Document:

Exhibit
      4.6

     

    [FORM
      OF SERIES C WARRANT]

     

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

     

    GENEREX
      BIOTECHNOLOGY CORPORATION

     

    
      WARRANT
        TO PURCHASE COMMON STOCK

    

     

    Warrant
      No.: ____________

    Number
      of
      Shares of Common Stock: ____________

    Date
      of
      Issuance: March 31, 2008 (“Issuance
      Date”)

     

    Generex
      Biotechnology Corporation, a Delaware corporation (the “Company”),
      hereby certifies that, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, _________________, the registered
      holder hereof or its permitted assigns (the “Holder”),
      is
      entitled, subject to the terms set forth below, to purchase from the Company,
      at
      the Exercise Price (as defined below) then in effect, upon exercise of this
      Warrant to Purchase Common Stock (including any Warrants to Purchase Common
      Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
      at
      any time or times on or after the six (6) month and one (1) day anniversary
      of
      the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration
      Date (as defined below), ______________ fully paid and nonassessable shares
      of
      Common Stock (as defined below) (the
      “Warrant
      Shares”).
      Except as otherwise defined herein, capitalized terms in this Warrant shall
      have
      the meanings set forth in Section 16.
      This
      Warrant is one of the Warrants to purchase Common Stock (the “SPA
      Warrants”)
      issued
      pursuant to Section 1 of that certain Securities Purchase Agreement, dated
      as of
      March 31, 2008, by and among the Company and the investors (the “Buyers”)
      referred to therein (the “Securities
      Purchase Agreement”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	1.  	
              EXERCISE
                OF WARRANT.

            

    

     

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

     

    
      
        
        

      

      
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    (b)  Exercise
      Price.
      For
      purposes of this Warrant, “Exercise
      Price”
means
      $1.21, subject to adjustment as provided herein.

     

    (c)  Company’s
      Failure to Timely Deliver Securities.
      If the
      Company shall fail, for any reason or for no reason, to issue to the Holder
      within three (3) Trading Days of receipt of the Exercise Delivery Documents,
      a
      certificate for the number of shares of Common Stock to which the Holder is
      entitled and register such shares of Common Stock on the Company’s share
      register or to credit the Holder’s balance account with DTC for such number of
      shares of Common Stock to which the Holder is entitled upon the Holder’s
      exercise of this Warrant (as the case may be), then, in addition to all other
      remedies available to the Holder, the Company shall pay in cash to the Holder
      on
      each day after such third (3rd)
      Trading
      Day that the issuance of such shares of Common Stock is not timely effected
      an
      amount equal to 2% of the product of (A) the sum of the number of shares of
      Common Stock not issued to the Holder on a timely basis and to which the Holder
      is entitled and (B) the Closing Sale Price of the Common Stock on the Trading
      Day immediately preceding the last possible date which the Company could have
      issued such shares of Common Stock to the Holder without violating Section
      1(a).
      In
      addition to the foregoing, if within three (3) Trading Days after the Company’s
      receipt of the facsimile copy of an Exercise Notice, the Company shall fail
      to
      issue and deliver a certificate to the Holder and register such shares of Common
      Stock on the Company’s share register or credit the Holder’s balance account
      with DTC for the number of shares of Common Stock to which the Holder is
      entitled upon such Holder’s exercise hereunder (as the case may be), and if on
      or after such third (3rd)
      Trading
      Day the Holder purchases (in an open market transaction or otherwise) shares
      of
      Common Stock to deliver in satisfaction of a sale by the Holder of shares of
      Common Stock issuable upon such exercise that the Holder anticipated receiving
      from the Company (a “Buy-In”),
      then
      the Company shall, within three (3) Business Days after the Holder’s request and
      in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal
      to the Holder’s total purchase price (including brokerage commissions, if any)
      for the shares of Common Stock so purchased (the “Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate (and to issue
      such shares of Common Stock) shall terminate, or (ii) promptly honor its
      obligation to deliver to the Holder a certificate or certificates representing
      such shares of Common Stock or credit the Holder’s balance account with DTC for
      the number of shares of Common Stock to which the Holder is entitled upon such
      Holder’s exercise hereunder (as the case may be) and pay cash to the Holder in
      an amount equal to the excess (if any) of the Buy-In Price over the product
      of
      (A) such number of shares of Common Stock times (B) the Closing Sale Price
      of
      the Common Stock on the Trading Day immediately preceding the date of the
      Exercise Notice.

     

    (d)  Cashless
      Exercise.
      Notwithstanding anything contained herein to the contrary (other than Section
      1(f)
      below),
      the Holder may, in its sole discretion, exercise this Warrant in whole or in
      part and, in lieu of making the cash payment otherwise contemplated to be made
      to the Company upon such exercise in payment of the Aggregate Exercise Price,
      elect instead to receive upon such exercise the “Net Number” of shares of Common
      Stock determined according to the following formula (a “Cashless
      Exercise”):

     

    
      
        
        

      

      
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              Net
                Number =

            	
              (A
                x B) - (A x C)

            
	 	
              B

            

    

    For
      purposes of the foregoing formula:

     

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

     

    B=
      the
      Closing Sale Price of the Common Stock on the Trading Day immediately preceding
      the date of the Exercise Notice.

     

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

     

    (e)  Disputes.
      In the
      case of a dispute as to the determination of the Exercise Price or the
      arithmetic calculation of the number of Warrant Shares to be issued pursuant
      to
      the terms hereof (including, without limitation, under Section 1(h)), the
      Company shall promptly issue to the Holder the number of Warrant Shares that
      are
      not disputed and resolve such dispute in accordance with Section 13.

     

    (f)  Limitations
      on Exercises.

     

    (i)  Beneficial
      Ownership.
      Notwithstanding anything to the contrary contained in this Warrant, this Warrant
      shall not be exercisable by the Holder hereof to the extent (but only to the
      extent) that, if exercisable by the Holder, the Holder or any of its affiliates
      would beneficially own in excess of [4.99%] [9.99%] (the “Maximum
      Percentage”)
      of the
      outstanding shares of Common Stock. To the extent the above limitation
      applies, the determination of whether this Warrant shall be exercisable
      (vis-à-vis other convertible, exercisable or exchangeable securities owned by
      the Holder) and of which warrants shall be exercisable (as among all warrants
      owned by the Holder) shall, subject to such Maximum Percentage limitation,
      be
      determined on the basis of the first submission to the Company for conversion,
      exercise or exchange (as the case may be). No prior inability to exercise this
      Warrant pursuant to this paragraph shall have any effect on the applicability
      of
      the provisions of this paragraph with respect to any subsequent
      determination of exercisability. For the purposes of this paragraph, beneficial
      ownership and all determinations and calculations (including, without
      limitation, with respect to calculations of percentage ownership) shall be
      determined by the Holder in accordance with Section 13(d) of the 1934 Act (as
      defined in the Securities Purchase Agreement) and the rules and regulations
      promulgated thereunder. The provisions of this paragraph shall be implemented
      in
      a manner otherwise than in strict conformity with the terms of this paragraph
      to
      correct this paragraph (or any portion hereof) which may be defective or
      inconsistent with the intended Maximum Percentage beneficial ownership
      limitation herein contained or to make changes or supplements necessary or
      desirable to properly give effect to such Maximum Percentage limitation. The
      limitations contained in this paragraph shall apply to a successor Holder of
      this Warrant. For any reason at any time, upon the written or oral request
      of
      the Holder, the Company shall within one (1) Business Day confirm orally and
      in
      writing to the Holder the number of shares of Common Stock then outstanding,
      including by virtue of any prior conversion or exercise of convertible or
      exercisable securities into Common Stock, including, without limitation,
      pursuant to this Warrant or securities issued pursuant to the Securities
      Purchase Agreement. Each delivery of an Exercise Notice by the Holder will
      constitute a representation by the Holder that it has evaluated the limitation
      set forth in this paragraph and determined that issuance of the full number
      of
      Warrant Shares requested by the Holder in such Exercise Notice is permitted
      under this paragraph.

     

    
      
        
        

      

      
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    (ii)  Principal
      Market Regulation.
      The
      Company shall not issue any shares of Common Stock upon exercise of this Warrant
      if the issuance of such shares of Common Stock would exceed the aggregate number
      of shares of Common Stock which the Company may issue upon conversion or
      exercise (as the case may be) of the Notes and SPA Warrants without breaching
      the Company’s obligations under the rules or regulations of the Principal Market
      (the number of shares which may be issued without violating such rules and
      regulations, the “Exchange
      Cap”),
      except that such limitation shall not apply in the event that the Company (A)
      obtains Shareholder Approval (as defined in the Securities Purchase Agreement)
      as required by the applicable rules of the Principal Market for issuances of
      shares of Common Stock in excess of such amount or (B) obtains a written opinion
      from outside counsel to the Company that such approval is not required, which
      opinion shall be reasonably satisfactory to the Holder. Until Shareholder
      Approval or such written opinion is obtained, no Buyer shall be issued in the
      aggregate, upon exercise or conversion of any SPA Warrants or any of the Notes
      or otherwise, shares of Common Stock in an amount greater than the product
      of
      the Exchange Cap multiplied by a fraction, the numerator of which is the
      original principal amount of Notes issued to such Buyer pursuant to the
      Securities Purchase Agreement on the Closing Date and the denominator of which
      is the aggregate original principal amount of all Notes issued to the Buyers
      pursuant to the Securities Purchase Agreement on the Closing Date (with respect
      to each Buyer, the “Exchange
      Cap Allocation”).
      In
      the event that any Buyer shall sell or otherwise transfer any of such Buyer’s
      SPA Warrants, the transferee shall be allocated a pro rata portion of such
      Buyer’s Exchange Cap Allocation, and the restrictions of the prior sentence
      shall apply to such transferee with respect to the portion of the Exchange
      Cap
      Allocation allocated to such transferee. In the event that any holder of SPA
      Warrants shall exercise all of such holder’s SPA Warrants into a number of
      shares of Common Stock which, in the aggregate, is less than such holder’s
      Exchange Cap Allocation, then the difference between such holder’s Exchange Cap
      Allocation and the number of shares of Common Stock actually issued to such
      holder shall be allocated to the respective Exchange Cap Allocations of the
      remaining holders of SPA Warrants on a pro rata basis in proportion to the
      shares of Common Stock underlying the SPA Warrants then held by each such
      holder. In the event that the Company is prohibited from issuing any Warrant
      Shares for which an Exercise Notice has been received as a result of the
      operation of this Section 1(f)(ii),
      the
      Company shall pay cash in exchange for cancellation of such Warrant Shares,
      at a
      price per Warrant Share equal to the difference between the Closing Sale Price
      of the Common Stock for the Trading Day immediately preceding the date of the
      attempted exercise and the Exercise Price as of such date of attempted
      exercise.

     

    
      
        
        

      

      
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    (g)  Insufficient
      Authorized Shares.
      The
      Company shall at all times keep reserved for issuance under this Warrant a
      number of shares of Common Stock as shall be necessary to satisfy the Company’s
      obligation to issue shares of Common Stock hereunder (without regard to any
      limitation otherwise contained herein with respect to the number of shares
      of
      Common Stock that may be acquirable upon exercise of this Warrant). If,
      notwithstanding the foregoing, and not in limitation thereof, at any time while
      any of the SPA Warrants remain outstanding the Company does not have a
      sufficient number of authorized and unreserved shares of Common Stock to satisfy
      its obligation to reserve for issuance upon exercise of the SPA Warrants at
      least a number of shares of Common Stock equal to the number of shares of Common
      Stock as shall from time to time be necessary to effect the exercise of all
      of
      the SPA Warrants then outstanding (the “Required
      Reserve Amount”)
      (an
“Authorized
      Share Failure”),
      then
      the Company shall immediately take all action necessary to increase the
      Company’s authorized shares of Common Stock to an amount sufficient to allow the
      Company to reserve the Required Reserve Amount for all the SPA Warrants then
      outstanding. Without limiting the generality of the foregoing sentence, as
      soon
      as practicable after the date of the occurrence of an Authorized Share Failure,
      but in no event later than sixty (60) days after the occurrence of such
      Authorized Share Failure, the Company shall hold a meeting of its stockholders
      for the approval of an increase in the number of authorized shares of Common
      Stock. In connection with such meeting, the Company shall provide each
      stockholder with a proxy statement and shall use its best efforts to solicit
      its
      stockholders’ approval of such increase in authorized shares of Common Stock and
      to cause its board of directors to recommend to the stockholders that they
      approve such proposal.

     

    (h)  Issuance
      Limit.
      Notwithstanding anything to the contrary contained in this Warrant (but subject
      to Section 1(f)),
      the
      maximum number of Warrant Shares for which this Warrant may be exercised at
      any
      specific time by the Holder shall be equal to the quotient of (i) the Current
      Available Amount as of such time over (ii) the Exercise Price then in effect
      as
      of such time. The foregoing determination shall be made upon each receipt of
      Exercise Delivery Documents hereunder and no inability to exercise as of any
      specific time as a result of this Section 1(h)
      shall
      affect any future determination of exercisability as of any other time. In
      the
      event that the Holder shall sell or otherwise transfer all or any portion of
      this Warrant, the Company’s Board of Directors shall in good faith make
      equitable adjustments with respect to the Current Available Amount (and the
      components thereof) to properly give effect to such sale of transfer, provided
      further that if the Holder does not accept such adjustments, then the Company’s
      Board of Directors and the Holder shall agree, in good faith, upon an
      independent investment bank of nationally recognized standing to make such
      appropriate adjustments, whose determination shall be final and binding and
      whose fees and expenses shall be borne by the Company.

     

    2.  ADJUSTMENT
      OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
      The
      Exercise Price and number of Warrant Shares issuable upon exercise of this
      Warrant are subject to adjustment from time to time as set forth in this Section
      2.

     

    
      
        
        

      

      
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    (a)  Stock
      Dividends and Splits.
      If the
      Company, at any time on or after the date of the Securities Purchase Agreement,
      (i) pays a stock dividend on one or more classes of its then outstanding shares
      of Common Stock or otherwise makes a distribution on any class of capital stock
      that is payable in shares of Common Stock, (ii) subdivides (by any stock split,
      stock dividend, recapitalization or otherwise) one or more classes of its then
      outstanding shares of Common Stock into a larger number of shares or (iii)
      combines (by combination, reverse stock split or otherwise) one or more classes
      of its then outstanding shares of Common Stock into a smaller number of shares,
      then in each such case the Exercise Price shall be multiplied by a fraction
      of
      which the numerator shall be the number of shares of Common Stock outstanding
      immediately before such event and of which the denominator shall be the number
      of shares of Common Stock outstanding immediately after such event. Any
      adjustment made pursuant to clause (i) of this paragraph shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution, and any adjustment pursuant to clause
      (ii) or (iii) of this paragraph shall become effective immediately after the
      effective date of such subdivision or combination. If any event requiring an
      adjustment under this paragraph occurs during the period that an Exercise Price
      is calculated hereunder, then the calculation of such Exercise Price shall
      be
      adjusted appropriately to reflect such event.

     

    (b)  Adjustment
      Upon Issuance of Shares of Common Stock.
      If and
      whenever on or after the date of the Securities Purchase Agreement, the Company
      issues or sells, or in accordance with this Section 2
      is
      deemed to have issued or sold, any shares of Common Stock (including the
      issuance or sale of shares of Common Stock owned or held by or for the account
      of the Company, but excluding any Excluded Securities (as defined in the
      Securities Purchase Agreement) issued or sold or deemed to have been issued
      or
      sold) for a consideration per share (the “New
      Issuance Price”)
      less
      than a price equal to the Exercise Price in effect immediately prior to such
      issue or sale or deemed issuance or sale (such lesser price being referred
      to as
      the “Applicable
      Price”)
      (the
      foregoing a “Dilutive
      Issuance”),
      then
      immediately after such Dilutive Issuance, the Exercise Price then in effect
      shall be reduced to an amount equal to the New Issuance Price. For purposes
      of
      determining the adjusted Exercise Price under this Section 2(b),
      the
      following shall be applicable:

     

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

     

    
      
        
        

      

      
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    (ii)  Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any Convertible Securities and the lowest
      price per share for which one share of Common Stock is issuable upon the
      conversion, exercise or exchange thereof is less than the Applicable Price,
      then
      such share of Common Stock shall be deemed to be outstanding and to have been
      issued and sold by the Company at the time of the issuance or sale of such
      Convertible Securities for such price per share. For the purposes of this
      Section 2(b)(ii),
      the
“lowest price per share for which one share of Common Stock is issuable upon
      the
      conversion, exercise or exchange thereof” shall be equal to the sum of the
      lowest amounts of consideration (if any) received or receivable by the Company
      with respect to one share of Common Stock upon the issuance or sale of the
      Convertible Security and upon conversion, exercise or exchange of such
      Convertible Security. Except as contemplated below, no further adjustment of
      the
      Exercise Price shall be made upon the actual issuance of such shares of Common
      Stock upon conversion, exercise or exchange of such Convertible Securities,
      and
      if any such issue or sale of such Convertible Securities is made upon exercise
      of any Options for which adjustment of this Warrant has been or is to be made
      pursuant to other provisions of this Section 2(b),
      except
      as contemplated below, no further adjustment of the Exercise Price shall be
      made
      by reason of such issue or sale. 

     

    (iii)  Change
      in Option Price or Rate of Conversion.
      If the
      purchase or exercise price provided for in any Options, the additional
      consideration, if any, payable upon the issue, conversion, exercise or exchange
      of any Convertible Securities, or the rate at which any Convertible Securities
      are convertible into or exercisable or exchangeable for shares of Common Stock
      increases or decreases at any time, the Exercise Price in effect at the time
      of
      such increase or decrease shall be adjusted to the Exercise Price which would
      have been in effect at such time had such Options or Convertible Securities
      provided for such increased or decreased purchase price, additional
      consideration or increased or decreased conversion rate, as the case may be,
      at
      the time initially granted, issued or sold. For purposes of this Section
2(b)(iii),
      if the
      terms of any Option or Convertible Security that was outstanding as of the
      date
      of issuance of this Warrant are increased or decreased in the manner described
      in the immediately preceding sentence, then such Option or Convertible Security
      and the shares of Common Stock deemed issuable upon exercise, conversion or
      exchange thereof shall be deemed to have been issued as of the date of such
      increase or decrease. No adjustment pursuant to this Section 2(b)
      shall be
      made if such adjustment would result in an increase of the Exercise Price then
      in effect.

     

    
      
        
        

      

      
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    (iv)  Calculation
      of Consideration Received.
      In case
      any Option is issued in connection with the issue or sale of other securities
      of
      the Company, together comprising one integrated transaction in which no specific
      consideration is allocated to such Options by the parties thereto, the Options
      will be deemed to have been issued for a consideration of $0.01. If any shares
      of Common Stock, Options or Convertible Securities are issued or sold or deemed
      to have been issued or sold for cash, the consideration received therefor will
      be deemed to be the net amount received by the Company therefor. If any shares
      of Common Stock, Options or Convertible Securities are issued or sold for a
      consideration other than cash, the amount of such consideration received by
      the
      Company will be the fair value of such consideration, except where such
      consideration consists of publicly traded securities, in which case the amount
      of consideration received by the Company for such securities will be the average
      VWAP of such security for the five (5) Trading Day period immediately preceding
      the date of receipt. If any shares of Common Stock, Options or Convertible
      Securities are issued to the owners of the non-surviving entity in connection
      with any merger in which the Company is the surviving entity, the amount of
      consideration therefor will be deemed to be the fair value of such portion
      of
      the net assets and business of the non-surviving entity as is attributable
      to
      such shares of Common Stock, Options or Convertible Securities, as the case
      may
      be. The fair value of any consideration other than cash or publicly traded
      securities will be determined jointly by the Company and the Holder. If such
      parties are unable to reach agreement within ten (10) days after the occurrence
      of an event requiring valuation (the “Valuation
      Event”),
      the
      fair value of such consideration will be determined within five (5) Trading
      Days
      after the tenth (10th)
      day
      following such Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the Holder. The determination of such appraiser
      shall be final and binding upon all parties absent manifest error and the fees
      and expenses of such appraiser shall be borne by the Company.

     

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

     

    (vi)  Floor
      Price.
      No
      adjustment pursuant to Section 2(b)
      shall
      cause the Exercise Price to be less than $1.10 (as adjusted for any stock
      dividend, stock split, stock combination, reclassification or similar
      transaction), provided that the foregoing shall not apply if Shareholder
      Approval (as defined in the Securities Purchase Agreement) is
      obtained.

     

    (c)  Number
      of Warrant Shares.
      Simultaneously with any adjustment to the Exercise Price pursuant to paragraphs
      (a) or (b) of this Section 2,
      the
      number of Warrant Shares that may be purchased upon exercise of this Warrant
      shall be increased or decreased proportionately, so that after such adjustment
      the aggregate Exercise Price payable hereunder for the adjusted number of
      Warrant Shares shall be the same as the aggregate Exercise Price in effect
      immediately prior to such adjustment (without regard to any limitations on
      exercise contained herein).

     

    
      
        
        

      

      
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    (d)  Other
      Events.
      In the
      event that the Company (or any direct or indirect subsidiary thereof) shall
      take any action to which the provisions hereof are not strictly applicable,
      or,
      if applicable, would not operate to protect the Holder from dilution or if
      any
      event occurs of the type contemplated by the provisions of this Section
2
      but not
      expressly provided for by such provisions (including, without limitation, the
      granting of stock appreciation rights, phantom stock rights or other rights
      with
      equity features), then the Company’s Board of Directors shall in good faith
      determine and implement an appropriate adjustment in the Exercise Price and
      the
      number of Warrant Shares (if applicable) so as to protect the rights of the
      Holder; provided that no such adjustment pursuant to this Section 2(d)
      will
      increase the Exercise Price or decrease the number of Warrant Shares as
      otherwise determined pursuant to this Section 2,
      provided further that if the Holder does not accept such adjustments as
      appropriately protecting its interests hereunder against such dilution, then
      the
      Company’s Board of Directors and the Holder shall agree, in good faith, upon an
      independent investment bank of nationally recognized standing to make such
      appropriate adjustments, whose determination shall be final and binding and
      whose fees and expenses shall be borne by the Company.

     

    (e)  Calculations.
      All
      calculations under this Section 2
      shall be
      made to the nearest cent or the nearest 1/100th
      of a
      share, as applicable. The number of shares of Common Stock outstanding at any
      given time shall not include shares owned or held by or for the account of
      the
      Company, and the disposition of any such shares shall be considered an issue
      or
      sale of Common Stock.

     

    3.  RIGHTS
      UPON DISTRIBUTION OF ASSETS.
      If the
      Company shall declare or make any dividend or other distribution of its assets
      (or rights to acquire its assets) to holders of shares of Common Stock, by
      way
      of return of capital or otherwise (including, without limitation, any
      distribution of cash, stock or other securities, property or options by way
      of a
      dividend, spin off, reclassification, corporate rearrangement, scheme of
      arrangement or other similar transaction) (a “Distribution”),
      at
      any time after the issuance of this Warrant, then, in each such case, the Holder
      shall be entitled to participate in such Distribution to the same extent that
      the Holder would have participated therein if the Holder had held the number
      of
      shares of Common Stock acquirable upon complete exercise of this Warrant
      (without regard to any limitations on exercise hereof, including without
      limitation, the Maximum Percentage) immediately before the date on which a
      record is taken for such Distribution, or, if no such record is taken, the
      date
      as of which the record holders of shares of Common Stock are to be determined
      for the participation in such Distribution (provided, however, that to the
      extent that the Holder’s right to participate in any such Distributions would
      result in the Holder exceeding the Maximum Percentage, then the Holder shall
      not
      be entitled to participate in such Distribution to such extent (or the
      beneficial ownership of any such shares of Common Stock as a result of such
      Distribution to such extent) and such Distribution to such extent shall be
      held
      in abeyance for the benefit of the Holder until such time, if ever, as its
      right
      thereto would not result in the Holder exceeding the Maximum
      Percentage).

     

    
      4.    PURCHASE
        RIGHTS; FUNDAMENTAL TRANSACTIONS.

    

     

    (a)  Purchase
      Rights.
      In
      addition to any adjustments pursuant to Section 2
      above,
      if at any time the Company grants, issues or sells any Options, Convertible
      Securities or rights to purchase stock, warrants, securities or other property
      pro rata to the record holders of any class of shares of Common Stock (the
      “Purchase
      Rights”),
      then
      the Holder will be entitled to acquire, upon the terms applicable to such
      Purchase Rights, the aggregate Purchase Rights which the Holder could have
      acquired if the Holder had held the number of shares of Common Stock acquirable
      upon complete exercise of this Warrant (without regard to any limitations on
      exercise hereof, including without limitation, the Maximum Percentage)
      immediately before the date on which a record is taken for the grant, issuance
      or sale of such Purchase Rights, or, if no such record is taken, the date as
      of
      which the record holders of shares of Common Stock are to be determined for
      the
      grant, issue or sale of such Purchase Rights (provided, however, that to the
      extent that the Holder’s right to participate in any such Purchase Right would
      result in the Holder exceeding the Maximum Percentage, then the Holder shall
      not
      be entitled to participate in such Purchase Right to such extent (or beneficial
      ownership of such shares of Common Stock as a result of such Purchase Right
      to
      such extent) and such Purchase Right to such extent shall be held in abeyance
      for the Holder until such time, if ever, as its right thereto would not result
      in the Holder exceeding the Maximum Percentage).

     

    
      
        
        

      

      
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    (b)  Fundamental
      Transactions.
      The
      Company shall not enter into or be party to a Fundamental Transaction unless
      (i)  the Successor Entity assumes in writing all of the obligations of the
      Company under this Warrant and the other Transaction Documents (as defined
      in
      the Securities Purchase Agreement) in accordance with the provisions of this
      Section 4(b)
      pursuant
      to written agreements in form and substance satisfactory to the Holder and
      approved by the Holder prior to such Fundamental Transaction, including
      agreements to deliver to the Holder in exchange for this Warrant a security
      of
      the Successor Entity evidenced by a written instrument substantially similar
      in
      form and substance to this Warrant, including, without limitation, which is
      exercisable for a corresponding number of shares of capital stock equivalent
      to
      the shares of Common Stock acquirable and receivable upon exercise of this
      Warrant (without regard to any limitations on the exercise of this Warrant)
      prior to such Fundamental Transaction, and with an exercise price which applies
      the exercise price hereunder to such shares of capital stock (but taking into
      account the relative value of the shares of Common Stock pursuant to such
      Fundamental Transaction and the value of such shares of capital stock, such
      adjustments to the number of shares of capital stock and such exercise price
      being for the purpose of protecting the economic value of this Warrant
      immediately prior to the consummation of such Fundamental Transaction), and
      which is satisfactory in form and substance to the Holder and (ii) the
      Successor Entity (including its Parent Entity) is a publicly traded corporation
      whose common stock is quoted on or listed for trading on an Eligible Market.
      Upon the occurrence of any Fundamental Transaction, the Successor Entity shall
      succeed to, and be substituted for (so that from and after the date of such
      Fundamental Transaction, the provisions of this Warrant and the other
      Transaction Documents referring to the “Company” shall refer instead to the
      Successor Entity), and may exercise every right and power of the Company and
      shall assume all of the obligations of the Company under this Warrant and the
      other Transaction Documents with the same effect as if such Successor Entity
      had
      been named as the Company herein. Upon consummation of the Fundamental
      Transaction, the Successor Entity shall deliver to the Holder confirmation
      that
      there shall be issued upon exercise of this Warrant at
      any
      time after the consummation of the Fundamental Transaction, in lieu of the
      shares of the Common Stock (or
      other
      securities, cash, assets or other property (except such items still issuable
      under Sections 3
      and
4(a)
      above,
      which shall continue to be receivable thereafter)) issuable
      upon the exercise of this Warrant
      prior
      to
      such Fundamental Transaction,
      such
      shares of the publicly traded Common Stock (or its equivalent) of the Successor
      Entity (including its Parent Entity) which the Holder would have been entitled
      to receive upon the happening of such Fundamental Transaction had this
Warrant
      been
      exercised immediately prior to such Fundamental Transaction (without
      regard to any limitations on the exercise of this Warrant),
      as
      adjusted in accordance with the provisions of this Warrant.
      In
      addition to and not in substitution for any other rights hereunder, prior to
      the
      consummation of any Fundamental Transaction pursuant to which holders of shares
      of Common Stock are entitled to receive securities or other assets with respect
      to or in exchange for shares of Common Stock (a “Corporate
      Event”),
      the
      Company shall make appropriate provision to insure that the Holder will
      thereafter have the right to receive upon an exercise of this Warrant
at
      any
      time after the consummation of
      the
      Fundamental Transaction but
      prior
      to the Expiration Date,
      in lieu
      of the shares of the Common Stock (or
      other
      securities, cash, assets or other property (except such items still issuable
      under Sections 3
      and
4(a)
      above,
      which shall continue to be receivable thereafter)) issuable
      upon the exercise of the Warrant prior to such Fundamental
      Transaction,
      such
      shares of stock, securities, cash, assets or any other property whatsoever
      (including warrants or other purchase or subscription rights) which the Holder
      would have been entitled to receive upon the happening of such Fundamental
      Transaction had the Warrant been exercised immediately prior to such Fundamental
      Transaction (without
      regard to any limitations on the exercise of this Warrant).
      Provision
      made pursuant to the preceding sentence shall be in a form and substance
      reasonably satisfactory to the Holder. The provisions of this Section
4
      shall
      apply similarly and equally to successive Fundamental Transactions and Corporate
      Events and shall be applied as if this Warrant (and any such subsequent
      warrants) were fully exercisable and without regard to any limitations on the
      exercise of this Warrant (provided that the Holder shall continue to be entitled
      to the benefit of the Maximum Percentage, applied however with respect to shares
      of capital stock registered under the 1934 Act and thereafter receivable upon
      exercise of this Warrant (or any such other warrant)).

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (c)  Black
      Scholes Value.
      Notwithstanding the foregoing and the provisions of Section 4(b)
      above,
      in the event of a Fundamental Transaction, if the Holder has not exercised
      this
      Warrant in full prior to the consummation of such Fundamental Transaction,
      at
      the request of the Holder delivered before the ninetieth (90th)
      day
      after the consummation of such Fundamental Transaction, the Company or the
      Successor Entity (as the case may be) shall purchase
      this Warrant from the Holder by paying to the Holder
      cash in
      an amount equal to the Black Scholes Value of the remaining unexercised portion
      of this Warrant on the date of the consummation of such Fundamental
      Transaction.

     

    5.  NONCIRCUMVENTION.
      The
      Company hereby covenants and agrees that the Company will not, by amendment
      of
      its Certificate of Incorporation, Bylaws or through any reorganization, transfer
      of assets, consolidation, merger, scheme of arrangement, dissolution, issue
      or
      sale of securities, or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms of this Warrant, and will at
      all
      times in good faith carry out all the provisions of this Warrant and take all
      action as may be required to protect the rights of the Holder. Without limiting
      the generality of the foregoing, the Company (i) shall not increase the par
      value of any shares of Common Stock receivable upon the exercise of this Warrant
      above the Exercise Price then in effect, (ii) shall take all such actions
      as may be necessary or appropriate in order that the Company may validly and
      legally issue fully paid and nonassessable shares of Common Stock upon the
      exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants
      are outstanding, take all action necessary to reserve and keep available out
      of
      its authorized and unissued shares of Common Stock, solely for the purpose
      of
      effecting the exercise of the SPA Warrants, the maximum number of shares of
      Common Stock as shall from time to time be necessary to effect the exercise
      of
      the SPA Warrants then outstanding (without regard to any limitations on
      exercise).

     

    
      
        
        

      

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

     

    7.  REISSUANCE
      OF WARRANTS.

     

    (a)  Transfer
      of Warrant.
      If this
      Warrant is to be transferred, the Holder shall surrender this Warrant to the
      Company, whereupon the Company will forthwith issue and deliver upon the order
      of the Holder a new Warrant (in accordance with Section 7(d)),
      registered as the Holder may request, representing the right to purchase the
      number of Warrant Shares being transferred by the Holder and, if less than
      the
      total number of Warrant Shares then underlying this Warrant is being
      transferred, a new Warrant (in accordance with Section 7(d))
      to the
      Holder representing the right to purchase the number of Warrant Shares not
      being
      transferred.

     

    (b)  Lost,
      Stolen or Mutilated Warrant.
      Upon
      receipt by the Company of evidence reasonably satisfactory to the Company of
      the
      loss, theft, destruction or mutilation of this Warrant (as to which a written
      certification and the indemnification contemplated below shall suffice as such
      evidence), and, in the case of loss, theft or destruction, of any
      indemnification undertaking by the Holder to the Company in customary and
      reasonable form and, in the case of mutilation, upon surrender and cancellation
      of this Warrant, the Company shall execute and deliver to the Holder a new
      Warrant (in accordance with Section 7(d))
      representing the right to purchase the Warrant Shares then underlying this
      Warrant.

     

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

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

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

     

    8.  NOTICES.
      Whenever notice is required to be given under this Warrant, unless otherwise
      provided herein, such notice shall be given in accordance with Section 9(f)
      of
      the Securities Purchase Agreement. The Company shall provide the Holder with
      prompt written notice of all actions taken pursuant to this Warrant, including
      in reasonable detail a description of such action and the reason therefore.
      Without limiting the generality of the foregoing, the Company will give written
      notice to the Holder (i) immediately upon each adjustment of the Exercise Price
      and the number of Warrant Shares, setting forth in reasonable detail, and
      certifying, the calculation of such adjustment(s) and (ii) at least fifteen
      (15)
      days prior to the date on which the Company closes its books or takes a record
      (A) with respect to any dividend or distribution upon the shares of Common
      Stock, (B) with respect to any grants, issuances or sales of any Options,
      Convertible Securities or rights to purchase stock, warrants, securities or
      other property to holders of shares of Common Stock or (C) for determining
      rights to vote with respect to any Fundamental Transaction, dissolution or
      liquidation, provided in each case that such information shall be made known
      to
      the public prior to or in conjunction with such notice being provided to the
      Holder and (iii) at least ten (10) Trading Days prior to the consummation of
      any
      Fundamental Transaction. To the extent that any notice provided hereunder
      constitutes, or contains, material, non-public information regarding the Company
      or any of its subsidiaries, the Company shall simultaneously file such notice
      with the SEC (as defined in the Securities Purchase Agreement) pursuant to
      a
      Current Report on Form 8-K.

     

    9.  AMENDMENT
      AND WAIVER.
      Except
      as otherwise provided herein, the provisions of this Warrant (other than Section
      1(f)(i))
      may be
      amended and the Company may take any action herein prohibited, or omit to
      perform any act herein required to be performed by it, only if the Company
      has
      obtained the written consent of the Holder. The Holder shall be entitled, at
      its
      option, to the benefit of any amendment of any other similar warrant issued
      either under the Securities Purchase Agreement or any other similar warrant.
      No
      waiver shall be effective unless it is in writing and signed by an authorized
      representative of the waiving party.

     

    10.  SEVERABILITY.
      If any
      provision of this Warrant or the application thereof becomes or is declared
      by a
      court of competent jurisdiction to be illegal, void or unenforceable, the
      remainder of the terms of this Warrant will continue in full force and
      effect.

     

    
      
        
        

      

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

     

    12.  CONSTRUCTION;
      HEADINGS.
      This
      Warrant shall be deemed to be jointly drafted by the Company and the Holder
      and
      shall not be construed against any Person as the drafter hereof. The headings
      of
      this Warrant are for convenience of reference and shall not form part of, or
      affect the interpretation of, this Warrant. Terms used in this Warrant but
      defined in the other Transaction Documents shall have the meanings ascribed
      to
      such terms on the Closing Date in such other Transaction Documents unless
      otherwise consented to in writing by the Holder.

     

    13.  DISPUTE
      RESOLUTION.
      In the
      case of a dispute as to the determination of the Exercise Price or fair market
      value or the arithmetic calculation of the Warrant Shares, the Company or the
      Holder (as the case may be) shall submit the disputed determinations or
      arithmetic calculations (as the case may be) via facsimile within two (2)
      Business Days of receipt of the applicable notice giving rise to such dispute
      to
      the Company or the Holder (as the case may be). If the Holder and the Company
      are unable to agree upon such determination or calculation of the Exercise
      Price
      or fair market value or the number of Warrant Shares (as the case may be) within
      three (3) Business Days of such disputed determination or arithmetic calculation
      being submitted to the Company or the Holder (as the case may be), then the
      Company shall, within two (2) Business Days submit via facsimile (a) the
      disputed determination of the Exercise Price or fair market value to an
      independent, reputable investment bank selected by the Company and approved
      by
      the Holder or (b) the disputed arithmetic calculation of the Warrant Shares
      to
      the Company’s independent, outside accountant. The Company shall cause at its
      expense the investment bank or the accountant (as the case may be) to perform
      the determinations or calculations (as the case may be) and notify the Company
      and the Holder of the results no later than ten (10) Business Days from the
      time
      it receives such disputed determinations or calculations (as the case may be).
      Such investment bank’s or accountant’s determination or calculation (as the case
      may be) shall be binding upon all parties absent demonstrable
      error.

     

    14.  REMEDIES,
      CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
      RELIEF.
      The
      remedies provided in this Warrant shall be cumulative and in addition to all
      other remedies available under this Warrant and the other Transaction Documents,
      at law or in equity (including a decree of specific performance and/or other
      injunctive relief), and nothing herein shall limit the right of the Holder
      to
      pursue actual damages for any failure by the Company to comply with the terms
      of
      this Warrant. The Company acknowledges that a breach by it of its obligations
      hereunder will cause irreparable harm to the Holder and that the remedy at
      law
      for any such breach may be inadequate. The Company therefore agrees that, in
      the
      event of any such breach or threatened breach, the holder of this Warrant shall
      be entitled, in addition to all other available remedies, to an injunction
      restraining any breach, without the necessity of showing economic loss and
      without any bond or other security being required. The issuance of shares and
      certificates for shares as contemplated hereby upon the exercise of this Warrant
      shall be made without charge to the Holder or such shares for any issuance
      tax
      or other costs in respect thereof, provided that the Company shall not be
      required to pay any tax which may be payable in respect of any transfer involved
      in the issuance and delivery of any certificate in a name other than the Holder
      or its agent on its behalf. The Company covenants to the Holder that there
      shall
      be no characterization concerning this instrument other than as expressly
      provided herein.

     

    
      
        
        

      

      
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    15.  TRANSFER.This
      Warrant may be offered for sale, sold, transferred or assigned without the
      consent of the Company, except as may otherwise be required by Section 2(g)
      of
      the Securities Purchase Agreement.

     

    16.  CERTAIN
      DEFINITIONS.
      For
      purposes of this Warrant, the following terms shall have the following
      meanings:

     

    (a)  “Aggregate
      Face Exercise Amount”
is
      equal to $3,749,999.33.

     

    (b)  “Aggregate
      Series B Face Exercise Amount”
is
      equal to $5,000,000.

     

    (c)  “Black
      Scholes Value”
means
      the value of this Warrant based on the Black and Scholes Option Pricing Model
      obtained from the “OV” function on Bloomberg determined as of the day of closing
      of the applicable Fundamental Transaction for pricing purposes and reflecting
      (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a
      period equal to the remaining term of this Warrant as of such date of request,
      (ii) an expected volatility equal to the greater of 75% and the 100 day
      volatility obtained from the HVT function on Bloomberg as of the trading
      day immediately following the public announcement of the applicable Fundamental
      Transaction and (iii) the underlying price per share used in such calculation
      shall be the sum of the price per share being offered in cash, if any, plus
      the
      value of any non cash consideration, if any, being offered in such Fundamental
      Transaction.

     

    (d)  “Bloomberg”
means
      Bloomberg Financial Markets.

     

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

     

    (f)  “Closing
      Sale Price”
means,
      for any security as of any date, the last closing trade price for such security
      on the Principal Market, as reported by Bloomberg, or, if the Principal Market
      begins to operate on an extended hours basis and does not designate the closing
      trade price, then the last trade price of such security prior to 4:00:00 p.m.,
      New York time, as reported by Bloomberg, or, if the Principal Market is not
      the
      principal securities exchange or trading market for such security, the last
      trade price of such security on the principal securities exchange or trading
      market where such security is listed or traded as reported by Bloomberg, or
      if
      the foregoing does not apply, the last trade price of such security in the
      over-the-counter market on the electronic bulletin board for such security
      as
      reported by Bloomberg, or, if no last trade price is reported for such security
      by Bloomberg, the average of the ask prices of any market makers for such
      security as reported in the “pink sheets” by Pink Sheets LLC (formerly the
      National Quotation Bureau, Inc.). If the Closing Sale Price cannot be calculated
      for a security on a particular date on any of the foregoing bases, the Closing
      Sale Price of such security on such date shall be the fair market value as
      mutually determined by the Company and the Holder. If the Company and the Holder
      are unable to agree upon the fair market value of such security, then such
      dispute shall be resolved in accordance with the procedures in
      Section 13.
      All
      such determinations shall appropriately adjusted for any share dividend, share
      split, share combination or other similar transaction during such
      period.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    (i)  “Current
      Available Amount”
is,
      as
      of the applicable time of determination, equal to (i) the product of (1) the
      Aggregate Face Exercise Amount times (2) the Series B Multiplier minus (ii)
      the
      Prior Aggregate Exercise Amount.

     

    (j)  “Eligible
      Market”
means
      the The New York Stock Exchange, Inc., the Nasdaq Global Select Market, the
      Nasdaq Global Market or the Principal Market.

     

    (k)  “Expiration
      Date”
means
      the date that is the ninety (90) month anniversary of the Issuance Date or,
      if
      such date falls on a day other than a Business Day or on which trading does
      not
      take place on the Principal Market (a “Holiday”),
      the
      next date that is not a Holiday. 

     

    (l)  “Fundamental
      Transaction”
means
      that the Company shall, directly or indirectly, in one or more related
      transactions, (i) consolidate or merge with or into (whether or not the Company
      is the surviving corporation) another Person, or (ii) sell, assign, transfer,
      convey or otherwise dispose of all or substantially all of the properties or
      assets of the Company to another Person, or (iii) allow another Person to make
      a
      purchase, tender or exchange offer that is accepted by the holders of more
      than
      the 50% of the outstanding shares of Common Stock (not including any shares
      of
      Common Stock held by the Person or Persons making or party to, or associated
      or
      affiliated with the Persons making or party to, such purchase, tender or
      exchange offer), or (iv) consummate a stock purchase agreement or other business
      combination (including, without limitation, a reorganization, recapitalization,
      spin-off or scheme of arrangement) with another Person whereby such other Person
      acquires more than the 50% of the outstanding shares of Common Stock (not
      including any shares of Common Stock held by the other Person or other Persons
      making or party to, or associated or affiliated with the other Persons making
      or
      party to, such stock purchase agreement or other business combination), or
      (v)
      reorganize, recapitalize or reclassify its Common Stock, or (vi) any “person” or
“group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the
      Exchange Act) is or shall become the “beneficial owner” (as defined in Rule
      13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate
      ordinary voting power represented by issued and outstanding Common
      Stock.

     

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

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    (p)  “Principal
      Market”
means
      The Nasdaq Capital Market.

     

    (q)  “Series
      B Prior Aggregate Exercise Amount”
is,
      as
      of the applicable time of determination, equal to the total aggregate Exercise
      Price (as defined in the Series B Warrants) theretofore actually paid (whether
      in cash or by delivery of notice of a Cashless Exercises) for prior or
      concurrent exercises with respect to the Series B Warrants initially issued
      to
      Cranshire Capital, L.P.

     

    (r)  “Series
      B Multiplier”
is
      equal to the quotient of (i) the Series B Prior Aggregate Exercise Amount
      divided by (ii) the Aggregate Series B Face Exercise Amount.

     

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

     

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

     

    (u)  “Prior
      Aggregate Exercise Amount”
is,
      as
      of the applicable time of determination, equal to the total aggregate Exercise
      Price theretofore actually paid (whether in cash or by delivery of notice of
      a
      Cashless Exercises) with respect to the Series C Warrants initially issued
      to
      Cranshire Capital, L.P. (and not including the exercise in
      question).

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (v)  “VWAP”
means,
      for any security as of any date, the dollar volume-weighted average price for
      such security on the Principal Market (or, if the Principal Market is not the
      principal trading market for such security, then on the principal securities
      exchange or securities market on which such security is then traded) during
      the
      period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m.,
      New
      York time, as reported by Bloomberg through its “Volume at Price” function or,
      if the foregoing does not apply, the dollar volume-weighted average price of
      such security in the over-the-counter market on the electronic bulletin board
      for such security during the period beginning at 9:30:01 a.m., New York time,
      and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if
      no
      dollar volume-weighted average price is reported for such security by Bloomberg
      for such hours, the average of the highest closing bid price and the lowest
      closing ask price of any of the market makers for such security as reported
      in
      the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau,
      Inc.). If VWAP cannot be calculated for such security on such date on any of
      the
      foregoing bases, the VWAP of such security on such date shall be the fair market
      value as mutually determined by the Company and the Holder. If the Company
      and
      the Holder are unable to agree upon the fair market value of such security,
      then
      such dispute shall be resolved in accordance with the procedures in Section
      13.
      All
      such determinations shall be appropriately adjusted for any share dividend,
      share split or other similar transaction during such period.

     

    [signature
      page follows]

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	
              GENEREX
                BIOTECHNOLOGY CORPORATION

            
	 	 
	 	
              By:

            	          
              	
            
	 	
              Name:

            
	 	
              Title:

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    EXERCISE
      NOTICE

    TO
      BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
      TO PURCHASE COMMON STOCK

     

    GENEREX
      BIOTECHNOLOGY CORPORATION

     

    The
      undersigned holder hereby exercises the right to purchase _________________
      of
      the shares of Common Stock (“Warrant
      Shares”)
      of
      Generex Biotechnology Corporation, a Delaware corporation (the “Company”),
      evidenced by Warrant to Purchase Common Stock No. _______ (the “Warrant”).
      Capitalized terms used herein and not otherwise defined shall have the
      respective meanings set forth in the Warrant.

     

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

     

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

     

    ____________ a
      “Cashless
      Exercise”
with
      respect to _______________ Warrant Shares.

     

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

     

    3. Delivery
      of Warrant Shares.
      The
      Company shall deliver to Holder, or its designee or agent as specified below,
      __________ Warrant Shares in accordance with the terms of the Warrant. Delivery
      shall be made to Holder, or for its benefit, to the following
      address:

     

    _______________________

    _______________________

    _______________________

    _______________________

     

    Date:
      _______________ __, ______

     

     

      
        

      

    

      
      Name of Registered Holder

     

    
      	
              By:

            	 	
            
	 	
              Name:

            
	 	
              Title:

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ACKNOWLEDGMENT

     

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

     

    
      	 	GENEREX
              BIOTECHNOLOGY CORPORATION 
	 	 
	 	
              By:

            	 	
            
	 	
              Name:

            
	 	
              Title:EXHIBIT
      10.1

     

    

    COMMON
      STOCK PURCHASE AGREEMENT

     

    Dated
      April 30, 2008

     

    by
      and between

     

    SULPHCO,
      INC.

     

    and

     

    AZIMUTH
      OPPORTUNITY LTD.

     

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
      OF CONTENTS

     

    Page

    

      
        	
                Article
                  I

              	
                PURCHASE
                  AND SALE OF COMMON STOCK

              	
                1

              
	
                Section
                  1.1

              	
                Purchase
                  and Sale of Stock

              	
                1

              
	
                Section
                  1.2

              	
                Effective
                  Date; Settlement Dates

              	
                1

              
	
                Section
                  1.3

              	
                The
                  Shares

              	
                2

              
	
                Section
                  1.4

              	
                Current
                  Report; Prospectus Supplement

              	
                2

              
	 	 	 
	
                Article
                  II

              	
                FIXED
                  REQUEST TERMS; OPTIONAL AMOUNT

              	
                2

              
	
                Section
                  2.1

              	
                Fixed
                  Request Notice

              	
                2

              
	
                Section
                  2.2

              	
                Fixed
                  Requests

              	
                3

              
	
                Section
                  2.3

              	
                Share
                  Calculation

              	
                4

              
	
                Section
                  2.4

              	
                Limitation
                  of Fixed Requests

              	
                4

              
	
                Section
                  2.5

              	
                Reduction
                  of Commitment

              	
                4

              
	
                Section
                  2.6

              	
                Below
                  Threshold Price

              	
                4

              
	
                Section
                  2.7

              	
                Settlement

              	
                5

              
	
                Section
                  2.8

              	
                Reduction
                  of Pricing Period

              	
                5

              
	
                Section
                  2.9

              	
                Optional
                  Amount

              	
                6

              
	
                Section
                  2.10

              	
                Calculation
                  of Optional Amount Shares

              	
                6

              
	
                Section
                  2.11

              	
                Exercise
                  of Optional Amount

              	
                7

              
	
                Section
                  2.12

              	
                Aggregate
                  Limit

              	
                7

              
	 	 	 
	
                Article
                  III

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE INVESTOR

              	
                8

              
	
                Section
                  3.1

              	
                Organization
                  and Standing of the Investor

              	
                8

              
	
                Section
                  3.2

              	
                Authorization
                  and Power

              	
                8

              
	
                Section
                  3.3

              	
                No
                  Conflicts

              	
                8

              
	
                Section
                  3.4

              	
                Information

              	
                9

              
	 	 	 
	
                Article
                  IV

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE COMPANY

              	
                9

              
	
                Section
                  4.1

              	
                Organization,
                  Good Standing and Power

              	
                9

              
	
                Section
                  4.2

              	
                Authorization,
                  Enforcement

              	
                9

              
	
                Section
                  4.3

              	
                Capitalization

              	
                10

              
	
                Section
                  4.4

              	
                Issuance
                  of Shares

              	
                10

              
	
                Section
                  4.5

              	
                No
                  Conflicts

              	
                11

              
	
                Section
                  4.6

              	
                Commission
                  Documents, Financial Statements

              	
                11

              
	
                Section
                  4.7

              	
                Subsidiaries

              	
                13

              
	
                Section
                  4.8

              	
                No
                  Material Adverse Effect

              	
                13

              
	
                Section
                  4.9

              	
                Indebtedness

              	
                13

              
	
                Section
                  4.10

              	
                Title
                  To Assets

              	
                13

              
	
                Section
                  4.11

              	
                Actions
                  Pending

              	
                13

              
	
                Section
                  4.12

              	
                Compliance
                  With Law

              	
                13

              
	
                Section
                  4.13

              	
                Certain
                  Fees

              	
                14

              
	
                Section
                  4.14

              	
                Operation
                  of Business

              	
                14

              

      

       

      
        
           

        

        
          i

          
            

          

        

        
           

        

      

       

      
        	
                Section
                  4.15

              	
                Environmental
                  Compliance

              	
                15

              
	
                Section
                  4.16

              	
                Material
                  Agreements

              	
                15

              
	
                Section
                  4.17

              	
                Transactions
                  With Affiliates

              	
                15

              
	
                Section
                  4.18

              	
                Securities
                  Act; NASD Conduct Rules

              	
                16

              
	
                Section
                  4.19

              	
                Employees

              	
                18

              
	
                Section
                  4.20

              	
                Use
                  of Proceeds

              	
                18

              
	
                Section
                  4.21

              	
                Investment
                  Company Act Status

              	
                18

              
	
                Section
                  4.22

              	
                ERISA

              	
                18

              
	
                Section
                  4.23

              	
                Taxes

              	
                18

              
	
                Section
                  4.24

              	
                Insurance

              	
                19

              
	
                Section
                  4.25

              	
                Acknowledgement
                  Regarding Investor’s Purchase of Shares

              	
                19

              
	 	 	 
	
                Article
                  V

              	
                COVENANTS

              	
                19

              
	
                Section
                  5.1

              	
                Securities
                  Compliance

              	
                19

              
	
                Section
                  5.2

              	
                Registration
                  and Listing

              	
                19

              
	
                Section
                  5.3

              	
                Compliance
                  with Laws.

              	
                19

              
	
                Section
                  5.4

              	
                Keeping
                  of Records and Books of Account; Foreign Corrupt Practices
                  Act

              	
                20

              
	
                Section
                  5.5

              	
                Limitations
                  on Holdings and Issuances

              	
                21

              
	
                Section
                  5.6

              	
                Other
                  Agreements and Other Financings.

              	
                21

              
	
                Section
                  5.7

              	
                Stop
                  Orders

              	
                22

              
	
                Section
                  5.8

              	
                Amendments
                  to the Registration Statement; Prospectus Supplements; Free Writing
                  Prospectuses

              	
                23

              
	
                Section
                  5.9

              	
                Prospectus
                  Delivery

              	
                23

              
	
                Section
                  5.10

              	
                Selling
                  Restrictions.

              	
                24

              
	
                Section
                  5.11

              	
                Effective
                  Registration Statement

              	
                25

              
	
                Section
                  5.12

              	
                Non-Public
                  Information

              	
                25

              
	
                Section
                  5.13

              	
                Broker/Dealer

              	
                25

              
	
                Section
                  5.14

              	
                Disclosure
                  Schedule

              	
                25

              
	 	 	 
	
                Article
                  VI

              	
                OPINION
                  OF COUNSEL AND CERTIFICATE; CONDITIONS TO THE SALE AND PURCHASE
                  OF THE
                  SHARES

              	
                26

              
	
                Section
                  6.1

              	
                Opinion
                  of Counsel and Certificate

              	
                26

              
	
                Section
                  6.2

              	
                Conditions
                  Precedent to the Obligation of the Company

              	
                26

              
	
                Section
                  6.3

              	
                Conditions
                  Precedent to the Obligation of the Investor

              	
                27

              
	 	 	 
	
                Article
                  VII

              	
                TERMINATION

              	
                29

              
	
                Section
                  7.1

              	
                Term,
                  Termination by Mutual Consent

              	
                29

              
	
                Section
                  7.2

              	
                Other
                  Termination

              	
                30

              
	
                Section
                  7.3

              	
                Effect
                  of Termination

              	
                30

              
	 	 	 
	
                Article
                  VIII

              	
                INDEMNIFICATION

              	
                31

              
	
                Section
                  8.1

              	
                General
                  Indemnity.

              	
                31

              
	
                Section
                  8.2

              	
                Indemnification
                  Procedures

              	
                32

              

      

       

      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

       

      
        	
                Article
                  IX

              	
                MISCELLANEOUS

              	
                34

              
	
                Section
                  9.1

              	
                Fees
                  and Expenses.

              	
                34

              
	
                Section
                  9.2

              	
                Specific
                  Enforcement, Consent to Jurisdiction, Waiver of Jury Trial

              	
                34

              
	
                Section
                  9.3

              	
                Entire
                  Agreement; Amendment

              	
                35

              
	
                Section
                  9.4

              	
                Notices

              	
                35

              
	
                Section
                  9.5

              	
                Waivers

              	
                36

              
	
                Section
                  9.6

              	
                Headings

              	
                36

              
	
                Section
                  9.7

              	
                Successors
                  and Assigns

              	
                36

              
	
                Section
                  9.8

              	
                Governing
                  Law

              	
                36

              
	
                Section
                  9.9

              	
                Survival

              	
                37

              
	
                Section
                  9.10

              	
                Counterparts

              	
                37

              
	
                Section
                  9.11

              	
                Publicity

              	
                37

              
	
                Section
                  9.12

              	
                Severability

              	
                37

              
	
                Section
                  9.13

              	
                Further
                  Assurances

              	
                37

              
	 	 	 
	
                Annex
                  A.

              	Definitions	 

      

    

     

     

     

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

     

     

    COMMON
      STOCK PURCHASE AGREEMENT

     

    This
      COMMON
      STOCK PURCHASE AGREEMENT,
      made
      and entered into on this 30th
      day of
      April 2008 (this “Agreement”),
      by
      and between Azimuth Opportunity Ltd., an international business company
      incorporated under the laws of the British Virgin Islands (the “Investor”),
      and
      SulphCo, Inc., a corporation organized and existing under the laws of the State
      of Nevada (the “Company”).
      Capitalized terms used but not defined herein shall have the meanings ascribed
      to such terms in Annex
      A
      hereto.

     

    RECITALS

     

    WHEREAS,
      the
      parties desire that, upon the terms and subject to the conditions contained
      herein, the Company may issue and sell to the Investor and the Investor shall
      thereupon purchase from the Company up to $60,000,000 worth of newly issued
      shares of the Company’s common stock, $0.001 par value (“Common
      Stock”),
      subject, in all cases, to the Trading Market Limit; and

     

    WHEREAS,
      the
      offer and sale of the shares of Common Stock hereunder have been registered
      by
      the Company in the Registration Statement, which has been declared effective
      by
      order of the Commission under the Securities Act;

     

    NOW,
      THEREFORE,
      the
      parties hereto, intending to be legally bound, hereby agree as
      follows:

     

    ARTICLE
      I

     

    PURCHASE
      AND SALE OF COMMON STOCK

     

    Section
      1.1 Purchase
      and Sale of Stock.
      Upon
      the terms and subject to the conditions of this Agreement, during the Investment
      Period the Company in its discretion may issue and sell to the Investor up
      to
      $60,000,000 (the “Total
      Commitment”)
      worth
      of duly authorized, validly issued, fully paid and non-assessable shares of
      Common Stock (subject in all cases to the Trading Market Limit, the
“Aggregate
      Limit”),
      by
      (i) the delivery to the Investor of not more than twenty-four (24) separate
      Fixed Request Notices (unless the Investor and the Company mutually agree that
      a
      different number of Fixed Request Notices may be delivered) as provided in
      Article II hereof and (ii) the exercise by the Investor of Optional Amounts,
      which the Company may in its discretion grant to the Investor and which may
      be
      exercised by the Investor, in whole or in part, as provided in Article II
      hereof. The aggregate of all Fixed Request Amounts and Optional Amount Dollar
      Amounts shall not exceed the Aggregate Limit.

     

    Section
      1.2 Effective
      Date; Settlement Dates.
      This
      Agreement shall become effective and binding upon delivery of counterpart
      signature pages of this Agreement executed by each of the parties hereto, and
      by
      delivery of an opinion of counsel and a certificate of the Company as provided
      in Section 6.1 hereof, to the offices of Greenberg Traurig, LLP, 200 Park
      Avenue, New York, New York 10166, at 10:00 a.m., New York time, on the Effective
      Date. In consideration of and in express reliance upon the representations,
      warranties and covenants, and otherwise upon the terms and subject to the
      conditions, of this Agreement, from and after the Effective Date and during
      the
      Investment Period (i) the Company shall issue and sell to the Investor, and
      the
      Investor agrees to purchase from the Company, the Shares in respect of
      each

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Fixed
      Request and (ii) the Investor may in its discretion elect to purchase Shares
      in
      respect of each Optional Amount. The issuance and sale of Shares to the Investor
      pursuant to any Fixed Request or Optional Amount shall occur on the applicable
      Settlement Date in accordance with Sections 2.7 and 2.9 (or on such Trading
      Day
      in accordance with Section 2.8, as applicable), provided in each case that
      all
      of the conditions precedent thereto set forth in Article VI theretofore shall
      have been fulfilled or (to the extent permitted by applicable law)
      waived.

     

    Section
      1.3 The
      Shares.
      The
      Company has or will have duly authorized and reserved for issuance, and
      covenants to continue to so reserve once reserved for issuance, free of all
      preemptive and other similar rights, at all times during the Investment Period,
      the requisite aggregate number of authorized but unissued shares of its Common
      Stock to timely effect the issuance, sale and delivery in full to the Investor
      of all Shares to be issued in respect of all Fixed Requests and Optional Amounts
      under this Agreement, in any case prior to the issuance to the Investor of
      such
      Shares.

     

    Section
      1.4 Current
      Report; Prospectus Supplement.
      As soon
      as practicable, but in any event not later than 5:30 p.m. (New York time) on
      the
      first Trading Day immediately following the Effective Date, the Company shall
      file with the Commission a report on Form 8-K relating to the transactions
      contemplated by, and describing the material terms and conditions of, this
      Agreement and disclosing all information relating to the transactions
      contemplated hereby required to be disclosed in the Registration Statement
      and
      the Base Prospectus (but which permissibly has been omitted therefrom in
      accordance with the Securities Act), including, without limitation, information
      required to be disclosed in the section captioned “Plan of Distribution” in the
      Base Prospectus (the “Current
      Report”).
      The
      Current Report shall include a copy of this Agreement as an exhibit. To the
      extent applicable, the Current Report shall be incorporated by reference in
      the
      Registration Statement in accordance with the provisions of Rule 430B under
      the
      Securities Act. The Company heretofore has provided the Investor a reasonable
      opportunity to comment on a draft of such Current Report and has given due
      consideration to such comments. The Company shall file a final Base Prospectus
      pursuant to Rule 424(b) under the Securities Act on or prior to the second
      Trading Day immediately following the Effective Date. Pursuant to Section 5.9
      and subject to the provisions of Section 5.8, on the first Trading Day
      immediately following the last Trading Day of each Pricing Period, the Company
      shall file with the Commission a Prospectus Supplement pursuant to Rule 424(b)
      under the Securities Act disclosing the number of Shares to be issued and sold
      to the Investor thereunder, the total purchase price therefor and the net
      proceeds to be received by the Company therefrom and, to the extent required
      by
      the Securities Act, identifying the Current Report.

     

    ARTICLE
      II

     

    FIXED
      REQUEST TERMS; OPTIONAL AMOUNT

     

    Subject
      to the satisfaction of the conditions set forth in this Agreement, the parties
      agree (unless otherwise mutually agreed upon by the parties in writing) as
      follows:

     

    Section
      2.1 Fixed
      Request Notice.
      Upon
      two (2) Trading Days’ prior written notice to the Investor, the Company may,
      from time to time in its sole discretion, provide a notice to the Investor
      of a
      Fixed Request before 9:30 a.m. (New York time) on the first Trading Day of
      the
      Pricing Period (the “Fixed
      Request Notice”),
      substantially in the form attached hereto as Exhibit

     

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    A.
      The
      Fixed Request Notice shall specify the Fixed Amount Requested, establish the
      Threshold Price for such Fixed Request, designate the first Trading Day of
      the
      Pricing Period and specify the Optional Amount, if any, that the Company elects
      to grant to the Investor during the Pricing Period and the applicable Threshold
      Price for such Optional Amount (the “Optional
      Amount Threshold Price”).
      The
      Threshold Price and the Optional Amount Threshold Price established by the
      Company in a Fixed Request Notice may be the same or different, in the Company’s
      sole discretion. Upon the terms and subject to the conditions of this Agreement,
      the Investor is obligated to accept each Fixed Request Notice prepared and
      delivered in accordance with the provisions of this Agreement. 

     

    Section
      2.2 Fixed
      Requests.
      From
      time to time during the Investment Period, the Company may in its sole
      discretion deliver to the Investor via facsimile or other electronic
      transmission a Fixed Request Notice for a specified Fixed Amount Requested,
      and
      the applicable discount price (the “Discount
      Price”)
      shall
      be determined, in accordance with the price and share amount parameters as
      set
      forth below or such other parameters mutually agreed upon by the Investor and
      the Company, and upon the terms and subject to the conditions of this Agreement,
      the Investor shall purchase from the Company the Shares subject to such Fixed
      Request Notice; provided,
      however,
      that
      (i) if an ex-dividend date is established by the Trading Market in respect
      of
      the Common Stock on or between the first Trading Day of the applicable Pricing
      Period and the applicable Settlement Date, the Discount Price shall be reduced
      by the per share dividend amount and (ii) the Company may not deliver any single
      Fixed Request Notice for a Fixed Amount Requested in excess of the lesser of
      (a)
      the amount in the applicable Fixed Amount Requested column below and (b) 2.5%
      of
      the Market Capitalization:

     

    
      	
              Threshold
                Price

            	 	
              Fixed
                Amount Requested

            	 	
              Discount
                Price

            
	
              Equal
                to or greater than $12.00

            	 	
              Not
                to exceed $9,000,000

            	 	
              96.25%
                of the VWAP

            
	
              Equal
                to or greater than $11.00 and less than $12.00

            	 	
              Not
                to exceed $8,250,000

            	 	
              96.25%
                of the VWAP

            
	
              Equal
                to or greater than $10.00 and less than $11.00

            	 	
              Not
                to exceed $7,500,000

            	 	
              96.00%
                of the VWAP

            
	
              Equal
                to or greater than $9.00 and less than $10.00

            	 	
              Not
                to exceed $6,750,000

            	 	
              95.75%
                of the VWAP

            
	
              Equal
                to or greater than $8.00 and less than $9.00

            	 	
              Not
                to exceed $6,000,000

            	 	
              95.75%
                of the VWAP

            
	
              Equal
                to or greater than $7.00 and less than $8.00

            	 	
              Not
                to exceed $5,250,000

            	 	
              95.50%
                of the VWAP

            
	
              Equal
                to or greater than $6.00 and less than $7.00

            	 	
              Not
                to exceed $4,500,000

            	 	
              95.25%
                of the VWAP

            
	
              Equal
                to or greater than $5.00 and less than $6.00

            	 	
              Not
                to exceed $3,750,000

            	 	
              95.00%
                of the VWAP

            
	
              Equal
                to or greater than $4.00 and less than $5.00

            	 	
              Not
                to exceed $3,000,000

            	 	
              94.50%
                of the VWAP

            
	
              Equal
                to or greater than $3.00 and less than $4.00

            	 	
              Not
                to exceed $2,250,000

            	 	
              94.50%
                of the VWAP

            
	 	 	 	 	 

    

    Anything
      to the contrary in this Agreement notwithstanding, at no time shall the Investor
      be required to purchase more than $9,000,000 worth of Common Stock in respect
      of
      any Pricing Period (not including Common Stock subject to any Optional Amount).
      The date on which the

     

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    Company
      delivers any Fixed Request Notice in accordance with this Section 2.2
      hereinafter shall be referred to as a “Fixed
      Request Exercise Date”.

     

    Section
      2.3 Share
      Calculation.
      Subject
      to Section 2.6, the number of Shares to be issued by the Company to the Investor
      pursuant to a Fixed Request shall equal the aggregate sum of each quotient
      (calculated for each Trading Day during the applicable Pricing Period for which
      the VWAP equals or exceeds the Threshold Price) determined pursuant to the
      following equation (rounded to the nearest whole Share):

     

    
      	N
              =	
              (A
                x B)/C, where:

            

    

     

    
      	N
              =	
              the
                number of Shares to be issued by the Company to the Investor in respect
                of
                a Trading Day during the applicable Pricing Period for which the
                VWAP
                equals or exceeds the Threshold
                Price,

            

    

     

    
      	A
              =	
              0.10
                (the “Multiplier”);
                provided,
                however,
                that if the number of Trading Days constituting a Pricing Period
                is
                decreased as set forth in Section 2.8 hereof, then the Multiplier
                correspondingly shall be increased to equal the decimal equivalent
                (in
                10-millionths) of a fraction, the numerator of which is one and the
                denominator of which equals the number of Trading Days in the Pricing
                Period as so decreased,

            

    

     

    
      	B
              =	
              the
                Fixed Amount Requested, and

            

    

     

    
      	C
              =	
              the
                applicable Discount Price.

            

    

     

    Section
      2.4 Limitation
      of Fixed Requests.
      The
      Company shall not make more than one Fixed Request in each Pricing Period.
      Not
      less than five (5) Trading Days shall elapse between the end of one Pricing
      Period and the commencement of any other Pricing Period during the Investment
      Period. There shall be permitted a maximum of twenty-four (24) Fixed Requests
      during the Investment Period. Each Fixed Request automatically shall expire
      immediately following the last Trading Day of each Pricing Period.

     

    Section
      2.5 Reduction
      of Commitment.
      On the
      last Trading Day of each Pricing Period, the Investor’s Total Commitment under
      this Agreement automatically (and without the need for any amendment to this
      Agreement) shall be reduced, on a dollar-for-dollar basis, by the total amount
      of the Fixed Request Amount and the Optional Amount Dollar Amount, if any,
      for
      such Pricing Period paid to the Company at the Settlement Date.

     

    Section
      2.6 Below
      Threshold Price.
      If the
      VWAP on any Trading Day in a Pricing Period is lower than the Threshold Price,
      then for each such Trading Day the total amount of the Fixed Amount Requested
      shall be reduced, on a dollar-for-dollar basis, by an amount equal to the
      product of (x) the Multiplier and (y) the original Fixed Amount Requested,
      and
      no Shares shall be purchased or sold with respect to such Trading Day, except
      as
      provided below. If trading in the Common Stock on the AMEX (or any other
      national securities exchange on which the Common Stock is then listed) is
      suspended for any reason for more than three (3) hours on any Trading Day,
      the
      Investor may at its option deem the price of the Common Stock to be lower than
      the Threshold Price for such Trading Day and, for each such Trading Day, the
      total amount of the Fixed Amount Requested shall be reduced as provided in
      the
      immediately preceding

     

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

    sentence,
      and no Shares shall be purchased or sold with respect to such Trading Day,
      except as provided below. For each Trading Day during a Pricing Period on which
      the VWAP is lower (or is deemed to be lower as provided in the immediately
      preceding sentence) than the Threshold Price, the Investor may in its sole
      discretion elect to purchase such
      U.S.
      dollar amount of Shares equal to the amount by which the Fixed Amount Requested
      has been reduced in accordance with this Section 2.6, at the Threshold Price
      multiplied by the applicable percentage determined in accordance with the price
      and share amount parameters set forth in Section 2.2. The Investor shall inform
      the Company via facsimile transmission not later than 8:00 p.m. (New York time)
      on the last Trading Day of such Pricing Period as to the number of Shares,
      if
      any, the Investor elects to purchase as provided in this Section
      2.6.

     

    Section
      2.7 Settlement.
      The
      payment for, against simultaneous delivery of, Shares in respect of each Fixed
      Request shall be settled on the second Trading Day next following the last
      Trading Day of each Pricing Period, or on such earlier date as the parties
      may
      mutually agree (the “Settlement
      Date”).
      On
      each Settlement Date, the Company shall deliver the Shares purchased by the
      Investor to the Investor or its designees via DTC’s Deposit Withdrawal Agent
      Commission (DWAC) system, against simultaneous payment therefor to the Company’s
      designated account by wire transfer of immediately available funds, provided
      that if the Shares are received by the Investor later than 1:00 p.m. (New York
      time), payment therefor shall be made with next day funds. As set forth in
      Section 9.1(ii), a failure by the Company to deliver such Shares shall result
      in
      the payment of liquidated damages by the Company to the Investor.

     

    Section
      2.8 Reduction
      of Pricing Period.
      If
      during a Pricing Period the Company elects to reduce the number of Trading
      Days
      in such Pricing Period (and thereby amend its previously delivered Fixed Request
      Notice), the Company shall so notify the Investor before 9:00 a.m. (New York
      time) on any Trading Day during a Pricing Period (a “Reduction
      Notice”)
      and
      the last Trading Day of such Pricing Period shall be the Trading Day immediately
      preceding the Trading Day on which the Investor received such Reduction Notice;
      provided,
      however,
      that if
      the Company delivers the Reduction Notice later than 9:00 a.m. (New York time)
      on a Trading Day during a Pricing Period, then the last Trading Day of such
      Pricing Period instead shall be the Trading Day on which the Investor received
      such Reduction Notice. 

     

    Upon
      receipt of a Reduction Notice, the Investor (i) shall purchase the Shares in
      respect of each Trading Day in such reduced Pricing Period for which the VWAP
      equals or exceeds the Threshold Price in accordance with Section 2.3 hereof;
      (ii) may elect to purchase the Shares in respect of any Trading Day in such
      reduced Pricing Period for which the VWAP is (or is deemed to be) lower than
      the
      Threshold Price in accordance with Section 2.6 hereof; and (iii) may elect
      to
      exercise all or any portion of an Optional Amount on any Trading Day during
      such
      reduced Pricing Period in accordance with Sections 2.10 and 2.11
      hereof.

     

    In
      addition, upon receipt of a Reduction Notice, the Investor may elect to purchase
      such U.S. dollar amount of additional Shares equal to the quotient determined
      pursuant to the following equation:

     

    D
      = (A/B)
      x (B - C), where:

     

    D
      = the
      U.S. dollar amount of additional Shares to be purchased,

     

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

    

    A
      = the
      Fixed Amount Requested,

     

    B
      = 10
      or, for purposes of this Section 2.8, such lesser number of Trading Days as
      the
      parties may mutually agree to, and

     

    C
      = the
      number of Trading Days in the reduced Pricing Period, at
      a per
      Share price equal to (x) the Fixed Amount Requested attributable to the reduced
      Pricing Period divided by (y) the number of Shares to be purchased during such
      reduced Pricing Period pursuant to clauses (i) and (ii) (as applicable) of
      the
      immediately preceding paragraph.

     

    The
      Investor may also elect to exercise any portion of the applicable Optional
      Amount which was unexercised during the reduced Pricing Period by issuing an
      Optional Amount Notice to the Company not later than 10:00 a.m. (New York time)
      on the first Trading Day next following the last Trading Day of the reduced
      Pricing Period. The number of Shares to be issued upon exercise of such Optional
      Amount shall be calculated pursuant to the equation set forth in Section 2.10
      hereof, except that “C” shall equal the greater of (i) the VWAP for the Common
      Stock on the last Trading Day of the reduced Pricing Period or (ii) the Optional
      Amount Threshold Price.

     

    The
      payment for, against simultaneous delivery of, Shares to be purchased and sold
      in accordance with this Section 2.8 shall be settled on the second Trading
      Day
      next following the Trading Day on which the Investor receives a Reduction
      Notice.

     

    Section
      2.9 Optional
      Amount.
      With
      respect to any Pricing Period, the Company may in its sole discretion grant
      to
      the Investor the right to exercise, from time to time during the Pricing Period
      (but not more than once on any Trading Day), all or any portion of an Optional
      Amount. The maximum Optional Amount Dollar Amount and the Optional Amount
      Threshold Price shall be set forth in the Fixed Request Notice. If an
      ex-dividend date is established by the Trading Market in respect of the Common
      Stock on or between the first Trading Day of the applicable Pricing Period
      and
      the applicable Settlement Date, the applicable exercise price in respect of
      the
      Optional Amount shall be reduced by the per share dividend amount. Each daily
      Optional Amount exercise shall be aggregated during the Pricing Period and
      settled on the next Settlement Date. The Optional Amount Threshold Price
      designated by the Company in its Fixed Request Notice shall apply to each
      Optional Amount during the applicable Pricing Period.

     

    Section
      2.10 Calculation
      of Optional Amount Shares.
      The
      number of shares of Common Stock to be issued in connection with the exercise
      of
      an Optional Amount shall be the quotient determined pursuant to the following
      equation (rounded to the nearest whole Share):

     

    O
      = A/(B
      x C), where:

     

    O
      = the
      number of shares of Common Stock to be issued in connection with such Optional
      Amount exercise,

     

    A
      = the
      Optional Amount Dollar Amount with respect to which the Investor has delivered
      an Optional Amount Notice,

     

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    

    B
      = the
      applicable percentage determined in accordance with the price and shares amount
      parameters set forth in Section 2.2 (with the Optional Amount Threshold Price
      serving as the Threshold Price for such purposes), and

     

    C
      = the
      greater of (i) the VWAP for the Common Stock on the day the Investor delivers
      the Optional Amount Notice or (ii) the Optional Amount Threshold
      Price.

     

    Section
      2.11 Exercise
      of Optional Amount.
      If
      granted by the Company to the Investor with respect to a Pricing Period, all
      or
      any portion of the Optional Amount may be exercised by the Investor on any
      Trading Day during the Pricing Period, subject to the limitations set forth
      in
      Section 2.9. As a condition to each exercise of an Optional Amount pursuant
      to
      this Section 2.11, the Investor shall issue an Optional Amount Notice to the
      Company no later than 8:00 p.m. (New York time) on the day of such Optional
      Amount exercise. If the Investor does not exercise an Optional Amount in full
      by
      8:00 p.m. (New York time) on the last Trading Day of the applicable Pricing
      Period, such unexercised portion of the Investor’s Optional Amount with respect
      to that Pricing Period automatically shall lapse and terminate.

     

    Section
      2.12 Aggregate
      Limit.
      Notwithstanding anything to the contrary contained in this Agreement, in no
      event may the Company issue a Fixed Request Notice or grant an Optional Amount
      to the extent that the sale of Shares pursuant thereto and pursuant to all
      prior
      Fixed Request Notices and Optional Amounts issued hereunder, and as liquidated
      damages pursuant to Section 9.1(ii), would cause the Company to sell or the
      Investor to purchase Shares which in the aggregate are in excess of the
      Aggregate Limit. If the Company issues a Fixed Request Notice or Optional Amount
      that otherwise would permit the Investor to purchase shares of Common Stock
      which would cause the aggregate purchases by Investor hereunder to exceed the
      Aggregate Limit, such Fixed Request Notice or Optional Amount shall be void
      ab
      initio
      to the
      extent of the amount by which the dollar value of shares or number of shares,
      as
      the case may be, of Common Stock otherwise issuable pursuant to such Fixed
      Request Notice or Optional Amount together with the dollar value of shares
      or
      number of shares, as the case may be, of all other Common Stock purchased by
      the
      Investor pursuant hereto would exceed the Aggregate Limit. The Company hereby
      represents, warrants and covenants that neither it nor any of its Subsidiaries
      (i) has effected any transaction or series of transactions, (ii) is a party
      to
      any pending transaction or series of transactions or (iii) shall enter into
      any
      contract, agreement, agreement-in-principle, arrangement or understanding with
      respect to, or shall effect, any Other Financing which, in any of such cases,
      may be integrated with the transactions contemplated by this Agreement for
      purposes of determining whether approval of the Company’s stockholders is
      required under any bylaw, listed securities maintenance standards or other
      rules
      of the Trading Market; provided,
      however,
      that
      the Company shall be permitted to take any action referred to in clause (iii)
      above if the Company has timely provided the Investor with an Integration Notice
      as provided in Section 5.6(ii) hereof. 

     

    At
      the
      Company’s sole discretion, and effective automatically upon receipt by the
      Investor of notice thereof from the Company, this Agreement may be amended
      by
      the Company from time to time to reduce the Aggregate Limit by a specified
      dollar amount of Common Stock which shall be no greater than is required to
      enable the Company to utilize the Registration Statement to consummate an
      underwritten public offering of Common Stock or a registered direct public
      offering of Common Stock during the Investment Period; provided,
      however,
      that

     

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

    any
      such
      amendment of this Agreement (and any such purported amendment) shall be void
      and
      of no force and effect if the effect thereof would restrict, materially delay,
      conflict with or impair the ability or right of the Company to perform its
      obligations under this Agreement, including, without limitation, the obligation
      of the Company to deliver Shares to the Investor in respect of a Fixed Request
      or Optional Amount on the applicable Settlement Date. In the event the Company
      shall have elected to reduce the Aggregate Limit as provided in the immediately
      preceding sentence, at the Company’s sole discretion, and effective
      automatically upon receipt by the Investor of notice thereof from the Company,
      the Company may subsequently amend this Agreement to increase the Aggregate
      Limit up to $60,000,000; provided,
      however,
      that in
      no event shall the Company be entitled to issue Fixed Requests and grant
      Optional Amounts during the remainder of the Investment Period for an aggregate
      amount greater than the amount obtained by subtracting (x) the aggregate of
      all
      Fixed Request Amounts and Optional Amount Dollar Amounts (including any amounts
      paid as liquidated damages pursuant to Section 9.1(ii) hereunder) covered by
      all
      Fixed Requests and Optional Amounts theretofore issued or granted by the Company
      in respect of which a settlement has occurred pursuant to Section 2.7 from
      (y)
      $60,000,000, subject in all cases to the Trading Market Limit. 

     

    ARTICLE
      III

     

    REPRESENTATIONS
      AND WARRANTIES OF THE INVESTOR

     

    The
      Investor hereby makes the following representations and warranties to the
      Company:

     

    Section
      3.1 Organization
      and Standing of the Investor.
      The
      Investor is an international business company duly organized, validly existing
      and in good standing under the laws of the British Virgin Islands.

     

    Section
      3.2 Authorization
      and Power.
      The
      Investor has the requisite corporate power and authority to enter into and
      perform its obligations under this Agreement and to purchase the Shares in
      accordance with the terms hereof. The execution, delivery and performance of
      this Agreement by the Investor and the consummation by it of the transactions
      contemplated hereby have been duly authorized by all necessary corporate action,
      and no further consent or authorization of the Investor, its Board of Directors
      or stockholders is required. This Agreement has been duly executed and delivered
      by the Investor. This Agreement constitutes a valid and binding obligation
      of
      the Investor enforceable against it in accordance with its terms, except as
      such
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation, conservatorship, receivership, or
      similar laws relating to, or affecting generally the enforcement of, creditor’s
      rights and remedies or by other equitable principles of general
      application.

     

    Section
      3.3 No
      Conflicts.
      The
      execution, delivery and performance by the Investor of this Agreement and the
      consummation by the Investor of the transactions contemplated herein do not
      and
      shall not (i) result in a violation of such Investor’s charter documents, bylaws
      or other applicable organizational instruments, (ii) conflict with, constitute
      a
      default (or an event which, with notice or lapse of time or both, would become
      a
      default) under, or give rise to any rights of termination, amendment,
      acceleration or cancellation of, any material agreement, mortgage, deed of
      trust, indenture, note, bond, license, lease agreement, instrument or obligation
      to which the Investor is a party or is bound, (iii) create or impose any lien,
      charge or encumbrance on any

     

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

    

    property
      of the Investor under any agreement or any commitment to which the Investor
      is
      party or under which the Investor is bound or under which any of its properties
      or assets are bound, or (iv) result in a violation of any federal, state, local
      or foreign statute, rule, or regulation, or any order, judgment or decree of
      any
      court or governmental agency applicable to the Investor or by which any of
      its
      properties or assets are bound or affected, except, in the case of clauses
      (ii),
      (iii) and (iv), for such conflicts, defaults, terminations, amendments,
      acceleration, cancellations and violations as would not, individually or in
      the
      aggregate, prohibit or otherwise interfere with the ability of the Investor
      to
      enter into and perform its obligations under this Agreement in any material
      respect. The Investor is not required under federal, state, local or foreign
      law, rule or regulation to obtain any consent, authorization or order of, or
      make any filing or registration with, any court or governmental agency in order
      for it to execute, deliver or perform any of its obligations under this
      Agreement or to purchase the Shares in accordance with the terms
      hereof.

     

    Section
      3.4 Information.
      All
      materials relating to the business, financial condition, management and
      operations of the Company and materials relating to the offer and sale of the
      Shares which have been requested by the Investor have been made available to
      the
      Investor or its advisors. The Investor and its advisors have been afforded
      the
      opportunity to ask questions of representatives of the Company. The Investor
      has
      sought such accounting, legal and tax advice as it has considered necessary
      to
      make an informed investment decision with respect to its acquisition of the
      Shares. The Investor understands that it (and not the Company) shall be
      responsible for its own tax liabilities that may arise as a result of this
      investment or the transactions contemplated by this Agreement.

     

    ARTICLE
      IV

     

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY

     

    Except
      as
      set forth in the disclosure schedule delivered by the Company to the Investor
      (which is hereby incorporated by reference in, and constitutes an integral
      part
      of, this Agreement) (the “Disclosure
      Schedule”),
      the
      Company hereby makes the following representations and warranties to the
      Investor:

     

    Section
      4.1 Organization,
      Good Standing and Power.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Nevada and has the requisite corporate power
      and
      authority to own, lease and operate its properties and assets and to conduct
      its
      business as it is now being conducted. The Company is duly qualified as a
      foreign corporation to do business and is in good standing in every jurisdiction
      in which the nature of the business conducted or property owned by it makes
      such
      qualification necessary, except for any jurisdiction in which the failure to
      be
      so qualified would not have a Material Adverse Effect.

     

    Section
      4.2 Authorization,
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and
      perform this Agreement and to issue and sell the Shares in accordance with
      the
      terms hereof. Except for approvals of the Company’s Board of Directors or a
      committee thereof as may be required in connection with any issuance and sale
      of
      Shares to the Investor hereunder (which approvals shall be obtained prior to
      the
      delivery of any Fixed Request Notice), the execution, delivery and performance
      by the Company of this Agreement and the consummation by it of the transactions
      contemplated hereby have been duly and validly

     

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    authorized
      by all necessary corporate action and no further consent or authorization of
      the
      Company or its Board of Directors or stockholders is required. This Agreement
      has been duly executed and delivered by the Company and constitutes a valid
      and
      binding obligation of the Company enforceable against the Company in accordance
      with its terms, except as such enforceability may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium, liquidation,
      conservatorship, receivership or similar laws relating to, or affecting
      generally the enforcement of, creditor’s rights and remedies or by other
      equitable principles of general application.

     

    Section
      4.3 Capitalization.
      The
      authorized capital stock of the Company and the shares thereof issued and
      outstanding are as set forth in the Commission Documents as of the dates
      reflected therein. All of the outstanding shares of Common Stock have been
      duly
      authorized and validly issued, and are fully paid and nonassessable. Except
      as
      set forth in the Commission Documents, as of the Effective Date, (i) no shares
      of Common Stock were entitled to preemptive rights or registration rights and
      (ii) there were no outstanding options, warrants, scrip, rights to subscribe
      to,
      call or commitments of any character whatsoever relating to, or securities
      or
      rights convertible into or exchangeable for, any shares of capital stock of
      the
      Company. Except as set forth in the Commission Documents, there were no
      contracts, commitments, understandings, or arrangements by which the Company
      is
      or may become bound to issue additional shares of the capital stock of the
      Company or options, securities or rights convertible into or exchangeable for
      any shares of capital stock of the Company. Except for customary transfer
      restrictions contained in agreements entered into by the Company to sell
      restricted securities or as set forth in the Commission Documents, as of the
      Effective Date, the Company was not a party to, and it had no knowledge of,
      any
      agreement restricting the voting or transfer of any shares of the capital stock
      of the Company. Except as set forth in the Commission Documents, the offer
      and
      sale of all capital stock, convertible or exchangeable securities, rights,
      warrants or options of the Company issued prior to the Effective Date complied
      with all then applicable federal and state securities laws, and no stockholder
      has any right of rescission or damages or any “put” or similar right with
      respect thereto that would have a Material Adverse Effect. The Company has
      furnished or made available to the Investor via the Commission’s Electronic Data
      Gathering, Analysis and Retrieval System (“EDGAR”)
      true
      and correct copies of the Company’s Articles of Incorporation as in effect on
      the Effective Date (the “Charter”),
      and
      the Company’s Bylaws as in effect on the Effective Date (the “Bylaws”),
      and
      true and correct copies (redacted as appropriate) of all executed resolutions
      of
      the Company’s Board of Directors (and committees thereof) relating to the
      capital stock of the Company (and transactions in respect thereof) since
      December 31, 2005 (except with respect to issuances of shares of capital stock
      of the Company to directors or employees of the Company as fees or compensation
      that were duly approved by the Company’s Board of Directors or a committee
      thereof).

     

    Section
      4.4 Issuance
      of Shares.
      The
      Shares to be issued under this Agreement have been or will be duly authorized
      by
      all necessary corporate action and, when paid for or issued in accordance with
      the terms hereof, the Shares shall be validly issued and outstanding, fully
      paid
      and nonassessable, and, when the Shares have been issued to the Investor, the
      Investor shall be entitled to all rights accorded to a holder and beneficial
      owner of Common Stock.

     

    

    
      
        
           

        

        
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    Section
      4.5 No
      Conflicts.
      The
      execution, delivery and performance by the Company of this Agreement and the
      consummation by the Company of the transactions contemplated herein do not
      and
      shall not (i) result in a violation of any provision of the Company’s Charter or
      Bylaws, (ii) conflict with, constitute a default (or an event which, with notice
      or lapse of time or both, would become a default) under, or give rise to any
      rights of termination, amendment, acceleration or cancellation of, any material
      agreement, mortgage, deed of trust, indenture, note, bond, license, lease
      agreement, instrument or obligation to which the Company or any of its
      Significant Subsidiaries is a party or is bound (including, without limitation,
      any listing agreement with the Trading Market), (iii) create or impose a lien,
      charge or encumbrance on any property of the Company or any of its Significant
      Subsidiaries under any agreement or any commitment to which the Company or
      any
      of its Significant Subsidiaries is a party or under which the Company or any
      of
      its Significant Subsidiaries is bound or under which any of their respective
      properties or assets are bound, or (iv) result in a violation of any federal,
      state, local or foreign statute, rule, regulation, order, judgment or decree
      applicable to the Company or any of its Subsidiaries or by which any property
      or
      asset of the Company or any of its Subsidiaries are bound or affected, except,
      in the case of clauses (ii), (iii) and (iv), for such conflicts, defaults,
      terminations, amendments, acceleration, cancellations, liens, charges,
      encumbrances and violations as would not, individually or in the aggregate,
      have
      a Material Adverse Effect. The Company is not required under federal, state,
      local or foreign law, rule or regulation to obtain any consent, authorization
      or
      order of, or make any filing or registration with, any court or governmental
      agency in order for it to execute, deliver or perform any of its obligations
      under this Agreement, or to issue and sell the Shares to the Investor in
      accordance with the terms hereof (other than any filings which may be required
      to be made by the Company with the Commission or the Trading Market subsequent
      to the Effective Date, including but not limited to a Prospectus Supplement
      under Sections 1.4 and 5.9 of this Agreement, and any registration statement,
      prospectus or prospectus supplement which has been or may be filed pursuant
      to
      this Agreement).

     

    Section
      4.6 Commission
      Documents, Financial Statements.
      (a)
      The
      Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
      Act and, except as disclosed in the Commission Documents, as of the Effective
      Date the Company had timely filed (giving effect to permissible extensions
      in
      accordance with Rule 12b-25 under the Exchange Act) all Commission Documents.
      The Company has delivered or made available to the Investor via EDGAR or
      otherwise true and complete copies of the Commission Documents filed with the
      Commission prior to the Effective Date (including, without limitation, the
      2007
      Form 10-K) and has delivered or made available to the Investor via EDGAR or
      otherwise true and complete copies of all of the Commission Documents heretofore
      incorporated by reference in the Registration Statement and the Prospectus.
      The
      Company has not provided to the Investor any information which, according to
      applicable law, rule or regulation, should have been disclosed publicly by
      the
      Company but which has not been so disclosed, other than with respect to the
      transactions contemplated by this Agreement. As of its filing date, each
      Commission Document filed with the Commission and incorporated by reference
      in
      the Registration Statement and the Prospectus (including, without limitation,
      the 2007 Form 10-K) complied in all material respects with the requirements
      of
      the Securities Act or the Exchange Act, as applicable, and other federal, state
      and local laws, rules and regulations applicable to it, and, as of its filing
      date (or, if amended or superseded by a filing prior to the Effective Date,
      on
      the date of such amended or

     

    

    
      
        
           

        

        
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    superseded
      filing), such Commission Document did not contain any untrue statement of a
      material fact or omit 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. Each Commission Document to be
      filed
      with the Commission after the Effective Date and incorporated by reference
      in
      the Registration Statement, the Prospectus and any Prospectus Supplement
      required to be filed pursuant to Sections 1.4 and 5.9 hereof during the
      Investment Period (including, without limitation, the Current Report), when
      such
      document becomes effective or is filed with the Commission, as the case may
      be,
      shall comply in all material respects with the requirements of the Securities
      Act or the Exchange Act, as applicable, and other federal, state and local
      laws,
      rules and regulations applicable to it, and shall not contain any untrue
      statement of a material fact or omit 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.

     

    (b) The
      financial statements, together with the related notes and schedules, of the
      Company included in the Commission Documents comply as to form in all material
      respects with all applicable accounting requirements and the published rules
      and
      regulations of the Commission and all other applicable rules and regulations
      with respect thereto. Such financial statements, together with the related
      notes
      and schedules, have been prepared in accordance with GAAP applied on a
      consistent basis during the periods involved (except (i) as may be otherwise
      indicated in such financial statements or the notes thereto or (ii) in the
      case
      of unaudited interim statements, to the extent they may not include footnotes
      or
      may be condensed or summary statements), and fairly present in all material
      respects the financial condition of the Company and its consolidated
      Subsidiaries as of 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 year-end audit adjustments).

     

    (c) The
      Company has timely filed with the Commission and made available to the Investor
      via EDGAR or otherwise all certifications and statements required by (x) Rule
      13a-14 or Rule 15d-14 under the Exchange Act or (y) 18 U.S.C. Section 1350
      (Section 906 of the Sarbanes-Oxley Act of 2002 (“SOXA”))
      with
      respect to all relevant Commission Documents. The Company is in compliance
      in
      all material respects with the provisions of SOXA applicable to it as of the
      date hereof. The Company maintains disclosure controls and procedures required
      by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such controls and
      procedures are effective to ensure that all material information concerning
      the
      Company and its Subsidiaries is made known on a timely basis to the individuals
      responsible for the timely and accurate preparation of the Company’s Commission
      filings and other public disclosure documents. As used in this Section 4.6(c),
      the term “file” shall be broadly construed to include any manner in which a
      document or information is furnished, supplied or otherwise made available
      to
      the Commission.

     

    (d) Each
      of
      Hein & Associates LLP and Marc Lumer & Company, who has expressed its
      opinions on the audited financial statements and related schedules included
      or
      incorporated by reference in the Registration Statement and the Base Prospectus
      are, with respect to the Company, independent public accountants as required
      by
      the Securities Act and is an independent registered public accounting firm
      within the meaning of SOXA as required by the rules of the Public Company
      Accounting Oversight Board.

     

    

    
      
        
           

        

        
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    Section
      4.7 Subsidiaries.
      The
      Company does not have any Subsidiaries as of the Effective Date.

     

    Section
      4.8 No
      Material Adverse Effect.
      Since 
      December
      31, 2007, the Company has not experienced or suffered any Material Adverse
      Effect, and there exists no current state of facts, condition or event which
      would have a Material Adverse Effect, except (i) as disclosed in any Commission
      Documents filed since December 31, 2007 or (ii) continued losses from
      operations.

     

    Section
      4.9 Indebtedness.
      The
      2007 Form 10-K sets forth, as of December 31, 2007, all outstanding secured
      and
      unsecured Indebtedness of the Company, or for which the Company has commitments
      through such date. For the purposes of this Agreement, “Indebtedness”
shall
      mean (a) any liabilities for borrowed money or amounts owed in excess of
      $10,000,000 (other than trade accounts payable incurred in the ordinary course
      of business), (b) all guaranties, endorsements, indemnities and other contingent
      obligations in respect of Indebtedness of others in excess of $10,000,000,
      whether or not the same are or should be reflected in the Company’s balance
      sheet (or the notes thereto), except guaranties by endorsement of negotiable
      instruments for deposit or collection or similar transactions in the ordinary
      course of business; and (c) the present value of any lease payments in excess
      of
      $10,000,000 due under leases required to be capitalized in accordance with
      GAAP.
      There is no existing or continuing default or event of default in respect of
      any
      Indebtedness of the Company or any of its Subsidiaries.

     

    Section
      4.10 Title
      To Assets.
      Each of
      the Company and its Subsidiaries has good and marketable title to all of their
      respective real and personal property reflected in the Commission Documents,
      free of mortgages, pledges, charges, liens, security interests or other
      encumbrances, except for those indicated in the Commission Documents or those
      that would not have a Material Adverse Effect. All real property leases of
      the
      Company are valid and subsisting and in full force and effect in all material
      respects.

     

    Section
      4.11 Actions
      Pending.
      There
      is no action, suit, claim, investigation or proceeding pending, or, to the
      knowledge of the Company threatened, against the Company which questions the
      validity of this Agreement or the transactions contemplated hereby or any action
      taken or to be taken pursuant hereto or thereto. Except as set forth in the
      Commission Documents, there is no action, suit, claim, investigation or
      proceeding pending, or to the knowledge of the Company, threatened, against
      or
      involving the Company, or any of its properties or assets, or involving any
      officers or directors of the Company, including, without limitation, any
      securities class action lawsuit or stockholder derivative lawsuit, in each
      case
      which, if determined adversely to the Company, or any officer or director of
      the
      Company, would have a Material Adverse Effect. With respect to each of those
      certain actions under the caption “Item 3. Legal Proceedings” in the 2007 Form
      10-K, there has been no event or change required to be disclosed in a filing
      under the Exchange Act that has not been so disclosed.

     

    Section
      4.12 Compliance
      With Law.
      The
      business of the Company and the Subsidiaries has been and is presently being
      conducted in compliance with all applicable federal, state, local and foreign
      governmental laws, rules, regulations and ordinances, except as set
      forth

     

    

    
      
        
           

        

        
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    in
      the
      Commission Documents and except for such non-compliance which, individually
      or
      in the aggregate, would not have a Material Adverse Effect. 

     

    Section
      4.13 Certain
      Fees.
      Except
      for the placement fee payable by the Company to Reedland Capital Partners,
      an
      Institutional Division of the Financial West Group, Member FINRA/SIPC
      (“Reedland”),
      which
      shall be set forth in a separate placement agency agreement between the Company
      and Reedland (a true and complete fully executed copy of which has heretofore
      been provided to the Investor), no brokers, finders or financial advisory fees
      or commissions shall be payable by the Company (or any of its affiliates) with
      respect to the transactions contemplated by this Agreement.

     

    Section
      4.14 Operation
      of Business.
      (b)
      The
      Company or one or more of its Subsidiaries possesses such permits, licenses,
      approvals, consents and other authorizations (including licenses, accreditation
      and other similar documentation or approvals of any local health departments)
      (collectively, “Governmental
      Licenses”)
      issued
      by the appropriate federal, state, local or foreign regulatory agencies or
      bodies necessary to conduct the business now operated by it, except where the
      failure to possess such Governmental Licenses, individually or in the aggregate,
      would not have a Material Adverse Effect. The Company and its Subsidiaries
      are
      in compliance with the terms and conditions of all such Governmental Licenses,
      except where the failure to so comply, individually or in the aggregate, would
      not have a Material Adverse Effect. All of the Governmental Licenses are valid
      and in full force and effect, except where the invalidity of such Governmental
      Licenses or the failure of such Governmental Licenses to be in full force and
      effect, individually or in the aggregate, would not have a Material Adverse
      Effect. Except as set forth in the Commission Documents or the Registration
      Statement, neither the Company nor any of its Subsidiaries has received any
      notice of proceedings relating to the revocation or modification of any such
      Governmental Licenses. This Section 4.14 does not relate to environmental
      matters, such items being the subject of Section 4.15.

     

    (b) The
      Company or one or more of its Subsidiaries owns or possesses adequate rights
      to
      use the patents, patent rights, licenses, inventions, copyrights, know-how
      (including trade secrets and other unpatented and/or unpatentable proprietary
      or
      confidential information, systems or procedures), trademarks, service marks,
      trade names, trade dress, logos, copyrights and other intellectual property,
      including, without limitation, all of the intellectual property described in
      the
      Commission Documents as being owned or licensed by the Company (collectively,
      “Intellectual
      Property”),
      necessary to carry on the business now operated by it. Except as set forth
      in
      the Commission Documents, there are no actions, suits or judicial proceedings
      pending, or to the Company’s knowledge threatened, relating to patents or
      proprietary information to which the Company or any of its Subsidiaries is
      a
      party or of which any property of the Company or any of its Subsidiaries is
      subject, and neither the Company nor any of its Subsidiaries has received any
      notice or is otherwise aware of any infringement of or conflict with asserted
      rights of others with respect to any Intellectual Property or of any facts
      or
      circumstances which could render any Intellectual Property invalid or inadequate
      to protect the interest of the Company and its Subsidiaries therein, and which
      infringement or conflict (if the subject of any unfavorable decision, ruling
      or
      finding) or invalidity or inadequacy, individually or in the aggregate, would
      have a Material Adverse Effect. 

     

    

    
      
        
           

        

        
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    Section
      4.15 Environmental
      Compliance.
      Except
      as disclosed in the Commission Documents, the Company and each of its
      Subsidiaries have obtained all material approvals, authorization, certificates,
      consents, licenses, orders and permits or other similar authorizations of all
      governmental authorities, or from any other person, that are required under
      any
      Environmental Laws, except for any approvals, authorization, certificates,
      consents, licenses, orders and permits or other similar authorizations the
      failure of which to obtain does not or would not have a Material Adverse Effect.
      “Environmental
      Laws”
shall
      mean all applicable laws relating to the protection of the environment
      including, without limitation, all requirements pertaining to reporting,
      licensing, permitting, controlling, investigating or remediating emissions,
      discharges, releases or threatened releases of hazardous substances, chemical
      substances, pollutants, contaminants or toxic substances, materials or wastes,
      whether solid, liquid or gaseous in nature, into the air, surface water,
      groundwater or land, or relating to the manufacture, processing, distribution,
      use, treatment, storage, disposal, transport or handling of hazardous
      substances, chemical substances, pollutants, contaminants or toxic substances,
      material or wastes, whether solid, liquid or gaseous in nature. Except for
      such
      instances as would not, individually or in the aggregate, have a Material
      Adverse Effect, to the best of the Company’s knowledge, there are no past or
      present events, conditions, circumstances, incidents, actions or omissions
      relating to or in any way affecting the Company or its Subsidiaries that violate
      or could reasonably be expected to violate any Environmental Law after the
      Effective Date or that could reasonably be expected to give rise to any
      environmental liability, or otherwise form the basis of any claim, action,
      demand, suit, proceeding, hearing, study or investigation (i) under any
      Environmental Law, or (ii) based on or related to the manufacture, processing,
      distribution, use, treatment, storage (including without limitation underground
      storage tanks), disposal, transport or handling, or the emission, discharge,
      release or threatened release of any hazardous substance.

     

    Section
      4.16 Material
      Agreements.
      Except
      as set forth in the Commission Documents, the Company is not a party to any
      written or oral contract, instrument, agreement commitment, obligation, plan
      or
      arrangement, a copy of which would be required to be filed with the Commission
      as an exhibit to an annual report on Form 10-K (collectively, “Material
      Agreements”).
      The
      Company and each of its Subsidiaries have performed in all material respects
      all
      the obligations required to be performed by them under the Material Agreements,
      have received no notice of default or an event of default by the Company or
      any
      of its Subsidiaries thereunder and are not aware of any basis for the assertion
      thereof, and neither the Company or any of its Subsidiaries nor, to the best
      knowledge of the Company, any other contracting party thereto are in default
      under any Material Agreement now in effect, the result of which would have
      a
      Material Adverse Effect. Each of the Material Agreements is in full force and
      effect, and constitutes a legal, valid and binding obligation enforceable in
      accordance with its terms against the Company and/or any of its Subsidiaries
      and, to the knowledge of the Company, each other contracting party thereto,
      except as such enforceability may be limited by applicable bankruptcy,
      insolvency, reorganization, moratorium, liquidation, conservatorship,
      receivership or similar laws relating to, or affecting generally the enforcement
      of, creditor’s rights and remedies or by other equitable principles of general
      application.

     

    Section
      4.17 Transactions
      With Affiliates.
      Except
      as set forth in the Commission Documents, there are no loans, leases,
      agreements, contracts, royalty agreements, management contracts, service
      arrangements or other continuing transactions exceeding $120,000 between (a)
      the
      Company, on the one hand, and (b) any person or entity who would be covered
      by
      Item

     

    

    
      
        
           

        

        
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    404(a)
      of
      Regulation S-K, on the other hand. Except as disclosed in the Commission
      Documents, there are no outstanding amounts payable to or receivable from,
      or
      advances by the Company or any of its Subsidiaries to, and neither the Company
      nor any of its Subsidiaries is otherwise a creditor of or debtor to, any
      beneficial owner of more than five percent (5%) of the outstanding shares of
      Common Stock, or any director, employee or affiliate of the Company or any
      of
      its Subsidiaries, other than (i) reimbursement for reasonable expenses incurred
      on behalf of the Company or any of its Subsidiaries or (ii) as part of the
      normal and customary terms of such persons’ employment or service as a director
      with the Company or any of its Subsidiaries.

     

    Section
      4.18 Securities
      Act; NASD Conduct Rules.
      The
      Company has complied with all applicable federal and state securities laws
      in
      connection with the offer, issuance and sale of the Shares
      hereunder.

     

    (i) The
      Company has prepared and filed with the Commission in accordance with the
      provisions of the Securities Act the Registration Statement, including a base
      prospectus relating to the Shares. The Registration Statement was declared
      effective by order of the Commission on September 4, 2007. As of the date
      hereof, no stop order suspending the effectiveness of the Registration Statement
      has been issued by the Commission or is continuing in effect under the
      Securities Act and no proceedings therefor are pending before or, to the
      Company’s knowledge, threatened by the Commission. No order preventing or
      suspending the use of the Prospectus or any Permitted Free Writing Prospectus
      has been issued by the Commission.

     

    (ii) The
      Company meets the requirements for the use of Form S-3 under the Securities
      Act.
      The Commission has not notified the Company of any objection to the use of
      the
      form of the Registration Statement. The Registration Statement complied in
      all
      material respects on the date on which it was declared effective by the
      Commission and on the Effective Date of this Agreement, and will comply in
      all
      material respects on each applicable Fixed Request Exercise Date and on each
      applicable Settlement Date, with the requirements of the Securities Act and
      the
      Registration Statement (including the documents incorporated by reference
      therein) did not on the date it was declared effective by the Commission and
      on
      the Effective Date of this Agreement and shall not on each applicable Fixed
      Request Exercise Date and on each applicable Settlement Date contain an untrue
      statement of a material fact or omit to state a material fact required to be
      stated therein or necessary to make the statements therein not misleading;
      provided
      that
      this representation and warranty does not apply to statements in or omissions
      from the Registration Statement made in reliance upon and in conformity with
      information relating to the Investor furnished to the Company in writing by
      or
      on behalf of the Investor expressly for use therein. The Registration Statement,
      as of the Effective Date, meets the requirements set forth in Rule 415(a)(1)(x)
      under the Securities Act. The Base Prospectus complied in all material respects
      on its date and on the Effective Date, and will comply in all material respects
      on each applicable Fixed Request Exercise Date and, when taken together with
      the
      applicable Prospectus Supplement and any applicable Permitted Free Writing
      Prospectus, on each applicable Settlement Date, with the requirements of the
      Securities Act and did not on its date and on the Effective Date and shall
      not
      on each applicable Fixed Request Exercise Date and, when taken together with
      the
      applicable Prospectus Supplement and any applicable Permitted Free Writing
      Prospectus, on each applicable Settlement Date contain an untrue statement
      of a
      material fact or omit to state a material fact required to be stated therein
      or
      necessary to make the

     

    

    
      
        
           

        

        
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    statements
      therein, in the light of the circumstances under which they were made, not
      misleading; provided
      that
      this representation and warranty does not apply to statements in or omissions
      from the Base Prospectus made in reliance upon and in conformity with
      information relating to the Investor furnished to the Company in writing by
      or
      on behalf of the Investor expressly for use therein. 

     

    (iii) In
      accordance with NASD Conduct Rule 2710(b)(7)(C)(i) of the Financial Industry
      Regulatory Authority (the “FINRA”),
      the
      offering of the Shares pursuant to this Agreement has been registered with
      the
      Commission on Form S-3 under the Securities Act pursuant to the standards for
      Form S-3 in effect prior to October 21, 1992, and the Shares are being offered
      pursuant to Rule 415 promulgated under the Securities Act.

     

    (iv) Each
      Prospectus Supplement required to be filed pursuant to Sections 1.4 and 5.9
      hereof, when taken together with the Base Prospectus and any applicable
      Permitted Free Writing Prospectus, on its date and on the applicable Settlement
      Date, shall comply in all material respects with the provisions of the
      Securities Act and shall not on its date and on the applicable Settlement Date
      contain an untrue statement of a material fact or omit to state a material
      fact
      required to be stated therein or necessary to make the statements therein,
      in
      the light of the circumstances under which they are made, not misleading, except
      that this representation and warranty does not apply to statements in or
      omissions from any Prospectus Supplement made in reliance upon and in conformity
      with information relating to the Investor furnished to the Company in writing
      by
      or on behalf of the Investor expressly for use therein. 

     

    (v) At
      the
      earliest time after the filing of the Registration Statement that the Company
      or
      another offering participant made a bona fide offer (within the meaning of
      Rule
      164(h)(2) under the Securities Act) relating to the Shares, the Company was
      not
      and is not an Ineligible Issuer (as defined in Rule 405 under the Securities
      Act). Each Permitted Free Writing Prospectus (a) shall conform in all material
      respects to the requirements of the Securities Act on the date of its first
      use,
      (b) when considered together with the Prospectus on each applicable Fixed
      Request Exercise Date and on each applicable Settlement Date, shall not contain
      an untrue statement of a material fact or omit to state a material fact required
      to be stated therein or necessary to make the statements therein, in the light
      of the circumstances under which they are made, not misleading, and (c) shall
      not include any information that conflicts with the information contained in
      the
      Registration Statement, including any document incorporated by reference therein
      and any Prospectus Supplement deemed to be a part thereof that has not been
      superseded or modified. The immediately preceding sentence does not apply to
      statements in or omissions from any Permitted Free Writing Prospectus made
      in
      reliance upon and in conformity with information relating to the Investor
      furnished to the Company in writing by or on behalf of the Investor expressly
      for use therein.

     

    (vi) Prior
      to
      the Effective Date, the Company has not distributed any offering material in
      connection with the offering and sale of the Shares. From and after the
      Effective Date and prior to the completion of the distribution of the Shares,
      the Company shall not distribute any offering material in connection with the
      offering and sale of the Shares, other than the Registration Statement, the
      Base
      Prospectus as supplemented by any Prospectus Supplement or a Permitted Free
      Writing Prospectus. 

     

    

    
      
        
           

        

        
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    Section
      4.19 Employees.
      As
      of the
      Effective Date, the Company has no collective bargaining arrangements or
      agreements covering any of its employees, except as set forth in the Commission
      Documents. As of the Effective Date, except as disclosed in the Registration
      Statement or the Commission Documents, no officer, consultant or key employee
      of
      the Company whose termination, either individually or in the aggregate, would
      reasonably be expected to have a Material Adverse Effect, has terminated or,
      to
      the knowledge of the Company, has any present intention of terminating his
      or
      her employment or engagement with the Company.

     

    Section
      4.20 Use
      of Proceeds.
      The
      proceeds from the sale of the Shares shall be used by the Company and its
      Subsidiaries as set forth in the Base Prospectus and any Prospectus Supplement
      filed pursuant to Sections 1.4 and 5.9.

     

    Section
      4.21 Investment
      Company Act Status.
      The
      Company is not, and as a result of the consummation of the transactions
      contemplated by this Agreement and the application of the proceeds from the
      sale
      of the Shares as set forth in the Base Prospectus and any Prospectus Supplement
      shall not be, an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
      as amended.

     

    Section
      4.22 ERISA.
      No
      liability to the Pension Benefit Guaranty Corporation has been incurred with
      respect to any Plan by the Company or any of its Subsidiaries which has had
      or
      would have a Material Adverse Effect. No “prohibited transaction” (as defined in
      Section 406 of ERISA or Section 4975 of the Code) or “accumulated funding
      deficiency” (as defined in Section 203 of ERISA) or any of the events set forth
      in Section 4043(b) of ERISA has occurred with respect to any Plan which has
      had
      or would have a Material Adverse Effect, and the execution and delivery of
      this
      Agreement and the issuance and sale of the Shares hereunder shall not result
      in
      any of the foregoing events. Each Plan is in compliance in all material respects
      with applicable law, including ERISA and the Code; the Company has not incurred
      and does not expect to incur any liability under Title IV of ERISA with respect
      to the termination of, or withdrawal from, any Plan; and each Plan for which
      the
      Company would have any liability that is intended to be qualified under Section
      401(a) of the Code is so qualified in all material respects and nothing has
      occurred, whether by action or failure to act, which would cause the loss of
      such qualifications. As used in this Section 4.22, the term “Plan”
shall
      mean an “employee
      pension benefit plan”
(as
      defined in Section 3 of ERISA) which is or has been established or maintained,
      or to which contributions are or have been made, by the Company or by any trade
      or business, whether or not incorporated, which, together with the Company,
      is
      under common control, as described in Section 414(b) or (c) of the
      Code.

     

    Section
      4.23 Taxes.
      The
      Company (i) has filed all necessary federal, state and foreign income and
      franchise tax returns or has duly requested extensions thereof, except for
      those
      the failure of which to file would not have a Material Adverse Effect, (ii)
      has
      paid all federal, state, local and foreign taxes due and payable for which
      it is
      liable, except to the extent that any such taxes are being contested in good
      faith and by appropriate proceedings, except for such taxes the failure of
      which
      to pay would not have a Material Adverse Effect, and (iii) does not have any
      tax
      deficiency or claims outstanding or assessed or, to the best of the Company’s
      knowledge, proposed against it which would have a Material Adverse
      Effect.

     

    

    
      
        
           

        

        
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    Section
      4.24 Insurance.
      The
      Company carries, or is covered by, insurance in such amounts and covering such
      risks as is adequate for the conduct of its and its Subsidiaries’ businesses and
      the value of their respective properties and as is customary for companies
      engaged in similar businesses in similar industries. 

     

    Section
      4.25 Acknowledgement
      Regarding Investor’s Purchase of Shares.
      The
      Company acknowledges and agrees that the Investor is acting solely in the
      capacity of an arm’s length purchaser with respect to this Agreement and the
      transactions contemplated hereunder. The Company further acknowledges that
      the
      Investor is not acting as a financial advisor or fiduciary of the Company (or
      in
      any similar capacity) with respect to this Agreement and the transactions
      contemplated hereunder, and any advice given by the Investor or any of its
      representatives or agents in connection with this Agreement and the transactions
      contemplated hereunder is merely incidental to the Investor’s purchase of the
      Shares.

     

    ARTICLE
      V

     

    COVENANTS

     

    The
      Company covenants with the Investor, and the Investor covenants with the
      Company, as follows, which covenants of one party are for the benefit of the
      other party, during the Investment Period:

     

    Section
      5.1 Securities
      Compliance.
      The
      Company shall notify the Commission and the Trading Market, as applicable,
      in
      accordance with their respective rules and regulations, of the transactions
      contemplated by this Agreement, and shall take all necessary action, undertake
      all proceedings and obtain all registrations, permits, consents and approvals
      for the legal and valid issuance of the Shares to the Investor in accordance
      with the terms of this Agreement. 

     

    Section
      5.2 Registration
      and Listing.
      The
      Company shall take all action necessary to cause the Common Stock to continue
      to
      be registered as a class of securities under Sections 12(b) or 12(g) of the
      Exchange Act, shall comply with its reporting and filing obligations under
      the
      Exchange Act, and shall not take any action or file any document (whether or
      not
      permitted by the Securities Act) to terminate or suspend such registration
      or to
      terminate or suspend its reporting and filing obligations under the Exchange
      Act
      or Securities Act, except as permitted herein. The Company shall take all action
      necessary to continue the listing and trading of its Common Stock and the
      listing of the Shares purchased by Investor hereunder on the Trading Market,
      and
      shall comply with the Company’s reporting, filing and other obligations under
      the bylaws, listed securities maintenance standards and other rules of the
      Trading Market.

     

    Section
      5.3 Compliance
      with Laws.

     

    (i) The
      Company shall comply, and cause each Subsidiary to comply, (a) with all laws,
      rules, regulations and orders applicable to the business and operations of
      the
      Company and its Subsidiaries except as would not have a Material Adverse Effect
      and (b) with all applicable provisions of the Securities Act, the Exchange
      Act,
      and the listing standards of the Trading Market. Without limiting the generality
      of the foregoing, neither the Company nor any of its officers, directors or
      affiliates has taken or will take, directly or indirectly, any action designed
      or intended to stabilize or manipulate the price of any security of the Company,
      or

     

    

    
      
        
           

        

        
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    which
      caused or resulted in, or which would in the future reasonably be expected
      to
      cause or result in, stabilization or manipulation of the price of any security
      of the Company.

     

    (ii) The
      Investor shall comply with all laws, rules, regulations and orders applicable
      to
      the performance by it of its obligations under this Agreement and its investment
      in the Shares, except as would not, individually or in the aggregate, prohibit
      or otherwise interfere with the ability of the Investor to enter into and
      perform its obligations under this Agreement in any material respect. Without
      limiting the foregoing, the Investor shall comply with all applicable provisions
      of the Securities Act and the Exchange Act, including, without limitation,
      Section 13(d) of the Exchange Act.

     

    Section
      5.4 Keeping
      of Records and Books of Account; Foreign Corrupt Practices
      Act.

     

    (i) The
      Company shall keep and cause each Subsidiary to keep adequate records and books
      of account, in which complete entries shall be made in accordance with GAAP
      consistently applied, reflecting all financial transactions of the Company
      and
      its Subsidiaries, and in which, for each fiscal year, all proper reserves for
      depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
      purposes in connection with its business shall be made. The Company shall
      maintain a system of internal accounting controls that (a) pertain to the
      maintenance of records that in reasonable detail accurately and fairly reflect
      the transactions and dispositions of the assets of the Company; (b) provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that receipts and expenditures of the Company are
      being made only in accordance with authorizations of management and directors
      of
      the Company; and (c) provide reasonable assurance regarding prevention or timely
      detection of unauthorized acquisition, use or disposition of the Company’s
      assets that could have a material effect on the Company’s financial
      statements.

     

    (ii) Neither
      the Company, nor any of its Subsidiaries, nor to the knowledge of the Company,
      any of their respective directors, officers, agents, employees or any other
      persons acting on their behalf shall, in connection with the operation of the
      Company’s and its Subsidiaries’ respective businesses, (a) use any corporate
      funds for unlawful contributions, payments, gifts or entertainment or to make
      any unlawful expenditures relating to political activity to government
      officials, candidates or members of political parties or organizations, (b)
      pay,
      accept or receive any unlawful contributions, payments, expenditures or gifts,
      or (c) violate or operate in noncompliance with any export restrictions,
      anti-boycott regulations, embargo regulations or other applicable domestic
      or
      foreign laws and regulations.

     

    (iii) Subject
      to the requirements of Section 5.12 of this Agreement, from time to time from
      and after the period beginning with the second Trading Day immediately preceding
      each Fixed Request Exercise Date through and including the applicable Settlement
      Date, the Company shall make available for inspection and review by the
      Investor, customary documentation allowing the Investor and/or its appointed
      counsel or advisors to conduct due diligence.

     

    

    
      
        
           

        

        
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    Section
      5.5 Limitations
      on Holdings and Issuances.
      At no
      time during the term of this Agreement shall the Investor directly or indirectly
      own more than nine and nine-tenths percent (9.9%) of the then issued and
      outstanding shares of Common Stock. The Company shall not be obligated to issue
      and the Investor shall not be obligated to purchase any shares of Common Stock
      which would result in the issuance under this Agreement to the Investor at
      any
      time of Shares which, when aggregated with all other shares of Common Stock
      then
      owned beneficially by the Investor, would result in the beneficial ownership
      by
      the Investor of more than nine and nine-tenths percent (9.9%) of the then issued
      and outstanding shares of the Common Stock.

     

    Section
      5.6 Other
      Agreements and Other Financings.

     

    (i) The
      Company shall not enter into, announce or recommend to its stockholders any
      agreement, plan, arrangement or transaction in or of which the terms thereof
      would restrict, materially delay, conflict with or impair the ability or right
      of the Company or any Subsidiary to perform its obligations under this
      Agreement, including, without limitation, the obligation of the Company to
      deliver Shares to the Investor in respect of a Fixed Request or Optional Amount
      on the applicable Settlement Date.

     

    (ii) The
      Company shall notify the Investor, within forty-eight (48) hours, if it enters
      into any agreement, plan, arrangement or transaction with a third party, the
      principal purpose of which is to obtain during a Pricing Period an Other
      Financing not constituting an Acceptable Financing (an “Other
      Financing Notice”);
      provided,
      however,
      that
      the Company shall notify the Investor immediately (an “Integration
      Notice”)
      if it
      enters into any agreement, plan, arrangement or transaction with a third party,
      the principal purpose of which is to obtain at any time during the Investment
      Period an Other Financing which may be integrated with the transactions
      contemplated by this Agreement for purposes of determining whether approval
      of
      the Company’s stockholders is required under any bylaw, listed securities
      maintenance standards or other rules of the Trading Market and, if required
      under applicable law, including, without limitation, Regulation FD promulgated
      by the Commission, or under the applicable rules and regulations of the Trading
      Market, the Company shall simultaneously publicly disclose such information
      in
      accordance with Regulation FD and the applicable rules and regulations of the
      Trading Market. For purposes of this Section 5.6(ii), any press release issued
      by, or Commission Document filed by, the Company shall constitute sufficient
      notice, provided that it is issued or filed, as the case may be, within the
      time
      requirements set forth in the first sentence of this Section 5.6(ii) for an
      Other Financing Notice or an Integration Notice, as applicable. During any
      Pricing Period in which the Company is required to provide an Other Financing
      Notice pursuant to the first sentence of this Section 5.6(ii), the Investor
      shall (i) have the option to purchase the Shares subject to the Fixed Request
      at
      (x) the price therefor in accordance with the terms of this Agreement or (y)
      the
      third party’s per share purchase price in connection with the Other Financing,
      net of such third party’s discounts, Warrant Value and fees, or (ii) the
      Investor may elect to not purchase any Shares subject to the Fixed Request
      for
      that Pricing Period. An “Other
      Financing”
shall
      mean (x) the issuance of Common Stock for a purchase price less than, or the
      issuance of securities convertible into or exchangeable for Common Stock at
      an
      exercise or conversion price (as the case may be) less than, the then Current
      Market Price of the Common Stock (in each case, after all fees, discounts,
      Warrant Value and commissions associated with the transaction) (a “Below
      Market Offering”);
      (y)
      the implementation by the Company of any

     

    

    
      
        
           

        

        
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    mechanism
      in respect of any securities convertible into or exchangeable for Common Stock
      for the reset of the purchase price of the Common Stock to below the then
      Current Market Price of the Common Stock (including, without limitation, any
      antidilution or similar adjustment provisions in respect of any Company
      securities, but specifically excluding customary adjustments for stock splits,
      stock dividends, stock combinations and similar events); or (z) the issuance
      of
      options, warrants or similar rights of subscription in each case not
      constituting an Acceptable Financing. “Acceptable
      Financing”
shall
      mean the issuance by the Company of: (1) shares of Common Stock or securities
      convertible into or exchangeable for Common Stock other than in connection
      with
      a Below Market Offering; (2) shares of Common Stock or securities convertible
      into or exchangeable for Common Stock in connection with awards under the
      Company’s benefit and equity plans and arrangements and the issuance of shares
      of Common Stock upon the conversion, exercise or exchange thereof; (3) shares
      of
      Common Stock issuable upon the conversion or exchange of equity awards or
      convertible or exchangeable securities outstanding as of the Effective Date;
      (4)
      shares of Common Stock or securities convertible into or exchangeable for Common
      Stock or similar rights to subscribe for the purchase of shares of Common Stock
      in connection with technology sharing, licensing, research and joint development
      agreements (or amendments thereto) with third parties, and the issuance of
      shares of Common Stock upon the conversion, exercise or exchange thereof; and
      (5) shares of Common Stock and/or warrants or similar rights to subscribe for
      the purchase of shares of Common Stock issued in connection with equipment
      financings and/or real property leases (or amendments thereto) and the issuance
      of shares of Common Stock upon the exercise thereof. 

     

    Section
      5.7 Stop
      Orders.
      The
      Company shall advise the Investor immediately and shall confirm such advice
      in
      writing: (i) of the Company’s receipt of notice of any request by the Commission
      for amendment of or a supplement to the Registration Statement, the Prospectus,
      any Permitted Free Writing Prospectus or for any additional information; (ii)
      of
      the Company’s receipt of notice of the issuance by the Commission of any stop
      order suspending the effectiveness of the Registration Statement or prohibiting
      or suspending the use of the Prospectus or any Prospectus Supplement, or of
      the
      suspension of qualification of the Shares for offering or sale in any
      jurisdiction, or the initiation or contemplated initiation of any proceeding
      for
      such purpose; and (iii) of the Company becoming aware of the happening of any
      event, which makes any statement of a material fact made in the Registration
      Statement, the Prospectus or any Permitted Free Writing Prospectus untrue or
      which requires the making of any additions to or changes to the statements
      then
      made in the Registration Statement, the Prospectus or any Permitted Free Writing
      Prospectus in order to state a material fact required by the Securities Act
      to
      be stated therein or necessary in order to make the statements then made therein
      (in the case of the Prospectus, in light of the circumstances under which they
      were made) not misleading, or of the necessity to amend the Registration
      Statement or supplement the Prospectus or any Permitted Free Writing Prospectus
      to comply with the Securities Act or any other law. The Company shall not be
      required to disclose to the Investor the substance or specific reasons of any
      of
      the events set forth in clauses (i) through (iii) of the immediately preceding
      sentence, but rather, shall only be required to disclose that the event has
      occurred. The Company shall not issue any Fixed Request during the continuation
      of any of the foregoing events. If at any time the Commission shall issue any
      stop order suspending the effectiveness of the Registration Statement or
      prohibiting or suspending the use of the Prospectus or any Prospectus
      Supplement, the Company shall use commercially reasonable efforts to obtain
      the
      withdrawal of such order at the earliest possible time.

     

    

    
      
        
           

        

        
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    Section
      5.8 Amendments
      to the Registration Statement; Prospectus Supplements; Free Writing
      Prospectuses.
      

     

    (i) Except
      as
      provided in this Agreement and other than periodic reports required to be filed
      pursuant to the Exchange Act, the Company shall not file with the Commission
      any
      amendment to the Registration Statement that relates to the Investor, the
      Agreement or the transactions contemplated hereby or file with the Commission
      any Prospectus Supplement that relates to the Investor, this Agreement or the
      transactions contemplated hereby with respect to which (a) the Investor shall
      not previously have been advised, (b) the Company shall not have given due
      consideration to any comments thereon received from the Investor or its counsel,
      or (c) the Investor shall reasonably object after being so advised, unless
      it is
      necessary to amend the Registration Statement or make any supplement to the
      Prospectus to comply with the Securities Act or any other applicable law or
      regulation, in which case the Company shall immediately so inform the Investor,
      the Investor shall be provided with a reasonable opportunity to review and
      comment upon any disclosure relating to the Investor and the Company shall
      expeditiously furnish to the Investor an electronic copy thereof. In addition,
      for so long as, in the reasonable opinion of counsel for the Investor, the
      Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under
      the
      Securities Act) is required to be delivered in connection with any purchase
      of
      Shares by the Investor, the Company shall not file any Prospectus Supplement
      with respect to the Shares without delivering or making available a copy of
      such
      Prospectus Supplement, together with the Base Prospectus, to the Investor
      promptly.

     

    (ii) The
      Company agrees that, unless it obtains the prior written consent of the
      Investor, it has not made and will not make an offer relating to the Shares
      that
      would constitute an Issuer Free Writing Prospectus or that would otherwise
      constitute a Free Writing Prospectus required to be filed by the Company or
      the
      Investor with the Commission or retained by the Company or the Investor under
      Rule 433 under the Securities Act. The Investor agrees that, unless it obtains
      the prior written consent of the Company, it has not made and will not make
      an
      offer relating to the Shares that would constitute a Free Writing Prospectus
      required to be filed by the Company with the Commission or retained by the
      Company under Rule 433 under the Securities Act. Any such Issuer Free Writing
      Prospectus or other Free Writing Prospectus consented to by the Investor or
      the
      Company is referred to in this Agreement as a “Permitted
      Free Writing Prospectus.”
The
      Company agrees that (x) it has treated and will treat, as the case may be,
      each
      Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and
      (y)
      it has complied and will comply, as the case may be, with the requirements
      of
      Rules 164 and 433 under the Securities Act applicable to any Permitted Free
      Writing Prospectus, including in respect of timely filing with the Commission,
      legending and record keeping.

     

    Section
      5.9 Prospectus
      Delivery.
      The
      Company shall file with the Commission a Prospectus Supplement pursuant to
      Rule
      424(b) under the Securities Act on the first Trading Day immediately following
      the last Trading Day of each Pricing Period. The Company shall provide the
      Investor a reasonable opportunity to comment on a draft of each such Prospectus
      Supplement and any Issuer Free Writing Prospectus, shall give due consideration
      to all such comments and, subject to the provisions of Section 5.8 hereof,
      shall
      deliver or make available to the Investor, without charge, an electronic copy
      of
      each form of Prospectus Supplement, together with the Base Prospectus, and
      any
      Permitted Free Writing Prospectus on each applicable Settlement Date. The
      Company consents to the use of the Prospectus (and of any Prospectus Supplement
      thereto)

     

    

    
      
        
           

        

        
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    in
      accordance with the provisions of the Securities Act and with the securities
      or
“blue sky” laws of the jurisdictions in which the Shares may be sold by the
      Investor, in connection with the offering and sale of the Shares and for such
      period of time thereafter as the Prospectus (or in lieu thereof, the notice
      referred to in Rule 173(a) under the Securities Act) is required by the
      Securities Act to be delivered in connection with sales of the Shares. If during
      such period of time any event shall occur that in the judgment of the Company
      and its counsel is required to be set forth in the Registration Statement or
      the
      Prospectus or any Permitted Free Writing Prospectus or should be set forth
      therein in order to make the statements made therein (in the case of the
      Prospectus, in light of the circumstances under which they were made) not
      misleading, or if it is necessary to amend the Registration Statement or
      supplement or amend the Prospectus or any Permitted Free Writing Prospectus
      to
      comply with the Securities Act or any other applicable law or regulation, the
      Company shall forthwith prepare and, subject to Section 5.8 above, file with
      the
      Commission an appropriate amendment to the Registration Statement or Prospectus
      Supplement to the Prospectus (or supplement to the Permitted Free Writing
      Prospectus) and shall expeditiously furnish or make available to the Investor
      an
      electronic copy thereof.

     

    Section
      5.10 Selling
      Restrictions.

     

    (i) The
      Investor covenants that from and after the date hereof through and including
      the
      90th
      day next
      following the termination of this Agreement (the “Restricted
      Period”),
      neither the Investor nor any of its affiliates (within the meaning of the
      Exchange Act) nor any entity managed or controlled by the Investor shall,
      directly or indirectly, sell any securities of the Company, except the Shares
      that it owns or has the right to purchase as provided in a Fixed Request Notice.
      During the Restricted Period, neither the Investor or any of its affiliates
      nor
      any entity managed or controlled by the Investor shall sell any shares of Common
      Stock of the Company it does not “own” or have the unconditional right to
      receive under the terms of this Agreement (within the meaning of Rule 200 of
      Regulation SHO promulgated by the Commission under the Exchange Act), including
      Shares in any account of the Investor or in any account directly or indirectly
      managed or controlled by the Investor or any of its affiliates or any entity
      managed or controlled by the Investor. Without limiting the generality of the
      foregoing, prior to and during the Restricted Period, neither the Investor
      nor
      any of its affiliates nor any entity managed or controlled by the Investor
      or
      any of its affiliates shall enter into a short position with respect to shares
      of Common Stock of the Company, including in any account of the Investor’s or in
      any account directly or indirectly managed or controlled by the Investor or
      any
      of its Affiliates or any entity managed or controlled by the Investor, except
      that the Investor may sell Shares that it is obligated to purchase under a
      pending Fixed Request Notice but has not yet taken possession of so long as
      the
      Investor (or the Broker-Dealer, as applicable) covers any such sales with the
      Shares purchased pursuant to such Fixed Request Notice; provided,
      however,
      that
      the Investor (or the Broker-Dealer, as applicable) shall not be required to
      cover any such sales with the Shares purchased pursuant to such Fixed Request
      Notice if (a) the Fixed Request is terminated by mutual agreement of the Company
      and the Investor and, as a result of such termination, no Shares are delivered
      to the Investor under this Agreement or (b) the Company otherwise fails to
      deliver such Shares to the Investor on the applicable Settlement Date upon
      the
      terms and subject to the provisions of this Agreement. Prior to and during
      the
      Restricted Period, the Investor shall not grant any option to purchase or
      acquire any right to dispose or otherwise dispose for value of any shares of
      Common Stock or any securities convertible into or

     

    

    
      
        
           

        

        
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    exercisable
      or exchangeable for, or warrants to purchase, any shares of Common Stock, or
      enter into any swap, hedge or other agreement that transfers, in whole or in
      part, the economic risk of ownership of the Common Stock, except for such sales
      expressly permitted by this Section 5.10(i).

     

    (ii) In
      addition to the foregoing, in connection with any sale of the Company’s
      securities (including any sale permitted by paragraph (i) above), the Investor
      shall comply in all respects with all applicable laws, rules, regulations and
      orders, including, without limitation, the requirements of the Securities Act
      and the Exchange Act.

     

    Section
      5.11 Effective
      Registration Statement.
      During
      the Investment Period, the Company shall use its best efforts to maintain the
      continuous effectiveness of the Registration Statement under the Securities
      Act.

     

    Section
      5.12 Non-Public
      Information.
      Neither
      the Company nor any of its directors, officers or agents shall disclose any
      material non-public information about the Company to the Investor, unless a
      simultaneous public announcement thereof is made by the Company in the manner
      contemplated by Regulation FD.

     

    Section
      5.13 Broker/Dealer.
      The
      Investor shall use one or more broker-dealers to effectuate all sales, if any,
      of the Shares that it may purchase from the Company pursuant to this Agreement
      which (or whom) shall be unaffiliated with the Investor and not then currently
      engaged or used by the Company (collectively, the “Broker-Dealer”).
      The
      Investor shall provide the Company with all information regarding the
      Broker-Dealer reasonably requested by the Company. The Investor shall be solely
      responsible for all fees and commissions of the Broker-Dealer.

     

    Section
      5.14 Disclosure
      Schedule.
      

     

    (i) During
      the Investment Period, the Company shall from time to time update the Disclosure
      Schedule as may be required to satisfy the condition set forth in Section
      6.3(i). For purposes of this Section 5.14, any disclosure made in a schedule
      to
      the Compliance Certificate substantially in the form attached hereto as
Exhibit
      D
      shall be
      deemed to be an update of the Disclosure Schedule. Notwithstanding anything
      in
      this Agreement to the contrary, no update to the Disclosure Schedule pursuant
      to
      this Section 5.14 shall cure any breach of a representation or warranty of
      the
      Company contained in this Agreement and shall not affect any of the Investor’s
      rights or remedies with respect thereto.

     

    (ii) Notwithstanding
      anything to the contrary contained in the Disclosure Schedules or in this
      Agreement, the information and disclosure contained in any Schedule of the
      Disclosure Schedules shall be deemed to be disclosed and incorporated by
      reference in any other Schedule of the Disclosure Schedules as though fully
      set
      forth in such Schedule for which applicability of such information and
      disclosure is readily apparent on its face. The fact that any item of
      information is disclosed in the Disclosure Schedules shall not be construed
      to
      mean that such information is required to be disclosed by this Agreement. Except
      as expressly set forth in this Agreement, such information and the thresholds
      (whether based on quantity, qualitative characterization, dollar amounts or
      otherwise) set forth herein shall not be used as a basis for

     

    

    
      
        
           

        

        
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    interpreting
      the terms “material” or “Material Adverse Effect” or other similar terms in this
      Agreement.

     

    ARTICLE
      VI

     

    OPINION
      OF COUNSEL AND CERTIFICATE; CONDITIONS TO THE SALE AND

    PURCHASE
      OF THE SHARES

     

    Section
      6.1 Opinion
      of Counsel and Certificate.
      Simultaneously with the execution and delivery of this Agreement, the Investor
      has received and relied upon (i) opinions of outside counsel to the Company,
      dated the Effective Date, in the forms mutually agreed to by the parties hereto,
      and (ii) a certificate from the Company, dated the Effective Date, in the form
      of Exhibit
      C
      hereto.

     

    Section
      6.2 Conditions
      Precedent to the Obligation of the Company.
      The
      obligation hereunder of the Company to issue and sell the Shares to the Investor
      under any Fixed Request or Optional Amount is subject to the satisfaction or
      (to
      the extent permitted by applicable law) waiver of each of the conditions set
      forth below. These conditions are for the Company’s sole benefit and (to the
      extent permitted by applicable law) may be waived by the Company at any time
      in
      its sole discretion.

     

    (i) Accuracy
      of the Investor’s Representations and Warranties.
      The
      representations and warranties of the Investor contained in this Agreement
      (i)
      that are not qualified by “materiality” shall have been true and correct in all
      material respects when made and shall be true and correct in all material
      respects as of the applicable Fixed Request Exercise Date and the applicable
      Settlement Date with the same force and effect as if made on such dates, except
      to the extent such representations and warranties are as of another date, in
      which case, such representations and warranties shall be true and correct in
      all
      material respects as of such other date and (ii) that are qualified by
“materiality” shall have been true and correct when made and shall be true and
      correct as of the applicable Fixed Request Exercise Date and the applicable
      Settlement Date with the same force and effect as if made on such dates, except
      to the extent such representations and warranties are as of another date, in
      which case, such representations and warranties shall be true and correct as
      of
      such other date.

     

    (ii) Registration
      Statement.
      The
      Registration Statement is effective and neither the Company nor the Investor
      shall have received notice that the Commission has issued or intends to issue
      a
      stop order with respect to the Registration Statement. The Company shall have
      a
      maximum dollar amount certain of Shares registered under the Registration
      Statement which are in an amount (A) as of the Effective Date, not less than
      the
      Total Commitment and (B) as of the applicable Fixed Request Exercise Date,
      not
      less than the maximum dollar amount worth of Shares issuable pursuant to the
      applicable Fixed Request Notice and applicable Optional Amount, if any. The
      Current Report shall have been filed with the Commission, as required pursuant
      to Section 1.4, and all Prospectus Supplements shall have been filed with the
      Commission, as required pursuant to Sections 1.4 and 5.9 hereof, to disclose
      the
      sale of the Shares prior to each Settlement Date, as applicable. Any other
      material required to be filed by the Company or any other offering participant
      pursuant to Rule 433(d) under the Securities Act shall have been filed with
      the
      Commission within the applicable time periods prescribed for such filings by
      Rule 433 under the Securities Act.

     

    

    
      
        
           

        

        
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    (iii) Performance
      by the Investor.
      The
      Investor shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by this Agreement to
      be
      performed, satisfied or complied with by the Investor at or prior to the
      applicable Fixed Request Exercise Date and the applicable Settlement
      Date.

     

    (iv) No
      Injunction.
      No
      statute, regulation, order, decree, writ, ruling or injunction shall have been
      enacted, entered, promulgated, threatened or endorsed by any court or
      governmental authority of competent jurisdiction which prohibits the
      consummation of or which would materially modify or delay any of the
      transactions contemplated by this Agreement.

     

    (v) No
      Suspension, Etc.
      Trading
      in the Common Stock shall not have been suspended by the Commission or the
      Trading Market (except for any suspension of trading of limited duration agreed
      to by the Company, which suspension shall be terminated prior to the applicable
      Fixed Request Exercise Date and applicable Settlement Date), and, at any time
      prior to the applicable Fixed Request Exercise Date and applicable Settlement
      Date, none of the events described in clauses (i), (ii) and (iii) of Section
      5.7
      shall have occurred, trading in securities generally as reported on the Trading
      Market shall not have been suspended or limited, nor shall a banking moratorium
      have been declared either by the United States or New York State authorities,
      nor shall there have occurred any material outbreak or escalation of hostilities
      or other national or international calamity or crisis of such magnitude in
      its
      effect on, or any material adverse change in, any financial market which, in
      each case, in the reasonable judgment of the Company, makes it impracticable
      or
      inadvisable to issue the Shares.

     

    (vi) No
      Proceedings or Litigation.
      No
      action, suit or proceeding before any arbitrator or any court or governmental
      authority shall have been commenced or threatened, and no inquiry or
      investigation by any governmental authority shall have been commenced or
      threatened, against the Company or any Subsidiary, or any of the officers,
      directors or affiliates of the Company or any Subsidiary, seeking to restrain,
      prevent or change the transactions contemplated by this Agreement, or seeking
      damages in connection with such transactions.

     

    (vii) Aggregate
      Limit.
      The
      issuance and sale of the Shares issuable pursuant to such Fixed Request Notice
      or Optional Amount shall not violate Sections 2.2, 2.12 and 5.5 hereof.

     

    Section
      6.3 Conditions
      Precedent to the Obligation of the Investor.
      The
      obligation hereunder of the Investor to accept a Fixed Request Notice or
      Optional Amount grant and to acquire and pay for the Shares is subject to the
      satisfaction or (to the extent permitted by applicable law) waiver, at or before
      each Fixed Request Exercise Date and each Settlement Date, of each of the
      conditions set forth below. These conditions are for the Investor’s sole benefit
      and (to the extent permitted by applicable law) may be waived by the Investor
      at
      any time in its sole discretion.

     

    (i) Accuracy
      of the Company’s Representations and Warranties.
      The
      representations and warranties of the Company contained in this Agreement (i)
      that are not qualified by “materiality” or “Material Adverse Effect” shall have
      been true and correct in all material respects when made and shall be true
      and
      correct in all material respects as of the applicable Fixed Request Exercise
      Date and the applicable Settlement Date with the same force

     

    

    
      
        
           

        

        
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    and
      effect as if made on such dates, except to the extent such representations
      and
      warranties are as of another date, in which case, such representations and
      warranties shall be true and correct in all material respects as of such other
      date and (ii) that are qualified by “materiality” or “Material Adverse
      Effect” shall have been true and correct when made and shall be true and correct
      as of the applicable Fixed Request Exercise Date and the applicable Settlement
      Date with the same force and effect as if made on such dates, except to the
      extent such representations and warranties are as of another date, in which
      case, such representations and warranties shall be true and correct as of such
      other date.

     

    (ii) Registration
      Statement.
      The
      Registration Statement is effective and neither the Company nor the Investor
      shall have received notice that the Commission has issued or intends to issue
      a
      stop order with respect to the Registration Statement. The Company shall have
      a
      maximum dollar amount certain of Shares registered under the Registration
      Statement which are in an amount (A) as of the Effective Date, not less than
      the
      Total Commitment and (B) as of the applicable Fixed Request Exercise Date,
      not
      less than the maximum dollar amount worth of Shares issuable pursuant to the
      applicable Fixed Request Notice and applicable Optional Amount, if any. The
      Current Report shall have been filed with the Commission, as required pursuant
      to Section 1.4, and all Prospectus Supplements shall have been filed with the
      Commission, as required pursuant to Sections 1.4 and 5.9 hereof, to disclose
      the
      sale of the Shares prior to each Settlement Date, as applicable, and an
      electronic copy of each such Prospectus Supplement together with the Base
      Prospectus shall have been delivered or made available to the Investor in
      accordance with Section 5.9 hereof. Any other material required to be filed
      by
      the Company or any other offering participant pursuant to Rule 433(d) under
      the
      Securities Act shall have been filed with the Commission within the applicable
      time periods prescribed for such filings by Rule 433 under the Securities
      Act.

     

    (iii) No
      Suspension.
      Trading
      in the Common Stock shall not have been suspended by the Commission or the
      Trading Market (except for any suspension of trading of limited duration agreed
      to by the Company, which suspension shall be terminated prior to the applicable
      Fixed Request Exercise Date and applicable Settlement Date), and, at any time
      prior to the applicable Fixed Request Exercise Date and applicable Settlement
      Date, none of the events described in clauses (i), (ii) and (iii) of Section
      5.7
      shall have occurred, trading in securities generally as reported on the Trading
      Market shall not have been suspended or limited, nor shall a banking moratorium
      have been declared either by the United States or New York State authorities,
      nor shall there have occurred any material outbreak or escalation of hostilities
      or other national or international calamity or crisis of such magnitude in
      its
      effect on, or any material adverse change in, any financial market which, in
      each case, in the reasonable judgment of the Investor, makes it impracticable
      or
      inadvisable to purchase the Shares.

     

    (iv) Performance
      of the Company.
      The
      Company shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and conditions required by this Agreement to
      be
      performed, satisfied or complied with by the Company at or prior to the
      applicable Fixed Request Exercise Date and the applicable Settlement Date and
      shall have delivered to the Investor on the applicable Settlement Date the
      Compliance Certificate substantially in the form attached hereto as Exhibit
      D.

     

    

    
      
        
           

        

        
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    (v) No
      Injunction.
      No
      statute, rule, regulation, order, decree, writ, ruling or injunction shall
      have
      been enacted, entered, promulgated, threatened or endorsed by any court or
      governmental authority of competent jurisdiction which prohibits the
      consummation of or which would materially modify or delay any of the
      transactions contemplated by this Agreement.

     

    (vi) No
      Proceedings or Litigation.
      No
      action, suit or proceeding before any arbitrator or any court or governmental
      authority shall have been commenced or threatened, and no inquiry or
      investigation by any governmental authority shall have been commenced or
      threatened, against the Company or any Subsidiary, or any of the officers,
      directors or affiliates of the Company or any Subsidiary, seeking to restrain,
      prevent or change the transactions contemplated by this Agreement, or seeking
      damages in connection with such transactions.

     

    (vii) Aggregate
      Limit.
      The
      issuance and sale of the Shares issuable pursuant to such Fixed Request Notice
      or Optional Amount shall not violate Sections 2.2, 2.12 and 5.5
      hereof.

     

    (viii) Shares
      Authorized.
      The
      Shares issuable pursuant to such Fixed Request Notice or Optional Amount shall
      have been duly authorized by all necessary corporate action of the
      Company.

     

    (ix) Notification
      of Listing of Shares.
      If
      required, the Company shall have submitted to the Trading Market a notification
      form of listing of additional shares related to the Shares issuable pursuant
      to
      such Fixed Request or Optional Amount in accordance with the bylaws, listed
      securities maintenance standards and other rules of the Trading
      Market.

     

    (x) Opinions
      of Counsel; Bring-Down.
      Subsequent to the filing of the Current Report pursuant to Section 1.4 and
      prior
      to the first Fixed Request Exercise Date, the Investor shall have received
      opinions from outside counsel to the Company in the forms mutually agreed to
      by
      the parties hereto. On each Settlement Date, the Investor shall have received
      opinion “bring downs” from outside counsel to the Company in the forms mutually
      agreed to by the parties hereto.

     

    (xi) Payment
      of Investor’s Counsel Fees; Due Diligence Expenses.
      On the
      Effective Date, the Company shall have paid by wire transfer of immediately
      available funds to an account designated by the Investor’s counsel, the fees and
      expenses of the Investor’s counsel in accordance with the proviso to the first
      sentence of Section 9.1(i) of this Agreement. On the 30th
      day of
      the third month in each calendar quarter during the Investment Period, the
      Company shall have paid by wire transfer of immediately available funds to
      an
      account designated by the Investor, the due diligence expenses incurred by
      the
      Investor in accordance with the provisions of the second sentence of Section
      9.1(i) of this Agreement.

     

    ARTICLE
      VII

     

    TERMINATION

     

    Section
      7.1 Term,
      Termination by Mutual Consent.
      Unless
      earlier terminated as provided hereunder, this Agreement shall terminate
      automatically on the earliest of (i) the first day of the month next following
      the 18-month anniversary of the Effective Date (the “Investment
      Period”),
      (ii)
      the date that the entire dollar amount of Shares registered under the
      Registration

     

    

    
      
        
           

        

        
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    Statement
      have been issued and sold and (iii) the date the Investor shall have purchased
      the Total Commitment of shares of Common Stock (subject in all cases to the
      Trading Market Limit). The Company may terminate this Agreement effective upon
      three Trading Days’ prior written notice to the Investor under Section 9.4;
provided,
      however,
      that
      such termination shall not occur during a Pricing Period or prior to a
      Settlement Date. This Agreement may be terminated at any time by the mutual
      written consent of the parties, effective as of the date of such mutual written
      consent unless otherwise provided in such written consent, it being hereby
      acknowledged and agreed that the Investor may not consent to such termination
      during a Pricing Period or prior to a Settlement Date in the event the Investor
      has instructed the Broker-Dealer to effect an open-market sale of Shares which
      are subject to a pending Fixed Request Notice but which have not yet been
      physically delivered by the Company (and/or credited by book-entry) to the
      Investor in accordance with the terms and subject to the conditions of this
      Agreement. 

     

    Section
      7.2 Other
      Termination.
      If the
      Company provides the Investor with an Other Financing Notice (other than in
      respect of an underwritten public offering of equity securities of the Company
      or a registered direct public offering of equity securities of the Company)
      or
      an Integration Notice, in each case pursuant to Section 5.6(ii) of this
      Agreement, or if the Company otherwise enters into any agreement, plan,
      arrangement or transaction with a third party, the principal purpose of which
      is
      to obtain outside a Pricing Period, but otherwise during the Investment Period,
      an Other Financing not constituting an Acceptable Financing (other than in
      respect of an underwritten public offering of equity securities of the Company
      or a registered direct public offering of equity securities of the Company),
      in
      which latter case the Company shall so notify the Investor within forty-eight
      (48) hours thereof, then in all such cases the Investor shall have the right
      to
      terminate this Agreement within the subsequent 30-day period (the “Event
      Period”),
      effective upon one Trading Day’s prior written notice delivered to the Company
      in accordance with Section 9.4 at any time during the Event Period. The
      Company shall immediately notify the Investor (and, if required under applicable
      law, including, without limitation, Regulation FD promulgated by the Commission,
      or under the applicable rules and regulations of the Trading Market, the Company
      shall simultaneously publicly disclose such information in accordance with
      Regulation FD and the applicable rules and regulations of the Trading Market),
      and the Investor shall have the right to terminate this Agreement at any time
      after receipt of such notification, if: (i) any condition, occurrence, state
      of
      facts or event constituting a Material Adverse Effect has occurred; (ii) a
      Material Change in Ownership has occurred or the Company enters into a
      definitive agreement providing for a Material Change in Ownership; or (iii)
      a
      default or event of default has occurred and is continuing under the terms
      of
      any agreement, contract, note or other instrument to which the Company or any
      of
      its Subsidiaries is a party with respect to any indebtedness for borrowed money
      representing more than ten percent (10%) of the Company’s consolidated assets,
      in any such case, upon one Trading Day’s prior written notice delivered to the
      Company in accordance with Section 9.4 hereof.

     

    Section
      7.3 Effect
      of Termination.
      In the
      event of termination by the Company or the Investor, written notice thereof
      shall forthwith be given to the other party as provided in Section 9.4 and
      the
      transactions contemplated by this Agreement shall be terminated without further
      action by either party. If this Agreement is terminated as provided in Section
      7.1 or 7.2 herein, this Agreement shall become void and of no further force
      and
      effect, except as provided in Section 9.9 hereof. Nothing in this Section 7.3
      shall be deemed to release the Company or the

     

    

    
      
        
           

        

        
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    Investor
      from any liability for any breach under this Agreement, or to impair the rights
      of the Company and the Investor to compel specific performance by the other
      party of its obligations under this Agreement.

     

    ARTICLE
      VIII

     

    INDEMNIFICATION

     

    Section
      8.1 General
      Indemnity.

     

    (i) Indemnification
      by the Company.
      The
      Company shall indemnify and hold harmless the Investor, the Broker-Dealer,
      each
      affiliate, employee, representative and advisor of and to the Investor and
      the
      Broker-Dealer,
      and each
      person, if any, who controls the Investor or the Broker-Dealer within the
      meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
      Act
      from and against all losses, claims, damages, liabilities and expenses
      (including reasonable costs of defense and investigation and all attorneys’
fees) to which the Investor, the Broker-Dealer and each such other person may
      become subject, under the Securities Act or otherwise, insofar as such losses,
      claims, damages, liabilities and expenses (or actions in respect thereof) arise
      out of or are based upon (i) any untrue statement or alleged untrue statement
      of
      a material fact contained, or incorporated by reference, in the Registration
      Statement or any amendment thereto or any omission or alleged omission to state
      therein, or in any document incorporated by reference therein, a material fact
      required to be stated therein or necessary to make the statements therein not
      misleading, or (ii) any untrue statement or alleged untrue statement of a
      material fact contained, or incorporated by reference, in the Prospectus, any
      Issuer Free Writing Prospectus, or in any amendment thereof or supplement
      thereto, or in any “issuer information” (as defined in Rule 433 under the
      Securities Act) of the Company, which “issuer information” is required to be, or
      is, filed with the Commission or otherwise contained in any Free Writing
      Prospectus, or any amendment or supplement thereto, or any omission or alleged
      omission to state therein, or in any document incorporated by reference therein,
      a material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were made,
      not misleading; provided,
      however,
      that
      (A) the Company shall not be liable under this Section 8.1(i) to the extent
      that
      a court of competent jurisdiction shall have determined by a final judgment
      (from which no further appeals are available) that such loss, claim, damage,
      liability or expense resulting directly and solely from any such acts or
      failures to act, undertaken or omitted to be taken by the Investor, any
      Broker-Dealer or such person through its bad faith or willful misconduct, (B)
      the foregoing indemnity shall not apply to any loss, claim, damage, liability
      or
      expense to the extent, but only to the extent, arising out of or based upon
      any
      untrue statement or alleged untrue statement or omission or alleged omission
      made in reliance upon and in conformity with written information furnished
      to
      the Company by the Investor or any Broker-Dealer expressly for use in the
      Current Report or any Prospectus Supplement or Permitted Free Writing
      Prospectus, or any amendment thereof or supplement thereto, and (C) with respect
      to the Prospectus, the foregoing indemnity shall not inure to the benefit of
      the
      Investor or any such person from whom the person asserting any loss, claim,
      damage, liability or expense purchased Common Stock, if copies of all Prospectus
      Supplements required to be filed pursuant to Section 1.4 and 5.9, together
      with
      the Base Prospectus, were timely delivered or made available to the Investor
      pursuant hereto and a copy of the Base Prospectus, together with a Prospectus
      Supplement (as applicable), was not sent or given by or on behalf of the
      Investor or any such person to such person, if required by law to

     

    

    
      
        
           

        

        
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    have
      been
      delivered, at or prior to the written confirmation of the sale of the Common
      Stock to such person, and if delivery of the Base Prospectus, together with
      a
      Prospectus Supplement (as applicable), would have cured the defect giving rise
      to such loss, claim, damage, liability or expense.

     

    The
      Company shall reimburse the Investor, the Broker-Dealer and each such
      controlling person promptly upon demand (with accompanying presentation of
      documentary evidence) for all legal and other costs and expenses reasonably
      incurred by the Investor, the Broker-Dealer or such indemnified persons in
      investigating, defending against, or preparing to defend against any such claim,
      action, suit or proceeding with respect to which it is entitled to
      indemnification.

     

    (ii) Indemnification
      by the Investor.
      The
      Investor shall indemnify and hold harmless the Company, each of its directors
      and officers, and each person, if any, who controls the Company within the
      meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
      Act
      from and against all losses, claims, damages, liabilities and expenses
      (including reasonable costs of defense and investigation and all attorneys
      fees)
      to which the Company and each such other person may become subject, under the
      Securities Act or otherwise, insofar as such losses, claims, damages,
      liabilities and expenses (or actions in respect thereof) arise out of or are
      based upon any untrue statement or alleged untrue statement of a material fact
      contained in the Current Report or any Prospectus Supplement or Permitted Free
      Writing Prospectus, or in any amendment thereof 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 under which they were made, not misleading, in each case, to
      the
      extent, but only to the extent, the untrue statement, alleged untrue statement,
      omission or alleged omission was made in reliance upon, and in conformity with,
      written information furnished by the Investor to the Company expressly for
      inclusion in the Current Report or such Prospectus Supplement or Permitted
      Free
      Writing Prospectus, or any amendment thereof or supplement thereto.

     

    The
      Investor shall reimburse the Company and each such director, officer or
      controlling person promptly upon demand for all legal and other costs and
      expenses reasonably incurred by the Company or such indemnified persons in
      investigating, defending against, or preparing to defend against any such claim,
      action, suit or proceeding with respect to which it is entitled to
      indemnification.

     

    Section
      8.2 Indemnification
      Procedures.
      Promptly after a person receives notice of a claim or the commencement of an
      action for which the person intends to seek indemnification under Section 8.1,
      the person will notify the indemnifying party in writing of the claim or
      commencement of the action, suit or proceeding; provided,
      however,
      that
      failure to notify the indemnifying party will not relieve the indemnifying
      party
      from liability under Section 8.1, except to the extent it has been materially
      prejudiced by the failure to give notice. The indemnifying party will be
      entitled to participate in the defense of any claim, action, suit or proceeding
      as to which indemnification is being sought, and if the indemnifying party
      acknowledges in writing the obligation to indemnify the party against whom
      the
      claim or action is brought, the indemnifying party may (but will not be required
      to) assume the defense against the claim, action, suit or proceeding with
      counsel satisfactory to it. After an indemnifying party notifies an indemnified
      party that the indemnifying party wishes to assume the defense of a

     

    

    
      
        
           

        

        
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    claim,
      action, suit or proceeding, the indemnifying party will not be liable for any
      legal or other expenses incurred by the indemnified party in connection with
      the
      defense against the claim, action, suit or proceeding except that if, in the
      opinion of counsel to the indemnifying party, one or more of the indemnified
      parties should be separately represented in connection with a claim, action,
      suit or proceeding, the indemnifying party will pay the reasonable fees and
      expenses of one separate counsel for the indemnified parties. Each indemnified
      party, as a condition to receiving indemnification as provided in Section 8.1,
      will cooperate in all reasonable respects with the indemnifying party in the
      defense of any action or claim as to which indemnification is sought. No
      indemnifying party will be liable for any settlement of any action effected
      without its prior written consent. Notwithstanding the foregoing sentence,
      if at
      any time an indemnified party shall have requested (by written notice provided
      in accordance with Section 9.4) an indemnifying party to reimburse the
      indemnified party for fees and expenses of counsel, such indemnifying party
      agrees that it shall be liable for any settlement of the nature contemplated
      hereby effected without its written consent if (i) such settlement is entered
      into more than forty-five (45) days after receipt by such indemnifying party
      of
      the aforesaid request, (ii) such indemnifying party shall have received written
      notice of the terms of such settlement at least thirty (30) days prior to such
      settlement being entered into and (iii) such indemnifying party shall not have
      reimbursed such indemnified party in accordance with such request prior to
      the
      date of such settlement. No indemnifying party will, without the prior written
      consent of the indemnified party, effect any settlement of a pending or
      threatened action with respect to which an indemnified party is, or is informed
      that it may be, made a party and for which it would be entitled to
      indemnification, unless the settlement includes an unconditional release of
      the
      indemnified party from all liability and claims which are the subject matter
      of
      the pending or threatened action.

     

    If
      for
      any reason the indemnification provided for in this Agreement is not available
      to, or is not sufficient to hold harmless, an indemnified party in respect
      of
      any loss or liability referred to in Section 8.1 as to which such indemnified
      party is entitled to indemnification thereunder, each indemnifying party shall,
      in lieu of indemnifying the indemnified party, contribute to the amount paid
      or
      payable by the indemnified party as a result of such loss or liability, (i)
      in
      the proportion which is appropriate to reflect the relative benefits received
      by
      the indemnifying party, on the one hand, and by the indemnified party, on the
      other hand, from the sale of Shares which is the subject of the claim, action,
      suit or proceeding which resulted in the loss or liability or (ii) if the
      allocation provided by clause (i) is not permitted by applicable law, in such
      proportion as is appropriate to reflect not only the relative benefits referred
      to in clause (i) above, but also the relative fault of the indemnifying party,
      on the one hand, and the indemnified party, on the other hand, with respect
      to
      the statements or omissions which are the subject of the claim, action, suit
      or
      proceeding that resulted in the loss or liability, as well as any other relevant
      equitable considerations.

     

    The
      remedies provided for in Section 8.1 and this Section 8.2 are not exclusive
      and
      shall not limit any rights or remedies which may otherwise be available to
      any
      Indemnified Person at law or in equity.

     

    

    
      
        
           

        

        
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    ARTICLE
      IX

     

    MISCELLANEOUS

     

    Section
      9.1 Fees
      and Expenses.

     

    (i) Each
      party shall bear its own fees and expenses related to the transactions
      contemplated by this Agreement; provided,
      however,
      that
      the Company shall pay, on the Effective Date, by wire transfer of immediately
      available funds to an account designated by the Investor’s counsel, promptly
      following the receipt of an invoice therefor, all reasonable attorneys’ fees and
      expenses (exclusive of disbursements and out-of-pocket expenses) incurred by
      the
      Investor, up to $35,000, in connection with the preparation, negotiation,
      execution and delivery of this Agreement, legal due diligence of the Company
      and
      review of the Registration Statement, the Base Prospectus, the Current Report,
      any Permitted Free Writing Prospectus and all other related transaction
      documentation. In addition, the Company shall pay, on the 30th
      day of
      the third month in each calendar quarter during the Investment Period, promptly
      following the receipt of an invoice therefor, up to $12,500, representing the
      due diligence expenses incurred by the Investor during such calendar quarter
      of
      the Investment Period. The Company shall pay all U.S. federal, state and local
      stamp and other similar transfer and other taxes and duties levied in connection
      with issuance of the Shares pursuant hereto.

     

    (ii) If
      the
      Company issues a Fixed Request Notice and fails to deliver the Shares to the
      Investor on the applicable Settlement Date and such failure continues for ten
      (10) Trading Days, the Company shall pay the Investor, in cash (or, at the
      option of the Investor, in shares of Common Stock which have not been registered
      under the Securities Act), as liquidated damages for such failure and not as
      a
      penalty, an amount equal to two percent (2.0%) of the payment required to be
      paid by the Investor on such Settlement Date (i.e., the sum of the Fixed Amount
      Requested and the Optional Amount Dollar Amount) for the initial thirty (30)
      days following such Settlement Date until the Shares have been delivered, and
      an
      additional two percent (2.0%) for each additional 30-day period thereafter
      until
      the Shares have been delivered, which amount shall be prorated for such periods
      less than thirty (30) days (subject in all cases to the Trading Market Limit).
      

     

    Section
      9.2 Specific
      Enforcement, Consent to Jurisdiction, Waiver of Jury
      Trial.
      

     

    (i) The
      Company and the Investor acknowledge and agree that irreparable damage would
      occur in the event that any of the provisions of this Agreement were not
      performed in accordance with their specific terms or were otherwise breached.
      It
      is accordingly agreed that either party shall be entitled to an injunction
      or
      injunctions to prevent or cure breaches of the provisions of this Agreement
      by
      the other party and to enforce specifically the terms and provisions hereof
      this
      being in addition to any other remedy to which either party may be entitled
      by
      law or equity.

     

    (ii) Each
      of
      the Company and the Investor (a) hereby irrevocably submits to the jurisdiction
      of the United States District Court and other courts of the United States
      sitting in the State of New York for the purposes of any suit, action or
      proceeding arising out of or relating to this Agreement, and (b) hereby waives,
      and agrees not to assert in any such suit, action or proceeding, any claim
      that
      it is not personally subject to the jurisdiction of such court, that
      the

     

    

    
      
        
           

        

        
          34

          
            

          

        

        
           

        

      

    

    

    suit,
      action or proceeding is brought in an inconvenient forum or that the venue
      of
      the suit, action or proceeding is improper. Each of the Company and the Investor
      consents to process being served in any such suit, action or proceeding by
      mailing a copy thereof to such party at the address in effect for notices to
      it
      under this Agreement and agrees that such service shall constitute good and
      sufficient service of process and notice thereof. Nothing in this Section 9.2
      shall affect or limit any right to serve process in any other manner permitted
      by law.

     

    (iii) Each
      of
      the Company and the Investor hereby waives to the fullest extent permitted
      by
      applicable law, any right it may have to a trial by jury in respect to any
      litigation directly or indirectly arising out of, under or in connection with
      this Agreement or the transactions contemplated hereby or disputes relating
      hereto. Each of the Company and the Investor (a) certifies that no
      representative, agent or attorney of any other party has represented, expressly
      or otherwise, that such other party would not, in the event of litigation,
      seek
      to enforce the foregoing waiver and (b) acknowledges that it and the other
      parties hereto have been induced to enter into this Agreement by, among other
      things, the mutual waivers and certifications in this Section 9.2.

     

    Section
      9.3 Entire
      Agreement; Amendment.
      This
      Agreement, together with the exhibits referred to herein and the Disclosure
      Schedule, represents the entire agreement of the parties with respect to the
      subject matter hereof, and there are no promises, undertakings, representations
      or warranties by either party relative to subject matter hereof not expressly
      set forth herein. No provision of this Agreement may be amended other than
      by a
      written instrument signed by both parties hereto. The Disclosure Schedule and
      all exhibits to this Agreement are hereby incorporated by reference in, and
      made
      a part of, this Agreement as if set forth in full herein.

     

    Section
      9.4 Notices.
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) upon hand
      delivery or facsimile (with facsimile machine confirmation of delivery received)
      at the address or number designated below (if delivered on a business day during
      normal business hours where such notice is to be received), or the first
      business day following such delivery (if delivered other than on a business
      day
      during normal business hours where such notice is to be received) or (b) on
      the
      second business day following the date of mailing by express courier service,
      fully prepaid, addressed to such address, or upon actual receipt of such
      mailing, whichever shall first occur. The address for such communications shall
      be:

     

    If
      to the
      Company:

    SulphCo,
      Inc.

    4333
      W.
      Sam Houston Pkwy N., Suite 190

    Houston,
      Texas 77043

    Telephone
      Number: (713) 896-9100

    Fax:
      (713) 896-8803

    Attention:
      Stanley W. Farmer

     

    With
      copies to:

    Kirkpatrick
      & Lockhart Preston Gates Ellis LLP

    599
      Lexington Avenue

    New
      York,
      New York 10022

    Telephone
      Number: (212) 536-3900

     

    

    
      
        
           

        

        
          35

          
            

          

        

        
           

        

      

    

    

    Fax:
      (212) 536-3901

    Attention:
      Robert S. Matlin, Esq.

     

    If
      to the
      Investor:

    Azimuth
      Opportunity Ltd.

    c/o
      Fortis Prime Fund Solutions (BVI) Limited

    P.O.
      Box
      761, 1st
      Floor

    James
      Frett Building

    Road
      Town, Tortola

    British
      Virgin Islands

    Telephone
      Number: (284) 494-6046

    Fax:
      (284) 494-6898

    Attention:
      Becky McGinnis

     

    With
      copies to:

    Greenberg
      Traurig, LLP

    The
      MetLife Building

    200
      Park
      Avenue

    New
      York,
      NY 10166

    Telephone
      Number: (212) 801-9200

    Fax:
      (212) 801-6400

    Attention:  Clifford
      E. Neimeth, Esq.

    Anthony
      J. Marsico, Esq.

     

    Either
      party hereto may from time to time change its address for notices by giving
      at
      least 10 days advance written notice of such changed address to the other party
      hereto.

     

    Section
      9.5 Waivers.
      No
      waiver by either party of any default with respect to any provision, condition
      or requirement of this Agreement shall be deemed to be a continuing waiver
      in
      the future or a waiver of any other provisions, condition or requirement hereof
      nor shall any delay or omission of any party to exercise any right hereunder
      in
      any manner impair the exercise of any such right accruing to it thereafter.
      No
      provision of this Agreement may be waived other than in a written instrument
      signed by the party against whom enforcement of such waiver is
      sought.

     

    Section
      9.6 Headings.
      The
      article, section and subsection headings in this Agreement are for convenience
      only and shall not constitute a part of this Agreement for any other purpose
      and
      shall not be deemed to limit or affect any of the provisions
      hereof.

     

    Section
      9.7 Successors
      and Assigns.
      The
      Investor may not assign this Agreement to any person without the prior consent
      of the Company, in the Company’s sole discretion. This Agreement shall be
      binding upon and inure to the benefit of the parties and their successors and
      assigns. The assignment by a party to this Agreement of any rights hereunder
      shall not affect the obligations of such party under this
      Agreement.

     

    Section
      9.8 Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the internal
      procedural and substantive laws of the State of New York, without giving effect
      to the choice of law provisions of such state.

     

    

    
      
        
           

        

        
          36

          
            

          

        

        
           

        

      

    

    

    Section
      9.9 Survival.
      The
      representations and warranties of the Company and the Investor contained in
      Articles III and IV and the covenants contained in Article V shall survive
      the
      execution and delivery hereof until the termination of this Agreement, and
      the
      agreements and covenants set forth in Article VIII of this Agreement shall
      survive the execution and delivery hereof.

     

    Section
      9.10 Counterparts.
      This
      Agreement may be executed in counterparts, all of which taken together shall
      constitute one and the same original and binding instrument and shall become
      effective when all counterparts have been signed by each party and delivered
      to
      the other parties hereto, it being understood that all parties hereto need
      not
      sign the same counterpart. In the event any signature is delivered by facsimile
      transmission, the party using such means of delivery shall cause four (4)
      additional executed signature pages to be physically delivered to the other
      parties within five (5) days of the execution and delivery hereof.

     

    Section
      9.11 Publicity.
      On or
      after the Effective Date, the Company may issue a press release or otherwise
      make a public statement or announcement with respect to this Agreement or the
      transactions contemplated hereby or the existence of this Agreement (including,
      without limitation, by filing a copy of this Agreement with the Commission);
      provided,
      however,
      that
      prior to issuing any such press release, or making any such public statement
      or
      announcement, the Company shall consult with the Investor on the form and
      substance of such press release or other disclosure.

     

    Section
      9.12 Severability.
      The
      provisions of this Agreement are severable and, in the event that any court
      of
      competent jurisdiction shall determine that any one or more of the provisions
      or
      part of the provisions contained in this Agreement shall, for any reason, be
      held to be invalid, illegal or unenforceable in any respect, such invalidity,
      illegality or unenforceability shall not affect any other provision or part
      of a
      provision of this Agreement, and this Agreement shall be reformed and construed
      as if such invalid or illegal or unenforceable provision, or part of such
      provision, had never been contained herein, so that such provisions would be
      valid, legal and enforceable to the maximum extent possible, provided that
      the
      Agreement, as so amended, (a) reflects the intent of the parties hereto and
      (b)
      does not change the bargained for consideration or benefits to be received
      by
      each party hereto.

     

    Section
      9.13 Further
      Assurances.
      From
      and after the date of this Agreement, upon the request of the Investor or the
      Company, each of the Company and the Investor shall execute and deliver such
      instrument, documents and other writings as may be reasonably necessary or
      desirable to confirm and carry out and to effectuate fully the intent and
      purposes of this Agreement.

     

    [Signature
      Page Follows]

     

    

    
      
        
           

        

        
          37

          
            

          

        

        
           

        

      

    

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this Agreement to be duly executed by their
      respective authorized officer as of the date first above written.

     

     

    SULPHCO,
      INC.:

     

     

    By:

    
      

    

    Name:
      Larry D. Ryan

    Title:
      Chief Executive Officer

     

    AZIMUTH
      OPPORTUNITY LTD.:

     

     

    By:

    
      

    

    Name:

    Title:

     

     

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

     

    ANNEX
      A TO THE

     

    COMMON
      STOCK PURCHASE AGREEMENT

     

    DEFINITIONS

     

    (a) “Acceptable
      Financing”
shall
      have the meaning assigned to such term in Section 5.6(ii) hereof.

     

    (b) “Aggregate
      Limit”
shall
      have the meaning assigned to such term in Section 1.1 hereof.

     

    (c) “AMEX”
means
      the American Stock Exchange or any successor thereto.

     

    (d) “Base
      Prospectus”
shall
      mean the Company’s prospectus, dated April 30, 2008, a preliminary form of which
      is included in the Registration Statement, including the documents incorporated
      by reference therein.

     

    (e) “Below
      Market Offering”
shall
      have the meaning assigned to such term in Section 5.6(ii) hereof. 

     

    (f) “Broker-Dealer”
shall
      have the meaning assigned to such term in Section 5.13 hereof.

     

    (g) “Bylaws”
shall
      have the meaning assigned to such term in Section 4.3 hereof.

     

    (h) “Charter”
shall
      have the meaning assigned to such term in Section 4.3 hereof.

     

    (i) “Code”
shall
      mean the Internal Revenue Code of 1986, as amended.

     

    (j) “Commission”
shall
      mean the Securities and Exchange Commission or any successor
      entity.

     

    (k) “Commission
      Documents”
shall
      mean (1) all reports, schedules, registrations, forms, statements, information
      and other documents filed by the Company with the Commission pursuant to the
      reporting requirements of the Exchange Act, including all material filed
      pursuant to Section 13(a) or 15(d) of the Exchange Act, which have been filed
      by
      the Company since December 31, 2007, and which hereafter shall be filed by
      the
      Company during the Investment Period, including, without limitation, the Form
      10-K filed by the Company for its fiscal year ended December 31, 2007 (the
      “2007
      Form 10-K”)
      and
      the Current Report, (2) the Registration Statement, as the same may be amended
      from time to time, the Prospectus and each Prospectus Supplement, and each
      Permitted Free Writing Prospectus and (3) all information contained in such
      filings and all documents and disclosures that have been and heretofore shall
      be
      incorporated by reference therein.

     

    (l) “Common
      Stock”
shall
      have the meaning assigned to such term in the Recitals.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (m) “Current
      Market Price”
means,
      with respect to any particular measurement date, the closing price of a share
      of
      Common Stock as reported on the Trading Market for the Trading Day immediately
      preceding such measurement date.

     

    (n) “Current
      Report”
shall
      have the meaning assigned to such term in Section 1.4 hereof. 

     

    (o) “Discount
      Price”
shall
      have the meaning assigned to such term in Section 2.2 hereof.

     

    (p) “EDGAR”
shall
      have the meaning assigned to such term in Section 4.3 hereof.

     

    (q) “Effective
      Date”
shall
      mean the date of this Agreement.

     

    (r) “Environmental
      Laws”
shall
      have the meaning assigned to such term in Section 4.15 hereof.

     

    (s) “ERISA”
shall
      mean the Employee Retirement Income Security Act of 1974, as
      amended.

     

    (t) “Event
      Period”
shall
      have the meaning assigned to such term in Section 7.2 hereof.

     

    (u) “Exchange
      Act”
shall
      mean the Securities Exchange Act of 1934, as amended, and the rules and
      regulations of the Commission thereunder.

     

    (v) “FINRA”
shall
      have the meaning assigned to such term in Section 4.18(iii) hereof.

     

    (w) “Fixed
      Amount Requested”
shall
      mean the amount of a Fixed Request requested by the Company in a Fixed Request
      Notice delivered pursuant to Section 2.1 hereof.

     

    (x) “Fixed
      Request”
means
      the transactions contemplated under Sections 2.1 through 2.8 of this
      Agreement.

     

    (y) “Fixed
      Request Amount”
means
      the actual amount of proceeds received by the Company pursuant to a Fixed
      Request under this Agreement.

     

    (z) “Fixed
      Request Exercise Date”
shall
      have the meaning assigned to such term in Section 2.2 hereof.

     

    (aa) “Fixed
      Request Notice”
shall
      have the meaning assigned to such term in Section 2.1 hereof.

     

    (bb) “Free
      Writing Prospectus”
shall
      mean a “free writing prospectus” as defined in Rule 405 promulgated under the
      Securities Act. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (cc) “GAAP”
shall
      mean generally accepted accounting principles in the United States of America
      as
      applied by the Company.

     

    (dd) “Governmental
      Licenses”
shall
      have the meaning assigned to such term in Section 4.14(a) hereof.

     

    (ee) “Indebtedness”
shall
      have the meaning assigned to such term in Section 4.9 hereof.

     

    (ff) “Integration
      Notice”
shall
      have the meaning assigned to such term in Section 5.6(ii) hereof.

     

    (gg) “Intellectual
      Property”
shall
      have the meaning assigned to such term in Section 4.14(b) hereof.

     

    (hh) “Investment
      Period”
shall
      have the meaning assigned to such term in Section 7.1 hereof.

     

    (ii) “Issuer
      Free Writing Prospectus”
shall
      mean an “issuer free writing prospectus” as defined in Rule 433 promulgated
      under the Securities Act. 

     

    (jj) “Market
      Capitalization”
shall
      be calculated on the Trading Day preceding the applicable Pricing Period and
      shall be the product of (x) the number of shares of Common Stock outstanding
      and
      (y) the closing bid price of the Common Stock, both as determined by Bloomberg
      Financial LP using the DES and HP functions.

     

    (kk) “Material
      Adverse Effect”
shall
      mean any condition, occurrence, state of facts or event having, or insofar
      as
      reasonably can be foreseen would likely have, any effect on the business,
      operations, properties or condition (financial or otherwise) of the Company
      that
      is material and adverse to the Company and its Subsidiaries, taken as a whole,
      and/or any condition, occurrence, state of facts or event that would prohibit
      or
      otherwise materially interfere with or delay the ability of the Company to
      perform any of its obligations under this Agreement.

     

    (ll) “Material
      Agreements”
shall
      have the meaning assigned to such term in Section 4.16 hereof.

     

    (mm) “Material
      Change in Ownership”
shall
      mean the occurrence of any one or more of the following: (i) the acquisition
      by
      any person, including any syndicate or group deemed to be a “person” under
      Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or
      indirectly, through a purchase, merger or other acquisition transaction or
      series of transactions, of shares of capital stock or other securities of the
      Company entitling such person to exercise, upon an event of default or default
      or otherwise, 50% or more of the total voting power of all series and classes
      of
      capital stock and other securities of the Company entitled to vote generally
      in
      the election of directors, other than any such acquisition by the Company,
      any
      Subsidiary of the Company or any employee benefit plan of the Company; (ii)
      any
      consolidation or merger of the Company with or into any other person, any merger
      of another person into the Company, or any conveyance, transfer, sale, lease
      or
      other disposition of all or substantially all of the properties and assets
      of
      the Company to another person, other than (a) any such 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    transaction
      (x) that does not result in any reclassification, conversion, exchange or
      cancellation of outstanding shares of capital stock of the Company and (y)
      pursuant to which holders of capital stock of the Company immediately prior
      to
      such transaction have the entitlement to exercise, directly or indirectly,
      50%
      or more of the total voting power of all shares of capital stock of the Company
      entitled to vote generally in the election of directors of the continuing or
      surviving person immediately after such transaction or (b) any merger which
      is
      effected solely to change the jurisdiction of incorporation of the Company
      and
      results in a reclassification, conversion or exchange of outstanding shares
      of
      Common Stock solely into shares of common stock of the surviving entity; (iii)
      during any consecutive two-year period, individuals who at the beginning of
      that
      two-year period constituted the Board of Directors (together with any new
      directors whose election to the Board of Directors, or whose nomination for
      election by the stockholders of the Company, was approved by a vote of a
      majority of the directors then still in office who were either directors at
      the
      beginning of such period or whose elections or nominations for election were
      previously so approved) cease for any reason to constitute a majority of the
      Board of Directors then in office; or (iv) the Company is liquidated or
      dissolved or a resolution is passed by the Company’s stockholders approving a
      plan of liquidation or dissolution of the Company. Beneficial ownership shall
      be
      determined in accordance with Rule 13d-3 promulgated by the SEC under the
      Exchange Act. The term “person” shall include any syndicate or group which would
      be deemed to be a “person” under Section 13(d)(3) of the Exchange
      Act.

     

    (nn) “Multiplier”
shall
      have the meaning assigned to such term in Section 2.3 hereof.

     

    (oo) “Optional
      Amount”
means
      the transactions contemplated under Sections 2.9 through 2.11 of this
      Agreement.

     

    (pp) “Optional
      Amount Dollar Amount”
shall
      mean the actual amount of proceeds received by the Company pursuant to the
      exercise of an Optional Amount under this Agreement.

     

    (qq) “Optional
      Amount Notice”
shall
      mean a notice sent to the Company with regard to the Investor’s election to
      exercise all or any portion of an Optional Amount, as provided in Section 2.11
      hereof and substantially in the form attached hereto as Exhibit
      B.

     

    (rr) “Optional
      Amount Threshold Price”
shall
      have the meaning assigned to such term in Section 2.1 hereof. 

     

    (ss) “Other
      Financing”
shall
      have the meaning assigned to such term in Section 5.6(ii) hereof.

     

    (tt) “Other
      Financing Notice”
shall
      have the meaning assigned to such term in Section 5.6(ii) hereof.

     

    (uu) “Permitted
      Free Writing Prospectus”
shall
      have the meaning assigned to such term in Section 5.8(ii) hereof. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (vv) “Plan”
shall
      have the meaning assigned to such term in Section 4.22 hereof.

     

    (ww) “Pricing
      Period
      shall
      mean a period of 10 consecutive Trading Days commencing on the day of delivery
      of a Fixed Request Notice (or, if the Fixed Request Notice is delivered after
      9:30 a.m. (New York time), on the next Trading Day), or such other period
      mutually agreed upon by the Investor and the Company.

     

    (xx) “Prospectus”
shall
      mean the Base Prospectus, together with any final prospectus filed with the
      Commission pursuant to Rule 424(b), as supplemented by any Prospectus
      Supplement, including the documents incorporated by reference
      therein.

     

    (yy) “Prospectus
      Supplement”
shall
      mean any prospectus supplement to the Base Prospectus filed with the Commission
      pursuant to Rule 424(b) under the Securities Act, including the documents
      incorporated by reference therein.

     

    (zz) “Reduction
      Notice”
shall
      have the meaning assigned to such term in Section 2.8 hereof.

     

    (aaa) “Registration
      Statement”
shall
      mean the registration statement on Form S-3, Commission File Number 333-145460,
      filed by the Company with the Commission under the Securities Act for the
      registration of the Shares, as such Registration Statement may be amended and
      supplemented from time to time, including the documents incorporated by
      reference therein and the information deemed to be a part thereof at the time
      of
      effectiveness pursuant to Rule 430A or Rule 430B under the Securities
      Act.

     

    (bbb) “Restricted
      Period”
shall
      have the meaning assigned to such term in Section 5.10 hereof.

     

    (ccc) “Securities
      Act”
shall
      mean the Securities Act of 1933, as amended, and the rules and regulations
      of
      the Commission thereunder.

     

    (ddd) “Settlement
      Date”
shall
      have the meaning assigned to such term in Section 2.7 hereof.

     

    (eee) “Shares”
shall
      mean shares of Common Stock issuable to the Investor upon exercise of a Fixed
      Request and shares of Common Stock issuable to the Investor upon exercise of
      an
      Optional Amount, as applicable.

     

    (fff) “Significant
      Subsidiary”
means
      any Subsidiary of the Company that would constitute a Significant Subsidiary
      of
      the Company within the meaning of Rule 1-02 of Regulation S-X of the
      Commission.

     

    (ggg) “SOXA”
shall
      have the meaning assigned to such term in Section 4.6(c) hereof.

     

    (hhh) “Subsidiary”
shall
      mean any corporation or other entity of which at least a majority of the
      securities or other ownership interest having ordinary voting power (absolutely
      or contingently) for the election of directors or other persons performing
      similar functions are at the time owned directly or indirectly by the Company
      and/or any of its other Subsidiaries.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (iii) “Threshold
      Price”
is
      the
      lowest price (except to the extent otherwise provided in Section 2.6) at which
      the Company may sell Shares during the applicable Pricing Period as set forth
      in
      a Fixed Request Notice (not taking into account the applicable percentage
      discount during such Pricing Period determined in accordance with Section 2.2);
      provided,
      however,
      that at
      no time shall the Threshold Price be lower than $3.00 per share unless the
      Company and the Investor mutually shall agree.

     

    (jjj) “Total
      Commitment”
shall
      have the meaning assigned to such term in Section 1.1 hereof.

     

    (kkk) “Trading
      Day”
shall
      mean a full trading day (beginning at 9:30 a.m., New York City time, and ending
      at 4:00 p.m., New York City time) on the AMEX.

     

    (lll) “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the AMEX, The New York Stock Exchange,
      Inc.
      or The NASDAQ Stock Market LLC.

     

    (mmm) “Trading
      Market Limit”
means
      that number of shares which is one less than 20.0% of the issued and outstanding
      shares of the Company’s Common Stock as of the Effective Date.

     

    (nnn) “VWAP”
shall
      mean the daily volume weighted average price (based on a Trading Day from 9:30
      a.m. to 4:00 p.m. (New York time)) of the Company on the AMEX as reported by
      Bloomberg Financial L.P. using the AQR function.

     

    (ooo) “Warrant
      Value”
shall
      mean the fair value of all warrants, options and other similar rights issued
      to
      a third party in connection with an Other Financing, determined by using a
      standard Black-Scholes option-pricing model using an expected volatility
      percentage as shall be mutually agreed by the Investor and the Company. In
      the
      case of a dispute relating to such expected volatility assumption, the Investor
      shall obtain applicable volatility data from three (3) investment banking firms
      of nationally recognized reputation, and the parties hereto shall use the
      average thereof for purposes of determining the expected volatility percentage
      in connection with the Black-Scholes calculation referred to in the immediately
      preceding sentence.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A TO THE

    COMMON
      STOCK PURCHASE AGREEMENT

    FORM
      OF FIXED REQUEST NOTICE

     

    Reference
      is made to the Common Stock Purchase Agreement dated as of April 30, 2008,
      (the
“Purchase
      Agreement”)
      between SulphCo, Inc., a corporation organized and existing under the laws
      of
      the State of Nevada (the “Company”),
      and
      Azimuth Opportunity Ltd., an international business company incorporated under
      the laws of the British Virgin Islands. Capitalized terms used and not otherwise
      defined herein shall have the meanings given such terms in the Purchase
      Agreement.

     

    In
      accordance with and pursuant to Section 2.1 of the Purchase Agreement, the
      Company hereby issues this Fixed Request Notice to exercise a Fixed Request
      for
      the Fixed Request Amount indicated below.

     

    
      	
              Fixed
                Amount Requested:

            	  

	
              Optional
                Amount Dollar Amount:

            	  

	
              Pricing
                Period start date:

            	  

	
              Pricing
                Period end date:

            	  

	
              Settlement
                Date:

            	  

	
              Fixed
                Request Threshold Price:

            	  

	
              Optional
                Amount Threshold Price:

            	  

	
              Dollar
                Amount and Number of Shares of Common
                Stock Currently Unissued under the Registration Statement;

            	  

	
              Dollar
                Amount and Number of Shares of Common
                Stock Currently Available under the Aggregate Limit:

               

            	  

	 	 
	
              Dated: 
                _________________________

               

            	
              By: 
                ________________________________________

              Name

              Title:

            
	 	 
	 	
              Address:
                

              Facsimile
                No.

            

    

    AGREED
      AND ACCEPTED

     

    By:
      ______________________________

    Name

    Title:

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      B TO THE

    COMMON
      STOCK PURCHASE AGREEMENT

    FORM
      OF OPTIONAL AMOUNT NOTICE

     

    To:
      _________________

    Fax#:
      _______________

     

    Reference
      is made to the Common Stock Purchase Agreement dated as of April 30, 2008 (the
      “Purchase
      Agreement”)
      between SulphCo, Inc., a corporation organized and existing under the laws
      of
      the State of Nevada (the “Company”),
      and
      Azimuth Opportunity Ltd., an international business company incorporated under
      the laws of the British Virgin Islands (the “Investor”).
      Capitalized terms used and not otherwise defined herein shall have the meanings
      given such terms in the Purchase Agreement.

     

    In
      accordance with and pursuant to Section 2.1 of the Purchase Agreement, the
      Investor hereby issues this Optional Amount Notice to exercise an Optional
      Amount for the Optional Amount Dollar Amount indicated below.

     

    
      	
              Optional
                Amount Dollar Amount Exercised

            	  

	
              Number
                of Shares to be purchased

            	  

	
              VWAP
                on the date hereof:

            	   

	
              Discount
                Price:

            	  

	
              Settlement
                Date:

            	  

	
              Threshold
                Price:

            	  

	 	 
	 	  

	
              Dated:
                ____________________

            	
              By:
                _________________________

              Name

              Title:

               

            
	 	 
	 	
              Address:
                

              Facsimile
                No.

            

    

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      C TO THE

    COMMON
      STOCK PURCHASE AGREEMENT

    CERTIFICATE
      OF THE COMPANY

    CLOSING
      CERTIFICATE

     

    _________
      200__

     

    The
      undersigned, the [___________] of SulphCo, Inc., a corporation organized and
      existing under the laws of the State of Nevada (the “Company”),
      delivers this certificate in connection with the Common Stock Purchase
      Agreement, dated as of April 30, 2008 (the “Agreement”),
      by
      and between the Company and Azimuth Opportunity Ltd., an international business
      company incorporated under the laws of the British Virgin Islands (the
“Investor”),
      and
      hereby certifies on the date hereof that (capitalized terms used herein without
      definition have the meanings assigned to them in the Agreement):

     

    1. Attached
      hereto as Exhibit
      A
      is a
      true, complete and correct copy of the Articles of Incorporation of the Company
      as filed with the Secretary of State of the State of Nevada. The Articles of
      Incorporation of the Company have not been further amended or restated, and
      no
      document with respect to any amendment to the Articles of Incorporation of
      the
      Company has been filed in the office of the Secretary of State of the State
      of
      Nevada since the date shown on the face of the state certification relating
      to
      the Company’s Articles of Incorporation, which is in full force and effect on
      the date hereof, and no action has been taken by the Company in contemplation
      of
      any such amendment or the dissolution, merger or consolidation of the
      Company.

     

    2. Attached
      hereto as Exhibit
      B
      is a
      true and complete copy of the Bylaws of the Company, as amended and restated
      through, and as in full force and effect on, the date hereof, and no proposal
      for any amendment, repeal or other modification to the Bylaws of the Company
      has
      been taken or is currently pending before the Board of Directors or stockholders
      of the Company.

     

    3. The
      Board
      of Directors of the Company has approved the transactions contemplated by the
      Agreement; said approval has not been amended, rescinded or modified and remains
      in full force and effect as of the date hereof.

     

    4. Each
      person who, as an officer of the Company, or as attorney-in-fact of an officer
      of the Company, signed (i) the Agreement and (ii) any other document delivered
      prior hereto or on the date hereof in connection with the transactions
      contemplated by the Agreement, was duly elected, qualified and acting as such
      officer or duly appointed and acting as such attorney-in-fact, and the signature
      of each such person appearing on any such document is his genuine
      signature.

     

    IN
      WITNESS WHEREOF,
      I have
      signed my name as of the date first above written.

     

     

    ___________________________________

    By:

    Title:

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    EXHIBIT
      D TO THE

    COMMON
      STOCK PURCHASE AGREEMENT

    COMPLIANCE
      CERTIFICATE

     

    In
      connection with the issuance of shares of common stock of SulphCo, Inc., a
      corporation organized and existing under the laws of the State of Nevada (the
      “Company”),
      pursuant to the Fixed Request Notice, dated [_____________], delivered by the
      Company to Azimuth Opportunity Ltd. (the “Investor”)
      pursuant to Article II of the Common Stock Purchase Agreement, dated April
      30,
      2008, by and between the Company and the Investor (the “Agreement”),
      the
      undersigned hereby certifies as follows:

     

    1. The
      undersigned is the duly elected [_____________] of the Company.

     

    2. Except
      as
      set forth in the attached Disclosure Schedule, the representations and
      warranties of the Company set forth in Article IV of the Agreement (i) that
      are
      not qualified by “materiality” or “Material Adverse Effect” are true and correct
      in all material respects as of [insert Fixed Request Exercise Date] and as
      of
      the date hereof with the same force and effect as if made on such dates, except
      to the extent such representations and warranties are as of another date, in
      which case, such representations and warranties are true and correct in all
      material respects as of such other date and (ii) that are qualified by
“materiality” or “Material Adverse Effect” are true and correct as of [insert
      Fixed Request Exercise Date] and as of the date hereof with the same force
      and
      effect as if made on such dates, except to the extent such representations
      and
      warranties are as of another date, in which case, such representations and
      warranties are true and correct as of such other date.

     

    3. The
      Company has performed, satisfied and complied in all material respects with
      all
      covenants, agreements and conditions required by the Agreement to be performed,
      satisfied or complied with by the Company at or prior to [insert Fixed Request
      Exercise Date] and the date hereof.

     

    Capitalized
      terms used but not otherwise defined herein shall have the meanings assigned to
      them in the Agreement.

     

    The
      undersigned has executed this Certificate this [___] day of [___________],
      200[__].

     

     

    By:
      _______________________________

     

    Name:
      _____________________________

     

    Title:
      ______________________________

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    DISCLOSURE
      SCHEDULE

    RELATING
      TO THE COMMON STOCK 

    PURCHASE
      AGREEMENT, DATED AS OF APRIL 30, 2008 

    BETWEEN
      SULPHCO, INC. AND AZIMUTH OPPORTUNITY LTD.

     

    This
      disclosure schedule is made and given pursuant to Article IV of the Common
      Stock
      Purchase Agreement, dated as of April 30, 2008 (the “Agreement”),
      by
      and between SulphCo, Inc., a Nevada corporation (the “Company”),
      and
      Azimuth Opportunity Ltd., an international business company incorporated under
      the laws of the British Virgin Islands. Unless the context otherwise requires,
      all capitalized terms are used herein as defined in the Agreement. The numbers
      below correspond to the section numbers of representations and warranties in
      the
      Agreement most directly modified by the below exceptions.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    FORM
      OF OPINION OF OUTSIDE COUNSEL TO BE DELIVERED PURSUANT TO

    SECTION
      6.1(I) OF THE COMMON STOCK PURCHASE AGREEMENT

    DATED
      AS OF APRIL 30, 2008 BETWEEN SULPHCO, INC. AND AZIMUTH OPPORTUNITY
      LTD.

     

    [Company
      Counsel’s Letterhead]

     

    April
      30,
      2008

     

    Azimuth
      Opportunity Ltd.

    c/o
      Fortis Prime Fund Solutions (BVI) Limited

    P.O.
      Box
      761, 1st
      Floor

    James
      Frett Building 

    Road
      Town, Tortola, BVI

    

    Re:
      SulphCo, Inc.

     

    Ladies
      and Gentlemen:

     

    We
      have
      acted as counsel to SulphCo, Inc., a Nevada corporation (the “Company”),
      in
      connection with the Common Stock Purchase Agreement, dated April 30, 2008 (the
      “Stock
      Purchase Agreement”),
      between Azimuth Opportunity Ltd. (the “Purchaser”)
      and
      the Company. The Stock Purchase Agreement provides for the issuance and sale
      (the “Transaction”),
      by
      the Company to the Purchaser, of up to $60,000,000 of shares (the “Shares”)
      of
      common stock, $0.001 par value (“Common
      Stock”),
      of
      the Company. We are delivering this opinion letter to you at the Company’s
      request pursuant to Section 6.1 of the Stock Purchase Agreement. 

     

    The
      following documents are referred to collectively in this opinion letter as
      the
“Transaction
      Documents”:

     

    1. The
      Stock
      Purchase Agreement

    2. The
      Company’s Articles of Incorporation

    3.
       The
      Company’s By-laws

    4.
       Resolutions
      adopted by the Company’s Board of Directors on April 25, 2008

    5.
       The
      Company’s Form S-3, filed with the Securities and Exchange Commission (the
“Commission”)
      on
      August 15, 2007 (the “Registration
      Statement”)

    

    References
      in this opinion letter to our knowledge, or words to that effect, mean a
      conscious awareness of facts, without investigation, by any of the lawyers
      currently with this firm who have given substantive attention to legal
      representation of the Company in matters relating directly to the Transaction
      Documents.

     

    In
      connection with rendering the opinions set forth below, we have examined the
      Transaction Documents and made such other investigation as we have deemed
      appropriate. We have examined and relied on certificates of public officials
      and, as to certain matters of fact that are material to our opinions, we have
      also examined and relied on a certificate of an officer of the Company (the
      “Fact
      Certificate”).
      A
      copy of the Fact Certificate is attached to this opinion letter. We have not
      independently established any of the facts so relied on.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    For
      the
      purposes of this opinion letter we have made the assumptions that are customary
      in opinion letters of this kind, including the assumptions that each document
      submitted to us is accurate and complete, that each such document that is an
      original is authentic, that each such document that is a copy conforms to an
      authentic original, that all signatures (other than signatures on behalf of
      the
      Company) on each such document are genuine, and that no changes in the facts
      certified in the Fact Certificate have occurred or will occur after the date
      of
      the Fact Certificate. We have further assumed the legal capacity of natural
      persons, and we have assumed that each party to the Stock Purchase Agreement
      (other than the Company) has the legal capacity and has satisfied all legal
      requirements that are applicable to that party to the extent necessary to make
      the Stock Purchase Agreement enforceable against that party. We have not
      verified any of the foregoing assumptions.

     

    We
      have
      also assumed with your permission that the Company is a corporation validly
      existing and in good standing in the State of Nevada, that it has full corporate
      power and has been duly authorized by all necessary corporate action to execute,
      deliver and perform its obligations under the Stock Purchase Agreement, and
      that
      it has duly executed and delivered the Stock Purchase Agreement. We understand
      that you are today receiving a separate opinion of McDonald Carano Wilson LLP
      with respect to these matters.

     

    The
      opinions expressed in this opinion letter are limited to the laws of the State
      of New York and federal laws of the United States that in our experience are
      normally applicable to the transactions contemplated by the Stock Purchase
      Agreement. We are not opining on specialized laws that are not customarily
      covered in opinion letters of this kind, such as tax, insolvency, antitrust,
      pension, employee benefit, environmental, intellectual property, banking,
      insurance, labor, health and safety, or (except as expressly set forth in
      opinion paragraph 2 below) securities laws.

     

    Based
      on
      the foregoing, and subject to the foregoing and the additional qualifications
      and other matters set forth below, it is our opinion that:

     

    1. The
      Stock
      Purchase Agreement constitutes a valid and binding obligation of the Company
      enforceable against the Company in accordance with its terms. 

    

    2. The
      Registration Statement has become effective under the Securities Act of 1933,
      as
      amended (the “1933
      Act”).
      To
      our knowledge, based solely on a telephone conversation with a member of the
      staff of the Commission, no stop order suspending the effectiveness of the
      Registration Statement has been issued under the 1933 Act and no proceedings
      for
      that purpose have been initiated or threatened by the Commission.

    

    Our
      opinion in paragraph number 1 above is subject to the effect of bankruptcy,
      insolvency, fraudulent transfer, reorganization, receivership, moratorium,
      and
      other laws affecting the rights and remedies of creditors generally, and to
      general principles of equity (whether applied by a court of law or
      equity).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    We
      express no opinion with respect to any matter involving financial information
      or
      relating to compliance with financial covenants or financial
      requirements.

     

    We
      also
      express no opinion with respect to the enforceability of any provision of any
      of
      the Transaction Documents that purports to:

    

    (a) waive
      equitable rights, remedies, or defenses;

    

    (b) limit
      any person’s liability, or relieve any party of the consequences of its own
      unlawful, willful or negligent acts or omissions, or grant indemnity or a right
      of contribution;

    

    (c) waive
      trial by jury;

    

    (d) waive
      the right to assert any statute of limitations;

    

    (e) designate
      the jurisdiction, forum or venue for resolution of any cause of action or
      dispute or the method of service of process; or

    

    (f) preclude
      the modification of the Transaction Documents by any means other than a
      writing.

    

    We
      further advise you that the enforceability of “severability” provisions may
      depend on the materiality of the unenforceable provisions to the document as
      a
      whole and to the undertakings of the parties thereunder

     

    We
      are
      furnishing this opinion letter to you solely in connection with the Transaction.
      You may not rely on this opinion letter in any other connection, and it may
      not
      be furnished to or relied upon by any other person for any purpose, without
      our
      specific prior written consent. 

     

    The
      foregoing opinions are rendered as of the date of this letter. We assume no
      obligation to update or supplement any of our opinions to reflect any changes
      of
      law or fact that may occur.

     

    Yours
      truly,

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    April
      ____, 2008

    

    Azimuth
      Opportunity Ltd.

    _________________________

    _________________________

    _________________________

     

    

    
      	 	
              Re:

            	
              Common
                Stock Purchase Agreement (the "Purchase Agreement") by and between
                Sulphco, Inc., a Nevada corporation (the "Company"), and Azimuth
                Opportunity Ltd., an international business company incorporated
                under the
                laws of the British Virgin Islands (the "Investor"), dated April
                ___,
                2008.

            

    

    

    Ladies
      and Gentlemen:

    

    We
      have
      acted as special Nevada counsel to the Company in connection with the execution
      and delivery of the Purchase Agreement. Unless otherwise indicated, capitalized
      terms used herein shall have the meanings ascribed to them in the Purchase
      Agreement.      

    In
      connection with the preparation of this opinion letter, and as the basis for
      the
      opinions hereinafter set forth, we have made such investigations of the laws
      of
      the State of Nevada as we have deemed relevant and necessary, and we have
      examined such documents as we have deemed relevant and necessary, including
      copies of the following documents and records:

    

    (a) An
      email
      copy of the Purchase Agreement (except that we have not reviewed any other
      documents or instruments that may be referenced or referred to in the Purchase
      Agreement and not attached thereto);

    

    (b) An
      email
      copy of the Restated Articles of Incorporation of the Company filed with the
      Secretary of State of the State of Nevada on December 30, 2003, as amended
      by
      that certain Certificate of Amendment to Articles of Incorporation of the
      Company filed with the Secretary of State of the State of Nevada on March 10,
      2008 (collectively, the "Articles");

    

    (c) An
      email
      copy of the Amended and Restated Bylaws of the Company duly adopted by the
      Board
      of Directors of the Company on April 18, 2003, as amended by that certain
      Amendment to Bylaws of the Company adopted by the Board of Directors of the
      Company on January 17, 2007 (collectively, the "Bylaws");

    

    (d) A
      email
      copy of the Certificate of Existence with Status in Good Standing of the Company
      issued by the Secretary of State of the State of Nevada as of April 28, 2008
      (the "Good Standing Certificate”);

    

    (e) An
      email
      copy of the Resolutions Of The Board of Directors of the Company, duly adopted
      by unanimous written consent on April ____, 2008, as certified by an officer
      of
      the Company in the Officer’s Certificate attached hereto (the "Resolutions");
      and 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (f) A
      photocopy of the Officer’s Certificate of Stanley W. Farmer, Vice-President and
      Chief Financial Officer of the Company, dated of even date herewith (the
      "Officer’s Certificate"), attached hereto as Exhibit "A" and made a part hereof
      by reference.

    

    As
      to
      matters of fact relevant to our opinion, we have relied upon representations
      made by the Company in the Purchase Agreement and Officer’s Certificate, and
      upon certificates of public officials as to matters stated therein. We have
      assumed (i) the genuineness of all signatures; (ii) the legal capacity of
      natural persons; (iii) the authenticity and accuracy of all documents submitted
      to us as originals and the conformity to originals of all documents submitted
      to
      us as copies; (iv) that all of the shares of the Company’s Common Stock to be
      issued under the Purchase Agreement have been or will be, as the case may be,
      issued in accordance with the registration or qualification provisions of the
      Securities Act of 1933, as amended, and any relevant state securities laws,
      or
      pursuant to valid exemptions therefrom; and (v) the adequacy of consideration
      received by the Company for the issuance and sale of any of the shares of the
      Company’s Common Stock.

    

    This
      opinion letter deals only with the specific and express legal issues addressed,
      and does not and is not intended to address any other legal issues. No opinions
      may be implied from the specific and express opinions set forth below, nor
      may
      the taking of any actions on our part be inferred or implied unless specifically
      and expressly stated. Based upon the foregoing, and subject to the
      qualifications, limitations and exceptions set forth herein, as of the date
      hereof and under current interpretations of the laws of the State of Nevada,
      we
      are of the opinion that:

    

    1. The
      execution, delivery and performance of the Purchase Agreement by the Company
      and
      the consummation by it of the transactions contemplated thereby have been duly
      and validly authorized by all necessary corporate action of the
      Company.

    

    2. The
      Company has been duly incorporated as a corporation under the laws of the State
      of Nevada with corporate power and authority to own its properties and to
      conduct its business as described in the Registration Statement and the
      Prospectus. Based on the Good Standing Certificate, we confirm that the Company
      is validly existing and in good standing under the laws of the State of
      Nevada.

    

    4. The
      issuance and sale of the Shares by the Company to you pursuant to the Purchase
      Agreement, assuming such issuance and sale occurred on the date hereof, do
      not:
      (i) violate the Company’s Articles and Bylaws; (ii) violate the corporate laws
      of the State of Nevada; or (iii) require any consents, approvals, or
      authorizations to be obtained by the Company, or any registrations, declarations
      or filings to be made by the Company, in each case, under the corporate laws
      of
      the State of Nevada. 

    

    5. When
      the
      terms (including the sales price and number of Shares) of the issuance of the
      Shares are determined by resolution of the Company’s Board of Directors, or a
      duly authorized committee thereof, in accordance with the Purchase Agreement,
      and upon receipt of payment for the Shares in the manner contemplated by the
      Purchase Agreement in legal consideration of not less than the aggregate par
      value for such Shares, and upon execution, issuance and delivery of certificates
      representing the Shares (and notation of such issuance in the stock transfer
      records of the Company) and assuming the Company completes all other actions
      and
      proceedings required on its part to be taken prior to the issuance and delivery
      of the Shares pursuant to the Purchase Agreement, the Shares will be duly
      authorized, validly issued, fully paid and nonassessable and free of preemptive
      rights arising under the Company’s Articles and Bylaws or the laws of the State
      of Nevada. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    The
      foregoing opinions are subject to the following qualifications, exceptions,
      assumptions, and limitations:

    

    A. In
      rendering the opinion in Paragraph 2 above, we have relied solely upon the
      Articles, Bylaws, Good Standing Certificate and the Officer’s
      Certificate.

    

    B. Please
      be
      advised that we are licensed to practice law only in the State of Nevada and
      our
      opinions are therefore limited only to matters of Nevada law and should not
      be
      construed as expressions of opinions as to the laws of any other
      jurisdiction.

    

    C. In
      rendering the opinions set forth above, please be advised that we are not giving
      an opinion as to the Company’s compliance with any state or federal securities
      laws, rules or regulations, including Nevada Blue Sky laws, in connection with
      the Purchase Agreement and the issuance and sale of the Shares.

    

    

    All
      of
      the opinions rendered herein are as of the date hereof. We assume no obligation
      to update such opinions to reflect any facts or circumstances that hereafter
      may
      come to our attention or any changes in the law that hereafter may occur. This
      opinion is rendered only with regard to the matters set out in the numbered
      paragraphs above. 

    

    This
      opinion is limited to the laws of the State of Nevada. This opinion is given
      to
      the addressee solely for its benefit in connection with the transactions
      described in the Purchase Agreement and, except for you, may not be relied
      upon
      in any respect by any other person or for any other purpose.

    

    Very
      truly yours,

    

     

    

    McDonald
      Carano Wilson LLP

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    FORM
      OF OPINION OF OUTSIDE COUNSEL TO BE DELIVERED PURSUANT TO

    SECTION
      6.3(X) OF THE COMMON STOCK PURCHASE AGREEMENT

    DATED
      AS OF APRIL 30, 2008 BETWEEN SULPHCO, INC. AND AZIMUTH OPPORTUNITY
      LTD.

     

    [Company
      Counsel’s Letterhead]

     

    

     

    _______
      __, 2008

     

    Azimuth
      Opportunity Ltd.

    c/o
      Fortis Prime Fund Solutions (BVI) Limited

    P.O.
      Box
      761, 1st
      Floor

    James
      Frett Building 

    Road
      Town, Tortola, BVI

    

    Re:
      SulphCo, Inc.

     

    Ladies
      and Gentlemen:

     

    We
      have
      acted as counsel to SulphCo, Inc., a Nevada corporation (the “Company”),
      in
      connection with the Common Stock Purchase Agreement, dated April 30, 2008 (the
      “Stock
      Purchase Agreement”),
      between Azimuth Opportunity Ltd. (the “Purchaser”)
      and
      the Company. The Stock Purchase Agreement provides for the issuance and sale
      (the “Transaction”),
      by
      the Company to the Purchaser, of up to $60,000,000 of shares (the “Shares”)
      of
      common stock, $0.001 par value (“Common
      Stock”),
      of
      the Company. We are delivering this opinion letter to you at the Company’s
      request pursuant to Section 6.3(x) of the Stock Purchase Agreement.

     

    The
      following documents are referred to collectively in this opinion letter as
      the
“Transaction
      Documents”:

     

    1. The
      Stock
      Purchase Agreement

    2. The
      Company’s Articles of Incorporation

    3.
       The
      Company’s By-laws

    4.
       Resolutions
      adopted by the Company’s Board of Directors on April 25, 2008

    5. The
      Company’s Form S-3, filed with the Securities and Exchange Commission (the
“Commission”)
      on
      August 15, 2007 (the “Registration
      Statement”)

    6.
       The
      Form
      8-K filed by the Company with the Commission on April 30, 2008

    7. Prospectus,
      filed with the Commission, pursuant to Rule 424(b) on April 30,
      2008

    

    References
      in this opinion letter to our knowledge, or words to that effect, mean a
      conscious awareness of facts, without investigation, by any of the lawyers
      currently with this firm who have given substantive attention to legal
      representation of the Company in matters relating directly to the Transaction
      Documents.

     

    In
      connection with rendering the opinions set forth below, we have examined the
      Transaction Documents and made such other investigation as we have deemed
      appropriate. We have examined and relied on certificates of public officials
      and, as to certain matters of fact that are material to our opinions, we have
      also examined and relied on a certificate of an officer of the Company (the
      “Fact
      Certificate”).
      A
      copy of the Fact Certificate is attached to this opinion letter. We have not
      independently established any of the facts so relied on.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    For
      the
      purposes of this opinion letter we have made the assumptions that are customary
      in opinion letters of this kind, including the assumptions that each document
      submitted to us is accurate and complete, that each such document that is an
      original is authentic, that each such document that is a copy conforms to an
      authentic original, that all signatures (other than signatures on behalf of
      the
      Company) on each such document are genuine, and that no changes in the facts
      certified in the Fact Certificate have occurred or will occur after the date
      of
      the Fact Certificate. We have not verified any of the foregoing
      assumptions.

     

    We
      have
      also assumed with your permission that the Company is a corporation validly
      existing and in good standing in the State of Nevada, that it has full corporate
      power and has been duly authorized by all necessary corporate action to execute,
      deliver and perform its obligations under the Stock Purchase Agreement. We
      understand that you are today receiving a separate opinion of McDonald Carano
      Wilson LLP with respect to these matters.

     

    The
      opinions expressed in numbered paragraphs 3, 4, 6, 7 and 8 below are limited
      to
      the laws of the State of New York and federal laws of the United States that
      in
      our experience are normally applicable to the transactions contemplated by
      the
      Stock Purchase Agreement. The opinions expressed in numbered paragraphs 1,
      2 and
      5 below are limited to the laws of the State of Texas and federal laws of the
      United States that in our experience are normally applicable to the transactions
      contemplated by the Stock Purchase Agreement. We are not opining on specialized
      laws that are not customarily covered in opinion letters of this kind, such
      as
      tax, insolvency, antitrust, pension, employee benefit, environmental,
      intellectual property, banking, insurance, labor, health and safety, or (except
      as expressly set forth herein) securities laws.

     

    Based
      on
      the foregoing, and subject to the foregoing and the additional qualifications
      and other matters set forth below, it is our opinion that:

     

    1. Based
      solely on the Certificate of Fact issued by the Secretary of State of the State
      of Texas on April 16, 2008, the Company is qualified as a foreign corporation
      in
      the State of Texas.

    

    2. The
      execution and delivery by the Company of the Transaction Documents, and the
      performance by the Company of its obligations under the Transaction Documents,
      do not violate
      any applicable statute, rule, or regulation of the State of Texas or the United
      States.

    

    3. The
      Registration Statement has become effective under the Securities Act of 1933,
      as
      amended (the “1933
      Act”).
      Any
      required filing of a prospectus (the “Prospectus”)
      pursuant to Rule 424(b) of the 1933 Act (“Rule
      424(b)”)
      has
      been made in accordance with Rule 424(b). To our knowledge, based solely on
      a
      telephone conversation with a member of the staff of the Commission, no stop
      order suspending the effectiveness of the Registration Statement has been issued
      under the 1933 Act and no proceedings for that purpose have been initiated
      or
      threatened by the Commission.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    4. The
      Registration Statement and the Prospectus, as of their respective effective
      or
      issue dates (other than the financial statements and related notes and schedules
      and other financial, accounting, and statistical information included therein
      or
      omitted therefrom, as to which we express no opinion), complied as to form
      in
      all material respects with the requirements of the 1933 Act and the regulations
      under the 1933 Act.

    

    5. The
      execution and delivery by the Company of the Transaction Documents, and the
      performance by the Company of its obligations under the Transaction Documents,
      do not require the Company to obtain any approval by or make any filing with
      any
      governmental authority under any statute, rule, or regulation of the State
      of
      Texas or the United States, except such approvals and filings as have been
      obtained or made and are in full force and effect.

    

    6. The
      execution and delivery by the Company of the Transaction Documents, and the
      performance by the Company of its obligations under the Transaction Documents,
      do not (a) breach or constitute a default or an event which, with the giving
      of
      notice or the passage of time or both, would constitute a default under any
      existing obligation of the Company under the express terms of any agreement
      listed in Exhibit
      A
      attached
      hereto, (b) result in the acceleration of (or entitle any party to accelerate)
      the maturity of any obligation of the Company under any such agreement or
      instrument, or (c) result in a lien on any property of the Company pursuant
      to
      the express terms of any such agreement or instrument.

    

    7. The
      Company is not an “investment company” (as each such term is defined in the
      Investment Company Act of 1940 (“1940 Act”)) that is registered or required to
      be registered under the 1940 Act.

    

    8. To
      our
      knowledge, at the date of this opinion letter there is no action or proceeding
      pending before any court, governmental agency or arbitrator, or threatened
      in
      writing, against the Company that seeks to enjoin the performance or affect
      the
      enforceability of the Transaction Documents or the consummation of the
      Transaction or, except as disclosed in the Company’s most recent Form 10-K,
      seeks damages from the Company in excess of $100,000.

    

    We
      are
      not opining as to factual matters, and the character of determinations involved
      in the registration process is such that we are not passing upon and do not
      assume any responsibility for the accuracy, completeness or fairness of the
      information included in the Registration Statement and the Prospectus. We assume
      the correctness and completeness of the information included in the Registration
      Statement and the Prospectus, and, except as set forth in the immediately
      following sentence, we have made no independent investigation or verification
      of
      that information. We can advise you, however, that in and on the basis of our
      review of the Registration Statement and the Prospectus, and, with respect
      to
      those documents incorporated by reference in the Registration Statement and
      the
      Prospectus, only the Company’s Form 10-K for the year ended December 31, 2007
      (the “Form 10-K”) and the Company’s current reports on Form 8-K filed in 2008
      (the “Current Reports”), nothing has come to our attention that causes us to
      believe that the Registration Statement, at the time it became effective, and
      the Prospectus, as of its date, contained an untrue statement of a material
      fact
      or omitted to state a material fact required to be stated therein or necessary
      to make the statements therein, in light of the circumstances under which they
      were made, not misleading.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    We
      express no opinion with respect to the financial statements and related notes
      and schedules, and other financial, accounting, and statistical information,
      included in, incorporated by reference in, or omitted from the Registration
      Statement and the Prospectus.

     

    We
      express no opinion with respect to any matter involving financial information
      or
      relating to compliance with financial covenants or financial requirements,
      including the Management Discussion and Analysis of Financial Condition and
      Results of Operation in the Form 10-K. We also express no opinion with respect
      to the Company’s determination of its internal control over financial reporting
      or its disclosure controls and procedures as reported in the Form 10-K.

     

    We
      are
      furnishing this opinion letter to you solely in connection with the Transaction.
      You may not rely on this opinion letter in any other connection, and it may
      not
      be furnished to or relied upon by any other person for any purpose, without
      our
      specific prior written consent. 

     

    The
      foregoing opinions are rendered as of the date of this letter. We assume no
      obligation to update or supplement any of our opinions to reflect any changes
      of
      law or fact that may occur.

     

    Yours
      truly,

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    FORM
      OF OPINION “BRING DOWN” OF OUTSIDE COUNSEL TO BE DELIVERED PURSUANT TO SECTION
      6.3(X) OF THE COMMON STOCK PURCHASE AGREEMENT DATED AS OF APRIL 30, 2008 BETWEEN
      SULPHCO, INC. AND AZIMUTH OPPORTUNITY LTD.

     

    [Company
      Counsel’s Letterhead]

     

    

     

    _______
      __, 2008

     

    Azimuth
      Opportunity Ltd.

    c/o
      Fortis Prime Fund Solutions (BVI) Limited

    P.O.
      Box
      761, 1st
      Floor

    James
      Frett Building 

    Road
      Town, Tortola, BVI

    

    Re:
      SulphCo, Inc.

     

    Ladies
      and Gentlemen:

     

    We
      have
      acted as counsel to SulphCo, Inc., a Nevada corporation (the “Company”),
      in
      connection with the Common Stock Purchase Agreement, dated April 30, 2008 (the
      “Stock
      Purchase Agreement”),
      between Azimuth Opportunity Ltd. (the “Purchaser”)
      and
      the Company. The Stock Purchase Agreement provides for the issuance and sale
      (the “Transaction”),
      by
      the Company to the Purchaser, of up to $60,000,000 of shares (the “Shares”)
      of
      common stock, $0.001 par value (“Common
      Stock”),
      of
      the Company. We are delivering this opinion letter to you at the Company’s
      request pursuant to Section 6.3(x) of the Stock Purchase Agreement.

     

    The
      following documents are referred to collectively in this opinion letter as
      the
“Transaction
      Documents”:

     

    1. The
      Stock
      Purchase Agreement

    2. The
      Company’s Articles of Incorporation

    3.
       The
      Company’s By-laws

    4.
       Resolutions
      adopted by the Company’s Board of Directors on April 25, 2008

    5. The
      Company’s Form S-3, filed with the Securities and Exchange Commission (the
“Commission”)
      on
      August 15, 2007 (the “Registration
      Statement”)

    6.
       The
      Form
      8-K filed by the Company with the Commission on April 30, 2008

    7. Prospectus,
      filed with the Commission, pursuant to Rule 424(b) on April 30, 2008 (the
“Prospectus”)

    8. Prospectus
      supplement, filed with the Commission, pursuant to Rule 424(b) on _____, 2008
      (the “Prospectus
      Supplement”).

    

    References
      in this opinion letter to our knowledge, or words to that effect, mean a
      conscious awareness of facts, without investigation, by any of the lawyers
      currently with this firm who have given substantive attention to legal
      representation of the Company in matters relating directly to the Transaction
      Documents.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      connection with rendering the opinions set forth below, we have examined the
      Transaction Documents and made such other investigation as we have deemed
      appropriate. We have examined and relied on certificates of public officials
      and, as to certain matters of fact that are material to our opinions, we have
      also examined and relied on a certificate of an officer of the Company (the
      “Fact
      Certificate”).
      A
      copy of the Fact Certificate is attached to this opinion letter. We have not
      independently established any of the facts so relied on.

     

    For
      the
      purposes of this opinion letter we have made the assumptions that are customary
      in opinion letters of this kind, including the assumptions that each document
      submitted to us is accurate and complete, that each such document that is an
      original is authentic, that each such document that is a copy conforms to an
      authentic original, that all signatures (other than signatures on behalf of
      the
      Company) on each such document are genuine, and that no changes in the facts
      certified in the Fact Certificate have occurred or will occur after the date
      of
      the Fact Certificate. We have not verified any of the foregoing
      assumptions.

     

    The
      opinions expressed in numbered paragraphs 1 and 3 below are limited to federal
      laws of the United States that in our experience are normally applicable to
      the
      transactions contemplated by the Stock Purchase Agreement. The opinions
      expressed in numbered paragraph 2 below is limited to the laws of the State
      of
      Texas and federal laws of the United States that in our experience are normally
      applicable to the transactions contemplated by the Stock Purchase Agreement.
      We
      are not opining on specialized laws that are not customarily covered in opinion
      letters of this kind, such as tax, insolvency, antitrust, pension, employee
      benefit, environmental, intellectual property, banking, insurance, labor, health
      and safety, or (except as expressly set forth herein) securities
      laws.

     

    Based
      on
      the foregoing, and subject to the foregoing and the additional qualifications
      and other matters set forth below, it is our opinion that:

     

    1. The
      Registration Statement has become effective under the Securities Act of 1933,
      as
      amended (the “1933
      Act”).
      Any
      required filing of a prospectus and prospectus supplement pursuant to Rule
      424(b) of the 1933 Act (“Rule
      424(b)”)
      has
      been made in accordance with Rule 424(b). To our knowledge, based solely on
      a
      telephone conversation with a member of the staff of the Commission, no stop
      order suspending the effectiveness of the Registration Statement has been issued
      under the 1933 Act and no proceedings for that purpose have been initiated
      or
      threatened by the Commission.

    

    2. The
      execution and delivery by the Company of the Transaction Documents, and the
      performance by the Company of its obligations under the Transaction Documents,
      do not violate
      any applicable statute, rule, or regulation of the State of Texas or the United
      States.

    

    3. The
      Registration Statement, the Prospectus, and the Prospectus Supplement, as of
      their respective effective or issue dates (other than the financial statements
      and related notes and schedules and other financial, accounting, and statistical
      information included therein or omitted therefrom, as to which we express no
      opinion), complied as to form in all material respects with the requirements
      of
      the 1933 Act and the regulations under the 1933 Act.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    We
      are
      not opining as to factual matters, and the character of determinations involved
      in the registration process is such that we are not passing upon and do not
      assume any responsibility for the accuracy, completeness or fairness of the
      information included in the Registration Statement, the Prospectus and the
      Prospectus Supplement. We assume the correctness and completeness of the
      information included in the Registration Statement, the Prospectus and the
      Prospectus Supplement, and, except as set forth in the immediately following
      sentence, we have made no independent investigation or verification of that
      information. We can advise you, however, that in and on the basis of our review
      of the Registration Statement, the Prospectus and the Prospectus Supplement,
      and, with respect to those documents incorporated by reference in the
      Registration Statement, the Prospectus and the Prospectus Supplement, only
      the
      Company’s Form 10-K for the year ended December 31, 2007 (the “Form 10-K”) and
      the Company’s current reports on Form 8-K filed after December 31, 2007 (the
“Current Reports”), nothing has come to our attention that causes us to believe
      that the Registration Statement, at the time it became effective, the
      Prospectus, as of its date and the Prospectus Supplement, as of its date,
      contained an untrue statement of a material fact or omitted to state a material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading.

    

    We
      express no opinion with respect to the financial statements and related notes
      and schedules, and other financial, accounting, and statistical information,
      included in, incorporated by reference in, or omitted from the Registration
      Statement, the Prospectus and the Prospectus Supplement.

     

    We
      express no opinion with respect to any matter involving financial information
      or
      relating to compliance with financial covenants or financial requirements,
      including the Management Discussion and Analysis of Financial Condition and
      Results of Operation in the Form 10-K. We also express no opinion with respect
      to the Company’s determination of its internal control over financial reporting
      or its disclosure controls and procedures as reported in the Form 10-K.

     

    We
      are
      furnishing this opinion letter to you solely in connection with the Transaction.
      You may not rely on this opinion letter in any other connection, and it may
      not
      be furnished to or relied upon by any other person for any purpose, without
      our
      specific prior written consent. 

     

    The
      foregoing opinions are rendered as of the date of this letter. We assume no
      obligation to update or supplement any of our opinions to reflect any changes
      of
      law or fact that may occur.

     

    Yours
      truly,

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    [Letterhead
      of McDonald Carano Wilson LLP]

    

    FORM
      OF
      BRING-DOWN OPINION

    

    Reply
      to: Reno

    

    ____________,
      20___

    

    Azimuth
      Opportunity Ltd.

    c/o
      Fortis Prime Fund Solutions (BVI) Limited

    P.O.
      Box
      761, 1st
      Floor

    James
      Frett Building

    Road
      Town, Tortola

    British
      Virgin Islands 

    

    
      	 	
              Re:

            	
              Common
                Stock Purchase Agreement (the "Purchase Agreement") by and between
                Sulphco, Inc., a Nevada corporation (the "Company"), and Azimuth
                Opportunity Ltd., an international business company incorporated
                under the
                laws of the British Virgin Islands, dated April 30,
                2008.

            

    

    

    Ladies
      and Gentlemen:

    

    We
      have
      acted as special Nevada counsel to the Company in the issuance to you of a
      legal
      opinion dated April 30, 2008, in connection with the Purchase Agreement
      (“Azimuth Opinion”).      

    You
      have
      requested that we issue a bring-down opinion pursuant to Section 6.3(x) of
      the
      Purchase Agreement. In that regard, and subject to all of the qualifications,
      exceptions, assumptions, and limitations set forth herein and in the Azimuth
      opinion, no facts have been brought to our attention that cause us to believe
      that any of the opinions expressed in Paragraphs 3 and 4 of the Azimuth Opinion
      are not true and correct as of the date hereof. 

    

    For
      purposes of this bring-down opinion, we have relied solely on the Officer’s
      Certificate of even date attached hereto and have not made any investigation
      or
      inquiry as to, and have not independently verified, any of such matters. Any
      limited inquiry undertaken by us during the preparation of this bring-down
      opinion should not and may not be regarded as such an investigation or
      inquiry.

    

    The
      opinion rendered herein is as of the date hereof. We assume no obligation to
      update such opinion to reflect any facts or circumstances that hereafter may
      come to our attention or any changes in the law that hereafter may occur.

    

    This
      opinion is limited to the laws of the State of Nevada. This opinion is given
      to
      the addressee solely for its benefit in connection with the transactions
      described in the Purchase Agreement and, except for you, may not be relied
      upon
      in any respect by any other person or for any other purpose.

    

    Very
      truly yours,

    

     

    

    McDonald
      Carano Wilson LLP

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