Document:

Exhibit
      4.2

     

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

     

    MDWERKS,
      INC.

     

    SERIES
      H WARRANT TO PURCHASE COMMON STOCK

     

    Warrant
      No.: W-H-1

     

    Number
      of
      Shares of Common Stock: 53,333,334

     

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

     

    MDwerks,
      Inc., a Delaware corporation (the “COMPANY”), hereby certifies that, for good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, VICIS CAPITAL MASTER FUND, the registered holder hereof or its
      permitted assigns (the “HOLDER”), is entitled, subject to the terms set forth
      below, to purchase from the Company, at the Exercise Price (as defined below)
      then in effect, upon surrender of this Warrant to Purchase Common Stock
      (including any Warrants to purchase Common Stock issued in exchange, transfer
      or
      replacement hereof, the “WARRANT”), at any time or times on or after the date
      hereof, but not after 11:59 p.m., New York Time, on the Expiration Date (as
      defined below), Fifty Three Million Three Hundred Thirty-Three Thousand Three
      Hundred Thirty-Four (53,333,334)
      fully
      paid nonassessable shares of Common Stock (as defined below) (the “WARRANT
      SHARES”). Except as otherwise defined herein, capitalized terms in this Warrant
      shall have the meanings set forth in Section 15. This Warrant is one of the
      Warrants to purchase Common Stock (the “WARRANTS”) issued pursuant to that
      certain Securities Purchase Agreement, dated March 31, 2008 (the “SUBSCRIPTION
      DATE”), between the Company and the Purchaser 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 date hereof, in whole or in part, by
      (i) delivery of a written notice, in the form attached hereto as
Exhibit
      A
      (the
“EXERCISE NOTICE”), of the Holder’s election to exercise this Warrant and
      (ii) (A) payment to the Company of an amount equal to the applicable
      Exercise Price multiplied by the number of Warrant Shares as to which this
      Warrant is being exercised (the “AGGREGATE EXERCISE PRICE”) in cash or by wire
      transfer of immediately available funds or (B) by notifying the Company
      that this Warrant is being exercised pursuant to a Cashless Exercise (as defined
      in Section 1(d)). The Holder shall not be required to deliver the original
      Warrant in order to affect an exercise hereunder. Execution and delivery of
      the
      Exercise Notice with respect to less than all of the Warrant Shares shall have
      the same effect as cancellation of the original Warrant and issuance of a new
      Warrant evidencing the right to purchase the remaining number of Warrant Shares.
      On or before the first (1st) Business Day following the date on which the
      Company has received each of the Exercise Notice and the Aggregate Exercise
      Price (or notice of a Cashless Exercise) (the “EXERCISE DELIVERY DOCUMENTS”),
      the Company shall transmit by facsimile an acknowledgment of confirmation of
      receipt of the Exercise Delivery Documents to the Holder and the Company’s
      transfer agent (the “TRANSFER AGENT”). On or before the third (3rd) Business Day
      following the date on which the Company has received all of the Exercise
      Delivery Documents (the “SHARE DELIVERY DATE”), the Company shall
      (X) provided that the Transfer Agent is participating in The Depository
      Trust Company (“DTC”) Fast Automated Securities Transfer Program, credit such
      aggregate number of shares of Common Stock to which the Holder is entitled
      pursuant to such exercise to the Holder’s or its designee’s balance account with
      DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the
      Transfer Agent is not participating in the DTC Fast Automated Securities
      Transfer Program, issue and dispatch by overnight courier to the address as
      specified in the Exercise Notice, a certificate, registered in the Company’s
      share register in the name of the Holder or its designee, for the number of
      shares of Common Stock to which the Holder is entitled pursuant to such
      exercise. Upon delivery of the Exercise Delivery Documents, the Holder shall
      be
      deemed for all corporate purposes to have become the holder of record of the
      Warrant Shares with respect to which this Warrant has been exercised,
      irrespective of the date such Warrant Shares are credited to the Holder’s DTC
      account or the date of delivery of the certificates evidencing such Warrant
      Shares as the case may be. If this Warrant is submitted in connection with
      any
      exercise pursuant to this Section 1(a) and the number of Warrant Shares
      represented by this Warrant submitted for exercise is greater than the number
      of
      Warrant Shares being acquired upon an exercise, then the Company shall as soon
      as practicable and in no event later than three Business Days after any exercise
      and at its own expense, issue, a new Warrant (in accordance with
      Section 7(d)) representing the right to purchase the number of Warrant
      Shares purchasable immediately prior to such exercise under this Warrant, less
      the number of Warrant Shares with respect to which this Warrant is exercised.
      No
      fractional shares of Common Stock are to be issued upon the exercise of this
      Warrant, but rather the number of shares of Common Stock to be issued shall
      be
      rounded up to the nearest whole number. The Company shall pay stamp and similar
      taxes which may be payable with respect to the issuance and delivery of Warrant
      Shares upon exercise of this Warrant. The Company shall not be required,
      however, to pay any transfer tax or similar charge imposed in connection with
      the issuance and delivery of Warrant shares in any name other than that of
      the
      Holder.

     

    (b) Exercise
      Price.
      For
      purposes of this Warrant, “EXERCISE PRICE” means $0.75 subject to adjustment as
      provided herein.

    
      
        
        

      

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

     

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

     

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

    
      
        
        

      

      
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    (d) Cashless
      Exercise.
      Notwithstanding anything contained herein to the contrary, commencing on
      September 30, 2008, if, at the time of exercise of this Warrant, a Registration
      Statement (as defined in the Registration Rights Agreement) covering the Warrant
      Shares that are the subject of the Exercise Notice (the “UNAVAILABLE WARRANT
      SHARES”) is not available for the resale of such Unavailable Warrant Shares, the
      Holder may, in its sole discretion, exercise this Warrant in whole or in part
      and, in lieu of making the cash payment otherwise contemplated to be made to
      the
      Company upon such exercise in payment of the Aggregate Exercise Price, elect
      instead to receive upon such exercise the “Net Number” of shares of Common Stock
      determined according to the following formula (a “CASHLESS
      EXERCISE”):

    

      
        	 	
                Net
                  Number = 

              	
                (A
                  x B) - (A x C)

              	 
	 	 	
                B

              	 

      

    

    

    For
      purposes of the foregoing formula:

    

      
        	 	
                A
                  

              	
                =

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

              
	 	 	 	 
	 	
                B

              	
                =

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

              
	 	 	 	 
	 	
                C

              	
                =

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

              

      

    

     

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

     

    (f) Limitations
      on Exercises.

     

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

     

    
      
        
        

      

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

     

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

     

    (g) Insufficient
      Authorized Shares.
      If at
      any time while any of the Warrants remain outstanding the Company does not
      have
      a sufficient number of authorized and unreserved shares of Common Stock (an
      “AUTHORIZED SHARE FAILURE”) to satisfy its obligation to reserve for issuance
      upon exercise of the Warrants at least a number of shares of Common Stock equal
      to 100% of the number of shares of Common Stock as shall from time to time
      be
      necessary to effect the exercise of all of the Warrants then outstanding (the
      “REQUIRED RESERVE AMOUNT”), then the Company shall immediately take all action
      necessary to increase the Company’s authorized shares of Common Stock to an
      amount sufficient to allow the Company to reserve the Required Reserve Amount
      for the Warrants then outstanding. Without limiting the generality of the
      foregoing sentence, as soon as practicable after the date of the occurrence
      of
      an Authorized Share Failure, but in no event later than ninety (90) days after
      the occurrence of such Authorized Share Failure, the Company shall hold a
      meeting of its stockholders for the approval of an increase in the number of
      authorized shares of Common Stock. In connection with such meeting, the Company
      shall provide each stockholder with a proxy statement and shall use its
      reasonable best efforts to solicit its stockholders’ approval of such increase
      in authorized shares of Common Stock and to cause its board of directors to
      recommend to the stockholders that they approve such proposal.

     

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

    
      
        
        

      

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

    

     

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

     

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

     

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

    
      
        
        

      

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

     

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

    
      
        
        

      

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

     

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

     

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

     

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

    
      
        
        

      

      
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    (d) Other
      Events.
      If any
      event occurs of the type contemplated by the provisions of this Section 2
      but not expressly provided for by such provisions (including, without
      limitation, the granting of stock appreciation rights, phantom stock rights
      or
      other rights with equity features), then the Company’s Board of Directors in
      good faith will make an appropriate adjustment in the Conversion Price so as
      to
      be equitable under the circumstances and otherwise protect the rights of the
      Holder; provided that no such adjustment will increase the Exercise Price as
      otherwise determined pursuant to this Section 7.3.

     

    
      3.RIGHTS
        UPON DISTRIBUTION OF ASSETS.

    

     

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

     

    
      4.PURCHASE
        RIGHTS; FUNDAMENTAL TRANSACTIONS.

    

     

    (a) Purchase
      Rights.
      In
      addition to any adjustments pursuant to Section 2 above, if at any time the
      Company grants, issues or sells any Options, Convertible Securities or rights
      to
      purchase stock, warrants, securities or other property pro rata to the record
      holders of any class of shares of Common Stock (the “PURCHASE RIGHTS”), then the
      Holder will be entitled to acquire, upon the terms applicable to such Purchase
      Rights, the aggregate Purchase Rights which the Holder could have acquired
      if
      the Holder had held the proportionate number of shares of Common Stock
      acquirable upon complete exercise of this Warrant (without regard to any
      limitations on the exercise of this Warrant) immediately before the date on
      which a record is taken for the grant, issuance or sale of such Purchase Rights,
      or, if no such record is taken, the date as of which the record holders of
      shares of Common Stock are to be determined for the grant, issue or sale of
      such
      Purchase Rights.

     

    (b) Redemption
      Right.
      No
      sooner than fifteen (15) days nor later than ten (10) days prior to the
      consummation of a Change of Control, but not prior to the public announcement
      of
      such Change of Control, the Company shall deliver written notice thereof via
      facsimile and overnight courier to the Holder (a “CHANGE IN CONTROL NOTICE”). At
      any time during the period beginning after the Holder’s receipt of a Change of
      Control Notice and ending ten (10) Trading Days after the consummation of such
      Change of Control, the Holder may require the Company to redeem all or any
      portion of this Warrant by delivering written notice thereof (“CHANGE IN CONTROL
      REDEMPTION NOTICE”) to the Company, which Change of Control Redemption Notice
      shall indicate the amount the Holder is electing to be redeemed. Any such
      redemption shall be in cash in the amount equal to the value of the remaining
      unexercised portion of this Warrant on the date of such consummation, which
      value shall be determined by use of the Black Scholes Option Pricing Model
      reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury
      rate
      for a period equal to the remaining term of this Warrant as of such date of
      request and (B) an expected volatility equal to the greater of 60% and the
      100
      day volatility obtained from the HVT function on Bloomberg.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      5.NONCIRCUMVENTION.

    

     

    The
      Company hereby covenants and agrees that the Company will not, by amendment
      of
      its Certificate of Incorporation, Bylaws or through any reorganization, transfer
      of assets, consolidation, merger, scheme of arrangement, dissolution, issue
      or
      sale of securities, or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms of this Warrant, and will at
      all
      times in good faith carry out all the provisions of this Warrant and take all
      action as may be required to protect the rights of the Holder. Without limiting
      the generality of the foregoing, the Company (i) shall not increase the par
      value of any shares of Common Stock receivable upon the exercise of this Warrant
      above the Exercise Price then in effect, (ii) shall take all such actions as
      may
      be necessary or appropriate in order that the Company may validly and legally
      issue fully paid and nonassessable shares of Common Stock upon the exercise
      of
      this Warrant, and (iii) shall, so long as any of the Warrants are outstanding,
      take all action necessary to reserve and keep available out of its authorized
      and unissued shares of Common Stock, solely for the purpose of effecting the
      exercise of the Warrants, 100% of the number of shares of Common Stock as shall
      from time to time be necessary to effect the exercise of the Warrants then
      outstanding (without regard to any limitations on exercise).

     

    
      6.WARRANT
        HOLDER NOT DEEMED A STOCKHOLDER.

    

     

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

     

    
      7.REISSUANCE
        OF WARRANTS.

    

     

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

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    
      8.NOTICES.

    

     

    Whenever
      notice is required to be given under this Warrant, unless otherwise provided
      herein, such notice shall be given in accordance with Section 12.6 of the
      Securities Purchase Agreement. The Company shall provide the Holder with prompt
      written notice of all actions taken pursuant to this Warrant, including in
      reasonable detail a description of such action and the reason therefore. Without
      limiting the generality of the foregoing, the Company will give written notice
      to the Holder (i) immediately upon any adjustment of the Exercise Price, setting
      forth in reasonable detail, and certifying, the calculation of such adjustment
      and (ii) at least fifteen (15) days prior to the date on which the Company
      closes its books or takes a record (A) with respect to any dividend or
      distribution upon the shares of Common Stock, (B) with respect to any grants,
      issuances or sales of any Options, Convertible Securities or rights to purchase
      stock, warrants, securities or other property to holders of shares of Common
      Stock or (C) for determining rights to vote with respect to any Fundamental
      Transaction, dissolution or liquidation, provided in each case that such
      information shall be made known to the public prior to or in conjunction with
      such notice being provided to the Holder.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      9.AMENDMENT
        AND WAIVER.

    

     

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

     

    
      10.GOVERNING
        LAW.

    

     

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

     

    
      11.CONSTRUCTION;
        HEADINGS.

    

     

    This
      Warrant shall be deemed to be jointly drafted by the Company and all the Buyers
      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.

     

    
      12.DISPUTE
        RESOLUTION.

    

     

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

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

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

    

     

    The
      remedies provided in this Warrant shall be cumulative and in addition to all
      other remedies available under this Warrant and the other Transaction Documents,
      at law or in equity (including a decree of specific performance and/or other
      injunctive relief), and nothing herein shall limit the right of the Holder
      right
      to pursue actual damages for any failure by the Company to comply with the
      terms
      of this Warrant. The Company acknowledges that a breach by it of its obligations
      hereunder will cause irreparable harm to the Holder and that the remedy at
      law
      for any such breach may be inadequate. The Company therefore agrees that, in
      the
      event of any such breach or threatened breach, the holder of this Warrant shall
      be entitled, in addition to all other available remedies, to an injunction
      restraining any breach, without the necessity of showing economic loss and
      without any bond or other security being required.

     

    
      14.TRANSFER.

    

     

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

     

    
      15.CERTAIN
        DEFINITIONS.

    

     

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

     

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

     

    (b) “BLOOMBERG”
      means Bloomberg Financial Markets.

     

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

     

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

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (e) “CLOSING
      BID PRICE” and “CLOSING SALE PRICE” means, for any security as of any date, the
      last closing bid price and last closing trade price, respectively, for such
      security on the Principal Market, as reported by Bloomberg, or, if the Principal
      Market begins to operate on an extended hours basis and does not designate
      the
      closing bid price or the closing trade price, as the case may be, then the
      last
      bid price or last trade price, respectively, of such security prior to 4:00
      p.m., New York Time, as reported by Bloomberg, or, if the Principal Market
      is
      not the principal securities exchange or trading market for such security,
      the
      last closing bid price or last trade price, respectively, of such security
      on
      the principal securities exchange or trading market where such security is
      listed or traded as reported by Bloomberg, or if the foregoing do not apply,
      the
      last closing bid price or last trade price, respectively, of such security
      in
      the over-the-counter market on the electronic bulletin board for such security
      as reported by Bloomberg, or, if no closing bid price or last trade price,
      respectively, is reported for such security by Bloomberg, the average of the
      bid
      prices, or the ask prices, respectively, of any market makers for such security
      as reported in the “pink sheets” by Pink Sheets LLC (formerly the National
      Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price
      cannot be calculated for a security on a particular date on any of the foregoing
      bases, the Closing Bid Price or the Closing Sale Price, as the case may be,
      of
      such security on such date shall be the fair market value as mutually determined
      by the Company and the Holder. If the Company and the Holder are unable to
      agree
      upon the fair market value of such security, then such dispute shall be resolved
      pursuant to Section 12. All such determinations to be appropriately
      adjusted for any stock dividend, stock split, stock combination or other similar
      transaction during the applicable calculation period.

     

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

     

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

     

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

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (i) “EXCLUDED
      SECURITIES” means (i) any Common Stock and/or Options (and the Common Stock
      issuable pursuant to such Options) issued or issuable: (A) in connection
      with any Approved Stock Plan up to a maximum of ten percent (10%) of the Common
      Stock outstanding at the time of issuance of such Common Stock and/or Options
      (provided that securities issued in connection with an Approved Stock Plan
      that
      are outstanding as of the Issuance Date and shares of Common Stock issuable
      pursuant to exercise or conversion of such outstanding securities shall not
      be
      included for purposes of calculating the maximum of ten percent (10%)) or
      (B) upon conversion or exercise of any Options or Convertible Securities
      which are outstanding on the Issuance Date, provided that the terms of such
      Options or Convertible Securities are not amended, modified or changed on or
      after the Issuance Date to lower the conversion or exercise price thereof and
      so
      long as the number of shares of Common Stock underlying such securities is
      not
      otherwise increased; (ii) any shares of Common Stock issued in an
      underwritten public offering in which the gross cash proceeds to the Company
      (before underwriting discounts, commissions and fees) are at least $10,000,000;
      (iii) Options (and the Common Stock issuable pursuant thereto) issued to
      medical practices that are customers of the Company in good standing to acquire
      up to a maximum of 250,000 shares of Common Stock per practice with an exercise
      or conversion price at or above the Closing Sale Price on the day of issuance;
      (iv) up to 250,000 shares of Common Stock (or securities convertible into up
      to
      250,000 shares of Common Stock with an exercise or conversion price at or above
      the Closing Sale price on the day of issuance) as consideration for strategic
      acquisitions up to a maximum of 250,000 shares of Common Stock per acquisition;
      (v) up to 250,000 shares of Common Stock (or securities convertible into up
      to
      250,000 shares of Common Stock with an exercise or conversion price at or above
      the Closing Sale Price on the day of issuance) per year to third parties in
      connection with investor relations and public relations efforts of the Company;
      (vi) up to 250,000 shares of Common Stock, options, or warrants to be issued
      to
      Rodman & Renshaw (or their designees) as consideration for securing a line
      of credit or similar financing for the Company; (vii)
      the
      Series D Warrant of the Company(and the Common Stock issuable pursuant thereto)
      to purchase 500,000 shares of Common Stock of the Company at an exercise price
      of $2.25 per share issued to Gottbetter Capital Master, Ltd.;
      (viii)
      the amendments to those certain Series E Warrants of the Company issued to
      Gottbetter Capital Master, Ltd., to reduce the exercise price of such warrant
      to
      $2.25 per share of Common Stock and increase the number of shares of Common
      Stock for which such warrants may be exercised to 541,666 and 2/3 shares; and
      (ix)
      up
      to 2,000,000 shares of Common Stock to be issued to Medical Solutions Management
      Inc. and or Orthosupply Management, Inc., their respective affiliates or
      designees in connection with the acquisition by the Corporation of that certain
      Management Agreement, dated April 30, 2007, by and between Orthosupply
      Management, Inc. and Deutsche Medical Services, Inc. (the “DMSI Contract
      Acquisition”); (x) the Series I Warrant of the Company (and the Common Stock
      issuable pursuant thereto) to purchase 2,000,000 shares of Common Stock of
      the
      Corporation; and (xi) options to Mr. David Goldner to purchase 75,000 shares
      of
      Common Stock of the Corporation at a price of $0.67 per share. 

     

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

     

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

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

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

     

    
      	
              MDWERKS,
                INC.

            
	 
	
              By:
                

            	
              /s/
                Vincent Colangelo

            
	
              Name: 
                

            	
              Vincent
                Colangelo

            
	
              Title:
                

            	
              Chief
                Financial Officer

            

    

    
      
        
        

      

      
        17Exhibit
      4.3

     

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

    

    MDWERKS,
      INC.

    

    SERIES
      I WARRANT TO PURCHASE COMMON STOCK

    

    Warrant
      No.: I-1

    Number
      of
      Shares of Common Stock: 1,000,000

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

    

    MDwerks,
      Inc., a Delaware corporation (the “Company”),
      hereby certifies that, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, GOTTBETTER CAPITAL MASTER, LTD.
      (IN LIQUIDATION), the registered holder hereof or its permitted assigns (the
      “Holder”),
      is
      entitled, subject to the terms set forth below, to purchase from the Company,
      at
      the Exercise Price (as defined below) then in effect, upon surrender of this
      Warrant to Purchase Common Stock (including any Warrants to purchase Common
      Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
      at
      any time or times on or after the date hereof, but not after 11:59 p.m., New
      York Time, on the Expiration Date (as defined below), One Million (1,000,000)
      fully paid nonassessable shares of Common Stock (as defined below) (the
“Warrant
      Shares”).
      Except as otherwise defined herein, capitalized terms in this Warrant shall
      have
      the meanings set forth in Section 15.  This Warrant is issued pursuant to
      that certain Amendment Consent and Waiver, dated as of March 31, 2008 (the
      “Subscription
      Date”),
      by
      and between the Company and Holder (the “Amendment
      Consent and Waiver Agreement”).

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    1. EXERCISE
      OF WARRANT.

    

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

    

    (b) Exercise
      Price.
      For
      purposes of this Warrant, “Exercise
      Price”
means
      $0.75 per share, subject to adjustment as provided herein.

     

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    (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, 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 sole 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 Warrant Shares and pay cash to the Holder in an amount equal to the excess
      (if any) of the Buy-In Price over the product of (A) such number of shares
      of
      Common Stock, times (B) the Closing Bid Price on the date of exercise. Nothing
      herein shall limit the holder's right to pursue actual damages for the Company's
      failure to maintain a sufficient number of authorized shares of Common Stock
      or
      to otherwise issue shares of Common Stock upon exercise of this Warrant in
      accordance with the terms hereof, and the Holder shall have the right to pursue
      all remedies available at law or in equity (including a decree of specific
      performance and/or injunctive relief).

    

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

     

    
      
        	
                 

              	 	
                Net
                  Number = (A x B) - (A x C)

              
	 	 	
                 
                  B

              
	 	 	 
	 	
                For
                  purposes of the foregoing formula:

              
	 	 	 
	
                A

              	
                =

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

              
	 	 	 
	
                B

              	
                =

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

              
	 	 	 
	
                C

              	
                =

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

              

      

       

    

    
      
        
          
          

        

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

    

    (f) Limitations
      on Exercises.

    

    (1) Beneficial
      Ownership.
      The
      Company shall not effect the exercise of this Warrant, and the Holder shall
      not
      have the right to exercise this Warrant, to the extent that after giving effect
      to such exercise, such Person (together with such Person's affiliates) would
      beneficially own (directly or indirectly through Warrant Shares or otherwise) in
      excess of 4.99% of the shares of Common Stock outstanding immediately after
      giving effect to such exercise. For purposes of the foregoing sentence, the
      aggregate number of shares of Common Stock beneficially owned (directly or
      indirectly through Warrant Shares or otherwise) by such Person and its
      affiliates shall include the number of shares of Common Stock issuable upon
      exercise of this Warrant with respect to which the determination of such
      sentence is being made, but shall exclude shares of Common Stock which would
      be
      issuable upon (i) exercise of the remaining, unexercised portion of this Warrant
      beneficially owned by such Person and its affiliates and (ii) exercise or
      conversion of the unexercised or unconverted portion of any other securities
      of
      the Company beneficially owned by such Person and its affiliates (including,
      without limitation, any convertible notes or convertible preferred stock or
      warrants) subject to a limitation on conversion or exercise analogous to the
      limitation contained herein.  Except as set forth in the preceding
      sentence, for purposes of this paragraph, beneficial ownership shall be
      calculated in accordance with Section 13(d) of the Securities Exchange Act
      of
      1934, as amended.  For purposes of this Warrant, in determining the number
      of outstanding shares of Common Stock, the Holder may rely on the number of
      outstanding shares of Common Stock as reflected in (1) the Company's most recent
      Form 10-KSB, Form 10-QSB, Current Report on Form 8-K or other public filing
      with
      the Securities and Exchange Commission, as the case may be, (2) a more recent
      public announcement by the Company or (3) any other notice by the Company or
      the
      Transfer Agent setting forth the number of shares of Common Stock outstanding.
      For any reason at any time, upon the written request of the Holder, the Company
      shall within two Business Days confirm orally and in writing to the Holder
      the
      number of shares of Common Stock then outstanding. In any case, the number
      of
      outstanding shares of Common Stock shall be determined after giving effect
      to
      the conversion or exercise of securities of the Company, including the SPA
      Securities, the SPA Warrants and this Warrant by the Holder and its affiliates
      since the date as of which such number of outstanding shares of Common Stock
      was
      reported. By written notice to the Company, the Holder may from time to time
      increase or decrease the Maximum Percentage specified in such notice; provided
      that (i) any such increase will not be effective until the
      sixty-first (61st)
      day
      after such notice is delivered to the Company, and (ii) any such increase or
      decrease will apply only to the Holder and not to any other holder of SPA
      Warrants.

     

    
      
        
          
          

        

        
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    (2) Principal
      Market Regulation.
      The
      Company shall not be obligated to issue any shares of Common Stock upon exercise
      of this Warrant if the issuance of such shares of Common Stock would exceed
      that
      number of shares of Common Stock which the Company may issue upon exercise,
      redemption or conversion, as applicable, of the SPA Warrants, SPA Securities,
      this Warrant or otherwise without breaching the Company's obligations under
      the
      rules or regulations of the Principal Market (the “Exchange
      Cap”),
      except that such limitation shall not apply in the event that the Company (A)
      obtains the approval of its stockholders 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 Required Holders. Until such approval or written opinion is obtained, no
      Holder shall be issued in the aggregate, upon exercise or conversion, as
      applicable, of this Warrant, any SPA Warrants or SPA Securities, 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 total number of shares
      of Common Stock underlying this Warrant and the SPA Warrants issued to Holder
      pursuant to the Securities Purchase Agreement on the Issuance Date and the
      denominator of which is the aggregate number of shares of Common Stock
      underlying the SPA Warrants issued to the Holder pursuant to the Securities
      Purchase Agreement and this Warant on the Issuance Date (with respect to Holder,
      the “Exchange
      Cap Allocation”).
      In
      the event that Holder shall sell or otherwise transfer any of Holder’s SPA
      Warrants or this Warrant, the transferee shall be allocated a pro rata portion
      of Holder’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 or this Warrant shall exercise all of such holder's SPA Warrants or
      this Warrant 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 and this Warrant on a
      pro
      rata basis in proportion to the aggregate number of shares of Common Stock
      underlying the SPA Warrants and this Warrant 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 and the Exercise Price as of the date of the
      attempted exercise. To
      the
      extent required by the Principal Market, the provisions of the Exchange Cap
      shall be modified to comply with the applicable rules and regulations of the
      Principal Market, provided that any such changes shall not, in the Holder's
      reasonable discretion, materially change the terms of the transaction
      contemplated hereby.

    

    (g) Insufficient
      Authorized Shares.
       If at any time while any of the Warrants remain outstanding the Company
      does not have a sufficient number of authorized and unreserved shares of Common
      Stock (an “Authorized
      Share Failure”)
      to
      satisfy its obligation to reserve for issuance upon exercise of the Warrants
      at
      least a number of shares of Common Stock equal to 175% the number of shares
      of
      Common Stock as shall from time to time be necessary to effect the exercise
      of
      all of the Warrants then outstanding (the “Required
      Reserve Amount”),
      then
      the Company shall immediately take all action necessary to increase the
      Company's authorized shares of Common Stock to an amount sufficient to allow
      the
      Company to reserve the Required Reserve Amount for the Warrants then
      outstanding. Without limiting the generality of the foregoing sentence, as
      soon
      as practicable after the date of the occurrence of an Authorized Share Failure,
      but in no event later than ninety (90) days after the occurrence of such
      Authorized Share Failure, the Company shall hold a meeting of its stockholders
      for the approval of an increase in the number of authorized shares of Common
      Stock.  In connection with such meeting, the Company shall provide each
      stockholder with a proxy statement and shall use its reasonable best efforts
      to
      solicit its stockholders' approval of such increase in authorized shares of
      Common Stock and to cause its board of directors to recommend to the
      stockholders that they approve such proposal.

     

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    

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

    

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

    

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

    

    
      	 	
              (i)

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

            

    

     

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    

    
      	 	
              (ii)

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

            

    

     

    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    

    
      	 	
              (iii)

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

            

    

    

    
      	 	
              (iv)

            	
              Calculation
                of Consideration Received.
                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 $0.001. 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 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 will be the Closing
                Sale Price of such publicly traded security on 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 Required Holders. 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)
                Business Days after the tenth day following the Valuation Event by
                an
                independent, reputable appraiser jointly selected by the Company
                and the
                Required Holders. 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.

            

    

    

    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

    

    
      	 	
              (v)

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

            

    

    

    (b) Adjustment
      upon Subdivision or Combination of Common Stock.
      If the
      Company at any time on or after the Subscription Date subdivides (by any stock
      split, stock dividend, recapitalization or otherwise) one or more classes of
      its
      outstanding shares of Common Stock into a greater number of shares, the Exercise
      Price in effect immediately prior to such subdivision will be proportionately
      reduced and the number of Warrant Shares will be proportionately increased.
       If the Company at any time on or after the Subscription Date combines (by
      combination, reverse stock split or otherwise) one or more classes of its
      outstanding shares of Common Stock into a smaller number of shares, the Exercise
      Price in effect immediately prior to such combination will be proportionately
      increased and the number of Warrant Shares will be proportionately decreased.
       Any adjustment under this Section 2(b) shall become effective at the close
      of business on the date the subdivision or combination becomes
      effective.

    

    (c) Other
      Events.
      If any
      event occurs of the type contemplated by the provisions of this Section 2 but
      not expressly provided for by such provisions (including, without limitation,
      the granting of stock appreciation rights, phantom stock rights or other rights
      with equity features), then the Company's Board of Directors will make an
      appropriate adjustment in the Exercise Price and the number of Warrant Shares
      so
      as to protect the rights of the Holder; provided that no such adjustment
      pursuant to this Section 2(c) will increase the Exercise Price or decrease
      the
      number of Warrant Shares as otherwise determined pursuant to this Section
      2.

    

    3. RIGHTS
      UPON DISTRIBUTION OF ASSETS.

    

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

    

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

    

    4. PURCHASE
      RIGHTS; FUNDAMENTAL TRANSACTIONS.

    

    (a) Purchase
      Rights.
      In
      addition to any adjustments pursuant to Section 2 above, if at any time the
      Company grants, issues or sells any Options, Convertible Securities or rights
      to
      purchase stock, warrants, securities or other property pro rata to the record
      holders of any class of shares of Common Stock (the “Purchase
      Rights”),
      then
      the Holder will be entitled to acquire, upon the terms applicable to such
      Purchase Rights, the aggregate Purchase Rights which the Holder could have
      acquired if the Holder had held the proportionate number of shares of Common
      Stock acquirable upon complete exercise of this Warrant (without regard to
      any
      limitations on the exercise of this Warrant) immediately before the date on
      which a record is taken for the grant, issuance or sale of such Purchase Rights,
      or, if no such record is taken, the date as of which the record holders of
      shares of Common Stock are to be determined for the grant, issue or sale of
      such
      Purchase Rights.

    

    (b) Fundamental
      Transactions.
      The
      Company shall not enter into or be party to a Fundamental Transaction unless
      the
      Successor Entity assumes in writing all of the obligations of the Company under
      this Warrant and the other Transaction Documents and agrees to deliver to each
      holder of Warrants in exchange for such Warrants a security of the Successor
      Entity evidenced by a written instrument substantially similar in form and
      substance to this Warrant, including, without limitation, an adjusted exercise
      price equal to the value for the shares of Common Stock reflected by the terms
      of such Fundamental Transaction, and 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). 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 referring to the “Company” shall refer instead to the Successor
      Entity), the Company and may exercise every right and power of the Company
      and
      shall assume all of the obligations of the Company under this Warrant 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) issuable upon the exercise of the 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 converted immediately prior to
      such Fundamental Transaction, 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) 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. Provisions made pursuant
      to
      the preceding sentence shall be in the form and substance reasonably
      satisfactory to the Required Holders. The provisions of this Section shall
      apply
      similarly and equally to successive Fundamental Transactions and Corporate
      Events and shall be applied without regard to any limitations on the exercise
      of
      this Warrant.

    

    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

    

    (c) Notwithstanding
      the foregoing and the provisions of Section 4(b) above, in the event of a
      Fundamental Transaction if the Holder has not exercised the Warrant in full
      prior to the consummation of the Fundamental Transaction, then the Company
      may
      enter into a Fundamental Transaction pursuant to which the Holder shall receive,
      simultaneously with the consummation of the Fundamental Transaction, in lieu
      of
      the warrant referred to in Section 4(b) cash in the amount equal to the value
      of
      the remaining unexercised portion of this Warrant on the date of such
      consummation, which value shall be determined by use of the Black Scholes Option
      Pricing Model reflecting (A) a risk-free interest rate corresponding to the
      U.S.
      Treasury rate for a period equal to the remaining term of this Warrant as of
      such date of request and (B) an expected volatility equal to the greater of
      60%
      and the 100 day volatility obtained from the HVT function on Bloomberg.
 

    

    5. NONCIRCUMVENTION.

    

    The
      Company hereby covenants and agrees that the Company will not, by amendment
      of
      its Articles 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 this Warrant is
      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 this Warrant, 175% of the number of shares of Common
      Stock as shall from time to time be necessary to effect the exercise of this
      Warrant (without regard to any limitations on exercise).

    

    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

    

    6. WARRANT
      HOLDER NOT DEEMED A STOCKHOLDER.

    

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

    

    7. REISSUANCE
      OF WARRANTS.

    

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

    

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

    

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

    

    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

    

    (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 any adjustment of the Exercise Price, setting
      forth in reasonable detail, and certifying, the calculation of such adjustment
      and (ii) at least fifteen (15) days prior to the date on which the Company
      closes its books or takes a record (A) with respect to any dividend or
      distribution upon the shares of Common Stock, (B) with respect to any grants,
      issuances or sales of any Options, Convertible Securities or rights to purchase
      stock, warrants, securities or other property to holders of shares of Common
      Stock or (C) for determining rights to vote with respect to any Fundamental
      Transaction, dissolution or liquidation, provided in each case that such
      information shall be made known to the public prior to or in conjunction with
      such notice being provided to the Holder.

    

    9. AMENDMENT
      AND WAIVER.

    

    Except
      as
      otherwise provided herein, the provisions of this Warrant may be amended and
      the
      Company may take any action herein prohibited, or omit to perform any act herein
      required to be performed by it, only if the Company has obtained the written
      consent of the Holder.

    

    10. GOVERNING
      LAW.

    

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

    

    11. CONSTRUCTION;
      HEADINGS.

    

    This
      Warrant shall be deemed to be jointly drafted by the Company and the 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.

    

    
      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

    

    12. DISPUTE
      RESOLUTION.

    

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

    

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

    

    The
      remedies provided in this Warrant shall be cumulative and in addition to all
      other remedies available under this Warrant and the other Transaction Documents,
      at law or in equity (including a decree of specific performance and/or other
      injunctive relief), and nothing herein shall limit the right of the Holder
      right
      to pursue actual damages for any failure by the Company to comply with the
      terms
      of this Warrant. The Company acknowledges that a breach by it of its obligations
      hereunder will cause irreparable harm to the Holder and that the remedy at
      law
      for any such breach may be inadequate. The Company therefore agrees that, in
      the
      event of any such breach or threatened breach, the holder of this Warrant shall
      be entitled, in addition to all other
      available remedies, to an injunction restraining any breach, without the
      necessity of showing economic loss and without any bond or other security being
      required.

    

    14. TRANSFER.

    

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

    

    15. CERTAIN
      DEFINITIONS.

    

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

    

    (a) “Bloomberg”
means
      Bloomberg Financial Markets.

    

    (b) “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.

    

    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

    

    (c) “Closing
      Bid Price”
and
      “Closing
      Sale Price”
means,
      for any security as of any date, the last closing bid price and last closing
      trade price, respectively, for such security on the Principal Market, as
      reported by Bloomberg, or, if the Principal Market begins to operate on an
      extended hours basis and does not designate the closing bid price or the closing
      trade price, as the case may be, then the last bid price or last trade price,
      respectively, of such security prior to 4:00:00 p.m., New York Time, as reported
      by Bloomberg, or, if the Principal Market is not the principal securities
      exchange or trading market for such security, the last closing bid price or
      last
      trade price, respectively, of such security on the principal securities exchange
      or trading market where such security is listed or traded as reported by
      Bloomberg, or if the foregoing do not apply, the last closing bid price or
      last
      trade price, respectively, of such security in the over-the-counter market
      on
      the electronic bulletin board for such security as reported by Bloomberg, or,
      if
      no closing bid price or last trade price, respectively, is reported for such
      security by Bloomberg, the average of the bid prices, or the ask prices,
      respectively, of any market makers for such security as reported in the “pink
      sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If
      the Closing Bid Price or the Closing Sale Price cannot be calculated for a
      security on a particular date on any of the foregoing bases, the Closing Bid
      Price or the Closing Sale Price, as the case may be, of such security on such
      date shall be the fair market value as mutually determined by the Company and
      the Holder.  If the Company and the Holder are unable to agree upon the
      fair market value of such security, then such dispute shall be resolved pursuant
      to Section 12. All such determinations to be appropriately adjusted for any
      stock dividend, stock split, stock combination or other similar transaction
      during the applicable calculation period.

    

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

    

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

    

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

    

    (g) “Expiration
      Date”
means
      the date sixty months after the Issuance Date or, if such date falls on a day
      other than a Business Day or on which trading does not take place on the
      Principal Market (a “Holiday”),
      the
      next date that is not a Holiday.

    

    
      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

    

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

    

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

    

    (j) “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.

    

    (k) “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.

    

    (l) “Principal
      Market”
means
      the Over-the-Counter Bulletin Board.

    

    (m) “Registration
      Rights Agreement”
means
      that certain registration rights agreement by and among the Company and
      Holder.

    

    (n) Intentionally
      omitted.

    

    (o) “Securities
      Purchase Agreement”
      means
      that certain Securities Purchase Agreement, dated October 19, 2006, between
      the
      Company and Holder.

    

    (o) “SPA
      Securities”
means
      the Notes issued pursuant to the Securities Purchase Agreement.

    

    (p) “SPA
      Warrants” means
      the
      warrants issued by the Company to Holder on October 19, 2006 and November 9,
      2006, pursuant to the Securities Purchase Agreement and the Series D Warrant
      to
      purchase 500,000 shares of Common Stock at a price of $2.25 per share, issued
      to
      by the Company to Holder on September 28, 2008.

    

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

    [Signature
      Page Follows]

    

    
      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

    

    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.

    

    
      	
              MDWERKS,
                INC.

            
	 	 
	
              By:

            	
              /s/
                Vincent Colangelo

            
	 	
              Name:
                Vincent Colangelo

            
	 	
              Title:
                Chief Financial Officer

            

    

     

    
      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      A

    

    EXERCISE
      NOTICE

    TO
      BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
      TO PURCHASE COMMON STOCK

    

    MDWERKS,
      INC.

    

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

    

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

    

    a
      "Cash
      Exercise"
      with
      respect to _________________ Warrant Shares; and/or

     _________________
      

     

    a
      "Cashless
      Exercise"
      with
      respect to _______________ Warrant Shares.

     _________________
      

     

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

    

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

    

    4.
      Delivery of Warrant.  The Registered Holder shall deliver the Warrant to
      the Company.

    

    Date:
      _______________ __, ______

    

    
      	
              Name
                of Registered Holder

            
	 	 
	
              By:

            	 
	
               

            	Name:
	
               

            	Title:

    

     

    
      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

    

    

    ACKNOWLEDGMENT

    

    The
      Company hereby acknowledges this Exercise Notice and hereby directs Corporate
      Stock Transfer to issue the above indicated number of shares of Common Stock
      in
      accordance with the Transfer Agent Instructions dated October __, 2006 from
      the
      Company and acknowledged and agreed to by Corporate Stock Transfer.

    

    
      	
              MDWERKS,
                INC.

            
	 	 
	
              By:

            	 
	
               

            	Name:
	
               

            	Title:

    

     

    
      
        
        

      

      
        19

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