any mortgage, lien, pledge, charge, security
      interest or other encumbrance upon or in any property or assets (including
      accounts and contract rights) owned by any Person, even though the Person which
      owns such assets or property has not assumed or become liable for the payment
      of
      such indebtedness, and (l) all Contingent Obligations in respect of indebtedness
      or obligations of others of the kinds referred to in clauses (a) through (k)
      above.

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    (xviii)  “Interest
      Rate”
means
      eight percent (8%) per annum, provided, however,
      that
      upon an Event of Default the Interest Rate shall automatically increase to
      twelve percent (12%) per annum.

     

    (xix)  “Material
      Subsidiary”
means
      (a) such Subsidiaries identified as Material Subsidiaries in Schedule
      3.3
      of the
      Subscription Agreement or (b) any “Significant Subsidiary,” existing from
      time to time, as such term is defined in Rule 1-02 of Regulation S-X of the
      Securities Act.

     

    (xx)  “Merger
      Agreement Date”
means
      [INSERT date].

     

    (xxi)  “Note
      Exchange Agreement”
means
      that certain note exchange agreement dated as of the Merger Agreement Date
      by
      and among the Company and the holders of the Old Notes, pursuant to which the
      Company is issuing the Notes in like principal amount in exchange for the Old
      Notes.

     

    (xxii)  “Note
      Purchase Agreement”
means
      the agreement dated May 5, 2006 by and among the Company and the purchasers
      named therein relating to the issuance of an aggregate principal amount of
      $●
Old Notes.

     

    (xxiii)  “Old
      Notes”
means
      the Company’s 8% Subordinated Secured Convertible Notes issued by the Company
      pursuant to the Note Purchase Agreement dated May 5, 2006 by and among the
      Company and the purchasers named therein.

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

     

    (xxiv)  “Options” means
      any
      rights, warrants or options to subscribe for or purchase Common Stock or
      Convertible Securities.

     

    (xxv)  “Person”
means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization, any other entity and
      a
      government or any department or agency thereof. 

     

    (xxvi)  “Principal
      Market”
means
      the principal stock exchange or trading market for the Common Stock, if
      any.

     

    (xxvii)   “Reclassification”
means
      any reclassification or change of shares of Common Stock issuable upon
      conversion of the Notes (other than a change in par value, or from par value
      to
      no par value, or from no par value to par value, or as a result of a subdivision
      or combination).

     

    (xxviii)  “Required
      Holders”
means
      the holders of Notes representing at least two-thirds of the aggregate Principal
      amount of the Notes then outstanding.

     

    (xxix)  “Rule
      144(k)”
means
      Rule 144(k) promulgated under the Securities Act and any successor provision
      thereto.

     

    (xxx)  “SEC”
means
      the United States Securities and Exchange Commission.

     

    (xxxi)  “Securities
      Act”
means
      the Securities Act of 1933, as amended.

     

    (xxxii)  “Significant
      Transaction”
means
      any Fundamental Transaction or other corporate transaction, or series of
      transactions, (including but not limited to, any acquisition, disposition,
      merger, license or collaboration, joint venture, financing or securities
      offering) that would result in either (x) the issuance of Common Stock and/or
      Convertible Securities that would exceed 40% of the Common Stock outstanding
      prior to the transaction or (y) the payment or receipt of cash or other
      consideration of in excess of $25 million, unless such transaction has been
      approved by the Required Holders.

     

    (xxxiii)  “Subsidiary”
means
      with respect to any Person, any corporation, association or other business
      entity of which more than 50% of the total voting power of equity entitled
      (without regard to the occurrence of any contingency) to vote in the election
      of
      directors, managers or trustees or other governing body thereof is at the time
      owned or controlled by such Person (regardless of whether such equity is owned
      directly or through one or more other Subsidiaries of such Person or a
      combination thereof).

     

    (xxxiv)  “Successor
      Entity”
means
      the Person, which may be the Company, formed by, resulting from or surviving
      any
      Fundamental Transaction or the person with which such Fundamental Transaction
      shall have been made. In the vent that the Person resulting from or surviving
      any Fundamental Transaction is a Subsidiary, Successor Entity shall be the
      parent of such Subsidiary.

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

     

    (xxxv)  “Termination
      of Trading”
shall
      be deemed to have occurred of the shares of Common Stock are not listed on
      the
      AMEX nor approved for trading on the Nasdaq Global Market or any other U.S.
      securities exchange or another established over-the-counter trading market
      in
      the United States.

     

    (xxxvi)  “Trading
      Day”
means
      any day on which the Common Stock is traded on the Principal Market, or, if
      the
      Principal Market is not the principal trading market for the Common Stock,
      then
      on the principal securities exchange or securities market on which the Common
      Stock is then traded; provided that “Trading Day” shall not include any day on
      which the Common Stock is scheduled to trade on such exchange or market for
      less
      than 4.5 hours or any day that the Common Stock is suspended from trading during
      the final hour of trading on such exchange or market (or if such exchange or
      market does not designate in advance the closing time of trading on such
      exchange or market, then during the hour ending at 4:00:00 p.m., New York
      Time).

     

    (xxxvii)  “Transaction
      Documents”
means
      the Note, Note Exchange Agreement, Registration Rights Agreement and any other
      documents or agreements executed in connection with the transactions
      contemplated hereunder or thereunder.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        -25-

        
          

        

      

       

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Note to be duly executed as of
      the
      Issuance Date set out above.

     

    
      	 	 	 
	 	
              
                PHARMATHENE,
                  INC.

              

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

              
                Title:

              

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    EXHIBIT
      I

     

    PHARMATHENE,
      INC..

    CONVERSION
      NOTICE

     

    Reference
      is made to the Convertible Note (the “Note”)
      issued
      to the undersigned by PharmAthene, Inc.. (the “Company”).
      In
      accordance with and pursuant to the Note, the undersigned hereby elects to
      convert the Conversion Amount (as defined in the Note) of the Note indicated
      below into shares of Common Stock par value $0.01 per share (the “Common
      Stock”)
      of the
      Company, as of the date specified below.

     

    

    
      	
              Date
                of Conversion:
                ___________________________________________________________________________

            
	 	 
	
              Aggregate
                Conversion Amount to be converted:
                _____________________________________________________

            
	 
	
              Please
                confirm the following information:

            
	 	 
	
              Conversion
                Price:
                _____________________________________________________________________________

            
	 	 
	
              Number
                of shares of Common Stock to be issued:
                _____________________________________________________

            
	 
	
              Please
                issue the Common Stock into which the Note is being converted in
                the
                following name and to the following address:

            
	 	 
	
              Issue
                to:
                ___________________________________________________________________________________

            
	 	 
	 	
              ___________________________________________________________________________________

            
	 	 
	 	___________________________________________________________________________________
	 	 
	
              Facsimile
                Number:
                ____________________________________________________________________________

            
	 	 
	
              Authorization:
                _______________________________________________________________________________

            
	 	 
	
              By:
                _________________________________________________________________________________

            
	 	 
	
              Title:
                __________________________________________________________________________

            
	 	 
	
              Dated:
                ____________________________________________________________________________________________

            
	 	
            
	
              Account
                Number:
                _____________________________________________________________________________

            
	
                (if
                electronic book entry transfer)

            	 
	 	 
	
              Transaction
                Code Number:
                ______________________________________________________________________

            
	
                (if
                electronic book entry transfer)FORM
      OF

     

    REGISTRATION
      RIGHTS AGREEMENT

     

    This REGISTRATION
      RIGHTS AGREEMENT (this
      “Agreement”)
      is
      entered into as of ____________ ___, 2006, by and between Healthcare Acquisition
      Corp., a Delaware corporation (the “Company”),
      and
      the investors signatory hereto (the “Investors”),
      who
      are also stockholders of PharmAthene, Inc., a Delaware corporation
      (“PAI”).

     

    WHEREAS,
      the
      Company and the Investors have entered into a certain Merger Agreement, dated
      as
      of January 19, 2007 (the “Merger
      Agreement”),
      pursuant to which the Company will merge its wholly-owned subsidiary into PAI;
      and

     

    WHEREAS,
      the
      Company wishes to grant the Investors certain registration rights in connection
      with the shares of common stock of the Company they will acquire as a result
      of
      the Merger Agreement and the transactions contemplated thereby.

     

    NOW,
      THEREFORE,
      in
      consideration of the foregoing recitals and the mutual promises and covenants
      hereinafter set forth and for other good and valuable consideration, the receipt
      and sufficiency of which are hereby acknowledged, the parties hereto agree
      as
      follows: 

     

    1. Certain
      Definitions.
      Capitalized terms used and not otherwise defined herein shall have the meanings
      given such terms in the Merger Agreement. As used in this Agreement, the
      following terms shall have the following meanings:

     

    (a) “Effective
      Date”
shall
      mean, with respect to the Registration Statement, the date on which the
      Registration Statement shall have been declared effective by the
      SEC.

     

    (b) “Effectiveness
      Period”
shall
      mean the period from the Closing Date until the date that is the fifth year
      anniversary of the Closing Date.

     

    (c) “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, together with all rules and
      regulations promulgated thereunder.

     

    (d) “Holders”
means
      the Investors or any of their respective affiliates or permitted transferees
      to
      the extent any of them are permitted to hold Registrable Securities, other
      than
      those purchasing Registrable Securities in a market transaction.

     

    (e) “Prospectus”
means
      the prospectus included in a 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 424(b) 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.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (f) “Registrable
      Securities”
shall
      mean the shares of common stock of the Company held or hereafter acquired by
      the
      Holders, including such shares received as a result of the transactions
      contemplated by the Merger Agreement or in respect of the 8% Convertible Notes,
      together with any securities issued or issuable upon any stock split, dividend
      or other distribution, adjustment, recapitalization or similar event with
      respect to the foregoing, but excluding (i) any such shares sold under any
      other
      effective Registration Statement, or (ii) any such shares sold pursuant to
      Rule
      144 under the Securities Act.

     

    (g) “Registration
      Statement”
means
      any registration statement required to be filed under this Agreement, 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.

     

    (h) “SEC”
means
      the U.S. Securities and Exchange Commission.

     

    (i) “Securities
      Act”
means
      the Securities Act of 1933, as amended, together with all rules and regulations
      promulgated thereunder.

     

    2. Registration.

     

    (a) Mandatory
      Registration.
      Within
      sixty (60) days after the Closing Date, the Company shall cause to be prepared
      and filed with the SEC a Registration Statement providing for the resale of
      all
      Registrable Securities then outstanding and all Registrable Securities issuable
      in respect of the 8% Convertible Notes for an offering to be made by the Holders
      on a continuous basis pursuant to Rule 415. Such Registration Statement shall
      be
      on Form S-3 (except if the Company is not then eligible to register for resale
      the Registrable Securities on Form S-3, in which case such registration shall
      be
      on another appropriate form in accordance herewith). The Company shall cause
      such Registration Statement to be declared effective under the Securities Act
      as
      promptly as possible after the filing thereof. The Company shall keep such
      Registration Statement continuously effective under the Securities Act until
      the
      date when all Registrable Securities covered by such Registration Statement
      have
      been sold.

     

    (b) Demand
      Registration.
      At any
      time following the date that is 180 days following the Closing Date but prior
      to
      the expiration of the Effectiveness Period, if the Company shall be requested
      (a
“Registration
      Request”)
      by
      Holders holding at least a majority of the then outstanding Registrable
      Securities to effect the registration under the Securities Act of Registrable
      Securities, then the Company shall (i) within ten (10) days of the receipt
      of
      such Registration Request, give written notice of such request to all Holders
      describing the terms of such registration and, if applicable, the underwriting
      and (ii) as soon as practicable cause to be prepared and filed with the SEC
      a
      Registration Statement providing for the resale of all Registrable Securities
      which Holders request to be registered. The Registration Statement shall be
      on
      Form S-3 (except if the Company is not then eligible to register for resale
      the
      Registrable Securities on Form S-3, in which case such registration shall be
      on
      another appropriate form in accordance herewith). The Company shall cause the
      Registration Statement to be declared effective under the Securities Act as
      promptly as possible after the filing thereof. The Company shall keep the
      Registration Statement continuously effective under the Securities Act until
      the
      date when all Registrable Securities covered by such Registration Statement
      have
      been sold. The Company shall not be obligated to file and cause to become
      effective more than two (2) Registration Statements pursuant to this Section
      2(b). A Registration Statement shall not be counted for purposes of the
      foregoing until such time as such Registrations Statement has been declared
      effective by the Commission and all of the Registrable Securities offered
      pursuant to such Registration Statement are sold thereunder upon the price
      and
      terms offered.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (c) Each
      Holder will furnish to the Company in writing the information specified in
      Item
      507 and/or 508 of Regulation S-K, as applicable, of the Securities Act for
      use
      in connection with any Registration Statement or prospectus or preliminary
      prospectus included therein. Each Holder agrees to promptly furnish additional
      information required to be disclosed in order to make the information previously
      furnished to the Company by such Holder not materially misleading.

     

    (d) The
      Company shall notify each Holder in writing promptly (and in any event within
      one business day) after receiving notification from the SEC that a Registration
      Statement has been declared effective.

     

    (e) Any
      Registration Statement required hereunder shall contain (except if otherwise
      directed by the Holders of at least two-thirds of the Registrable Securities
      included in such Registration Statement) the “Plan of Distribution” attached
      hereto as Annex
      A.

     

    3. Registration
      Procedures.
      In
      connection with the Company’s registration obligations hereunder, the Company
      shall:

     

    (a) (i)
      prepare and file with the SEC such amendments, including post-effective
      amendments, to the Registration Statement as may be necessary to keep the
      Registration Statement continuously effective as to the Registrable Securities
      until the date when all Registrable Securities covered by such Registration
      Statement have been sold; (ii) cause the related Prospectus to be amended or
      supplemented by any required Prospectus supplement, and as so supplemented
      or
      amended to be filed pursuant to Rule 424; and (iii) respond as promptly as
      reasonably possible to any comments received from the SEC with respect to the
      Registration Statement or any amendment thereto and as promptly as reasonably
      possible provide each Holder copies
      of
      all correspondence from and to the SEC relating to the Registration
      Statement.

     

    (b) Notify
      each Holder as promptly as reasonably possible, and confirm such notice in
      writing no later than one (1) trading day thereafter, of any of the following
      events: (i) the SEC notifies the Company whether there will be a “review” of the
      Registration Statement; (ii) the SEC comments in writing on the Registration
      Statement (in which case the Company shall deliver to each Holder a copy of
      such
      comments and of all written responses thereto); (iii) the SEC or any other
      Federal or state governmental authority in writing requests any amendment or
      supplement to the Registration Statement or Prospectus or requests additional
      information related thereto; (iv) if the SEC issues any stop order suspending
      the effectiveness of the Registration Statement or initiates any action, claim,
      suit, investigation or proceeding (a “Proceeding”)
      for
      that purpose; (v) the Company receives notice in writing of any suspension
      of
      the qualification or exemption from qualification of any Registrable Securities
      for sale in any jurisdiction, or the initiation or threat of any Proceeding
      for
      such purpose; or (vi) the financial statements included in the Registration
      Statement become ineligible for inclusion therein or any statement made in
      the
      Registration Statement or Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference is untrue in any material respect or any
      revision to the Registration Statement, Prospectus or other document is required
      so that it will not contain any untrue statement of a material fact or omit
      to
      state any material fact required to be stated therein or necessary to make
      the
      statements therein, in light of the circumstances under which they were made,
      not misleading.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (c) Use
      its
      reasonable best efforts to avoid the issuance of or, if issued, obtain the
      withdrawal of: (i) any order suspending the effectiveness of the Registration
      Statement or (ii) any suspension of the qualification (or exemption from
      qualification) of any of the Registrable Securities for sale in any
      jurisdiction, at the earliest practicable moment.

     

    (d) Promptly
      deliver to each Holder, without charge, such reasonable number of copies of
      the
      Prospectus or Prospectuses (including each form of prospectus) and each
      amendment or supplement thereto as such Holder may reasonably request. The
      Company hereby consents to the use of such Prospectus and each amendment or
      supplement thereto by the Holders in connection with the offering and sale
      of
      the Registrable Securities covered by such Prospectus and any amendment or
      supplement thereto.

     

    (e) (i)
      In
      the time and manner required by the American Stock Exchange and any other market
      on which the Registrable Securities are traded (the “Principal
      Market”),
      prepare and file with the Principal Market an additional shares listing
      application covering all of the Registrable Securities and a notification form
      regarding the change in the number of the Company’s outstanding Shares; (ii)
      take all steps necessary to cause such Registrable Securities to be approved
      for
      listing on the Principal Market as soon as possible thereafter; (iii) provide
      to
      each Holder notice of such listing; and (iv) maintain the listing of such
      Registrable Securities on the Principal Market.

     

    (f) Prior
      to
      any public offering of Registrable Securities, register or qualify or cooperate
      with the Holders in connection with the registration or qualification (or
      exemption from such registration or qualification) of such Registrable
      Securities for offer and sale under the securities or “blue sky” laws of such
      jurisdictions within the United States as any Holder requests in writing, to
      keep each such registration or qualification (or exemption therefrom) effective
      until the date when all Registrable Securities covered by such Registration
      Statement have been sold and to do any and all other acts or things necessary
      or
      advisable to enable the disposition in such jurisdictions of the Registrable
      Securities covered by a Registration Statement; provided,
      however,
      that
      the Company shall not be required for any such purpose to: (i) qualify generally
      to do business as a foreign corporation in any jurisdiction wherein it would
      not
      be otherwise required to qualify but for the requirements of this Section
      (3)(f), or (ii) subject itself to taxation.

     

    (g) Upon
      the
      occurrence of any event described in Section (3)(b)(vi) above, as promptly
      as
      reasonably possible, prepare a supplement or amendment, including a
      post-effective amendment, to the Registration Statement or a supplement to
      the
      related Prospectus or any document incorporated or deemed to be incorporated
      therein by reference, and file any other required document so that, as
      thereafter delivered, neither the Registration Statement nor such Prospectus
      will contain an untrue statement of a material fact or omit to state a material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading;
provided,
      however,
      that
      the Company may suspend sales pursuant to the Registration Statement for a
      period of up to sixty (60) days (unless the
      Holders of at least two-thirds of the Registrable Securities
      consent
      in writing to a longer delay of up to an additional thirty (30) days) no more
      than once in any twelve-month period if the Company furnishes to the Holders
      a
      certificate signed by the Company’s Chief Executive Officer stating that in the
      good faith judgment of the Company’s Board of Directors: (i) the offering could
      reasonably be expected to materially interfere with an acquisition, corporate
      reorganization or other material transaction then under consideration by the
      Company or (ii) there is some other material development relating to the
      operations or condition (financial or other) of the Company that has not been
      disclosed to the general public and as to which it is in the Company’s best
      interests not to disclose; provided
      further, however,
      that the
      Company may not so suspend sales more than once in any calendar year without
      the
      written consent of the Holders of at least two-thirds of the Registrable
      Securities.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (h) Comply
      with all applicable rules and regulations of the SEC and the Principal Market
      with respect to the Company’s obligations hereunder.

     

    4. Underwritten
      Offerings.

     

    (a) At
      the
      request (an “Underwriting
      Request”)
      of the
      Holders of at least two-thirds of the then outstanding Registrable Securities
      (the “Requesting
      Stockholders”),
      the
      distribution of the Registrable Securities covered by a Registration Statement
      filed or to be filed pursuant to Sections 2(a) or (b) hereof, shall be effected
      by means of an underwriting.

     

    (b) In
      the
      event of an Underwriting Request, the Company, together with all Holders
      proposing to distribute their securities through such underwriting (the
“Participating
      Stockholders”),
      shall
      enter into an underwriting agreement in customary form with the managing
      underwriter(s) selected for such underwriting by the Requesting Stockholders,
      which underwriter(s) shall be reasonably acceptable to the Company; provided,
      however, that no Holder shall be required to make any representations or
      warranties concerning the Company or its business, properties, prospects,
      financial condition or related matters. Notwithstanding any other provision
      of
      this Section 4, if the managing underwriter(s) advises the Company and the
      Participating Stockholders in writing that because the number of shares
      requested by the Participating Stockholders to be included in the registration
      exceeds the number which can be sold in an orderly manner in such offering
      within a price range acceptable to the Requesting Stockholders or that marketing
      factors require a limitation of the number of shares to be underwritten on
      behalf of the Participating Stockholders (the “Underwritten
      Registration Cutback”),
      and
      such Underwritten Registration Cutback results in less than all of the
      Registrable Securities of the Participating Stockholders that are requested
      to
      be included in such registration to actually be included in such registration,
      then the Company will include in such registration, to the extent of the number
      which the Company is so advised can be sold in (or during the time of) such
      offering without such interference or affect on the price or sale, such number
      of Registrable Securities shared pro rata among all of the Participating
      Stockholders based on the total number of Registrable Securities held by each
      such Participating Stockholder.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (c) In
      the
      event of an Underwriting Request, the Company shall

     

    (i) cooperate
      with the Participating Stockholders, the underwriters participating in the
      offering and their counsel in any due diligence investigation reasonably
      requested by the Participating Stockholders or the underwriters in connection
      therewith, and participate, to the extent reasonably requested by the
      Participating Stockholders and the underwriter for the offering, in efforts
      to
      sell the Registrable Securities under the offering (including, without
      limitation, participating in “roadshow” meetings with prospective investors)
      that would be customary for underwritten primary offerings of a comparable
      amount of equity securities by the Company;

     

    (ii) cooperate,
      to the extent reasonably requested, with each underwriter participating in
      the
      disposition of such Registrable Securities and their respective counsel in
      connection with any filings required to be made with the Principal
      Market;

     

    (iii) afford
      the Requesting Stockholders with the opportunity to participate in the drafting
      of the registration statement and the documentation relating
      thereto;

     

    (iv) furnish,
      on the date on which such Registrable Securities are sold to the underwriter,
      (A) an opinion, dated such date, of the counsel representing the Company for
      the
      purposes of such registration, in form and substance as is customarily given
      to
      underwriters in an underwritten public offering, addressed to the underwriters,
      if any, and (B) a “comfort” letter dated such date, from the independent
      certified public accountants of the Company, in form and substance as is
      customarily given by independent certified public accountants to underwriters
      in
      an underwritten public offering, addressed to the underwriters; and

     

    (v) take
      all
      other steps reasonably necessary to effect the registration of the Registrable
      Securities contemplated hereby.

     

    5. Registration
      Expenses.
      The
      Company shall pay all fees and expenses incident to the performance of or
      compliance with this Agreement by the Company, including without limitation:
      (a)
      all registration and filing fees and expenses, including without limitation
      those related to filings with the SEC, the Principal Market and in connection
      with applicable state securities or “Blue Sky” laws, (b) printing expenses
      (including, without limitation, expenses of printing certificates for
      Registrable Securities and of printing copies of Prospectuses reasonably
      requested by a Holder), (c) messenger, telephone and delivery expenses, (d)
      fees
      and disbursements of counsel for the Company, and (e) fees and expenses of
      all
      other Persons retained by the Company in connection with the consummation of
      the
      transactions contemplated by this Agreement. The Company shall also pay the
      reasonable fees and expenses of one counsel to the Holders (selected by the
      Holders of at least two-thirds of the Registrable Shares to be registered on
      such applicable Registration Statement). Notwithstanding the foregoing, each
      Holder shall pay any and all costs, fees, discounts or commissions attributable
      to the sale of its respective Registrable Securities.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    6. Indemnification.

     

    (a) Indemnification
      by the Company.
      In the
      event of a registration of any Registrable Securities under the Securities
      Act
      pursuant to this Agreement, the Company will indemnify and hold harmless each
      of
      the Holders, and their respective officers, directors and each other Person,
      if
      any, who controls or is an affiliate of such Holder within the meaning of the
      Securities Act, against any losses, claims, damages or liabilities
      (collectively, “Losses”),
      to
      which such Holder, or such Persons may become subject under the Securities
      Act
      or otherwise, insofar as such Losses arise out of or are based upon any untrue
      statement or alleged untrue statement of any material fact contained in the
      Registration Statement under which such Registrable Securities were registered
      under the Securities Act pursuant to this Agreement, any preliminary Prospectus
      or final Prospectus contained therein, or any amendment or supplement thereof,
      or arise out of or are based upon the omission or alleged omission to state
      therein a material fact required to be stated therein or necessary to make
      the
      statements therein not misleading, and will reimburse the Holder, and each
      such
      Person for any reasonable legal or other expenses incurred by them in connection
      with investigating or defending any such Losses; provided,
      however,
      that
      the Company will not be liable in any such case if and to the extent that any
      such Losses arise out of or are based upon: (i) an untrue statement or alleged
      untrue statement or omission or alleged omission so made in conformity with
      information furnished by or on behalf of such Holder or any such Person in
      writing specifically for use in any such document and specifically relating
      to
      such Holder, (ii) the failure of a Holder to deliver a Prospectus, to the extent
      that such Holder was required to do so under applicable securities laws, or
      (iii) in the case of an occurrence of an event of the type specified in Section
      (3)(b) above, the use by such Holder of an outdated or defective Prospectus
      after the Company has notified such Holder in writing that the Prospectus is
      outdated or defective and prior to the receipt by such Holder of the Advice
      contemplated in Section 7 below.

     

    (b) Indemnification
      by Holders.
      In the
      event of a registration of the Registrable Securities under the Securities
      Act
      pursuant to this Agreement, each Holder will severally, but not jointly,
      indemnify and hold harmless the Company, and its officers, directors and each
      other Person, if any, who controls the Company within the meaning of the
      Securities Act, against all Losses to which the Company or such Persons may
      become subject under the Securities Act or otherwise, insofar as such Losses
      (or
      actions in respect thereof) arise out of or are based upon any untrue statement
      or alleged untrue statement of any material fact in the Registration Statement
      under which such Registrable Securities were registered under the Securities
      Act
      pursuant to this Agreement, any preliminary Prospectus or final Prospectus
      contained therein, or any amendment or supplement thereof, or arise out of
      or
      are based upon the omission or alleged omission to state therein a material
      fact
      required to be stated therein or necessary to make the statements therein not
      misleading, and will reimburse the Company and each such Person for any
      reasonable legal or other expenses incurred by them in connection with
      investigating or defending any such Losses; provided,
      however,
      that a
      Holder will be liable in any such case if and only to the extent that any such
      Losses arise out of or are based upon an untrue statement or alleged untrue
      statement or omission or alleged omission so made in conformity with information
      furnished in writing to the Company by or on behalf of such Holder specifically
      for use in any such document and specifically relating to such Holder. In
      addition, the foregoing shall not inure to the benefit of a Holder (ii) if
      such
      Holder fails to deliver a Prospectus, to the extent that such Holder was
      required to do so under applicable securities laws, or (iii) in the case of
      an
      occurrence of an event of the type specified in Section (3)(b) above, by reason
      of the use by such Holder of an outdated or defective Prospectus after the
      Company has notified such Holder in writing that the Prospectus is outdated
      or
      defective and prior to the receipt by such Holder of the Advice contemplated
      in
      Section 7 below.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (c) Conduct
      of Indemnification Proceedings.
      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 assume the defense thereof, including
      the employment of counsel reasonably satisfactory to the Indemnified Party
      and
      the payment of all fees and expenses incurred in connection with defense
      thereof, provided, 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 Agreement, except (and only) to the extent that such failure
      shall have 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 or Parties unless: (i) the Indemnifying
      Party has agreed in writing to pay such fees and expenses; or (ii) 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 (iii) 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 is likely to exist 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 in
      the event that the Indemnifying Party shall be required to pay the fees and
      expenses of separate counsel, the Indemnifying Party shall only be required
      to
      pay the fees and expenses of one separate counsel for such Indemnified Party
      or
      Parties. The Indemnifying Party shall not be liable for any settlement of any
      such Proceeding affected without its written consent, which consent shall not
      be
      unreasonably withheld. 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. 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 in a manner not inconsistent with this Section) shall be paid to
      the
      Indemnified Party, as incurred, within ten trading days of written notice
      thereof to the Indemnifying Party (regardless of whether it is ultimately
      determined that an Indemnified Party is not entitled to indemnification
      hereunder; provided, that the Indemnifying Party may require such Indemnified
      Party to undertake to reimburse all such fees and expenses to the extent it
      is
      finally judicially determined that such Indemnified Party is not entitled to
      indemnification hereunder).

     

    (d) Contribution.
      If a
      claim for indemnification under Section 6(a) or (b) 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 related 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 in this Section 6 was available
      to
      such party in accordance with its terms.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) 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.

     

    (e) Notwithstanding
      the provision of this Section 6, no Holder shall be required to pay
      indemnification or to contribute, in the aggregate, any amount in excess of
      the
      amount of proceeds actually received by such Holder from the sale of the
      Registrable Securities subject to the Proceeding. 

     

    (f) The
      indemnity and contribution agreements contained in this Section are in addition
      to any liability that the Indemnifying Parties may have to the Indemnified
      Parties.

     

    7. Dispositions.
      Each
      Holder agrees that it will comply with the prospectus delivery requirements
      of
      the Securities Act as applicable to it in connection with sales of Registrable
      Securities pursuant to the Registration Statement. Each Holder further agrees
      that, upon receipt of a notice from the Company of the occurrence of any event
      of the kind described in Section 3(b), such Holder will discontinue disposition
      of such Registrable Securities under the Registration Statement until such
      Holder’s receipt of the copies of the supplemented Prospectus and/or amended
      Registration Statement contemplated by Section 3(g), or until it is advised
      in
      writing (the “Advice”)
      by the
      Company that the use of the applicable Prospectus may be resumed, and, in either
      case, has received copies of any additional or supplemental filings that are
      incorporated or deemed to be incorporated by reference in such Prospectus or
      Registration Statement. The Company may provide appropriate stop orders to
      enforce the provisions of this paragraph.

     

    8. Piggy-Back
      Registrations.
      If at
      any time during the Effectiveness Period, the Company shall determine to prepare
      and file with the SEC a registration statement relating to an offering for
      its
      own account or the account of others under the Securities Act of any of its
      equity securities, other than on Form S-4 or Form S-8 (each as promulgated
      under
      the Securities Act) or their then equivalents relating to equity securities
      to
      be issued solely in connection with any acquisition of any entity or business
      or
      equity securities issuable in connection with stock option or other employee
      benefit plans, then the Company shall send to the each Holder written notice
      of
      such determination and if, within fifteen (15) days after receipt of such
      notice, any such Holder shall so request in writing, the Company shall include
      in such registration statement all or any part of such Registrable Securities
      such Holder requests to be registered. Notwithstanding the foregoing, if the
      Company’s proposed registration of equity securities hereunder is, in whole or
      in part, an underwritten public offering, and the managing underwriter of such
      proposed registration determines and advises in writing that the inclusion
      of
      all Registrable Securities proposed to be included in the underwritten public
      offering, together with any other issued and outstanding shares of the Company’s
      common stock proposed to be included therein (such other shares hereinafter
      collectively referred to as the “Other Shares”), would interfere with the
      successful marketing of the Company’s securities, then the total number of such
      securities proposed to be included in such underwritten public offering shall
      be
      reduced, (i) first by the shares requested to be included in such registration
      by the holders of Other Shares, and (ii) second, if necessary, (A) one-half
      (1⁄2)
      by the securities proposed to be issued by the Company, and (B) one-half (1⁄2 ) by
      the Registrable Securities proposed to be included in such registration by
      the
      Holders, on a pro rata basis, based upon the number of Registrable Securities
      then held by each such Holder. The shares of the Company’s common stock that are
      excluded from the underwritten public offering pursuant to the preceding
      sentence shall be withheld from the market by the holders thereof for a period,
      not to exceed 90 days from the closing of such underwritten public offering,
      that the managing underwriter reasonably determines as necessary in order to
      effect such underwritten public offering.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    9. Reports
      Under Exchange Act.
      With a
      view to making available to the Holders the benefits of Rule 144 promulgated
      under the Securities Act and any other rule or regulation of the SEC that may
      at
      any time permit a Holder to sell securities of the Company to the public without
      registration, the Company shall:

     

    (a) make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144, at all times after the date hereof and so long as the Company is
      subject to the periodic reporting requirements under Sections 13 or 15(d) of
      the
      Exchange Act;

     

    (b) file
      with
      the Commission in a timely manner all reports and other documents required
      of
      the Company under the Securities Act and the Exchange Act; and

     

    (c) furnish
      to any Holder, so long as the Holder owns any Registrable Securities, forthwith
      upon request (i) a written statement by the Company that it has complied with
      the reporting requirements of SEC Rule 144, the Securities Act and the Exchange
      Act (at any time after it has become subject to such reporting requirements),
      or
      that it qualifies as a registrant whose securities may be resold pursuant to
      Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent
      annual or quarterly report of the Company and such other reports and documents
      so filed by the Company, and (iii) such other information as may be reasonably
      requested in availing any Holder of any rule or regulation of the Commission
      which permits the selling of any such securities without registration or
      pursuant to such form.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    10. Mergers.
      The
      Company shall not, directly or indirectly, enter into any merger, consolidation
      or reorganization in which the Company shall not be the surviving corporation
      unless the proposed surviving corporation shall, prior to such merger,
      consolidation or reorganization, agree in writing to assume the obligations
      of
      the Company under this Agreement, and for that purpose references hereunder
      to
“Registrable Securities” shall be deemed to be references to the securities
      which the Holders would be entitled to receive in exchange for Registrable
      Securities under any such merger, consolidation or reorganization, provided,
      however, that the provisions of this Agreement shall not apply in the event
      of
      any merger, consolidation or reorganization in which the Company is not the
      surviving corporation if the Holders are entitled to receive in exchange
      therefor (i) cash or (ii) securities of the acquiring corporation which may
      be
      immediately sold to the public pursuant to an effective registration statement
      under the Securities Act or pursuant to an exemption therefrom which permits
      sales without limitation as to volume or the manner of sale on a nationally
      recognized exchange in the United States or on the Principal
      Market.

     

    11. Miscellaneous.

     

    (a) Governing
      Law.
      This
      Agreement shall be governed by, and construed and interpreted in accordance
      with, the laws of the State of New York, without giving effect to principles
      of
      conflicts of law or choice of law that would cause the laws of any other
      jurisdiction to apply.

     

    (b) Transfer
      of Registration Rights.
      Any
      Holder that is a partnership, corporation or limited liability company may
      transfer or assign its registration rights provided pursuant to this Agreement
      with respect to any Registrable Securities to any partner, shareholder, member
      or affiliate of such Holder; provided, however, that (ii) such Holder shall
      give
      the Company written notice prior to the time of such transfer or assignment
      stating the name and address of the transferee and identifying the Registrable
      Securities with respect to which the rights under this Agreement are being
      transferred and (ii) such transferee or assignee agrees in writing, the form
      and
      substance of which shall be reasonably satisfactory to the Company, to be bound
      as a Holder by the provisions of this Agreement, following which any such
      transferee or assignee shall be deemed a “Holder” pursuant to this
      Agreement.

     

    (c) Amendment
      and Waiver.
      Any
      provision of this Agreement may be amended and the observance thereof may be
      waived (either generally or in a particular instance and either retroactively
      or
      prospectively), only upon the written consent of both the Company and the
      Holders of not less than two-thirds of the then outstanding Registrable
      Securities.

     

    (d) Entire
      Agreement.
      This
      Agreement and the Merger Agreement constitute the entire agreement between
      the
      parties relative to the specific subject matter hereof. Any previous agreement
      among the parties relative to the specific subject matter hereof is superseded
      by this Agreement.

     

    (e) Third
      Party Beneficiaries.
      There
      shall be no third party beneficiaries or intended beneficiaries of this
      Agreements.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (f) Notices.
      All
      notices required or permitted hereunder shall be in writing and shall be deemed
      effectively given in accordance with the Merger Agreement.

     

    (g) Severability.
      In the
      event one or more of the provisions of this Agreement should, for any reason,
      be
      held to be invalid, illegal or unenforceable in any respect, such invalidity,
      illegality, or unenforceability shall not affect any other provisions of this
      Agreement, and this Agreement shall be construed as if such invalid, illegal
      or
      unenforceable provision had never been contained herein.

     

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

     

    (i) Successors
      and Assigns.
      The
      provisions hereof shall inure to the benefit of, and be binding upon, the
      successors and assigns of the parties hereto.

     

    (j) Independent
      Nature of Holders’ Obligations and Rights.
      The
      obligations of each Holder hereunder are several and not joint with the
      obligations of any other Holder hereunder, and no Holder shall be responsible
      in
      any way for the performance of the obligations of any other Holder hereunder.
      Nothing contained herein or in any other agreement or document delivered at
      any
      closing, and no action taken by any Holder pursuant hereto or thereto, shall
      be
      deemed to constitute the Holders as a partnership, an association, a joint
      venture or any other kind of entity, or create a presumption that the Holders
      are in any way acting in concert with respect to such obligations or the
      transactions contemplated by this Agreement. Each Holder shall be entitled
      to
      protect and enforce its rights, including without limitation the rights arising
      out of this Agreement, and it shall not be necessary for any other Holder to
      be
      joined as an additional party in any proceeding for such purpose. 

     

    (k) Remedies.
      In the
      event of a breach by the Company or by a Holder, of any of their respective
      obligations under this Agreement, each Holder or the Company, as the case may
      be, in addition to being entitled to exercise all rights granted by law and
      under this Agreement, including recovery of damages, will be entitled to
      specific performance of its rights under this Agreement.

     

    (l) Titles
      and Subtitles. The
      titles of the sections and subsections of this Agreement are for convenience
      of
      reference only and are not to be considered in construing this
      Agreement.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Registration Rights Agreement as of the date
      and year first set forth above.

     

    
      	 	 	 
	 	
              COMPANY:

               

              
                HEALTHCARE
                  ACQUISITION CORP.

              

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	 	
              
Name:
              Matthew P. Kinley 
              Title:
                President 

            
	 	 	
               

               

            
	 	
              INVESTORS:

               

              
                [INSERT
                  SIGNATURE BLOCK OF INVESTORS]

              

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    
 

    ANNEX
      A

     

    Plan
      of Distribution

     

    The
      shares covered by this prospectus may be offered and sold from time to time
      by
      the selling stockholders. The term “selling stockholder” includes pledgees,
      donees, transferees or other successors in interest selling shares received
      after the date of this prospectus from each selling stockholder as a pledge,
      gift, partnership distribution or other non-sale related transfer. The number
      of
      shares beneficially owned by a selling stockholder will decrease as and when
      it
      effects any such transfers. The plan of distribution for the selling
      stockholders’ shares sold hereunder will otherwise remain unchanged, except that
      the transferees, pledgees, donees or other successors will be selling
      stockholders hereunder. To the extent required, we may amend and supplement
      this
      prospectus from time to time to describe a specific plan of
      distribution.

     

    The
      selling stockholders will act independently of us in making decisions with
      respect to the timing, manner and size of each sale. The selling stockholders
      may make these sales at prices and under terms then prevailing or at prices
      related to the then current market price. The selling stockholders may also
      make
      sales in negotiated transactions. The selling stockholders may offer their
      shares from time to time pursuant to one or more of the following
      methods:

    

      
        	
                  

              	
                ·

              	
                 

              	
                ordinary
                  brokerage transactions and transactions in which the broker-dealer
                  solicits purchasers; 

              
	 	 	 	 
	
                 

              	
                ·

              	
                 

              	
                one
                  or more block trades in which the broker-dealer will attempt to
                  sell the
                  shares as agent but may position and resell a portion of the block
                  as
                  principal to facilitate the transaction; 

              
	 	 	 	 
	
                 

              	
                ·

              	
                 

              	
                purchases
                  by a broker-dealer as principal and resale by the broker-dealer
                  for its
                  account; 

              
	 	 	 	 
	
                  

              	
                ·

              	
                 

              	
                an
                  exchange distribution in accordance with the rules of the applicable
                  exchange; 

              
	 	 	 	 
	
                  

              	
                ·

              	
                 

              	
                public
                  or privately negotiated transactions; 

              
	 	 	 	 
	
                  

              	
                ·

              	
                 

              	
                on
                  the American Stock Exchange (or through the facilities of any national
                  securities exchange or U.S. inter-dealer quotation system of a
                  registered
                  national securities association, on which the shares are then listed,
                  admitted to unlisted trading privileges or included for quotation);
                  

              
	 	 	 	 
	
                  

              	
                ·

              	
                 

              	
                through
                  underwriters, brokers or dealers (who may act as agents or principals)
                  or
                  directly to one or more purchasers; 

              
	 	 	 	 
	
                  

              	
                ·

              	
                 

              	
                a
                  combination of any such methods of sale; and 

              
	 	 	 	 
	
                  

              	
                ·

              	
                 

              	
                any
                  other method permitted pursuant to applicable law.
                  

              

      

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    In
      connection with distributions of the shares or otherwise, the selling
      stockholders may: 

    

      
        	
                  

              	
                ·

              	
                 

              	
                enter
                  into hedging transactions with broker-dealers or other financial
                  institutions, which may in turn engage in short sales of the shares
                  in the
                  course of hedging the positions they assume; 

              
	 	 	 	 
	
                  

              	
                ·

              	
                 

              	
                sell
                  the shares short and redeliver the shares to close out such short
                  positions; 

              
	 	 	 	 
	
                  

              	
                ·

              	
                 

              	
                enter
                  into option or other transactions with broker-dealers or other
                  financial
                  institutions which require the delivery to them of shares offered
                  by this
                  prospectus, which they may in turn resell; and 

              
	 	 	 	 
	
                  

              	
                ·

              	
                 

              	
                pledge
                  shares to a broker-dealer or other financial institution, which,
                  upon a
                  default, they may in turn resell.

              

      

    

     

    In
      addition to the foregoing methods, the selling stockholders may offer their
      shares from time to time in transactions involving principals or brokers not
      otherwise contemplated above, in a combination of such methods or described
      above or any other lawful methods. The selling stockholders may also transfer,
      donate or assign their shares to lenders, family members and others and each
      of
      such persons will be deemed to be a selling stockholder for purposes of this
      prospectus. The selling stockholders or their successors in interest may from
      time to time pledge or grant a security interest in some or all of the shares
      of
      common stock, and if the selling stockholders default in the performance of
      their secured obligations, the pledgees or secured parties may offer and sell
      the shares of common stock from to time under this prospectus; provided however
      in the event of a pledge or then default on a secured obligation by the selling
      stockholder, in order for the shares to be sold under this registration
      statement, unless permitted by law, we must distribute a prospectus supplement
      and/or amendment to this registration statement amending the list of selling
      stockholders to include the pledgee, secured party or other successors in
      interest of the selling stockholder under this prospectus. 

     

    The
      selling stockholders may also sell their shares pursuant to Rule 144 under
      the
      Securities Act, which permits limited resale of shares purchased in a private
      placement subject to the satisfaction of certain conditions, including, among
      other things, the availability of certain current public information concerning
      the issuer, the resale occurring following the required holding period under
      Rule 144 and the number of shares being sold during any three-month period
      not
      exceeding certain limitations. 

     

    Sales
      through brokers may be made by any method of trading authorized by any stock
      exchange or market on which the shares may be listed or quoted, including block
      trading in negotiated transactions. Without limiting the foregoing, such brokers
      may act as dealers by purchasing any or all of the shares covered by this
      prospectus, either as agents for others or as principals for their own accounts,
      and reselling such shares pursuant to this prospectus. The selling stockholders
      may effect such transactions directly, or indirectly through underwriters,
      broker-dealers or agents acting on their behalf. In effecting sales,
      broker-dealers or agents engaged by the selling stockholders may arrange for
      other broker-dealers to participate. Broker-dealers or agents may receive
      commissions, discounts or concessions from the selling stockholders, in amounts
      to be negotiated immediately prior to the sale (which compensation as to a
      particular broker-dealer might be in excess of customary commissions for routine
      market transactions). 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    In
      offering the shares covered by this prospectus, the selling stockholders, and
      any broker-dealers and any other participating broker-dealers who execute sales
      for the selling stockholders, may be deemed to be “underwriters” within the
      meaning of the Securities Act in connection with these sales. Any profits
      realized by the selling stockholders and the compensation of such broker-dealers
      may be deemed to be underwriting discounts and commissions. 

     

    The
      Company is required to pay all fees and expenses incident to the registration
      of
      the shares. 

     

    The
      Company has agreed to indemnify the selling stockholders against certain losses,
      claims, damages and liabilities, including liabilities under the Securities
      Act.

     

    
      
        
        

      

      
        16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]