Document:

kl05064_ex4-1.htm

    
      

    

     

    Exhibit
      4.1

     

     

     

    WARRANT
      AGREEMENT

    

    For
      the
      Purchase Shares of the Common Stock of STARTECH Environmental Corporation,
      the
      Holder shall have the right to receive TWO warrants for every
      one share of Common share purchased by the holder in conjunction with Company’s
      Stock Purchase Agreement of  May 11, 2007.

     

    THIS
      CERTIFIES THAT  FRANCISCO J. RIVERA
      FERNANDEZ-----------------------

     

    Or
      its
      successors or assigns (the "Warrant holder" or "Holder"), is entitled to TWO
      warrants upon the due exercise hereof, and subject to the terms and conditions
      hereof, at any time after the date hereof, and subject to the provisions of
      paragraph 2 below, before the close of business on May 11,
      2010   (“Expiration Date”), to purchase from Startech
      Environmental Corporation (the "Company") all or any part of fully paid and
      nonassessable shares of Common Stock, no par value (the "Common Stock") of
      the
      Company, upon surrender hereof, with the exercise form  and
      warrant  agreement annexed hereto duly filled out, at the office of
      the Company or any transfer agent for  the Company's Common Stock, and
      upon simultaneous payment therefore in cash or by certified or official bank
      check, payable to the order of the Company in New York Clearing House funds,
      at
      the price equal to the following traunches.  Seven hundred
      thousand (700,000) of the warrants granted shall be exercised at a
      price per share of $3.40 and Seven hundred thousand
      (700,000) of the warrants granted shall be exercised at a price per
      share of $4.40  (the “Exercise Price”).

     

    1.           No
      resale of the Warrants or of any Underlying Stock will be made unless such
      resale is registered pursuant to a Registration Statement filled by the Company
      with the Securities and Exchange Commission (the "Commission") or exempt from
      registration under the Securities Act of 1933, as amended (the
      "Act").  By acceptance of this agreement, the Warrant Holder agrees,
      for himself and all subsequent holders, that prior to making any disposition
      of
      any Warrants or of any Common Stock purchasable upon the exercise thereof
      ("Underlying Stock"), the Holder of the Warrants evidenced by this agreement
      shall give written notice to the Company describing briefly the proposed
      disposition; and no such disposition shall be made unless and until ( i ) the
      Company has notified such holder that, in the opinion of counsel satisfactory
      to
      it, no Registration Statement and no other action under the Act is required
      with
      respect to such disposition (which opinion may be conditioned upon the
      transferee's assuming the Warrant holder's obligation hereunder); or (ii) a
      Registration Statement has been filed by the Company and declared effective
      by
      the Commission or other such action has been taken.

     

    2.           Unless
      this Warrant and payment are tendered as herein provided before the close of
      business on the Expiration Date, this Warrant will become wholly void and all
      rights evidenced hereby will terminate.

     

    3.           Subsequent
      to the provisions of paragraph 1 above, this Warrant may be exchanged for a
      number of shares of Common Stock of the Company as are purchasable upon the
      exercise of this Warrant, upon surrender hereof at the office of the Company
      or
      any transfer agent of the Company's Common Stock and written instructions as
      to
      the exchange.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    If
      this
      Warrant is exercised for less than all the shares purchasable upon the exercise
      hereof, the Holder shall be entitled to receive Warrants of the same tenor
      as
      this Warrant for the purchase in the aggregate of the number of shares in
      respect of which this Warrant shall not have been exercised.

     

    4.             The
      Exercise price per Share and the number of shares of Common Stock of the Company
      issuable pursuant to such exercise is subject to adjustment as
      follows:

     

    (a)           In
      case the Company shall at any time declare a stock dividend or stock split
      on
      the outstanding shares of Common Stock in shares of its Common Stock, then
      the
      Exercise Price, and the number and kind of shares receivable upon exercise,
      in
      effect at the time of such dividend shall be proportionately adjusted so that
      the holder of any Warrant exercised after such time shall be entitled to receive
      the aggregate number and kind of shares which if such Warrant had been exercised
      immediately prior to such time, he or she would have owned upon such exercise
      and been entitled to receive by virtue of such dividend.

     

    (b)           In
      any case the Company shall at any time subdivide or combine the outstanding
      shares of the Common Stock, the share exercise price initial or adjusted, in
      effect immediately prior to such subdivision or combination shall forthwith
      be
      proportionately decreased in the case of subdivision or increased in the case
      of
      combination.

     

    (c)           In
      case of any capital reorganization, sale of substantially all the assets of
      the
      Company, or any reclassification of the shares of Common Stock of the Company,
      or in case of any consolidation with or merger of the Company into or with
      another corporation, then as a part of such reorganization sale
      reclassification, consolidation or merger, as the case may be, provision shall
      be made so that the registered owner of the Warrants evidenced hereby shall
      have
      the right thereafter to receive upon the exercise thereof the kind and amount
      of
      shares of stock or other securities or property which he would have been
      entitled to receive.  If immediately prior to such reorganization,
      reclassification, consolidation or merger, he had held the number of shares
      of
      Common stock which were then issuable upon the exercise of the Warrants
      evidenced hereby, to the end that the provisions set forth (including provisions
      with respect to adjustments of the Exercise Price) shall thereafter be
      applicable, as nearly as reasonably may be, in relation to any shares of stock
      or other property thereafter deliverable upon the exercise of such
      Warrants.

     

    (d)           If
      the Company at any time makes any spin-off, split-off, or distribution of assets
      upon or with respect to its Common Stock, as a liquidating or partial
      liquidating dividend, spin-off, or by way of return of capital, or other than
      as
      dividend payable out of earnings or any surplus legally available for dividends
      under the laws of the State of Colorado, the holder of each Warrant then
      outstanding shall, upon the exercise of the Warrant, receive, in addition to
      the
      shares of Common Stock then issuable on exercise of the Warrant, the amount
      of
      such assets (or, at the option of the Company, a sum equal to the value thereof
      at the time of the distributions) which would have been payable to such holder
      had he or she exercised the Warrant immediately prior to the record date for
      such distribution.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    (e)             No
      adjustment of the Exercise Price per Share shall be made if the amount of such
      adjustment shall be less than $.05 per share.  When any adjustment is
      required to be made in the Exercise Price Per Share, the number of shares of
      Common Stock issuable shall be determined as provided for in paragraph (f)
      hereof. No fractional shares of Common Stock shall be issued upon the exercise
      of Warrants evidenced hereby, but in lieu thereof the Company shall pay to
      the
      order of the holder of such warrants an amount in cash equal to the same
      fraction of the Exercise Price of one share of Common Stock on the date of
      exercise.

     

    (f)           Whenever
      the Exercise price Per Share is adjusted as provided above, the number of shares
      of Common Stock Shares purchasable upon exercise of this Warrant immediately
      prior to such adjustment shall be increased, effective simultaneously with
      such
      adjustment, by a number of shares of Common Stock computed by multiplying such
      number of shares of Common Stock by a fraction, the numerator of which is the
      Exercise Price per Share in effect immediately prior to such adjustment and
      the
      denominator of which is the Exercise Price per Share in effect upon such
      adjustment, and the number of shares of Common Stock arrived at by making said
      computation shall be added to the number of shares of Common Stock issuable
      upon
      exercise of the Warrant immediately prior to such adjustment.  The
      total number of shares arrived at by making the computation provided for in
      the
      immediately preceding sentence shall thereupon be the number of shares of Common
      Stock issuable upon exercise Price Per Share, initial or adjusted, the Company
      shall forthwith determine the new Exercise Price Per Share, and (a) prepare
      a
      statement describing in reasonable detail the method used in arriving at the
      new
      Exercise price per Share; and (b) cause a copy of such statement to be mailed
      to
      the registered owner of the Warrants evidenced hereby as of a date within twenty
      (20) days after the date when the circumstance giving rise to the adjustments
      occurred.

     

    5.             As
      soon as practicable after the exercise hereof, the company shall deliver a
      certificate or certificates for the number of full shares of Common Stock
      issuable upon such exercise, all of which shall be fully paid and nonassessable,
      to the person or persons entitled to receive the same provided.

     

    No
      sale,
      offer to sell or transfer of these Shares or of this Certificate, or of any
      shares or other securities issued in exchange for or in respect of such shares,
      shall be made unless a Registration Statement under the Securities Act of 1933,
      as amended, with respect to such shares, is in effect or an exemption from
      the
      registration requirements of such Act is applicable to such shares.

    

    Dated:
      ________________2007                                      Startech
      Environmental Corp.

     

                   
By:
      ________________________________

     

    Warrant
      Holder: _______________________________________

     

    Address:
      _____________________________________________

     

    City:
      ________________________________________________

     

    State:
      _____________________________ Zip Code: _________kl05064_ex10-1.htm

    
      

    

     

    Exhibit
      10.1

     

     

     

    This
      STOCK PURCHASE & REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is
      made and entered into as of May 10, 2007, by and between STARTECH ENVIRONMENTAL
      CORPORATION, a Colorado corporation (the “Company”), and the Francisco J.
      Rivera Fernandez of San Juan, Puerto Rico (the “Purchaser”).

     

    RECITALS

     

    The
      Company desires to issue and sell to the Purchaser in a private placement (the
      “Offering”), and the Purchaser desire to purchase from the Company, on
      the terms and subject to the conditions set forth herein, seven hundred thousand
      (700,000) shares  (the “Shares”) of common stock, no par value
      (“Common Stock”), of the Company, along with one million four hundred
      thousand (1,400,000) three-year warrants (the “Warrants” and, together
      with the Shares, the “Securities”), the terms of such Warrants being as
      set forth in the Warrant Agreement substantially in the form attached as
Exhibit A hereto.  This Agreement and the Warrants
      shall be referred to herein collectively as the “Transaction
      Documents”.

     

    The
      Purchaser desires, upon the terms and conditions set forth in this Agreement,
      to
      purchase Securities in the Offering.

     

    The
      Company and the Purchaser are executing and delivering this Agreement in
      reliance upon the exemption from securities regulation afforded by
      Section 4(2) of the Securities Act (as defined in Section 3
      hereof) and Rule 506 under Regulation D.

     

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

     

    1.           Purchase
      and Sale of Securities.

     

    (a)           Purchase
      and Sale of Shares.  Subject to the terms and conditions hereof,
      at the Closing identified in Section 2 hereof, the Company shall issue
      and sell to the Purchaser, and the Purchaser shall purchase from the Company
      seven hundred thousand (700,000)
      Shares, which number of Shares have been calculated by dividing ONE
      MILLION FIVE HUNDRED AND FORTY THOUSAND dollars ($1,540,000) (the “Purchase
      Price”) by $2.20 per Share (the “Share Price”), which said Share
      Price is Two Dollars and twenty cents per share ($2.20)

     

    (b)           Purchase
      and Sale of Warrants.  In addition to the foregoing and subject to
      the terms and conditions hereof, at the Closing identified in Section 2
      hereof, the Company shall issue to the Purchaser Two Warrants to purchase shares
      of Common Stock on the following terms:

     

    
      	
              Warrant
                Coverage:

            	
              The
                Purchaser will be entitled to receive TWO warrants (the
                “Purchased Warrants”), for each of the common Shares of the Company
                purchased. The Shares of Common Stock purchased into which the Warrants
                are exercisable (the “Warrant Shares”) will have piggyback
                registration rights as provided in this
                Agreement.

            

    

     

     

     

    
      
        
        

      

      
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              Term:

            	
              The
                Purchased Warrants shall be exercisable for a term of three-years
                from the
                Closing Date (as defined below).

            

    

    

    
      	
              Exercise
                Price:

            	
              The
                Warrants will be exercisable into700,000 shares of
                Common Stock at a warrant-price of $3.40 each (the “Series A
                Warrants”), and also700,000 shares of Common Stock
                at a warrant-price of $4.40 each (the “Series B
                Warrants”);.

            

    

    

    (c)           Exemption.  The
      purchase and sale of the Securities pursuant to the terms hereof will be made
      in
      reliance upon the provisions of Section 4(2) of the Securities Act of 1933,
      as
      amended (the “Securities Act”), Rule 506 of Regulation D promulgated
      thereunder by the United States Securities and Exchange Commission (the
“SEC”), or such other exemptions from the registration requirements of
      the Securities Act as may be available with respect to the investment in the
      Securities to be made hereunder.

     

    
      	
               

            	
              2.

            	
              Closings
                and Deliverables.

            

    

     

    (a)  Payment.
      In the next two weeks, the Purchaser will make a wire transfer payment to the
      Company, to the account set forth on Exhibit B hereto, in an
      amount equal to the Purchase Price, which Purchase Price shall entitle the
      Purchaser, subject to the satisfaction of the terms and conditions herein,
      to
      receive the Shares and the Purchased Warrants. Together with the Purchase Price,
      at the Closing, the Purchaser shall deliver to the Company a fully completed
      and
      executed copy of the Investor Questionnaire, in the form attached as
Exhibit C hereto (the “Investor
      Questionnaire”).

     

    (b)  Closing.  The
      closing of the purchase and sale of the Securities shall take place at 12:00
      p.m. (Eastern Standard Time) on the date hereof (the “Closing Date”), at
      the offices of the Company (the “Closing”).

     

    (c)  Deliverables.  At
      the Closing, or as soon as is reasonably practicable thereafter, and assuming
      the Company has received the Purchase Price and the Investor Questionnaire,
      the
      Company (or its transfer agent) shall deliver to the Purchaser a stock
      certificate (or certificates) representing the Shares so purchased at the
      Closing, as well as one or more Warrant Agreements representing the Series
      A
      Warrants and Series B Warrants and, in each case registered in the name of
      the
      Purchaser, and such other documents and certificates as are required by this
      Agreement at the Closing.

     

    3.           Representations
      and Warranties by the Company. The Company hereby
      represents and warrants to the Purchaser, as of the date hereof, as
      follows:

     

    (a)  Incorporation
      and Qualification.  The Company has been duly organized and is
      validly existing as a Corporation and in good standing under the laws of the
      State of Colorado with the requisite corporate power and authority to own and
      use its properties and assets and to carry on its business as currently
      conducted.

     

    (b)  Authority.  The
      Company has the requisite corporate power and authority to enter into this
      Agreement and to issue and deliver the Shares and the Warrants and, upon
      exercise of

     

     

     

    
      
        
        

      

      
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    the
      Warrants in accordance with the terms thereof, the Warrant
      Shares.  The execution and delivery of this Agreement and the issuance
      and delivery of the Shares and the Warrants hereunder and the consummation
      of
      the transactions contemplated hereby have been duly and validly authorized
      by
      all necessary corporate action by the Company.  This Agreement has
      been duly and validly executed and delivered by and on behalf of the Company
      and
      constitutes a valid, legal and binding agreement, enforceable against the
      Company in accordance with its terms, except as enforceability may be limited
      by
      general equitable principles, bankruptcy, insolvency, fraudulent conveyance,
      reorganization, moratorium or other laws affecting creditors’ rights
      generally.  Assuming payment of the Purchase Price in full at the
      Closing, the Shares and the Warrants will be duly authorized, validly issued,
      fully paid and non-assessable.  Upon exercise of the Warrants in
      accordance with the terms thereof, including payment of the exercise price
      in
      full, the Warrant Shares will be duly authorized, validly issued, fully paid
      and
      non-assessable.

     

    (c)  No
      Conflicts. The execution, delivery and performance of this Agreement by the
      Company and the consummation by the Company of the Offering do not and will
      not:
      (i) conflict with or violate any provision of the Company’s articles of
      incorporation or bylaws, or (ii) subject to obtaining the Required Approvals
      (as
      defined below), conflict with, or constitute a default (or an event that with
      notice or lapse of time or both would become a default) under, or give to others
      any rights of termination, amendment, acceleration or cancellation (with or
      without notice, lapse of time or both) of, any agreement, credit facility,
      debt
      or other instrument (evidencing a Company debt or otherwise) to which the
      Company is a party or by which any property or asset of the Company is bound
      or
      affected, or (iii) result in a violation of any law, rule, regulation, order,
      judgment, injunction, decree or other restriction of any court or governmental
      authority as currently in effect to which the Company is subject (including
      federal and state securities laws and regulations), or by which any property
      or
      asset of the Company is bound or affected; except in the case of each of clauses
      (ii) and (iii), such as could not, individually or in the aggregate (x)
      adversely affect the legality, validity or enforceability of the Offering,
      (y)
      have or result in a material adverse effect on the results of operations,
      assets, business or condition (financial or otherwise) of the Company, taken
      as
      a whole (other than any change, effect, event or condition that arises from
      changes in general economic conditions or conditions affecting the industry
      of
      the business of the Company generally, or such changes, events or conditions
      resulting directly from the announcement of or the consummation of the Offering
      contemplated hereby), or (z) adversely impair the Company’s ability to perform
      fully on a timely basis its obligations under this Agreement (any of (x), (y)
      or
      (z), a “Material Adverse Effect”).

     

    (d)           Capital
      Stock; Fully Paid and Non-Assessable.

     

    (i)           As
      of the date hereof, the authorized capital stock of the Company consists of
      10,000,000 shares of preferred stock, no par value (the “Preferred
      Stock”), of which there are no shares issued and outstanding, and
      800,000,000 shares of Common Stock, of which 26,517,745 shares are issued and
      19,320,845 are outstanding, of which: (x) 1,000,000 shares are authorized for
      issuance under the Company’s stock option plans; (y) 1,557,500 shares are
      reserved for issuance upon the exercise of options granted and issuable by
      the
      Company

     

     

     

    
      
        
        

      

      
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    thereunder;
      and (z) 2,363,611 shares are reserved for issuance upon the exercise of warrants
      to purchase shares of Common Stock.

     

    (ii)           All
      outstanding shares of Common Stock have been duly authorized and validly issued
      and are fully paid and nonassessable and were issued in compliance with all
      applicable Federal and state securities laws. Except as contemplated by this
      Agreement or as set forth in all forms, reports and documents filed with the
      SEC
      pursuant to the Securities Act and Securities Exchange Act of 1934, as amended
      (the “Exchange Act”) from January 1, 2003 through the date hereof
      (collectively, the “SEC Reports”), the Company has no outstanding
      subscription, option, warrant, right of first refusal, preemptive right, call,
      contract, demand, commitment, convertible security or other instrument,
      agreement or arrangement of any character or nature whatever under which the
      Company is or may be obligated to issue Common Stock or any other equity
      security of any kind or which otherwise relates to the Company’s
      securities.

     

    (e)           Filings,
      Consents and Approvals.  The Company is not required to obtain any
      consent, waiver, authorization or order of, give any notice to, or make any
      filing or registration with, any court or other federal, state, local or other
      governmental authority or other person or entity in connection with the
      execution, delivery and performance by the Company of this Agreement, other
      than
      (i) the filing with the SEC of a Form D pursuant to Regulation D of the
      Securities Act, and (iii) applicable state securities law Blue Sky filings
      (collectively, the “Required Approvals”).

     

    (f)           SEC
      Reports; Financial Statements.  Since January 1, 2003, the Company
      has filed (i) all reports required to be filed by it under the Securities
      Act; (ii) all annual reports on Form 10-K and all quarterly reports on
      Form 10-Q required to be filed by it under the Exchange Act, including
      pursuant to Section 13(a) or 15(d) thereof, in order for it to satisfy its
      filing requirements under the Exchange Act for the periods to which each such
      report relates; (iii) an annual report on Form 10-K, covering the fiscal year
      ended October 31, 2003, which was filed with the SEC on January 29, 2004; (iv)
      a
      quarterly report on Form 10-Q, covering the fiscal quarter ended January 31,
      2004, which was filed with the SEC on March 15, 2004; and (v) a quarterly report
      on Form 10-Q, covering the fiscal quarter ended April 30, 2004, which was filed
      with the SEC on June 2, 2004; (the foregoing materials, as amended, where
      applicable, being collectively referred to herein as the “SEC Reports”).
      As of their respective dates, the SEC Reports complied in all material respects
      with the requirements of the Securities Act and the Exchange Act and the rules
      and regulations of the SEC promulgated thereunder, and to the Knowledge (as
      defined below) of the Company, none of the SEC Reports, when filed, contained
      any untrue statement of a material fact or omitted to state a material fact
      required to be stated therein or necessary in order to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading.  The financial statements of the Company included in the
      SEC Reports comply in all material respects with applicable accounting
      requirements and the rules and regulations of the SEC with respect thereto
      as in
      effect at the time of filing.  Such financial statements have been
      prepared in accordance with generally accepted accounting principles applied
      on
      a consistent basis during the periods involved (“GAAP”), except as may be
      otherwise specified in such financial statements or the notes thereto, and
      fairly present in all material respects the financial position of the Company
      and its consolidated subsidiaries as of

     

     

     

    
      
        
        

      

      
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    and
      for
      the dates thereof and the results of operations and cash flows for the periods
      then ended, subject, in the case of unaudited statements, to normal, immaterial,
      year-end audit adjustments.

     

    (g)           No
      Legal Proceedings.  Except as may be described in the SEC Filings,
      there is no action, suit or proceeding before or by any court or any
      governmental agency or body, domestic or foreign, now pending or, to the actual
      knowledge (without the need for inquiry or special investigation) of the Chief
      Financial Officer, Chief Operating Officer or Chief Executive Officer of the
      Company (“Knowledge”), threatened against or affecting the Company, or
      any of its properties or assets, which is reasonably likely to have a Material
      Adverse Effect.

     

    4.           Representations
      and Warranties of the Purchaser.  The
      Purchaser represents and warrants to the Company, as of the date hereof, as
      follows:

     

    (a)  Power.
      The Purchaser has been duly organized, is validly existing and is in good
      standing under the laws of its state of incorporation, with all limited
      liability company power and authority to execute, deliver and perform its
      obligations under the Agreement.

     

    (b)  Authority.
      The Purchaser has the requisite power and authority to enter into this Agreement
      and to purchase the Shares and the Warrants and, upon exercise of the Warrants
      in accordance with the terms thereof, the Warrant Shares.  The
      execution and delivery of this Agreement and the purchase of the Shares and
      the
      Warrants hereunder and the consummation of the transactions contemplated hereby
      have been duly and validly authorized by all necessary action by the
      Purchaser.  This Agreement has been duly and validly executed and
      delivered by or on behalf of the Purchaser and constitutes a valid, legal and
      binding agreement, enforceable against the Purchaser in accordance with its
      terms, except as enforceability may be limited by general equitable principles,
      bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
      other laws affecting creditors’ rights generally.

     

    (c)  No
      Conflicts. The execution, delivery and performance of this Agreement by the
      Purchaser and the consummation by the Purchaser of the purchase of the
      Securities do not and will not: (i) conflict with or violate any provision
      of
      the Purchaser’s organizational or charter documents, or (ii) conflict with, or
      constitute a default (or an event that with notice or lapse of time or both
      would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation (with or without notice, lapse of time
      or both) of, any agreement, credit facility, debt or other instrument
      (evidencing a Company debt or otherwise) to which the Purchaser is a party
      or by
      which any property or asset of the Purchaser is bound or affected, or (iii)
      result in a violation of any law, rule, regulation, order, judgment, injunction,
      decree or other restriction of any court or governmental authority as currently
      in effect to which the Purchaser is subject (including federal and state
      securities laws and regulations), or by which any property or asset of the
      Purchaser is bound or affected; except in the case of each of clauses (ii)
      and
      (iii), such as could not, individually or in the aggregate result in a Material
      Adverse Effect.

     

     

    
      
        
        

      

      
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    (d)  Investment
      in Securities. The Purchaser represents and warrants to, and covenants with,
      the Company that: (i) the Purchaser, either individually, or together with
      a purchaser representative, is knowledgeable, sophisticated and experienced
      in
      making, and is qualified to make, decisions with respect to investments in
      shares representing an investment decision like that involved in the purchase
      of
      the Securities, including investments in securities issued by the Company and
      comparable entities, and has requested, received, reviewed and considered all
      information it deems relevant in making an informed decision to purchase the
      Securities; (ii) the Purchaser is acquiring the Securities in the ordinary
      course of its business and for its own account for investment only and with
      no
      present intention or view toward the public sale or distribution thereof, and
      no
      arrangement or understanding exists with any other persons regarding the public
      sale or distribution of any Securities; (iii) the Purchaser will not,
      directly or indirectly, except in compliance with the Securities Act, the rules
      and regulations promulgated thereunder and such other securities or blue sky
      laws as may be applicable, offer, sell, pledge, transfer or otherwise dispose
      of
      (or solicit any offers to buy, purchase or otherwise acquire or take a pledge
      of) any of the Securities or engage in any Short Sale (as defined below);
      (iv) the Purchaser has completed or caused to be completed the Investor
      Questionnaire and the answers thereto are true and correct in all respects
      as of
      the date hereof; (v) the Purchaser has, in connection with its decision to
      purchase the Securities, relied solely upon its own independent investigation
      of
      the Company and the representations and warranties of the Company contained
      herein;  and (vi) the Purchaser is an “accredited investor”
within the meaning of Rule 501(a) of Regulation D promulgated under the
      Securities Act.

     

    (e)  Short
      Sales. Neither the Purchaser nor any affiliate of the Purchaser (as defined
      in Rule 405 of the Securities Act (each a “Purchaser/Affiliate”) and
      which (i) had knowledge about the transactions contemplated hereby, (ii)
      has or shares discretion relating to the Purchaser’s investments or trading or
      information concerning Purchaser’s investments, including the Units, or (iii) is
      subject to the Purchaser’s review or input concerning such Purchaser/Affiliate’s
      investments or trading) has or will, directly or indirectly, engage (A) in
      any “short sale” (as defined in Rule 3b-3 promulgated under the Exchange Act),
      including, without limitation, the maintaining of any short position with
      respect to, establishing or maintaining a “put equivalent position” (within the
      meaning of Rule 16a-1(h) under the Exchange Act) with respect to, entering
      into
      any swap, derivative transaction or other arrangement (whether any such
      transaction is to be settled by delivery of Common Stock, other securities,
      cash
      or other consideration) that transfers to another, in whole or in part, any
      of
      the economic consequences of ownership, or otherwise dispose of, any of the
      Securities by the Purchaser or (B) in any hedging transaction which establishes
      a net short position with respect to the Securities (clauses (A) and (B)
      together, a “Short Sale”); except for (1) Short Sales by a
      Purchaser/Affiliate which was, prior to the date on which the Purchaser was
      first notified that the Company intended to engage in the transactions
      contemplated by this Agreement, a market maker for the Common Stock,
provided that such Short Sales are in the ordinary course of such
      Purchaser/Affiliate’s business and are in compliance with the Securities Act,
      and the rules and regulations promulgated thereunder, and such other securities
      or blue sky laws as may be applicable or (2) Short Sales by a
      Purchaser/Affiliate which by virtue of the procedures of the Purchaser are
      made
      without knowledge of the transactions contemplated in this Agreement and were
      not induced or encouraged by the Purchaser).

     

     

     

    
      
        
        

      

      
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    (f)  Exemptions.  The
      Purchaser understands that the Securities are being offered and sold to it
      in
      reliance upon specific exemptions from the registration requirements of
      Securities Act, the rules and regulations and state securities laws, and that
      the Company is relying upon the truth and accuracy of, and the Purchaser’s
      compliance with, the representations, warranties, agreements, acknowledgments
      and understandings of the Purchaser set forth herein in order to determine
      the
      availability of such exemptions and the eligibility of the Purchaser to acquire
      the Securities.

     

    (g)  Use
      of
      Information.  The Purchaser acknowledges that it is prohibited
      from and has not reproduced or distributed this Agreement or any other offering
      materials or other information provided by the Company in connection with the
      Purchaser’s consideration of its investment in the Company, in whole or in part,
      or divulged or discussed any of their contents except to its advisors and
      representatives for the purpose of evaluating such investment. The foregoing
      shall not apply to any information that is or becomes publicly available through
      no fault of the Purchaser, or that the Purchaser is legally required to
      disclose; provided, however, that if the Purchaser is requested or
      ordered to disclose any such information pursuant to any court or other
      government order or any other applicable legal procedure, it shall provide
      the
      Company with prompt notice of any such request or order in time sufficient
      to
      enable the Company to seek an appropriate protective order and shall provide
      the
      Company with reasonable assistance in obtaining such protective
      order.

     

    (h)  Investment
      Risk.  The Purchaser understands that its investment in the
      Securities involves a significant degree of risk and that the market price
      of
      the Common Stock has been and continues to be volatile, that no representation
      is being made as to the future value of the Common Stock and that the Purchaser
      has carefully read and considered the matters set forth in the SEC
      Reports.  The Purchaser has the knowledge and experience in financial
      and business matters as to be capable of evaluating the merits and risks of
      an
      investment in the Securities and has the ability to bear the economic risks
      of
      an investment in the Securities.  The Purchaser has had a reasonable
      opportunity to ask questions of the Company and its representatives; and the
      Company has answered all inquiries that the Purchaser or the Purchaser’s
      representatives have put to it, and all such inquiries have been answered to
      the
      full satisfaction of the Purchaser.

     

    (i)  Reliance.
      The Purchaser is not relying on the Company or any of its employees or agents
      with respect to the legal, tax, economic and related considerations as to an
      investment in the Securities, and the Purchaser has relied on the advice of,
      or
      has consulted with, only his own advisors as it deems necessary or
      advisable.

     

    (j)  No
      General Solicitation. The Purchaser is unaware of, is in no way relying on,
      and did not become aware of the offering of the Securities through or as a
      result of, any form of general solicitation or general advertising including,
      without limitation, any article, notice, advertisement or other communication
      published in any newspaper, magazine or similar media or broadcast over
      television or radio, in connection with the offering and sale of the Securities
      and is not subscribing for Securities and did not become aware of the Offering
      through or as a result of any seminar or meeting to which the Purchaser was
      invited by, or any solicitation of a subscription by, a person not previously
      known to the Purchaser in connection with investments in securities
      generally.

     

     

     

    
      
        
        

      

      
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    (k)  No
      Endorsement of Securities.  The Purchaser understands that no
      United States federal or state agency or any other government or governmental
      agency has passed upon or made any recommendation or endorsement of the
      Securities.

     

    (l)  No
      Registration of Securities.  The Purchaser understands that the
      Securities and the Warrant Shares have not been registered under the Securities
      Act and will not sell, offer to sell, assign, pledge, hypothecate or otherwise
      transfer any of the Securities or Warrant Shares unless (i) pursuant to an
      effective registration statement under the Securities Act, (ii) the Purchaser
      provides the Company with an opinion of counsel, in a generally acceptable
      form,
      to the effect that a sale, assignment or transfer of the Securities may be
      made
      without registration under the Securities Act and the transferee agrees to
      be
      bound by the terms and conditions of this Agreement, (iii) the Purchaser
      provides the Company with evidence of compliance with Rule 144 promulgated
      under
      the Securities Act (“Rule 144”), including reasonable assurances (in the
      form of seller and broker representation letters) that the Securities and
      Warrant Shares can be sold pursuant to Rule 144 or (iv) pursuant to Rule 144(k)
      following the applicable holding period.

     

    (m)  Legend.  The
      Purchaser understands that, until such time as a registration statement has
      been
      declared effective or the Securities and Warrant Shares may be sold by
      non-affiliates of the Company pursuant to Rule 144 under the Securities Act
      without any restriction as to the number of securities as of a particular date
      that can then be immediately sold, the certificates for the Securities and
      Warrant Shares shall bear a restrictive legend in substantially the following
      form (and a stop-transfer order may be placed against transfer of the
      certificates for the Securities and Warrant Shares):

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE
      SECURITIES LAWS OF ANY OTHER JURISDICTION.  THE SECURITIES MAY NOT BE
      SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE
      SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE
      REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
      THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT
      TO RULE 144 UNDER THE SECURITIES ACT.”

     

    (l)  Executive
      Offices.  The Purchaser’s principal executive offices are located
      in the State of Connecticut.

     

    (m)  Brokers
      and Finders.  There is no investment banker, broker, finder or
      other intermediary (other than any placement agent retained by the Company)
      which has been retained by or is authorized to act on behalf of the Purchaser
      who might be entitled to any fee or commission from the Purchaser, the Company,
      any of their respective Affiliates upon consummation of the transactions
      contemplated by this Agreement.

     

     

    
      
        
        

      

      
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    5.           Certain
      Covenants.

     

    (a)           Delisting.  In
      the event that the Company is no longer subject to the reporting requirements
      of
      the Exchange Act, the Company hereby covenants and agrees with the Purchaser
      that, so long as the Purchaser owns at least ten percent (10%) of the issued
      and
      outstanding shares of Common Stock, except as otherwise required in this
      Agreement, the Company shall provide the Purchaser with customary and reasonable
      financial information on at least a quarterly basis and such other information
      rights as provided to an investor in a privately held corporation.

     

    (b)           Confidentiality.   The
      Purchaser covenants and agrees to keep confidential any and all material
      non-public information which it has heretofore obtained or shall hereafter
      obtain, directly or indirectly, from the Company pursuant to this Agreement
      or
      otherwise, and agrees that it has not: (i) used the same except for the purpose
      of determining whether to purchase the Securities in the Offering; or (ii)
      disclosed the same to any party except as provided below, without the Company’s
      prior written consent; provided that the terms of this Section
      5(b) shall not extend to any such information that: (A) is already publicly
      known; (B) has become publicly known without any fault of the Purchaser or
      anyone to whom the Purchaser has made disclosure in compliance with the terms
      of
      this Section 5(b); or (C) is required to be disclosed to any governmental
      authorities or courts of law as a result of operation of law, regulation, or
      court order; provided, however, that the Purchaser shall have first
      given prompt written notice of such requirement to the Company (if permissible)
      and cooperates with the Company to restrict such disclosure and/or obtain
      confidential treatment thereof.

     

    (c)           Short-Selling.
      The Purchaser covenants and agrees that it will not, and shall cause each
      Purchaser/Affiliate not to, engage in any Short Sales.

     

    6.           Registration
      Rights.

     

    (a)           Defined
      Terms. The following capitalized terms, when used in this Section 6,
      have the respective meanings set forth below:

     

    “Affiliate”
      means, with respect to any Person (as defined below), any other Person, directly
      or indirectly, controlling, controlled by, or under common control with, such
      Person, and shall include (i) any Person who is an executive officer, director
      or beneficial holder of at least 10% of the outstanding capital stock of the
      Company (or other specified Person), (ii) any Person of which the Company (or
      other specified Person) or an Affiliate of the Company (or other specified
      Person) shall, directly or indirectly, either beneficially own at least 10%
      of
      the outstanding equity securities or constitute at least a 10% participant,
      and
      (iii) in the case of a specified Person who is an individual, each parent,
      spouse, child, brother, sister or the spouse of a child, brother or sister
      of
      such Person, and each trust or family limited partnership created for the
      benefit of one or more of such Persons.  For the purposes of this
      definition, “control” when used with respect to any Person, means the
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management and policies of such Person, whether through the
      ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the
      foregoing.  Notwithstanding the foregoing, the term “Affiliate” as
      used elsewhere in this Agreement shall have the same meaning as given to such
      term in this Section 6(a).

     

     

     

    
      
        
        

      

      
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    “Business
      Day” means any day, other than a Saturday or a Sunday, that is neither a
      legal holiday nor a day on which banking institutions are generally authorized
      or required by law or regulation to close in the State of
      Connecticut.

     

     “Holder”
      shall mean any Person that owns Registrable Securities, including such
      successors and assigns as acquire Registrable Securities, directly or
      indirectly, from such Person.  For purposes of this Agreement, the
      Company may deem the registered holder of a Registrable Security as the Holder
      thereof.

     

    “Other
      Approved Holders” shall mean holders of Common Stock having registration
      rights with respect to the Common Stock, other than pursuant to the terms of
      this Agreement.

     

    “Person”
      means any individual, company, corporation, partnership, limited liability
      company, trust, division, governmental, quasi-governmental or regulatory entity
      or authority or other entity.  Notwithstanding the foregoing, the term
“Person” as used elsewhere in this Agreement shall have the same meaning as
      given to such term in this Section 6(a).

     

    “Prospectus”
      shall mean the prospectus (including a preliminary prospectus) included in
      any
      Registration Statement, as amended or supplemented by a prospectus supplement
      with respect to the terms of the offering of any portion of the Registrable
      Securities covered by such Registration Statement and by all other amendments
      and supplements to the prospectus, including post-effective amendments and
      all
      material incorporated by reference in such prospectus.

     

    “Registrable
      Securities” shall mean the Shares, the Warrant Shares and any other capital
      stock or other securities issued or issuable as a result of or in connection
      with any stock dividend, stock split or reverse stock split, combination,
      recapitalization, reclassification, merger or consolidation, exchange,
      distribution or similar transaction in respect of the Shares or the Warrant
      Shares.

     

    “Registration
      Statement” shall mean any registration statement which covers any of the
      Registrable Securities pursuant to the provisions of this Agreement, including
      the Prospectus included therein, all amendments and supplements to such
      Registration Statement, including post-effective amendments, and all exhibits
      and all material incorporated by reference in such Registration
      Statement.

     

    “Rule
      144” shall mean Rule 144 promulgated under the Securities Act, as amended
      from time to time, or any similar successor rule thereto that may be promulgated
      by the SEC.

     

    “Rule
      144A” shall mean Rule 144A promulgated under the Securities Act, as amended
      from time to time, or any similar successor rule thereto that may be promulgated
      by the SEC.

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

     

    (b)           Piggyback
      Registration Rights.

     

    (i)  Whenever
      the Company proposes to register any of its securities under the Securities
      Act,
      either pursuant to an underwritten primary registration on behalf of the Company
      or pursuant to an underwritten secondary registration on behalf of a holder
      or
      holders of the Company’s securities (other than on Form S-4, Form S-8 or any
      successor form) and the registration form to be used may be used for the
      registration of any Registrable Securities (a “Piggyback Registration”),
      the Company will give written notice to each holder of Registrable Securities
      of
      its intention to effect such a registration and will include in such
      registration all Registrable Securities (subject to, and in accordance with,
      the
      priorities set forth in Section 6(b)(ii) hereof), with respect to which
      the Company has received written requests for inclusion within ten (10) days
      after delivery of the Company’s notice to each holder of Registrable
      Securities.

     

    (ii)  If
      the
      managing underwriter(s) advise the Company in writing, or the Board of Directors
      determines, that in their opinion, the number of Registrable Securities
      requested to be included in such registration exceeds the number which can
      be
      sold in such offering without adversely affecting the marketability or pricing
      thereof, the Company will include in such registration up to an aggregate amount
      determined advisable by such underwriter(s): (i) first, any shares of
      Common Stock that the Company desires to register; (ii) second, any
      shares of Common Stock requested to be registered by the holder(s) of Common
      Stock pursuant to which the Registration Statement is being filed and to which
      the holders of Registrable Securities hereunder are receiving Piggyback
      Registration; and (iii) pro rata among the holders of Registrable
      Securities on the basis of the number of Registrable Securities which are
      requested to be registered hereunder.

     

    (iii)  Notwithstanding
      anything herein to the contrary, the Company may withdraw any registration
      statement referred to in this Section 6(b) at any time in its sole
      discretion without thereby incurring any liability or expense to the holders
      of
      Registrable Securities.

     

     (c)           Registration
      Procedures. In connection with the Company’s registration obligations
      pursuant to Sections 6(b) hereof, the Company will use its commercially
      reasonable efforts to:

     

    (i)  register
      or qualify such Registrable Securities under the securities or blue sky laws
      of
      the jurisdictions as any seller reasonably requests in writing and do any and
      all other acts and things which may be reasonably necessary to permit such
      seller to consummate the disposition in such jurisdictions of the Registrable
      Securities owned by such seller (provided that the Company will not be
      required to (A) qualify generally to do business in any jurisdic­tion where
      it would not otherwise be required to qualify but for this subparagraph or
      (B)
      consent to general service of process in any such jurisdiction);

     

    (ii)  notify
      each seller of Registrable Securities at any time when a prospectus relating
      thereto is required to be delivered under the Securities Act, of the happening
      of any event as a result of which the prospectus included in such registration
      statement contains an untrue statement of a material fact or omits any fact
      necessary to make the

     

     

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

     

    statements
      therein not misleading, and, at the request of any such seller, the Company
      will
      prepare a supplement or amendment to such prospectus so that, as thereafter
      delivered to the purchasers of such Registrable Securities, such prospectus
      will
      not contain any untrue statement of a material fact or omit to state any fact
      necessary to make the statements therein not misleading;

     

    (iii)  cause
      all
      such Registrable Securities to be listed on each securities exchange, if any,
      on
      which the same securities issued by the Company are then listed;

     

    (iv)  provide
      a
      transfer agent and registrar for all such Registrable Securities not later
      than
      the effective date of such registration statement; and

     

    (v)  advise
      each seller of such Registrable Securities promptly after it shall receive
      notice or obtain knowledge thereof, of the issuance of any stop order by the
      SEC
      suspending the effectiveness of such registration statement or the initiation
      or
      threatening of any proceeding for such purpose and use commercially reasonable
      efforts to prevent the issuance of any stop order or to obtain its withdrawal
      if
      such stop order should be issued.

     

     (d)           Material
      Development Election.

     

    (i)           Subject
      to Section 6(d)(ii) below, the Company shall be entitled, for a period of
      time not to exceed thirty consecutive (30) days (a “Suspension Period”),
      to postpone the filing of any Registration Statement otherwise required to
      be
      filed by it pursuant to Section 6(b) and/or request that the Holders
      refrain from effecting any public sales or distributions of their Registrable
      Securities if the Company’s Board of Directors shall have reasonably determined
      in good faith and in its reasonable business judgment that such registration
      would interfere in any material respect with any financing (other than an
      underwritten secondary offering of any securities of the Company), acquisition,
      corporate reorganization or other transaction or development involving the
      Company or any subsidiary of the Company that in the reasonable good faith
      business judgment of such board is a transaction or development that is or
      would
      be material to the Company (a “Material Development
      Election”).

     

     

     

    
      
        
        

      

      
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    (ii)           The
      Board of Directors shall, as promptly as practicable, give the Holders written
      notice of any such Material Development Election.  In the event of a
      determination by the Board of Directors to postpone the filing of a Registration
      Statement required to be filed pursuant to Section 6(b) hereof, the
      Company shall be required to file such Registration Statement as soon as
      practicable after the Board of Directors of the Company shall determine, in
      its
      reasonable business judgment, that the filing of such Registration Statement
      and
      the offering thereunder will not interfere with the aforesaid material
      transaction or development, but in any event no later than the end of such
      Suspension Period.  In addition, if the Board of Directors of the
      Company has requested that the Holders refrain from making public sales or
      distributions of their Registrable Securities, such board shall, as promptly
      as
      practicable following its determination that the Holders may recommence such
      public sales and distributions, notify such Holders in writing of such
      determination (but in any event no later than the end of such Suspension
      Period).  In the event the Company shall exercise a Material
      Development Election during a period when a Registration Statement filed
      pursuant to Section 6(b) hereof is effective, the time period specified
      in Section 6(b) hereof during which such Registration Statement is
      required to be kept effective shall be extended by the number of days during
      which the Holders are prohibited by the Company from publicly selling or
      distributing their securities.

     

    (iii)           The
      Purchaser agrees that, upon receipt of any notice from the Company of a
      Suspension Period, the Purchaser shall forthwith discontinue disposition of
      shares of Common Stock covered by such Registration Statement or Prospectus
      until such Purchaser (A) is notified in writing by the Company that the use
      of
      the applicable prospectus may be resumed, (B) has received copies of a
      supplemental or amended prospectus, if applicable, and (C) has received copies
      of any additional or supplemental filings which are incorporated or deemed
      to be
      incorporated by reference into such prospectus.

     

     

    
      
        
        

      

      
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    (iv)
      Notwithstanding the foregoing, no more than one Suspension Period may occur
      during any twelve-month period, unless approved by a majority-in-interest of
      the
      then outstanding Holders (on a common equivalent basis).  The Company
      shall use its best efforts to limit the duration and aggregate number of any
      Suspension Periods.  (e)Registration Expenses.  All
      expenses incident to the Company’s performance of or compliance with Section
      6 of this Agreement, including all registration and filing fees, fees and
      expenses of compliance with securities or blue sky laws (including reasonable
      fees and disbursements of counsel in connection with blue sky qualifications
      or
      registrations (or the obtaining of exemptions therefrom) of the Registrable
      Securities), printing expenses (including expenses of printing Prospectuses),
      messenger and delivery expenses, internal expenses (including all salaries
      and
      expenses of its officers and employees performing legal or accounting duties),
      fees and disbursements of its counsel and its independent certified public
      accountants, securities acts liability insurance (if the Company elects to
      obtain such insurance), fees and expenses of any special experts retained by
      the
      Company in connection with any registration hereunder, fees and expenses of
      other Persons retained by the Company, (all such expenses being referred to
      as
“Registration Expenses”), shall be borne by the Company, whether or not
      any registration statement becomes effective; provided that
      Registration Expenses shall not include any underwriting discounts, commissions
      or fees attributable to the sale of the Registrable Securities.

     

    (f)           Registration
      Rights Indemnification.

     

    (i)           Indemnification
      by the Company.

     

    (1)           The
      Company will indemnify and hold harmless, to the fullest extent permitted by
      law, but without duplication, each Holder, including any managed or advised
      accounts and any investment advisor or agent therefore, officers, directors,
      employees, partners, representatives and agents, and each Person who controls
      such Holder or such other Persons (within the meaning of the Securities Act)
      (for purposes of this Section 6(f)(i), a “Holder Indemnified
      Person”), from and against, and will reimburse such Holder Indemnified
      Person with respect to, any and all claims, actions, demands, losses, damages,
      liabilities, costs and expenses (including reasonable costs of investigation
      and
      reasonable legal fees and expenses) (“Indemnifiable Costs and Expenses”) to
      which such Holder Indemnified Person may become subject under the Securities
      Act
      or otherwise and arise out of or are based upon (A) violation of securities
      laws
      or (B) any untrue statement or alleged untrue statement of any material fact
      contained in, or any omission or alleged omission to state therein a material
      fact required to be stated in, any such Registration Statement, any Prospectus
      contained therein or any amendment or supplement thereto or necessary to make
      the statements contained therein, in light of the circumstances under which
      they
      were made, not misleading; provided, however, that the Company will not
      be liable in any such case to the extent that any costs or expense covered
      by
      the preceding clauses (A) or (B) arises out of or results from any untrue or
      alleged untrue statement of any material fact contained in such Registration
      Statement, any Prospectus contained therein or any amendment or supplement
      thereto or any omission or alleged omission to state therein a material fact
      required to be stated therein or necessary to make the statements therein,
      in
      light of the circumstances in which

     

     

     

    
      
        
        

      

      
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    they
      were
      made, not misleading, in each case to the extent, but only to the extent, that
      such untrue statement or alleged untrue statement or omission or alleged
      omission was so made solely in reliance upon and in substantial conformity
      with
      written information furnished by such Holder Indemnified Person specifically
      for
      use in the preparation of any such Registration Statement, Prospectus or
      amendment or supplement thereto.

     

    (2)           The
      Company further agrees promptly upon demand by each Holder Indemnified Person
      to
      reimburse each Holder Indemnified Person for any Holder Indemnifiable Costs
      and
      Expenses as they are incurred by it; provided that if the Company
      reimburses a Holder Indemnified Person hereunder for any expenses incurred
      in
      connection with a lawsuit, claim, inquiry or other proceeding or investigation
      for which indemnification is sought, such Holder Indemnified Person agrees
      to
      refund such reimbursement of Holder Indemnifiable Costs and Expenses to the
      extent it is finally judicially determined that the indemnity provided for
      in
      this Section 6(f)(i) is not applicable to, or the Company is not
      otherwise obligated to pay, such Holder Indemnified Person in accordance with
      the terms hereof or otherwise.  The indemnity, contribution and
      expense reimbursement obligation of the Company under this Section
      6(f)(i) shall be in addition to any liability it may otherwise have. The
      obligations of the Company hereunder shall survive the Closing and the
      termination of any Registration Statement under which any Registrable Securities
      were registered the termination of this Agreement and shall not be extinguished
      with respect to any Person because any other Person is not entitled to indemnity
      or contribution hereunder.

     

    (ii)           Indemnification
      by Holders of Registrable Securities.  Each Holder
      whose  Registrable Securities are  included in a
      Registration Statement pursuant to the provisions of this Section 6 will
      indemnify and hold harmless the Company and its officers, directors, employees,
      partners, stockholders, agents, representatives, and any Person who controls
      the
      Company or any of its subsidiaries or Affiliates (within the meaning of the
      Securities Act) (each, a “Company Indemnified Person”), from and against,
      and will reimburse such Company Indemnified Person with respect to, any and
      all
      Indemnifiable Costs and Expenses to which the Company or such Company
      Indemnified Person may become subject under the Securities Act or otherwise
      and
      which arise out of or result from any untrue or alleged untrue statement of
      any
      material fact contained in such Registration Statement, any Prospectus contained
      therein or any amendment or supplement thereto, or any omission or the alleged
      omission to state therein any material fact required to be stated therein or
      necessary to make the statements therein, in light of the circumstances in
      which
      they were made, not misleading, in each case to the extent, but only to the
      extent, that such untrue statement or omission or alleged untrue statement
      or
      alleged omission was so made solely in reliance upon and in substantial
      conformity with written information furnished by such Holder specifically for
      use in the preparation thereof; provided, however, that the liability
      of any Holder pursuant to this subsection (ii) shall be limited to an amount
      not
      to exceed the net proceeds received by such Holder pursuant to the Registration
      Statement which gives rise to such obligation to indemnify.

     

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

     

    (iii)           Conduct
      of Indemnification Proceedings; Contribution.

     

    (1)           Each
      indemnifying party and indemnified party under this Section 6(f) shall
      comply with the procedures set forth in Section 7(a)(iii) with respect to
      any indemnity sought pursuant to this Section 6(f).

     

    (2)           Each
      indemnifying party and indemnified party under this Section 6(f) also
      agrees to comply with the provisions in Section 7(a)(iv) as they relate
      to contribution.

     

    (g)           Reporting
      Requirements Under the Exchange Act.  The Company shall use its
      commercially reasonable efforts to make publicly available and available to
      the
      Holders, pursuant to Rule 144, such information as is necessary to enable the
      Holders to make sales of Registrable Securities pursuant to that
      Rule.  The Company shall use its commercially reasonable efforts to
      file timely with the SEC all documents and reports required of the Company
      under
      the Exchange Act.  The Company shall furnish to any Holder, upon
      request, a written statement executed on behalf of the Company as to compliance
      with the current public information requirements of Rule 144.  In
      addition, the Company will provide to any Holder of a Registrable Security,
      or
      any potential purchaser of a Registrable Security, upon any such Person’s
      reasonable request, the information required by paragraph (d)(4) of Rule
      144A.

     

    (h)           Stockholder
      Information. The Company may require each seller of Registrable Securities
      as to which any registration is being effected to furnish to the Company such
      information regarding such seller and the distribution of such securities as
      the
      Company or the Managing Underwriter may from time to time reasonably request
      in
      writing.

     

    7.           Miscellaneous.

     

    (a)           Indemnification.  In
      addition, to any indemnification provided elsewhere in this Agreement, the
      parties hereto agree as follows:

     

    (i)           Company
      Indemnification.

     

    (1)           The
      Company will indemnify and hold harmless, to the fullest extent permitted by
      law, but without duplication, the Purchaser, including any managed or advised
      accounts and any investment advisor or agent therefor, and their respective,
      officers, directors, employees, partners, representatives, agents, and each
      Person who controls the Company and each of its Affiliates within the meaning
      of
      the Securities Act)  (each of the foregoing Persons being a
“Purchaser Indemnified Person”), from and against any and all
      Indemnifiable Costs and Expenses to which such Purchaser Indemnified Person
      may
      become subject under the Securities Act or otherwise arising out of or based
      in
      any manner upon any breach by the Company of any its representations, warranties
      or covenants contained in the Agreement or in any agreement, instrument or
      document delivered by the Company hereunder.

     

     

     

    
      
        
        

      

      
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     (2)           The
      obligations of the Company hereunder shall survive the Closing and any
      repurchase, conversion, exchange or transfer of the Shares, the Warrants and
      the
      Warrant Shares and the termination of this Agreement and shall not be
      extinguished with respect to any Person because any other Person is not entitled
      to indemnity or contribution hereunder.

     

    (ii)           Purchaser
      Indemnification. The Purchaser agrees and covenants to hold harmless and
      indemnify each Company Indemnified Person, from and against any and all
      Indemnifiable Costs and Expenses to which such Company Indemnified Person may
      become subject under the Securities Act or otherwise which arises out of or
      is
      based in any manner upon any breach by the Purchaser of any its representations,
      warranties or covenants contained in the Agreement or in any agreement,
      instrument or document delivered by the Purchaser hereunder.

     

    (iii)           Conduct
      of Indemnification Proceedings.  Promptly after receipt by a party
      indemnified pursuant to the provisions of paragraph (i) or (ii) of this
Section 7(a) or paragraph (i) or (ii) of Section 6(f) of notice of
      the commencement of any action involving the subject matter of the foregoing
      indemnity provisions, such indemnified party will, if a claim thereof is to
      be
      made against the indemnifying party pursuant to the provisions of paragraph
      (i)
      or (ii) of this Section 7(a) or paragraph (i) or (ii) of Section
      6(f), notify the indemnifying party of the commencement thereof; but the
      omission so to notify the indemnifying party will not relieve it from any
      liability which it may have to an indemnified party otherwise than under
      paragraph (i) or (ii) of this Section 7(a) or paragraph (i) or (ii) of
Section 6(f), and shall not relieve the indemnifying party from liability
      under this Section 7(a) or Section 6(f) unless such indemnifying
      party is materially prejudiced by such omission.  In case such action
      is brought against any indemnified party and it notifies the indemnifying party
      of the commencement thereof, the indemnifying party shall have the right to
      participate in, and, to the extent that it may wish, jointly with any other
      indemnifying party similarly notified, to assume the defense thereof, with
      counsel reasonably satisfactory to such indemnified party, and after notice
      from
      the indemnifying party to such indemnified party of its election so to assume
      the defense thereof, the indemnifying party will not be liable to such
      indemnified party pursuant to the provisions of such paragraph (i) or (ii)
      of
      this Section 7(a) or paragraph (i) or (ii) of Section 6(f) for any
      legal or other expense subsequently incurred by such indemnified party in
      connection with the defense thereof other than reasonable costs of
      investigation.  No indemnifying party shall be liable to an
      indemnified party for any settlement of any action or claim without the consent
      of the indemnifying party.  No indemnifying party will consent to
      entry of any judgment or enter into any settlement which does not include as
      an
      unconditional term thereof the giving by the claimant or plaintiff to such
      indemnified party of a release from all liability in respect to such claim
      or
      litigation and no settlement can have non-monetary remedies.

     

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

     

    (iv)           Contribution.  If
      the indemnification provided for in subsection (i) or (ii) of this Section
      7(a) or in subsection (i) or (ii) of Section 6(f) is held by a court
      of competent jurisdiction to be unavailable to a party to be indemnified with
      respect to any Indemnifiable Costs and Expenses, then each indemnifying party
      under any such subsection, in lieu of indemnifying such indemnified party
      thereunder, hereby agrees to contribute to the amount paid or payable by such
      indemnified party as a result of Indemnifiable Costs and Expenses, in such
      proportion as is appropriate to reflect the relative fault of the indemnifying
      party on the one hand and of the indemnified party on the other in connection
      with the statements or omissions, acts, facts matters or circumstances which
      resulted in such Indemnifiable Costs and Expenses, as well as any other relevant
      equitable considerations.  To the extent applicable to Section
      6(f) hereof, the relative fault of the indemnifying party and of the
      indemnified party shall be determined by reference to, among other things,
      whether the untrue or alleged untrue statement of a material fact or the
      omission or alleged omission to state a material fact relates to information
      supplied by the indemnifying party or by the indemnified party and the parties’
relative intent, knowledge, access to information and opportunity to correct
      or
      prevent such statement or omission.  No Person guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the Securities Act)
      shall be entitled to contribution hereunder from any Person who was not guilty
      of such fraudulent misrepresentation.

     

    (b)           Entire
      Agreement; Survival of Provisions. This Agreement constitutes the
      entireagreement of the parties with respect to the transactions contemplated
      hereby andsupersedes all prior agreements and understandings with respect
      thereto, whether written or oral.  All of the covenants of the parties
      made herein shall remain operative and in full force and effect pursuant to
      their respective terms regardless of acceptance of the Securities and the
      Warrant Shares, and payment therefor.  The representations and
      warranties set forth herein shall survive the execution and delivery of this
      Agreement until the first anniversary of the date hereof (the “Expiration
      Date”), and shall in no way be affected by any investigation of the subject
      matter thereof made by or on behalf of the Purchaser or the
      Company.  Notwithstanding the preceding sentence, any representation
      or warranty in respect of which an indemnity may be sought hereof shall survive
      the time at which it would otherwise terminate pursuant to the preceding
      sentence, if a claim for indemnification shall have been given to the party
      against whom such indemnity may be sought prior to the Expiration Date. The
      representations, warranties, agreements and covenants made in the Agreement
      shall be deemed to have been relied upon by the parties hereto.

     

    (c)           No
      Waiver; Modifications in Writing.  No failure or delay by a party
      in exercisingany right, power or remedy hereunder shall operate as a waiver
      thereof, nor shall anysingle or partial exercise of any such right, power or
      remedy preclude any other or further exercise thereof or the exercise of any
      other right, power or remedy.  Except as otherwise expressly provided
      herein with respect to any right of indemnification, the remedies provided
      for
      herein are cumulative and are not exclusive of any remedies that may be
      available to any party at law or in equity or otherwise.  No waiver of
      or consent to any departure by a party from any provision of this Agreement
      shall be effective unless signed in writing by the parties entitled to the
      benefit thereof.  No amendment,

     

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

     

    modification
      or termination of any provision of this Agreement shall be effective unless
      signed in writing by all parties.  Any amendment, supplement or
      modification of or to any provision of this Agreement, any waiver of any
      provision of this Agreement, and any consent to any departure from the terms
      of
      any provision of this Agreement, shall be effective only in the specific
      instance and for the specific purpose for which made or given.

     

    (d)           Notices.  All
      notices, demands and other communications provided for hereundershall be in
      writing, shall be given by registered or certified mail, return receipt
      requested,on the date sent by telecopy with electronic confirmation of such
      transmission, the business day next following deposit with a courier service
      for
      overnight delivery with written confirmation of such delivery or upon personal
      delivery, addressed to the parties, as follows:

     

    If
      to the
      Company, to:

     

    Startech
      Environmental Corporation

    88 Danbury
      Road, Suite 2A

    Wilton,
      Connecticut 06897-2525

    Attention:  Chief
      Financial Officer

    Fax:  (203)
      762-2499

     

    with
      a
      copy to:

     

    Kramer
      Levin Naftalis & Frankel LLP

    1177
      Avenue of the Americas

    New
      York,
      New York 10036

    Attention:
      Scott S. Rosenblum Esq.

    Fax:
      (212) 715-8000

     

    If
      to the
      Purchaser, to:

     

    Francisco
      J. Rivera Fernandez

    PO
      Box
      11852

    San
      Juan,
      Puerto Rico 00922-1852

    787-781-2555

    

     

    or
      to such other address as any party
      shall designate in writing in compliance with theprovisions of this Section
      7(d).

     

    (e)           Execution
      in Counterparts.  This Agreement may be executed in any number
      ofcounterparts and by different parties hereto on separate counterparts, each
      of
      whichcounterparts, when so executed and delivered, shall be deemed to be an
      original and all of which counterparts, taken together, shall constitute but
      one
      and the same Agreement.

     

    (f)           Binding
      Effect; Assignment.  The rights and obligations of the parties
      under thisAgreement may not be assigned or otherwise transferred to any other
      person, without the

     

     

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

     

     

    prior
      written consent of the other party hereto; provided that a Purchaser
      may assign or otherwise transfer the Shares to any of its Affiliates without
      obtaining any such consent, but only if such Affiliate: (i) agrees to be
      bound by the terms of this Agreement; (ii) is, at the time of such transfer,
      an
“accredited Investor” and provides a fully completed Investor Questionnaire and
      such other written certification as the Company may reasonably require as to
      the
      transferee’s status as an “accredited investor”; and (iii) such transfer to any
      such transferee does not violate federal or state securities laws and counsel
      for transferee, at the Company’s request, provides and opinion of counsel as to
      the same.  Except as expressly provided in this Agreement, this
      Agreement shall not be construed so as to confer any right or benefit upon
      any
      person other than the parties to this Agreement, their respective permitted
      heirs, representatives, executors, successors and assigns, each Company
      Indemnified Person and each Purchaser Indemnified Person.  This
      Agreement shall be binding upon and shall inure to the benefit of the Company,
      the Purchaser and their respective permitted heirs, representatives, executors,
      successors and assigns.

     

    (g)           Governing
      Law.  This Agreement shall be deemed to be a contract made
      underand shall be governed by and construed in accordance with the internal
      laws
      of the Stateof Connecticut without reference to the principles of conflict
      of
      laws.

     

    (h)           Consent
      to Jurisdiction and Service of Process. Any suit, action or
      proceedingarising out of or relating to the Agreement or the transactions
      contemplated hereby maybe instituted in any Federal court situated in the State
      of Connecticut or any state court of the State of Connecticut, and each party
      agrees not to assert, by way of motion, as a defense or otherwise, in any such
      suit, action or proceeding, any claim that it is not subject personally to
      the
      jurisdiction of such court, that the suit, action or proceeding is brought
      in an
      inconvenient forum, that the venue of the suit, action or proceeding is improper
      or that the Agreement or the subject matter hereof or thereof may not be
      enforced in or by such court.  Each party further irrevocably submits
      to the jurisdiction of such court in any such suit, action or
      proceeding.  Any and all service of process and any other notice in
      any such suit, action or proceeding shall be effective against any party if
      given personally or by registered or certified mail, return receipt requested
      if
      sent to such party at the address for such party set forth in Section
      7(d) hereof, or by any other means of mail that requires a signed receipt,
      postage fully prepaid, mailed to such party as herein
      provided.  Nothing herein contained shall be deemed to affect the
      right of any party to serve process in any manner permitted by law or to
      commence legal proceedings or otherwise proceed against any other party in
      any
      other jurisdiction.

     

    (i)           Severability.
      Any provision hereof that is prohibited or unenforceable in anyjurisdiction
      shall, as to such jurisdiction, be ineffective to the extent of such
      prohibitionor unenforceability without invalidating the remaining provisions
      hereof, and any such prohibition or unenforceability in any jurisdiction shall
      not invalidate or render unenforceable such provision in any other
      jurisdiction.  To the extent permitted by law, the parties hereto
      waive any provision of law that renders any such provision prohibited or
      unenforceable in any respect.

     

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

     

    (j)           Headings.  The
      Article, Section and subsection headings used or contained in thisAgreement
      are
      for convenience of reference only and shall not affect the construction ofthis
      Agreement.

     

    (k)           Expenses.
      Each party shall bear its own fees, costs and expenses in connection with the
      execution, delivery and performance of the Agreement.

     

    (l)           Waiver
      of Jury Trial. TO THE EXTENT THEY MAY LEGALLY DO SO, THE PARTIES HERETO
      EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE
      OF ACTION OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT OR
      IN
      ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE
      PARTIES HERETO WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS RELATED
      HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE
      OF WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  TO THE EXTENT
      THEY MAY LEGALLY DO SO, THE PARTIES HERETO AGREE THAT ANY SUCH CLAIM, DEMAND,
      ACTION, CAUSE OF ACTION OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT
      A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY
      OF
      THIS SECTION 7(m) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
      THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL
      BY
      JURY.  

     

    (m)           Publicity.  The
      parties agree that no public release or announcement concerningthe Agreement
      or
      the transactions contemplated hereby shall be made without advancereview and
      approval by each party hereto, except as otherwise required by applicable law,
      and which review and approval shall not be unreasonably withheld or
      delayed.

     

    (n)           Enforcement.  The
      Purchaser acknowledges that the Company will be irreparablydamaged if the
      provisions of this Agreement applicable to the Purchaser are notspecifically
      enforced.  If the Purchaser shall default in any of its obligations
      under this Agreement or if any representation or warranty made by or on behalf
      of the Purchaser in this Agreement or in any certificate, report or other
      instrument delivered under or pursuant to any term hereof or thereof shall
      be
      untrue or misleading as of the date made, the Company may proceed to protect
      and
      enforce its rights by suit in equity or action at law (without the posting
      of
      any bond and without proving that damages would be inadequate), whether for
      the
      specific performance of any term contained in this Agreement, injunction against
      the breach of any such term or in furtherance of the exercise of any power
      granted in this Agreement, or to enforce any other legal or equitable right
      of
      the Company or to take any one of more of such actions.  The Company
      shall be permitted to enforce specifically the terms and provisions hereof
      in
      any court of the United States or any state thereof or any other court having
      jurisdiction, this being in addition to any other remedy to which the Company
      may be entitled at law or in equity or otherwise.

     

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

     

    (o)           Further
      Assurances. Each party shall execute and deliver such documents, instruments
      and agreements and take such further actions as may be reasonably requiredor
      desirable to carry out the provisions of this Agreement and the transactions
      contemplated hereby, and each of the parties hereto shall cooperate with each
      other in connection with the foregoing.

     

    (p)           Broker’s
      Fee.  The Purchaser acknowledges that the Company may pay a fee to
      one or more placement agents in respect of the sale of the Securities to the
      Purchaser.The Purchaser and the Company hereby agree that the Purchaser shall
      not be responsible for such fee and that the Company will indemnify and hold
      harmless the Purchaser and each Purchaser/Affiliate against any losses, claims,
      damages, liabilities or expenses, joint or several, to which the Purchaser
      or
      Purchaser/Affiliate may become subject with respect to such fee.  Each
      of the parties hereto hereby represents that, on the basis of any actions and
      agreements by it, there are no other brokers or finders entitled to compensation
      in connection with the sale of the Securities to the Purchaser.

     

    (q)           Force
      Majeure.  Neither party shall be deemed in default of any
      provision of thisAgreement (other than provisions regarding confidentiality),
      to
      the extent thatperformance of its obligations or attempts to cure a breach
      are
      materially delayed or prevented by any event reasonably beyond the control
      of
      such party, including, without limitation, war, hostilities, acts of terrorism,
      revolution, riot, civil commotion, national emergency, strike, lockout,
      unavailability of supplies, epidemic, fire, flood, earthquake, force of nature,
      explosion, embargo, or any other Act of God, or any law, proclamation,
      regulation, ordinance, or other act or order of any court, government or
      governmental agency, provided that such party gives the other party written
      notice thereof promptly upon discovery thereof and uses reasonable efforts
      to
      cure or mitigate the delay or failure to perform

     

    [SIGNATURE
      PAGE FOLLOWS]

     

     

     

     

    
      
        
        

      

      
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      SIGNATURE
        PAGE

    

     

    IN
      WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
      the
      date first above written.

     

    

    

                                    By:
      ______________________________

                                    Name:
      Francisco J.
      Rivera Fernandez

                        Title:

    

                                    

                                    Federal
      Taxpayer
      Identification Number:

                         ________________________________

    

    

                                    STARTECH
      ENVIRONMENTAL CORPORATION

    

    

                                    By:
      ______________________________

                                    Name:

                                    Title:

     

     

     

     

     

     

     

     

    23

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