Document:

THIS
      SENIOR SECURED PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY
      AND NOT FOR DISTRIBUTION AND MAY BE TRANSFERRED OR OTHERWISE DISPOSED OF ONLY
      IN
      COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND
      APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY
      PROMISSORY NOTE ISSUED IN EXCHANGE FOR THIS SECURED PROMISSORY
      NOTE.

    

    THIS
      NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”). PURSUANT TO TREASURY
      REGULATION §1.1275-3(b)(1), VINCENT COLANGELO, A REPRESENTATIVE OF THE BORROWERS
      HEREOF WILL, BEGINNING TEN (10) DAYS AFTER THE ISSUE DATE OF THIS NOTE, PROMPTLY
      MAKE AVAILABLE TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY
      REGULATION §1.1275-3(b)(1)(i). VINCENT COLANGELO MAY BE REACHED AT TELEPHONE
      NUMBER (954) 389-8300.

    

    SENIOR
      SECURED PROMISSORY NOTE

     

    
      	
              Original
                Issuance Date:  November
                14, 2008

            	
              Original
                Principal Amount:    $10,300,000

            

    

     

    FOR
      VALUE
      RECEIVED, upon the terms and subject to the conditions set forth in this senior
      secured promissory note (this “Note”), MDWERKS, INC., a Delaware corporation
      with its principal place of business at 1020 NW 6th Street, Suite I, Deerfield
      Beach, FL 33442, and XENI FINANCIAL SERVICES, CORP., a Florida corporation
      with
      its principal place of business at 1020 NW 6th Street, Suite I, Deerfield Beach,
      FL 33442 (each a “Borrower” and collectively the “Borrowers”), jointly and
      severally, absolutely and unconditionally promise to pay to the order of DEBT
      OPPORTUNITY FUND, LLLP or registered assigns (the “Payee” or “Holder”), when
      due, whether upon the Maturity Date (as defined below), acceleration or
      otherwise (in each case in accordance with the terms hereof), the amount set
      out
      above as the Original Principal Amount or so much thereof as may from time
      to
      time be advanced hereunder (without deduction for the original issue discount
      taken by the Holder pursuant to Article I of the Loan and Securities Purchase
      Agreement of even date herewith between the Borrowers and the Holder (the “Loan
      Agreement”), each an “Advance” and collectively the “Advances”) and accrued
      interest thereon as hereinafter provided. All Advances made to the Borrowers
      shall be recorded by the holder hereof on Schedule
      A
      attached
      to this Note, which schedule is incorporated herein by reference and made a
      part
      hereof. This Note is issued in connection with the Loan Agreement, all terms
      of
      which are incorporated herein by this reference and hereby made a part of this
      Note. Capitalized terms not defined herein shall have the meanings ascribed
      to
      them in the Loan Agreement. 

    

    ARTICLE
      I

    PAYMENT
      OF PRINCIPAL AND INTEREST; METHOD OF PAYMENT; MATURITY
      DATE

     

    1.1 Payment
      of Principal.
      Commencing on June 1, 2009, the Borrowers shall pay to the Holder monthly
      payments of principal in the amount of One Hundred Fifty Thousand Dollars
      ($150,000). All oustanding principal, interest and fees and charges of any
      kind
      under the Note shall become due and payable on November 14, 2010 (the “Maturity
      Date”). Payment of the principal of this Note (and any interest accrued thereon)
      shall be made in U.S. dollars in immediately available funds.

     

    1.2 Payment
      of Interest.
      Interest on the principal under this Note shall accrue at the rate of thirteen
      percent (13%) per annum (the “Stated Interest Rate”) commencing on the date that
      the Funded Amount, or any portion thereof, is released to the Borrowers under
      that certain Escrow Agreement dated November 14, 2008 (the “Escrow Agreement”)
      by and among the Borrowers, the Lender and Escrow Agent (as defined in the
      Escrow Agreement), except that interest shall begin accruing with respect to
      any
      amounts advanced to the Borrowers outside the Escrow Agreement upon the
      Borrowers’ actual receipt thereof (inclusive of the Cash Payment), and shall be
      computed on the basis of a 360-day year comprised of twelve (12) thirty (30)
      day
      months and shall be payable monthly in cash on the first (1st) day of each
      month, in arrears, commencing December 1, 2008. Interest shall be paid in U.S.
      dollars in immediately available funds.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    1.3 Payment
      on Non-Business Days.
      If the
      outstanding principal or accrued but unpaid interest under this Note becomes
      due
      and payable on a Saturday, Sunday or public holiday under the laws of the State
      of New York, the due date hereof shall be extended to the next succeeding full
      business day and interest shall be payable at the rate of thirteen (13%) percent
      per annum during such extension. All payments received by the Holder shall
      be
      applied first to the payment of all accrued interest payable
      hereunder.

     

    1.4 Late
      Fee.
      In the
      event any payment of principal or interest or both shall remain unpaid for
      a
      period of ten (10) days or more after the due date thereof, a one-time late
      charge equivalent to five percent (5%) of each unpaid amount shall be
      charged.

     

    1.5  Adjustment
      of Stated Interest Rate.

     

    (a) After
      an
      Event of Default and acceleration of the Maturity Date by the Holder the Stated
      Interest Rate shall be adjusted to a rate of eighteen percent (18%) per annum,
      subject to the limitations of applicable law.

     

    (b) Regardless
      of any other provision of this Note or other Transaction Document (as defined
      in
      the Loan Agreement), if for any reason the interest paid should exceed the
      maximum lawful interest, the interest paid shall be deemed reduced to, and
      shall
      be, such maximum lawful interest, and (i) the amount which would be excessive
      interest shall be deemed applied to the reduction of the principal balance
      of
      this Note and not to the payment of interest, and (ii) if the loan evidenced
      by
      this Note has been or is thereby paid in full, the excess shall be returned
      to
      the party paying same, such application to the principal balance of this Note
      or
      the refunding of excess to be a complete settlement and acquittance
      thereof.

     

    1.6 Prepayment.
      This
      Note may be prepaid at any time, without premium or penalty, in whole or in
      part, together with accrued interest to the date of such prepayment on the
      portion prepaid. All prepayments made shall be recorded by the holder hereof
      on
Schedule
      A
      attached
      hereto.

     

    ARTICLE
      II

    SECURITY
      AND SENIORITY

     

    2.1 Security
      Interests.
      All of
      the obligations of the Borrowers under the Note and Loan Agreement are secured
      by (a) an unconditional guaranty executed by each of the Subsidiaries (as
      defined in the Loan Agreement) pursuant to those certain Guaranty Agreements
      (as
      defined in the Loan Agreement), (b) a lien on all the assets, tangible and
      intangible, of the Borrowers now existing or hereinafter acquired granted
      pursuant to the Security Agreement and Collateral Assignment (as such terms
      are
      defined in the Loan Agreement), and (c) the other Transaction
      Documents.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      III

    MISCELLANEOUS

     

    3.1  Default.
      Upon
      the occurrence of any one or more of the Events of Default specified or referred
      to in the Loan Agreement all amounts then remaining unpaid on this Note may
      be
      declared to be immediately due and payable as provided in the Loan
      Agreement.

     

    3.2 Collection
      Costs.
      Should
      all or any part of the indebtedness represented by this Note be collected by
      action at law, or in bankruptcy, insolvency, receivership or other court
      proceedings, or should this Note be placed in the hands of attorneys for
      collection after default, the Borrowers, jointly and severally, hereby promise
      to pay to the Holder, upon demand by the Holder at any time, in addition to
      the
      outstanding principal and all (if any) other amounts payable on or in respect
      of
      this Note, all court costs and reasonable attorneys' fees and other reasonable,
      third-party collection charges and expenses incurred or sustained by the
      Holder.

     

    3.3 Rights
      Cumulative.
      The
      rights, powers and remedies given to the Payee under this Note shall be in
      addition to all rights, powers and remedies given to it by virtue of the Loan
      Agreement, any document or instrument executed in connection therewith, or
      any
      statute or rule of law.

     

    3.4 No
      Waivers.
      Any
      forbearance, failure or delay by the Payee in exercising any right, power or
      remedy under this Note, the Loan Agreement, any documents or instruments
      executed in connection therewith or otherwise available to the Payee shall
      not
      be deemed to be a waiver of such right, power or remedy, nor shall any single
      or
      partial exercise of any right, power or remedy preclude the further exercise
      thereof.

     

    3.5 Amendments
      in Writing.
      No
      modification or waiver of any provision of this Note, the Loan Agreement or
      any
      documents or instruments executed in connection therewith shall be effective
      unless it shall be in writing and signed by all parties, and any such
      modification or waiver shall apply only in the specific instance for which
      given.

     

    3.6 Governing
      Law.
      This
      Note and the rights and obligations of the parties hereto, shall be governed,
      construed and interpreted according to the laws of the State of New York,
      wherein it was negotiated and executed. IN ANY LAWSUIT IN CONNECTION WITH THIS
      NOTE, THE HOLDER AND THE UNDERSIGNED CONSENT AND AGREE THAT THE STATE AND
      FEDERAL COURTS WHICH SIT IN THE STATE OF NEW YORK, COUNTY OF NEW YORK SHALL
      HAVE
      EXCLUSIVE JURISDICTION OF ALL CONTROVERSIES AND DISPUTES ARISING HEREUNDER.
      THE
      HOLDER AND EACH OF THE BORROWERS WAIVES THE RIGHT IN ANY LITIGATION ARISING
      HEREUNDER (WHETHER OR NOT ARISING OUT OF OR RELATING TO THIS NOTE) TO TRIAL
      BY
      JURY.

     

    3.7 Successors.
      The
      term “Payee” and “Holder” as used herein shall be deemed to include the Payee
      and its successors, endorsees and assigns. 

     

    3.8 Notices.
      All
      notices, demands or other communications given hereunder shall be in given
      in
      accordance with Section 12.6 of the Loan Agreement. 

     

    3.9 Certain
      Waivers.
      Except
      as otherwise specifically provided herein, the Borrowers and all others that
      may
      become liable for all or any part of the obligations evidenced by this Note,
      hereby waive presentment, demand, notice of nonpayment, protest and all other
      demands’ and notices in connection with the delivery, acceptance, performance
      and enforcement of this Note, and do hereby consent to any number of renewals
      of
      extensions of the time or payment hereof and agree that any such renewals or
      extensions may be made without notice to any such persons and without affecting
      their liability herein and do further consent to the release of any person
      liable hereon, all without affecting the liability of the other persons, firms
      or the Borrowers liable for the payment of this Note.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    3.10 Mutilated,
      Lost, Stolen or Destroyed Notes.
      In case
      this Note shall be mutilated, lost, stolen or destroyed, upon the written
      request of Holder, the Borrowers shall issue and deliver in exchange and
      substitution for and upon cancellation of the mutilated Note, or in lieu of
      and
      substitution for the Note, mutilated, lost, stolen or destroyed, a new Note
      of
      like tenor and representing an equivalent right or interest, but only upon
      receipt of evidence satisfactory to the Borrowers of such loss, theft or
      destruction and an indemnity also satisfactory to it.

     

    3.11  Transfer
      and Assignment.
      The
      Holder may transfer or assign this Note, including, without limitation, pursuant
      to the sale of participation rights in the Loan, without the consent of the
      Borrowers. The Borrowers may not transfer or assign this Note or their
      obligations hereunder without the consent of the Holder.

     

    3.12 Issue
      Taxes.
      The
      Borrowers shall pay any and all issue and other taxes, excluding federal, state
      or local income taxes, that may be payable in respect of any issue or delivery
      of this Note pursuant thereto.

     

    [Signature
      Page Follows]

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, each of MDWERKS, INC. and XENI FINANCIAL SERVICES, CORP. has
      caused this Note to be executed by its authorized officer and to be dated as
      of
      the Original Issuance Date above.

     

    
      	
                

            	
              MDWERKS,
                INC. 

            
	 	 
	
               

            	
              By:  

            	
               /s/
                Howard B. Katz

            
	
               

            	
               

            	
              Name:  

            	
              Howard
                B. Katz

            
	
               

            	
               

            	
              Title:  

            	
              Chief
                Executive Officer

            

    

    

    
      	
               

            	
              XENI
                FINANCIAL SERVICES, CORP. 

            
	 	 
	
               

            	
              By:  

            	
               /s/
                Howard B. Katz

            
	
               

            	
               

            	
              Name:  

            	
              Howard
                B. Katz

            
	
               

            	
               

            	
              Title:  

            	
              Chief
                Executive Officer

            

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      A

    

    This
      is
      the schedule referred to in that certain Senior Secured Promissory Note dated
      November 14, 2008, executed by MDWERKS, INC., and XENI FINANCIAL SERVICES,
      CORP.
      and payable to the order of DEBT OPPORTUNITY FUND, LLLP or registered
      assigns.

    

    Advances

    

    
      	
               

              Date

            	 	
              Advance

              Amount

            	 	
              Total
                Unpaid Principal

              Balance

            	 	
              Notation

              Made
                By

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 

    

    

    The
      aggregate unpaid principal amount shown on this Schedule shall be rebuttable,
      presumptive evidence of the principal amount owing and unpaid on this Note.
      The
      failure to record the date and amount of any loan on this Schedule shall not,
      however, limit or otherwise affect the obligations of MDWERKS, INC. or XENI
      FINANCIAL SERVICES, CORP. to pay the principal of and interest on this
      Note.

    

    
      
        
        

      

      
        6NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS WARRANT NOR THE
      SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE HAVE BEEN REGISTERED UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
      SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
      OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A FORM REASONABLY
      ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
      OR
      (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
      ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
      WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
      BY THE SECURITIES.

     

    MDWERKS,
      INC.

     

    SERIES
      J WARRANT TO PURCHASE COMMON STOCK

     

    Warrant
      No.: W-J-1

     

    Number
      of
      Shares of Common Stock: 9,339,816 

     

    Date
      of
      Issuance: November 14, 2008 (“ISSUANCE DATE”)

     

    MDWERKS,
      INC.,
      a
      Delaware corporation (the “COMPANY”), hereby certifies that, for good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, DEBT OPPORTUNITY FUND, LLLP (the “LENDER”), the registered holder
      hereof or its permitted assigns (the “HOLDER”), is entitled, subject to the
      terms set forth below, to purchase from the Company, at the Exercise Price
      (as
      defined below) then in effect, upon surrender of this Warrant to Purchase Common
      Stock (including any warrants to purchase Common Stock issued in exchange,
      transfer or replacement hereof, the “WARRANT”), at any time or times on or after
      the date hereof, but not after 11:59 p.m., New York Time, on the Expiration
      Date
      (as defined below), Nine Million Three Hundred Thirty Nine Thousand Eight
      Hundred Sixteen (9,339,816) fully paid nonassessable shares of Common Stock
      (as
      defined below) (the “WARRANT SHARES”). Except as otherwise defined herein,
      capitalized terms in this Warrant shall have the meanings set forth in Section
      15 hereof or the Securities Purchase Agreement (as defined below). This Warrant
      is the Warrant to purchase Common Stock issued pursuant to the Loan and
      Securities Purchase Agreement dated November 14, 2008 (the “SUBSCRIPTION DATE”),
      between the Company, Xeni Financial Services, Corp., a Florida corporation,
      and
      the Lender (the “SECURITIES PURCHASE AGREEMENT”).

    

    1. EXERCISE
      OF WARRANT.

     

    (a) Mechanics
      of Exercise.
      Subject
      to the terms and conditions hereof (including, without limitation, the
      limitations set forth in Section 1(f)), this Warrant may be exercised by
      the Holder on any day on or after the date hereof, in whole or in part, by
      (i) delivery of a written notice, in the form attached hereto as
Exhibit
      A
      (the
“EXERCISE NOTICE”), of the Holder’s election to exercise this Warrant and
      (ii) (A) payment to the Company of an amount equal to the applicable
      Exercise Price multiplied by the number of Warrant Shares as to which this
      Warrant is being exercised (the “AGGREGATE EXERCISE PRICE”) in cash or by wire
      transfer of immediately available funds or (B) by notifying the Company
      that this Warrant is being exercised pursuant to a Cashless Exercise (as defined
      in Section 1(d)). The Holder shall not be required to deliver the original
      Warrant in order to affect an exercise hereunder. Execution and delivery of
      the
      Exercise Notice with respect to less than all of the Warrant Shares shall have
      the same effect as cancellation of the original Warrant and issuance of a new
      Warrant evidencing the right to purchase the remaining number of Warrant Shares.
      On or before the first (1st) Business Day following the date on which the
      Company has received each of the Exercise Notice and the Aggregate Exercise
      Price (or notice of a Cashless Exercise) (the “EXERCISE DELIVERY DOCUMENTS”),
      the Company shall transmit by facsimile an acknowledgment of confirmation of
      receipt of the Exercise Delivery Documents to the Holder and the Company’s
      transfer agent (the “TRANSFER AGENT”). On or before the third (3rd) Business Day
      following the date on which the Company has received all of the Exercise
      Delivery Documents (the “SHARE DELIVERY DATE”), the Company shall
      (X) provided that the Transfer Agent is participating in The Depository
      Trust Company (“DTC”) Fast Automated Securities Transfer Program, credit such
      aggregate number of shares of Common Stock to which the Holder is entitled
      pursuant to such exercise to the Holder’s or its designee’s balance account with
      DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the
      Transfer Agent is not participating in the DTC Fast Automated Securities
      Transfer Program, issue and dispatch by overnight courier to the address as
      specified in the Exercise Notice, a certificate, registered in the Company’s
      share register in the name of the Holder or its designee, for the number of
      shares of Common Stock to which the Holder is entitled pursuant to such
      exercise. Upon delivery of the Exercise Delivery Documents, the Holder shall
      be
      deemed for all corporate purposes to have become the holder of record of the
      Warrant Shares with respect to which this Warrant has been exercised,
      irrespective of the date such Warrant Shares are credited to the Holder’s DTC
      account or the date of delivery of the certificates evidencing such Warrant
      Shares as the case may be. If this Warrant is submitted in connection with
      any
      exercise pursuant to this Section 1(a) and the number of Warrant Shares
      represented by this Warrant submitted for exercise is greater than the number
      of
      Warrant Shares being acquired upon an exercise, then the Company shall as soon
      as practicable and in no event later than three (3) Business Days after any
      exercise and at its own expense, issue, a new Warrant (in accordance with
      Section 7(d)) representing the right to purchase the number of Warrant
      Shares purchasable immediately prior to such exercise under this Warrant, less
      the number of Warrant Shares with respect to which this Warrant is exercised.
      No
      fractional shares of Common Stock are to be issued upon the exercise of this
      Warrant, but rather the number of shares of Common Stock to be issued shall
      be
      rounded up to the nearest whole number. The Company shall pay stamp and similar
      taxes which may be payable with respect to the issuance and delivery of Warrant
      Shares upon exercise of this Warrant. The Company shall not be required,
      however, to pay any transfer tax or similar charge imposed in connection with
      the issuance and delivery of Warrant shares in any name other than that of
      the
      Holder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) Exercise
      Price.
      For
      purposes of this Warrant, “EXERCISE PRICE” means $1.00 subject to adjustment as
      provided herein.

     

    (c) Company’s
      Failure to Timely Deliver Securities.

     

    (i) The
      Company understands that a delay in the delivery of the shares of Common Stock
      upon exercise of this Warrant beyond the Share Delivery Date could result in
      economic loss to the Holder. If the Company fails to deliver to the Holder
      such
      shares via DWAC or a certificate or certificates pursuant to this Section by
      the
      Share Delivery Date, the Company shall pay to the Holder, in cash, as partial
      liquidated damages and not as a penalty, for each $500 of Warrant Shares (based
      on the closing price of the Common Stock reported by the principal Trading
      Market on the date such securities are submitted to the Company’s transfer
      agent), $10 per Trading Day (increasing to $15 per Trading Day five (5) Trading
      Days after such damages have begun to accrue and increasing to $20 per Trading
      Day ten (10) Trading Days after such damages have begun to accrue) for each
      Trading Day after the Share Delivery Date until such Common Stock certificate
      is
      delivered. Nothing herein shall limit a Holder’s right to pursue actual damages
      for the Company’s failure to deliver certificates, and the Holder shall have the
      right to pursue all remedies available to it at law or in equity including,
      without limitation, a decree of specific performance and/or injunctive relief.
      Notwithstanding anything to the contrary contained herein, the Holder shall
      be
      entitled to withdraw an Exercise Notice, and upon such withdrawal the Company
      shall only be obligated to pay the liquidated damages accrued in accordance
      with
      this Section through the date the Exercise Notice is withdrawn. Notwithstanding
      the foregoing, the Holder shall not be entitled to the damages set forth herein
      for the delay in the delivery of the shares of Common Stock upon exercise of
      this Warrant, if such delay is due to causes which are beyond the reasonable
      control of the Company, including, but not limited to, acts of God, acts of
      civil or military authority, fire, flood, earthquake, hurricane, riot, war,
      terrorism, sabotage and/or governmental action, provided that the Company:
      (i)
      gives the Holder prompt notice of each such cause; and (ii) uses reasonable
      efforts to correct such failure or delay in its performance.

     

    
      
         

      

      
        -
          2 -

        
          

        

      

      
         

      

    

     

    (ii) In
      addition to any other rights available to the Holder, if the Company fails
      to
      cause its transfer agent to transmit to the Holder a certificate or certificates
      representing the shares of Common Stock issuable upon exercise of the Warrant
      on
      or before the Share Delivery Date, and if after such date the Holder is required
      by its broker to purchase (in an open market transaction or otherwise) shares
      of
      Common Stock to deliver in satisfaction of a sale by the Holder of the shares
      of
      Common Stock issuable upon exercise of the Warrant which the Holder anticipated
      receiving upon such exercise (a “BUY-IN”), then the Company shall (1) pay in
      cash to the Holder the amount by which (x) the Holder’s total purchase price
      (including brokerage commissions, if any) for the shares of Common Stock so
      purchased exceeds (y) the amount obtained by multiplying (A) the number of
      shares of Common Stock issuable upon exercise of the Warrant that the Company
      was required to deliver to the Holder in connection with the conversion at
      issue
      times (B) the price at which the sell order giving rise to such purchase
      obligation was executed, and (2) at the option of the Holder, either reinstate
      the portion of the Warrant and equivalent number of shares of Common Stock
      for
      which such conversion was not honored or deliver to the Holder the number of
      shares of Common Stock that would have been issued had the Company timely
      complied with its conversion and delivery obligations hereunder. For example,
      if
      the Holder purchases Common Stock having a total purchase price of $11,000
      to
      cover a Buy-In with respect to an attempted conversion of shares of Common
      Stock
      with an aggregate sale price giving rise to such purchase obligation of $10,000,
      under clause (1) of the immediately preceding sentence the Company shall be
      required to pay the Holder $1,000. The Holder shall provide the Company written
      notice indicating the amounts payable to the Holder in respect of the Buy-In,
      together with applicable confirmations and other evidence reasonably requested
      by the Company. Nothing herein shall limit a Holder’s right to pursue any other
      remedies available to it hereunder, at law or in equity including, without
      limitation, a decree of specific performance and/or injunctive relief with
      respect to the Company’s failure to timely deliver certificates representing
      shares of Common Stock upon exercise of the Warrant as required pursuant to
      the
      terms hereof.

     

    (d) Cashless
      Exercise.
      Notwithstanding anything contained herein to the contrary, commencing on May
      14,
      2009, if, at the time of exercise of this Warrant, a Registration Statement
      (as
      defined in the Registration Rights Agreement) covering the Warrant Shares that
      are the subject of the Exercise Notice (the “UNAVAILABLE WARRANT SHARES”) is not
      available for the resale of such Unavailable Warrant Shares, the Holder may,
      in
      its sole discretion, exercise this Warrant in whole or in part and, in lieu
      of
      making the cash payment otherwise contemplated to be made to the Company upon
      such exercise in payment of the Aggregate Exercise Price, elect instead to
      receive upon such exercise the “Net Number” of shares of Common Stock determined
      according to the following formula (a “CASHLESS EXERCISE”):

     

    
      	
              Net Number =

            	
              (A
                x B) - (A x C)

            
	
               

            	
              B

            

    

     

    
      
         

      

      
        -
          3-

        
          

        

      

      
         

      

    

     

    For purposes of
      the foregoing formula:

    

    
      	
               

            	
              A

            	
              =

            	
              the
                total number of shares with respect to which this Warrant is then
                being
                exercised.

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
              B

            	
              =

            	
              the
                Closing Sale Price of the shares of Common Stock (as reported by
                Bloomberg) on the date immediately preceding the date of the Exercise
                Notice.

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
              C

            	
              =

            	
              the
                Exercise Price then in effect for the applicable Warrant Shares at
                the
                time of such exercise.

            

    

     

    (e) Disputes.
      In the
      case of a dispute as to the determination of the Exercise Price or the
      arithmetic calculation of the Warrant Shares, the Company shall promptly issue
      to the Holder the number of Warrant Shares that are not disputed and resolve
      such dispute in accordance with Section 12.

     

    (f) Limitations
      on Exercises.

     

    (i) Notwithstanding
      anything to the contrary set forth in this Warrant, at no time may a Holder
      of
      this Warrant exercise this Warrant to the extent that after giving effect to
      such exercise, the Holder (together with the Holder’s affiliates) would
      beneficially own (as determined in accordance with Section 13(d) of the
      Securities Exchange Act of 1934, as amended, and the rules thereunder) in excess
      of 4.99% of the number of shares of Common Stock outstanding immediately after
      giving effect to such exercise; provided, however, that upon a Holder of this
      Warrant providing the Company with sixty-one (61) days notice (the “WAIVER
      NOTICE”) that such Holder would like to waive this Section with regard to any or
      all shares of Common Stock issuable upon exercise of this Warrant, this Section
      will be of no force or effect with regard to all or a portion of the Warrant
      referenced in the Waiver Notice.

     

    (ii) Notwithstanding
      anything to the contrary set forth in this Warrant, at no time may a Holder
      of
      this Warrant exercise this Warrant to the extent that after giving effect to
      such exercise, the Holder (together with the Holder’s affiliates) would
      beneficially own (as determined in accordance with Section 13(d) of the
      Securities Exchange Act of 1934, as amended, and the rules thereunder) in excess
      of 9.99% of the number of shares of Common Stock outstanding immediately after
      giving effect to such exercise; provided, however, that upon a Holder of this
      Warrant providing the Company with a Waiver Notice that such Holder would like
      to waive this Section with regard to any or all shares of Common Stock issuable
      upon exercise of the Warrant, this Section shall be of no force or effect with
      regard to all or a portion of the Warrant referenced in the Waiver
      Notice.

     

    (iii) Notwithstanding
      anything to the contrary set forth in this Warrant, at no time may a Holder
      of
      this Warrant exercise this Warrant to the extent that the issuance of shares
      of
      Common Stock upon such exercise would exceed the aggregate number of shares
      of
      Common Stock which the Company may issue upon exercise of this Warrant without
      breaching the Company’s obligations under the rules or regulation of the
      principal exchange upon which shares of the Company’s Common Stock are traded.
      In such an event, the Company covenants to promptly as possible seek to obtain
      the necessary shareholder or other approvals necessary to issue the shares
      of
      Common Stock upon the exercise of this Warrant.

     

    (g) Insufficient
      Authorized Shares.
      If at
      any time while any of the Warrants remain outstanding the Company does not
      have
      a sufficient number of authorized and unreserved shares of Common Stock (an
      “AUTHORIZED SHARE FAILURE”) to satisfy its obligation to reserve for issuance
      upon exercise of the Warrants at least a number of shares of Common Stock equal
      to 100% of the number of shares of Common Stock as shall from time to time
      be
      necessary to effect the exercise of all of the Warrants then outstanding (the
      “REQUIRED RESERVE AMOUNT”), then the Company shall immediately 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 Warrants 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 ninety (90) 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
      reasonable best 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.

     

    
      
         

      

      
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          4-

        
          

        

      

      
         

      

    

     

    (h) Redemption.
      Except
      as otherwise explicitly provided for herein, this Warrant is not redeemable
      or
      callable by the Company at any time.

     

    2. ADJUSTMENT
      OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.

     

    The
      Exercise Price and the number of Warrant Shares shall be adjusted from time
      to
      time as follows:

     

    (a) Adjustment
      upon Issuance of shares of Common Stock.
      If and
      whenever on or after the Subscription Date the Company issues or sells, or
      in
      accordance with this Section 2 is deemed to have issued or sold, any shares
      of Common Stock (including the issuance or sale of shares of Common Stock owned
      or held by or for the account of the Company, but excluding shares of Common
      Stock which are Excluded Securities or are deemed to have been issued by the
      Company in connection with any Excluded Securities) for a consideration per
      share (the “NEW ISSUANCE PRICE”) less than a price (the “APPLICABLE PRICE”)
      equal to the Exercise Price in effect immediately prior to such issue or sale
      or
      deemed issuance or sale (the foregoing a “DILUTIVE ISSUANCE”), then immediately
      after such Dilutive Issuance, the Exercise Price then in effect shall be reduced
      to an amount equal to the New Issuance Price. Upon each such adjustment of
      the
      Exercise Price hereunder, the number of Warrant Shares shall be adjusted to
      the
      number of shares of Common Stock determined by multiplying the Exercise Price
      in
      effect immediately prior to such adjustment by the number of Warrant Shares
      acquirable upon exercise of this Warrant immediately prior to such adjustment
      and dividing the product thereof by the Exercise Price resulting from such
      adjustment. For purposes of determining the adjusted Exercise Price under this
      Section 2(a), the following shall be applicable:

     

    (i) Issuance
      of Options.
      If the
      Company in any manner grants any Options and the lowest price per share for
      which one share of Common Stock is issuable upon the exercise of any such Option
      or upon conversion, exercise or exchange of any Convertible Securities issuable
      upon exercise of any such Option is less than the Applicable Price, then such
      shares of Common Stock (underlying such Option shall be deemed to be outstanding
      and to have been issued and sold by the Company at the time of the granting
      or
      sale of such Option for such price per share. For purposes of this
      Section 2(a)(i), the “lowest price per share for which one share of Common
      Stock is issuable upon exercise of such Options or upon conversion, exercise
      or
      exchange of such Convertible Securities” shall be equal to the sum of the lowest
      amounts of consideration (if any) received or receivable by the Company with
      respect to any one share of Common Stock upon the granting or sale of the
      Option, upon exercise of the Option and upon conversion, exercise or exchange
      of
      any Convertible Security issuable upon exercise of such Option. No further
      adjustment of the Exercise Price or number of Warrant Shares shall be made
      upon
      the actual issuance of such shares of Common Stock or of such Convertible
      Securities upon the exercise of such Options or upon the actual issuance of
      such
      shares of Common Stock upon conversion, exercise or exchange of such Convertible
      Securities.

     

    
      
         

      

      
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          5-

        
          

        

      

      
         

      

    

     

    (ii) Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any Convertible Securities and the lowest
      price per share for which one share of Common Stock is issuable upon the
      conversion, exercise or exchange thereof is less than the Applicable Price,
      then
      such shares of Common Stock issuable upon conversion of such Convertible
      Securities shall be deemed to be outstanding and to have been issued and sold
      by
      the Company at the time of the issuance or sale of such Convertible Securities
      for such price per share. For the purposes of this Section 2(a)(ii), the
“lowest price per share for which one share of Common Stock is issuable upon
      the
      conversion, exercise or exchange” shall be equal to the sum of the lowest
      amounts of consideration (if any) received or receivable by the Company with
      respect to one share of Common Stock upon the issuance or sale of the
      Convertible Security and upon conversion, exercise or exchange of such
      Convertible Security. No further adjustment of the Exercise Price or number
      of
      Warrant Shares shall be made upon the actual issuance of such shares of Common
      Stock upon conversion, exercise or exchange of such Convertible Securities,
      and
      if any such issue or sale of such Convertible Securities is made upon exercise
      of any Options for which adjustment of this Warrant has been or is to be made
      pursuant to other provisions of this Section 2(a), no further adjustment of
      the Exercise Price or number of Warrant Shares shall be made by reason of such
      issue or sale. A change that permits the holder of an Option or Convertible
      Security to utilize a cashless exercise feature shall not be deemed to decrease
      the consideration payable by the holder solely by reason of the fact that the
      cashless exercise feature would result in a reduction in cash consideration
      receivable by the Company.

     

    (iii) Change
      in Option Price or Rate of Conversion.
      If the
      purchase price provided for in any Options, the additional consideration, if
      any, payable upon the issue, conversion, exercise or exchange of any Convertible
      Securities, or the rate at which any Convertible Securities are convertible
      into
      or exercisable or exchangeable for shares of Common Stock increases or decreases
      at any time, the Exercise Price and the number of Warrant Shares in effect
      at
      the time of such increase or decrease shall be adjusted to the Exercise Price
      and the number of Warrant Shares which would have been in effect at such time
      had such Options or Convertible Securities provided for such increased or
      decreased purchase price, additional consideration or increased or decreased
      conversion rate, as the case may be, at the time initially granted, issued
      or
      sold. For purposes of this Section 2(a)(iii), if the terms of any Option or
      Convertible Security that was outstanding as of the date of issuance of this
      Warrant are increased or decreased in the manner described in the immediately
      preceding sentence, then such Option or Convertible Security and the shares
      of
      Common Stock deemed issuable upon exercise, conversion or exchange thereof
      shall
      be deemed to have been issued as of the date of such increase or decrease.
      No
      adjustment pursuant to this Section 2(a) shall be made if such adjustment
      would result in an increase of the Exercise Price then in effect or a decrease
      in the number of Warrant Shares. A change that permits the holder of an Option
      or Convertible Security to utilize a cashless exercise feature shall not be
      deemed to decrease the consideration payable by the holder solely by reason
      of
      the fact that the cashless exercise feature would result in a reduction in
      cash
      consideration receivable by the Company.

     

    (iv) Calculation
      of Consideration Received.
      If any
      Option is issued in connection with the issue or sale of other securities of
      the
      Company, together comprising one integrated transaction in which no specific
      consideration is allocated to such Options by the parties thereto, the Options
      will be deemed to have been issued for a consideration of $0.01. If any Common
      Stock, Options or Convertible Securities are issued or sold or deemed to have
      been issued or sold for cash, the consideration received therefor will be deemed
      to be the gross amount paid by the purchaser of such Common Stock, Options,
      or
      Convertible Securities, before any commissions, discounts, fees or expenses.
      If
      any Common Stock, Options or Convertible Securities are issued to the owners
      of
      the non-surviving entity in connection with any merger in which the Company
      is
      the surviving entity, the amount of consideration therefor will be deemed to
      be
      the fair value of such portion of the net assets and business of the
      non-surviving entity as is attributable to such Common Stock, Options or
      Convertible Securities, as the case may be. If any Common Stock, Options or
      Convertible Securities are issued or sold or deemed to have been issued or
      sold
      for non-cash consideration, the consideration received therefore will be deemed
      to be the fair value of such non-cash consideration as determined in good faith
      by the Board of Directors of the Company.

     

    
      
         

      

      
        -
          6-

        
          

        

      

      
         

      

    

     

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

     

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

     

    (c) Fundamental
      Transactions.
      If, at
      any time while this Warrant is outstanding there is a Fundamental Transaction,
      then the Holder shall have the right thereafter to receive, upon exercise of
      this Warrant, the same amount and kind of securities, cash or property as it
      would have been entitled to receive upon the occurrence of such Fundamental
      Transaction if it had been, immediately prior to such Fundamental Transaction,
      the holder of the number of shares of Common Stock then issuable upon exercise
      in full of this Warrant (the “ALTERNATE CONSIDERATION”). For purposes of any
      such conversion, the determination of the Exercise Price shall be appropriately
      adjusted to apply to such Alternate Consideration based on the amount of
      Alternate Consideration issuable in respect of one share of Common Stock in
      such
      Fundamental Transaction, and the Company shall apportion the Exercise Price
      among the Alternate Consideration in a reasonable manner reflecting the relative
      value of any different components of the Alternate Consideration. If holders
      of
      Common Stock are given any choice as to the securities, cash or property to
      be
      received in a Fundamental Transaction, then the Holder shall be given the same
      choice as to the Alternate Consideration it receives upon any exercise of
      Warrant following such Fundamental Transaction. The terms of any agreement
      pursuant to which a Fundamental Transaction is effected shall include terms
      requiring any such successor or surviving entity to comply with the provisions
      of this paragraph (c) and insuring that the Common Stock (or any such
      replacement security) will be similarly adjusted upon any subsequent transaction
      analogous to a Fundamental Transaction.

     

    (d) Other
      Events.
      If any
      event occurs of the type contemplated by the provisions of this Section 2
      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 in
      good faith will make an appropriate adjustment in the Conversion Price so as
      to
      be equitable under the circumstances and otherwise protect the rights of the
      Holder; provided that no such adjustment will increase the Exercise Price as
      otherwise determined pursuant to this Section 7.3.

     

    
      
         

      

      
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          7-

        
          

        

      

      
         

      

    

     

    3. RIGHTS
      UPON DISTRIBUTION OF ASSETS.

     

    If
      the
      Company shall declare or make any dividend or other distribution of its assets
      (or rights to acquire its assets) to holders of shares of Common Stock, by
      way
      of return of capital or otherwise (including, without limitation, any
      distribution of cash, stock or other securities, property or options by way
      of a
      dividend, spin off, reclassification, corporate rearrangement, scheme of
      arrangement or other similar transaction) (a “DISTRIBUTION”), at any time after
      the issuance of this Warrant, then, in each such case, the Exercise Price in
      effect immediately prior to the close of business on the record date fixed
      for
      the determination of holders of shares of Common Stock entitled to receive
      the
      Distribution shall be reduced, effective as of the close of business on such
      record date, to a price determined by multiplying such Exercise Price by a
      fraction of which (i) the numerator shall be the Exercise Price on such record
      date minus the value of the Distribution (as determined in good faith by the
      Company’s Board of Directors) applicable to one share of Common Stock, and (ii)
      the denominator shall be the Exercise Price on such record date.

     

    4. PURCHASE
      RIGHTS; FUNDAMENTAL TRANSACTIONS.

     

    (a) Purchase
      Rights.
      In
      addition to any adjustments pursuant to Section 2 above, if at any time the
      Company grants, issues or sells any Options, Convertible Securities or rights
      to
      purchase stock, warrants, securities or other property pro rata to the record
      holders of any class of shares of Common Stock (the “PURCHASE RIGHTS”), then the
      Holder 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 proportionate number of shares of Common Stock
      acquirable upon complete exercise of this Warrant (without regard to any
      limitations on the exercise of this Warrant) 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
      shares of Common Stock are to be determined for the grant, issue or sale of
      such
      Purchase Rights.

     

    (b) Redemption
      Right.
      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 via
      facsimile and overnight courier to the Holder (a “CHANGE IN CONTROL NOTICE”). At
      any time during the period beginning after the Holder’s receipt of a Change of
      Control Notice and ending ten (10) Trading Days after the consummation of such
      Change of Control, the Holder may require the Company to redeem all or any
      portion of this Warrant by delivering written notice thereof (“CHANGE IN CONTROL
      REDEMPTION NOTICE”) to the Company, which Change of Control Redemption Notice
      shall indicate the amount the Holder is electing to be redeemed. Any such
      redemption shall be in cash in the amount equal to the value of the remaining
      unexercised portion of this Warrant on the date of such consummation, which
      value shall be determined by use of the Black Scholes Option Pricing Model
      reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury
      rate
      for a period equal to the remaining term of this Warrant as of such date of
      request and (B) an expected volatility equal to the greater of 60% and the
      100
      day volatility obtained from the HVT function on Bloomberg.

     

    5. 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 Warrant, and will at
      all
      times in good faith carry out all the provisions of this Warrant and take all
      action as may be required to protect the rights of the Holder. Without limiting
      the generality of the foregoing, the Company (i) shall not increase the par
      value of any shares of Common Stock receivable upon the exercise of this Warrant
      above the Exercise Price then in effect, (ii) shall take all such actions as
      may
      be necessary or appropriate in order that the Company may validly and legally
      issue fully paid and nonassessable shares of Common Stock upon the exercise
      of
      this Warrant, and (iii) shall, so long as any of the Warrants are outstanding,
      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
      exercise of the Warrants, 100% of the number of shares of Common Stock as shall
      from time to time be necessary to effect the exercise of the Warrants then
      outstanding (without regard to any limitations on exercise).

     

    
      
         

      

      
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          8-

        
          

        

      

      
         

      

    

     

    6. WARRANT
      HOLDER NOT DEEMED A STOCKHOLDER.

     

    Except
      as
      otherwise specifically provided herein, the Holder, solely in such Person’s
      capacity as a holder of this Warrant, shall not be entitled to vote or receive
      dividends or be deemed the holder of share capital of the Company for any
      purpose, nor shall anything contained in this Warrant be construed to confer
      upon the Holder, solely in such Person’s capacity as the Holder of this Warrant,
      any of the rights of a stockholder of the Company or any right to vote, give
      or
      withhold consent to any corporate action (whether any reorganization, issue
      of
      stock, reclassification of stock, consolidation, merger, conveyance or
      otherwise), receive notice of meetings, receive dividends or subscription
      rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
      which such Person is then entitled to receive upon the due exercise of this
      Warrant. In addition, nothing contained in this Warrant shall be construed
      as
      imposing any liabilities on the Holder to purchase any securities (upon exercise
      of this Warrant or otherwise) or as a stockholder of the Company, whether such
      liabilities are asserted by the Company or by creditors of the Company.
      Notwithstanding this Section 6, the Company shall provide the Holder with
      copies of the same notices and other information given to the stockholders
      of
      the Company generally, contemporaneously with the giving thereof to the
      stockholders.

     

    7. REISSUANCE
      OF WARRANTS.

     

    (a) Transfer
      of Warrant.
      If this
      Warrant is to be transferred, the Holder shall surrender this Warrant to the
      Company, whereupon the Company will issue promptly following satisfaction of
      the
      transfer provisions contained in the Securities Purchase Agreement and deliver
      upon the order of the Holder a new Warrant (in accordance with
      Section 7(d)), in the name of the validly registered assignee or
      transferee, representing the right to purchase the number of Warrant Shares
      being transferred by the Holder and, if less then the total number of Warrant
      Shares then underlying this Warrant is being transferred, a new Warrant (in
      accordance with Section 7(d)) to the Holder representing the right to
      purchase the number of Warrant Shares not being transferred.

     

    (b) Lost,
      Stolen or Mutilated Warrant.
      Upon
      receipt by the Company of evidence reasonably satisfactory to the Company of
      the
      loss, theft, destruction or mutilation of this Warrant, 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 Warrant, the Company shall execute and deliver to the
      Holder a new Warrant (in accordance with Section 7(d)) representing the
      right to purchase the Warrant Shares then underlying this Warrant.

     

    (c) Exchangeable
      for Multiple Warrants.
      This
      Warrant is exchangeable, upon the surrender hereof by the Holder at the
      principal office of the Company, for a new Warrant or Warrants (in accordance
      with Section 7(d)) representing in the aggregate the right to purchase the
      number of Warrant Shares then underlying this Warrant, and each such new Warrant
      will represent the right to purchase such portion of such Warrant Shares as
      is
      designated by the Holder at the time of such surrender; provided, however,
      that
      no Warrants for fractional shares of Common Stock shall be given.

     

    
      
         

      

      
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    (d) Issuance
      of New Warrants.
      Whenever the Company is required to issue a new Warrant pursuant to the terms
      of
      this Warrant, such new Warrant (i) shall be of like tenor with this Warrant,
      (ii) shall represent, as indicated on the face of such new Warrant, the right
      to
      purchase the Warrant Shares then underlying this Warrant (or in the case of
      a
      new Warrant being issued pursuant to Section 7(a) or Section 7(c), the
      Warrant Shares designated by the Holder which, when added to the number of
      shares of Common Stock underlying the other new Warrants issued in connection
      with such issuance, does not exceed the number of Warrant Shares then underlying
      this Warrant), (iii) shall have an issuance date, as indicated on the face
      of
      such new Warrant which is the same as the Issuance Date, and (iv) shall have
      the
      same rights and conditions as this Warrant.

     

    8. NOTICES.

     

    Whenever
      notice is required to be given under this Warrant, unless otherwise provided
      herein, such notice shall be given in accordance with Section 12.6 of the
      Securities Purchase Agreement. The Company shall provide the Holder with prompt
      written notice of all actions taken pursuant to this Warrant, 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 (i) immediately upon any adjustment of the Exercise Price, setting
      forth in reasonable detail, and certifying, the calculation of such adjustment
      and (ii) at least fifteen (15) days prior to the date on which the Company
      closes its books or takes a record (A) with respect to any dividend or
      distribution upon the shares of Common Stock, (B) with respect to any grants,
      issuances or sales of any Options, Convertible Securities or rights to purchase
      stock, warrants, securities or other property to holders of shares of Common
      Stock or (C) for determining rights to vote with respect to any Fundamental
      Transaction, dissolution or liquidation, provided in each case that such
      information shall be made known to the public prior to or in conjunction with
      such notice being provided to the Holder.

    

    9. AMENDMENT
      AND WAIVER.

     

    Except
      as
      otherwise provided herein, the provisions of this Warrant may be amended and
      the
      Company may take any action herein prohibited, or omit to perform any act herein
      required to be performed by it, only if the Company has obtained the written
      consent of the Holder; provided that no such action may increase the exercise
      price of any Warrant or decrease the number of shares or class of stock
      obtainable upon exercise of any Warrant without the written consent of the
      Holder. No such amendment shall be effective to the extent that it applies
      to
      less than all of the holders of the Warrants then outstanding.

     

    10. GOVERNING
      LAW.

     

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

     

    11. CONSTRUCTION;
      HEADINGS.

     

    This
      Warrant shall be deemed to be jointly drafted by the Company and the Lender
      and
      shall not be construed against any person as the drafter hereof. The headings
      of
      this Warrant are for convenience of reference and shall not form part of, or
      affect the interpretation of, this Warrant.

     

    
      
         

      

      
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    12. DISPUTE
      RESOLUTION.

     

    In
      the
      case of a dispute as to the determination of the Exercise Price or the
      arithmetic calculation of the Warrant Shares, the Company shall submit the
      disputed determinations or arithmetic calculations via facsimile within two
      Business Days of receipt of the Exercise Notice 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 of the Exercise Price or the
      Warrant Shares within three Business Days of such disputed determination or
      arithmetic calculation being submitted to the Holder, then the Company shall,
      within two Business Days submit via facsimile (a) the disputed determination
      of
      the Exercise Price to an independent, reputable investment bank selected by
      the
      Company and approved by the Holder (such approval not to be unreasonably
      withheld or delayed) or (b) the disputed arithmetic calculation of the Warrant
      Shares to the Company’s independent, outside accountant. The Company shall cause
      at its expense the investment bank or the accountant, as the case may be, to
      perform the determinations or calculations and notify the Company and the Holder
      of the results no later than ten Business Days from the time it receives the
      disputed determinations or calculations. Such investment bank’s or accountant’s
      determination or calculation, as the case may be, shall be binding upon all
      parties absent demonstrable error.

     

    13. REMEDIES,
      OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.

     

    The
      remedies provided in this Warrant shall be cumulative and in addition to all
      other remedies available under this Warrant and 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 right of the Holder
      right
      to pursue actual damages for any failure by the Company to comply with the
      terms
      of this Warrant. 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 of this Warrant 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.

     

    14. TRANSFER.

     

    This
      Warrant may be offered for sale, sold, transferred or assigned without the
      consent of the Company, except as may otherwise be required by the Securities
      Purchase Agreement.

     

    15. CERTAIN
      DEFINITIONS.

     

    For
      purposes of this Warrant, the following terms shall have the following
      meanings:

     

    (a) “APPROVED
      STOCK PLAN” means any employee benefit plan which has been approved by the Board
      of Directors of the Company, pursuant to which the Company’s securities may be
      issued to any employee, consultant, officer or director for services provided
      to
      the Company.

     

    (b)  “BLOOMBERG”
      means Bloomberg Financial Markets.

     

    (c) “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.

     

    (d) “CHANGE
      OF CONTROL” means any Fundamental Transaction other than (i) any reorganization,
      recapitalization or reclassification of the Common Stock in which holders of
      the
      Company’s voting power immediately prior to such reorganization,
      recapitalization or reclassification continue after such reorganization,
      recapitalization or reclassification to hold publicly-traded securities and,
      directly or indirectly, the voting power of the surviving entity or entities
      necessary to elect a majority of the members of the board of directors (or
      their
      equivalent if other than a corporation) of such entity or entities, or (ii)
      pursuant to a migratory merger effected solely for the purpose of changing
      the
      jurisdiction of incorporation of the Company or (iii) any transaction that
      might
      otherwise be a Fundamental Transaction but which the Holder agrees in writing
      shall not be deemed to be a Fundamental Transaction for purposes of this
      Warrant.

     

    
      
         

      

      
        -
          11-

        
          

        

      

      
         

      

    

     

    (e) “CLOSING
      BID PRICE” and “CLOSING SALE PRICE” means, 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
      Quotation 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 12. All such determinations to be appropriately
      adjusted for any stock dividend, stock split, stock combination or other similar
      transaction during the applicable calculation period.

     

    (f) “COMMON
      STOCK” means (i) the Company’s shares of Common Stock, par value $0.001 per
      share, and (ii) any share capital into which such Common Stock shall have been
      changed or any share capital resulting from a reclassification of such Common
      Stock.

     

    (g) “CONVERTIBLE
      SECURITIES” means any stock or securities (other than Options) directly or
      indirectly convertible into or exercisable or exchangeable for shares of Common
      Stock.

     

    (h) “ELIGIBLE
      MARKET” means the Principal Market, The New York Stock Exchange, Inc., the
      Nasdaq National Market, the Nasdaq Capital Market or the American Stock
      Exchange.

     

    (i) “EXCLUDED
      SECURITIES” means (i) any Common Stock and/or Options (and the Common Stock
      issuable pursuant to such Options) issued or issuable: (A) in connection
      with any Approved Stock Plan up to a maximum of ten percent (10%) of the Common
      Stock outstanding at the time of issuance of such Common Stock and/or Options
      (provided that securities issued in connection with an Approved Stock Plan
      that
      are outstanding as of the Issuance Date and shares of Common Stock issuable
      pursuant to exercise or conversion of such outstanding securities shall not
      be
      included for purposes of calculating the maximum of ten percent (10%)) or
      (B) upon conversion or exercise of any Options or Convertible Securities
      which are outstanding on the Issuance Date; provided, such options or
      Convertible Securities are disclosed on Schedule 3.4(b) of the Securities
      Purchase Agreement or the Company’s filings with the Securities and Exchange
      Commission; provided further, that the terms of such Options or Convertible
      Securities are not amended, modified or changed on or after the Issuance Date
      to
      lower the conversion or exercise price thereof and so long as the number of
      shares of Common Stock underlying such securities is not otherwise increased;
      (ii) any shares of Common Stock issued in an underwritten public offering
      in which the gross cash proceeds to the Company (before underwriting discounts,
      commissions and fees) are at least $10,000,000; (iii) Options (and the
      Common Stock issuable pursuant thereto) issued to medical practices that are
      customers of the Company in good standing to acquire up to a maximum of 250,000
      shares of Common Stock per practice with an exercise or conversion price at
      or
      above the Closing Sale Price on the day of issuance; (iv) up to 250,000 shares
      of Common Stock (or options exercisable for up to 250,000 shares of Common
      Stock
      with an exercise price at or above the Closing Sale Price on the day of
      issuance) as consideration for strategic acquisitions up to a maximum of 250,000
      shares of Common Stock per acquisition; (v) up to 250,000 shares of Common
      Stock
      (or securities convertible into or exercisable for up to 250,000 shares of
      Common Stock with an exercise price at or above the Closing Sale Price on the
      day of issuance) per year to third parties in connection with investor relations
      and public relations efforts of the Company; (vi) up to 250,000 shares of Common
      Stock, options, or warrants to be issued to Rodman & Renshaw (or their
      designees) as consideration for securing a line of credit or similar financing
      for the Company or its subsidiaries; and (vii) up to 2,000,000 shares of Common
      Stock to be issued to Medical Solutions Management Inc. and or Orthosupply
      Management, Inc., their respective affiliates or designees in connection with
      the acquisition by the Corporation of that certain Management Agreement, dated
      April 30, 2007, by and between Orthosupply Management, Inc. and Deutsche Medical
      Services, Inc. (the “DMSI Contract Acquisition”).

     

    
      
         

      

      
        -
          12-

        
          

        

      

      
         

      

    

     

    (j) “EXPIRATION
      DATE” means the date one hundred twenty months after the Issuance Date or, if
      such date falls on a day other than a Business Day or on which trading does
      not
      take place on the Principal Market (a “HOLIDAY”), the next date that is not a
      Holiday.

     

    (k) “FUNDAMENTAL
      TRANSACTION” means that the Company shall, directly or indirectly, in one or
      more related transactions, (i) consolidate or merge with or into (whether or
      not
      the Company is the surviving corporation) another Person, or (ii) sell, assign,
      transfer, convey or otherwise dispose of all or substantially all of the
      properties or assets of the Company to another Person, or (iii) allow another
      Person to make a purchase, tender or exchange offer that is accepted by the
      holders of more than the 50% of either 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 (iv) 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 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), (v) reorganize, recapitalize or
      reclassify its Common Stock (other than a forward or reverse stock split),
      or
      (vi) any “person” or “group” (as these terms are used for purposes of Sections
      13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
      of
      50% of the aggregate ordinary voting power represented by issued and outstanding
      Common Stock.

     

    (l) “OPTIONS”
      means any rights, warrants or options to subscribe for or purchase shares of
      Common Stock or Convertible Securities.

     

    (m) “PARENT
      ENTITY” of a Person means an entity that, directly or indirectly, controls the
      applicable Person and whose common stock or equivalent equity security is quoted
      or listed on an Eligible Market, or, if there is more than one such Person
      or
      Parent Entity, the Person or Parent Entity with the largest public market
      capitalization as of the date of consummation of the Fundamental
      Transaction.

     

    
      
         

      

      
        -
          13-

        
          

        

      

      
         

      

    

     

    (n) “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.

     

    (o) “PRINCIPAL
      MARKET” means the Over-the-Counter Bulletin Board.

     

    (p)  “REGISTRATION
      RIGHTS AGREEMENT” means that certain registration rights agreement by and among
      the Company and the Buyers.

     

    (q) “SUCCESSOR
      ENTITY” means the Person (or, if so elected by the Holder, the Parent Entity)
      formed by, resulting from or surviving any Fundamental Transaction or the Person
      (or, if so elected by the Holder, the Parent Entity) with which such Fundamental
      Transaction shall have been entered into.

     

    [Signature
      Page Follows]

    
      
         

      

      
        -
          14-

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Series J Warrant to Purchase Common
      Stock to be duly executed as of the Issuance Date set out above.

    

    
      	
               

            	
              MDWERKS,
                INC.

            
	 	 
	
               

            	
              By:  

            	
               /s/
                Howard B. Katz

            
	
               

            	
               

            	
              Name:  

            	
              Howard
                B. Katz

            
	
               

            	
               

            	
              Title:  

            	
              Chief
                Executive Officer

            

    

    
      
         

      

      
        -
          15-

        
          

        

      

      
         

      

    

    EXHIBIT
      A

    

    EXERCISE
      NOTICE

    TO
      BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
      TO PURCHASE COMMON STOCK

    

    MDWERKS,
      INC.

    

         The
      undersigned holder hereby exercises the right to purchase                                        
      of the
      shares of Common Stock (“Warrant
      Shares”)
      of
      MDwerks, Inc., a Delaware corporation (the “Company”),
      evidenced by the attached Series J Warrant to Purchase Common Stock (the
“Warrant”).
      Capitalized terms used herein and not otherwise defined shall have the
      respective meanings set forth in the Warrant.

    

         1. Form
      of Exercise Price. The Holder intends that payment of the Exercise Price shall
      be made as:

                                  
      a “Cash
      Exercise” with respect to                    
      Warrant
      Shares; and/or

                                  
      a
“Cashless Exercise” with respect to                    
      Warrant
      Shares.

    

         2. Payment
      of Exercise Price. In the event that the holder has elected a Cash Exercise
      with
      respect to some or all of the Warrant Shares to be issued pursuant hereto,
      the
      holder shall pay the Aggregate Exercise Price in the sum of $                    
      to the
      Company in accordance with the terms of the Warrant.

    

         3. Delivery
      of Warrant Shares. The Company shall deliver to the holder                    
      Warrant
      Shares in accordance with the terms of the Warrant.

    

    Date:                          ,          

    

      
        	
                             
                  

              
	
                Name
                  of Registered Holder

              
	
                 

              	
                 

              	
                 

              
	
                By:

              	
                 

              	
                 

              
	
                Name:

              	 	 
	
                Title:

              	 	 

      
 

      
        
           

        

        
          -
            16-

          
            

          

        

        
           

        

      

    

     

    ACKNOWLEDGMENT

    

    The
      Company hereby acknowledges this Exercise Notice and hereby directs Corporate
      Stock Transfer to issue the above indicated number of shares of Common Stock
      in
      accordance with the Transfer Agent Instructions dated November __, 2008 from
      the
      Company and acknowledged and agreed to by Corporate Stock Transfer.

    

    
      	
               

            	
              MDWERKS,
                INC.

            
	 	 
	
               

            	
              By:  

            	
                               
                

            
	
               

            	
               

            	
              Name:  

            	 
	
               

            	
               

            	
              Title:  

            	 

    

    

    
      
         

      

      
        -
          17-

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