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    SHARE
PURCHASE AND SALE AGREEMENT

    

    

    

    

    

    

    April
21, 2010

    

    

    

    

    

    

    

    

    

    

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    SHARE
PURCHASE AND SALE AGREEMENT

    

    THIS
SHARE PURCHASE AND SALE AGREEMENT (the “Agreement”), dated the 21st day
of April, 2010, is entered into by and among Alchemical Capital Corp., a Florida
corporation (the “Company”), Advanced Water Technologies, Inc. (the
“Purchaser”), Willowhuasca Wellness, Inc., a Florida corporation, and Narayan
Capital Funding Corp., a Florida corporation (each a “Seller” and collectively,
the “Sellers”).

    

    WHEREAS,
the Purchaser desire to purchase an aggregate of 2,970,000 shares (the “Shares”)
of common stock, no par value per share (the “Common Stock”), of the Company
from the Sellers, which constitutes 99% of the issued and outstanding shares of
Common Stock of the Company, and the Sellers severally desire to sell the Shares
to the Purchaser, in consideration for payment of the Purchase Price (as defined
below) by the Purchaser to Sellers;

    

    WHEREAS,
the Sellers are the only shareholders of the Company;

    

    NOW,
THEREFORE, in consideration of the premises and the mutual covenants,
representations and warranties contained herein, the parties hereto do hereby
agree as follows:

    

    1.            TRANSFER
OF SHARES, CONSIDERATION AND OTHER MATTERS.

    

    1.1           Transfer of Shares.
Subject to the terms and conditions of this Agreement, the Sellers hereby sell,
assign, transfer, convey and deliver to the Purchaser, and the Purchaser hereby
purchases and acquires from Sellers, good and marketable title to the Shares,
free and clear of all mortgages, liens, encumbrances, claims, equities and
obligations to other persons of every kind and character except that the Shares
are “restricted securities” as set forth in Section 4.4
hereof.  Simultaneously herewith, Sellers are delivering to Purchaser
certificates duly endorsed for transfer or accompanied by duly executed stock
powers, together with such other documents or instruments, if any, as may be
necessary to convey the Shares to the Purchaser as provided herein.

    

    1.2           Consideration. The
purchase price for the Shares purchased by the Purchaser is $30,000 (the
“Purchase Price”), payable to the Law Offices of Michael H. Hoffman, P.A.
(“Escrow Agent”) on behalf of the Sellers.  Narayan Capital Funding
Corp. is hereby selling to Purchaser 2,673,000 shares of Common
Stock.  Willowhuasca Wellness, Inc. is hereby selling to Purchaser
297,000 shares of Common Stock.

    

    1.3           Form of Payment. On
the Closing Date (as defined below), (i) each of the Sellers shall deliver to
the Purchaser stock certificates (the “Certificates”) representing the Shares
together with a stock power (the “Stock Powers”), which the Purchaser is then
purchasing, against delivery of the Purchase Price; and (ii) the Purchaser shall
pay the Purchase Price to the Escrow Agent.

    

    1.4           Closing. The date on
which the closing (the “Closing”) of the purchase and sale of the Shares is
hereinafter referred to as the “Closing Date.” The Closing will be deemed to
occur when (A) this Agreement has been executed and delivered by the Sellers and
the Purchaser (which delivery may be effected by facsimile transmission or by
e-mail of a Portable Document Format (PDF) file), and (B) full payment of the
Purchaser’s Purchase Price has been made by wire transfer of immediately
available funds in accordance with Section 1.3, and (C)
the Certificates and Stock Powers have been delivered to the
Purchaser.

    

    2.            REPRESENTATIONS
AND WARRANTIES OF THE SELLERS.

    

    The
Sellers severally represent, warrant and covenant to and with the Purchaser as
an inducement to the Purchaser to enter into this Agreement and to consummate
the transaction contemplated hereby as follows:

     

    
      
         

      

      
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    2.1           Authorization of
Agreement.  The Sellers are fully able, authorized and
empowered to execute and deliver this Agreement and any other agreement or
instrument contemplated by this Agreement and to perform their covenants and
agreements hereunder and thereunder.  This Agreement and any such
other agreement or instrument, upon execution and delivery by the Sellers (and
assuming due execution and delivery hereof and thereof by the other parties
hereto and thereto), will constitute a valid and legally binding obligation of
the Sellers, in each case enforceable against them in accordance with their
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws from time to time in
effect which affect creditors’ rights generally and by legal and equitable
limitations on the availability of specific performance and other equitable
remedies against such Seller under or by virtue of this Agreement or such other
agreement or instrument.

    

    2.2           Board Approval. Any
and all other actions taken by the Company since inception, have been duly
approved by resolutions passed by the Company’s Board of Directors, or a duly
authorized committee thereof.

    

    2.3           Consents. All
requisite consents of third parties, including, but not limited to, governmental
or other regulatory agencies, federal, state or municipal, required to be
received by or on the part of the Company for the execution and delivery of this
Agreement and the performance of its respective obligations hereunder have been
obtained and are in full force and effect. The Company has fully complied with
all conditions of such consents.

    

    2.4           No Shareholder Loans or
Other Company Debt to Sellers.  Each of the Sellers, if
applicable, has cancelled any loans made by such Seller to the Company otherwise
unrepaid on the date of this Agreement.  In addition, the Sellers
confirm hereby that nothing is owed to each Seller by the Company on the date of
this Agreement for loans made or otherwise.

    

    2.5           SEC
Reports.  The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the
Securities Act of 1933, as amended (the “Securities Act”), and the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to
Section 13(a) or 15(d) thereof, since inception (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

    

    2.6           Financial
Statements.  The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Securities and Exchange
Commission (the “Commission”) with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved (“GAAP”), except as may be otherwise specified in
such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit
adjustments.

    

    2.7           Organization. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of Florida and has full power and authority to own, lease and
operate its properties and to carry on its business as now being and as
heretofore conducted. The Company is not qualified or licensed to do business as
a foreign corporation in any other jurisdiction and neither the location of its
assets nor the nature of its business requires it to be so
qualified.

    
      
         

      

      
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    2.8           Capitalization.  The
capitalization of the Company is as set forth in the SEC Reports.  The
Company has not issued any capital stock since its most recently filed periodic
report under the Exchange Act. No person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by the transaction documents. Except as a result
of the purchase and sale of the Shares, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or
exercisable or exchangeable for, or giving any Person any right to subscribe for
or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
issue additional shares of Common Stock or Common Stock Equivalents. The
issuance and sale of the Shares will not obligate the Company to issue shares of
Common Stock or other securities to any person (other than the Purchaser) and
will not result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under any of such securities. All
of the outstanding shares of capital stock of the Company are validly issued,
fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities. No further approval or authorization of any stockholder,
the Board of Directors or others is required for the issuance and sale of the
Shares. There are no stockholders agreements, voting agreements or other similar
agreements with respect to the Company’s capital stock to which the Company is a
party or, to the knowledge of the Company, between or among any of the Company’s
shareholders.

    

    2.9           Articles of Incorporation
and Bylaws. A true and complete copy of the Company’s Articles of
Incorporation and Bylaws as in effect on the date hereof are set forth in the
SEC Reports.

    

    2.10           Officers and
Directors.  Robert Papiri is the sole officer and director of
the Company.

    

    2.11            Liabilities,
etc.

    

    (a)           The
Company has filed all Federal, state and local tax returns which are required to
be filed by it and all taxes shown to be due thereon (together with any
applicable penalties and interest) have been paid. The Company has not incurred
any liability for taxes except in the ordinary course of business. The Company
has paid or provided adequate reserves for all taxes which have become due for
all periods prior to the date of this Agreement or pursuant to any assessments
received by it or which the Company is obligated to withhold from amounts owing
to any employee, creditor or other third party as at, or with respect to, any
period prior to the date of this Agreement. To the best knowledge of the
Sellers, the Federal income tax returns of the Company have never been audited
by the Internal Revenue Service. The Company has not waived any statute of
limitations in respect of taxes, nor agreed to any extension of time with
respect to a tax assessment or deficiency.

     

    (b)           On
the date of Closing, there are no liabilities, debts or obligations of the
Company, whether accrued, absolute, contingent or otherwise
(“Liabilities”).

     

    2.12           Absence of Certain
Events. Other than as disclosed in its SEC Reports and in Current Reports
on Form 8-K, the Company has been conducted solely in the usual and ordinary
course. Without limiting the generality of the foregoing, the Company has
not:

     

    (a)           waived
any right or rights of substantial value or paid, directly or indirectly, any
Liability before such Liability became due in accordance with its terms;
or

     

    (b)           other
than in the ordinary and usual course of business, created any Liability
(whether absolute or contingent and whether or not currently due and payable),
or entered into or assumed any contract, agreement, arrangement, lease (as
lessor or lessee), license or other commitment otherwise than in the ordinary
and usual course of business; or

     

    
      
         

      

      
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    (c)           purchased,
sold or transferred any assets other than in the ordinary and usual course of
the operations of the Company; granted any security interest or other lien or
encumbrance affecting any of its assets or properties other than in the ordinary
and usual course of business and in amounts not material; or amended any
agreement or contract to which the Company is a party or by which its assets and
properties are bound.

    

    2.13           Adverse Developments.
Except as disclosed in its SEC Reports, and particularly, in its Current Reports
on Form 8-K, there has been no material adverse change in the business,
operations or condition (financial or otherwise) of the Company; nor has there
been since such date, any damage, destruction or loss, whether covered by
insurance or not, materially or adversely affecting the business, properties or
operations of the Company.

     

    2.14           Actions and
Proceedings. The Company is not subject to any outstanding orders, writs,
injunctions or decrees of any court or arbitration tribunal or any governmental
department, commission, board, agency or instrumentality, domestic or foreign,
against, involving or affecting the business, properties or employees of the
Company or Sellers’ right to enter into and execute this Agreement. There are no
actions, suits, claims or legal, administrative or arbitration proceedings or
investigations, including any warranty or product liability claims (whether or
not the defense thereof or liabilities in respect thereof are covered by
policies of insurance) relating to or arising out of the business, properties or
employees of the Company pending or, to the best knowledge of the Sellers,
threatened against or affecting the Company.

     

    2.15           Compliance with Laws.
The Company has complied in all material respects with all laws, ordinances,
regulations and orders applicable to the conduct of its business, including all
laws relating to environmental matters, employees and working
conditions.

     

    2.16           Bank Accounts and Credit
Cards. As of the date hereof, the Company no longer maintains any bank
account, safe deposit box, credit or charge cards and has closed any respective
accounts therewith.

    

    2.17           Tax
Matters.

    

    (a)           The
Company has duly filed all material federal, state, local and foreign tax
returns required to be filed by or with respect to them with the Internal
Revenue Service or other applicable taxing authority;

    

    (b)           The
Company has paid all material taxes due, or claimed by any taxing authority to
be due, from or with respect to them;

    

    (c)           To
the best knowledge of the Company, there has been no material issue raised or
material adjustment proposed (and none is pending) by the Internal Revenue
Service or any other taxing authority in connection with the Company’s tax
returns;

    

    (d)           No
waiver or extension of any statute of limitations as to any material federal,
state, local or foreign tax matter has been given by or requested from the
Company; and

    

    For the
purposes of this Section 2.17, a tax
is due (and must therefore either be paid or adequately reserved against in the
Company’s Financial Statements) only on the last date payment of such tax can be
made without interest or penalties, whether such payment is due in respect of
estimated taxes, withholding taxes, required tax credits or any other
tax.

    

    2.18           Material Changes.
Since the date of the latest audited financial statements included within the
SEC Reports, except as specifically disclosed in a subsequent SEC Report filed
prior to the date hereof, (i) there has been no event, occurrence or development
that has had or that could reasonably be expected to result in a Material
Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of

     

    
      
         

      

      
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    business
consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or disclosed in filings
made with the SEC, (iii) the Company has not altered its method of accounting,
(iv) the Company has not declared or made any dividend or distribution of cash
or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock and (v) the
Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock option plans. The Company
does not have pending before the SEC any request for confidential treatment of
information.

    

    2.19           Transactions with Affiliates
and Employees.  Except as set forth in the SEC Reports and in
this Agreement, none of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner, in each case in excess of $60,000 other than for (i) payment of salary
or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the Company.

    

    
                      3.            
REPRESENTATIONS AND WARRANTIES OF
SELLERS REGARDING THE SHARES.

    

    

    Each of
the Sellers severally represents, warrants and covenants to and with the
Purchaser as an inducement to the Purchaser to enter into this Agreement and to
consummate the transaction contemplated hereby as follows:

    

    3.1           Ownership of the
Shares.  Narayan Capital Funding Corp., a Florida corporation,
is the sole record and beneficial owner of 2,700,000
shares.  Willowhuasca Wellness, Inc., a Florida corporation, is the
sole record and beneficial owner of 300,000 shares.  Each of the
Sellers holds his, her or its respective shares free and clear of any lien,
pledge, encumbrance, charge, security interest, claim or right of another and
has the absolute right to sell and transfer the Shares that are subject to this
Agreement to the Purchaser without the consent of any other person or entity.
Upon transfer of the Shares to the Purchaser hereunder, the Purchaser will
acquire good and marketable title to such Shares free and clear of any lien,
pledge, encumbrance, charge, security interest, claim or right of
another.

    

    3.2           No Seller Defaults.
Neither the execution and delivery of this Agreement, nor the consummation of
the transaction contemplated hereby, violates any statute, ordinance,
regulation, order, judgment or decree of any court or governmental agency, or
conflicts with, or will result in any breach of, any of the terms of, or
constitute a default under or result in the termination of, or the creation of,
any lien upon the Shares to be sold by each Seller pursuant to the terms of any
contract or agreement to which such Seller is a party or by which such Seller or
any of his, her or its respective assets is bound.

    

    3.3           Obligations;
Authorizations. Each of the Sellers is not (i) in violation of any
judgment, order, injunction, award or decree which is binding on him, her or it,
or any of his, her or its assets, properties, operations or business which
violation, by itself or in conjunction with any other such violation, would
materially and adversely affect the consummation of the transaction contemplated
hereby; or (ii) in violation of any law or regulation or any other requirement
of any governmental body, court or arbitrator relating to him, her or it, or to
his, her or its assets, operations or businesses which violation, by itself or
in conjunction with other violations of any other law, regulation or other
requirement, would materially adversely affect the consummation of the
transaction contemplated hereby.

    

    3.4           Voluntary Nature of
Transaction.  The sale by each of the Sellers to the Purchaser
of the Shares is made freely and voluntarily by such Seller.  Each of
the Sellers, in selling the Shares to the Purchaser, is not acting under fraud,
duress, menace, or undue influence.

    
      
         

      

      
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    4.           REPRESENTATIONS
AND WARRANTIES OF PURCHASER.

    

    The
Purchaser represents and warrants and covenants to and with the Sellers as an
inducement to the Sellers to enter into this Agreement and to consummate the
transaction contemplated hereby as follows:

    

    4.1           Power and
Authority.  The Purchaser is authorized to execute and deliver
this Agreement, and any other agreement or instrument contemplated by this
Agreement, and to consummate the transaction and to perform such obligations
contemplated hereby and thereby.

    

    4.2           Legal and Authorized
Transaction; Authority: No Breach. The execution and delivery by the
Purchaser of this Agreement and any other agreement or instrument contemplated
by this Agreement, and the consummation of the transaction contemplated hereby
and thereby, requires no specific consent or authority conferred by any third
party. This Agreement, and any such other agreement or instrument, upon
execution and delivery by the Purchaser (and assuming due execution and delivery
hereof and thereof by the other parties hereto and thereto), will constitute the
legal, valid and binding obligation of the Purchaser, in each case enforceable
against the Purchaser in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws from time to time in effect which affect
creditors’ rights generally and by legal and equitable limitations on the
availability of specific performance and other equitable remedies against the
Purchaser under or by virtue of this Agreement or such other agreement or
instrument. Neither the execution and delivery of this Agreement, or any such
other agreement or instrument by the Purchaser, nor the consummation of the
transaction contemplated hereby or thereby, will (i) violate, conflict with or
result in the breach or termination of, or otherwise give any other contracting
party the right to terminate, or constitute a default under the terms of, any
mortgage, bond, indenture or material agreement to which the Purchaser are a
party or by which the Purchaser or any of his, her or its property or assets may
be bound or materially affected, (ii) violate any judgment, order, injunction,
decree or award of any court, administrative agency or governmental body
against, or binding upon, the Purchaser or upon the securities, property or
business of the Purchaser, or (iii) constitute a violation by the Purchaser of
any applicable law or regulation of any jurisdiction as such law or regulation
relates to the Purchaser or to the property or business of the
Purchaser.

    

    4.3           No Litigation, Etc.
There is no material suit, action, or legal, administrative, arbitration or
other proceeding or governmental investigation pending or, to the Purchaser’
best knowledge, threatened against, materially affecting, or which will
materially affect, the property of the Purchaser, or to the Purchaser’ best
knowledge does there exist any basis therefor.

    

    4.4           Accredited Investors;
Investment Intent. The Purchaser is an “accredited investor” as that term
is defined in applicable rules and regulations and is acquiring the Shares for
his or her own account for investment purposes and not with a view to
distribution or resale, nor with the intention of selling, transferring or
otherwise disposing of all or any part of the Shares except in compliance with
all applicable provisions of the Securities Act, the rules and regulations
promulgated by the SEC thereunder, and applicable state securities
laws.  The Shares acquired by the Purchaser from the Sellers are
“restricted securities” as that term is defined under Rule 144 of the Securities
Act, and any sales of the Shares made in reliance upon Rule 144 can be made,
among other things, only in limited amounts in accordance with the terms and
conditions of that Rule and will require an opinion of counsel satisfactory to
the Company and Company’s counsel that registration is not required under the
Securities Act or state securities laws.  The Purchaser is familiar
with the business and operations of the Company, acknowledges that the Company
is in the developmental stage and is not profitable. The Purchaser has been
offered the opportunity to examine the books and records of the Company and to
discuss its business, operations and financial condition with officers of the
Company.

    

    4.5           Restrictive Legend.
The Purchaser understands that any and all certificates representing the Shares
transferred by the Sellers to the Purchaser and any and all Shares issued in
replacement thereof or in exchange therefor shall bear the following legend, or
one substantially similar thereto:

     

    
      
         

      

      
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    “The
shares represented by this certificate have not been registered under the
Securities Act of 1933 and are “restricted securities” as that term is defined
in Rule 144 under the Act. The shares may not be sold or offered for sale except
pursuant to an effective registration statement under the Securities Act of 1933
or an opinion of counsel for the corporation that registration is not required
under such Act.”

    

    4.6            During
the past five years, the Purchaser has not been:

    

    (1)           Subject
of a petition under the Federal bankruptcy laws or any state insolvency law
filed by or against it, or by a receiver, fiscal agent or similar officer
appointed by a court for its business or property, or any partnership in which
it was a general partner at or within two years before the time of such filing
or any corporation or business association of which it was an executive officer
at or within two years before the time of such filing;

    

    (2)           Convicted
in a criminal proceeding or a named subject of a pending criminal proceeding
(excluding traffic violations and other minor offenses);

    

    (3)           The
subject of any order, judgment, or decree not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining it for, or otherwise limiting, any of the following
activities:

    

    (i)           acting
as a futures commission merchant, introducing broker, commodity trading advisor,
commodity pool operator, floor broker, leverage transaction merchant, any other
person regulated by the Commodity Futures Trading Commission, or an associated
person of any of the foregoing, or as an investment adviser, underwriter, broker
or dealer in securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance company, or
engaging in or continuing any conduct or practice in connection with any such
activity;

    

    (ii)           engaging
in any type of business practice; and

    

    (iii)           engaging
in any activity in connection with the purchase or sale of any security or
commodity or in connection with any violation of Federal or State securities law
or Federal Commodity laws.

    

    (4)           The
subject of any order, judgment or decree, not subsequently reversed, suspended
or vacated of any Federal or State authority barring, suspending or otherwise
limiting for more than sixty (60) days either of their right to engage in any
activity described in paragraph (3) (i) above, or be associated with persons
engaged in any such activity.

    

    (5)           Found
by any court of competent jurisdiction in a civil action or by the Commission to
have violated any Federal or state securities law, and the judgment in such
civil action or finding by the Commission has not been subsequently reversed,
suspended or vacated; or

    

    (6)           Found
by a court of competent jurisdiction in a civil action or by the Commodity
Futures Trading Commission to have violated any Federal Commodities Law, and the
judgment in such civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended or
vacated.

     

    
      
         

      

      
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    5.           COVENANTS
AND AGREEMENTS OF THE PARTIES.

    

    5.1           Lock-Up; Trading Price
Protection.  Each of the Sellers severally agree to lock up,
leak-out provisions that will last with an agreed lock-up, leak-out of no more
than ten (10%) percent per day of the daily trading volume in a single day and
no more than a cumulative of ten (10%) percent per month of the monthly volume
and no more than ten (10%) percent per month of their total share ownership as
measured by their initial holding, of the each of the Sellers individual
ownership interest percentage of the shares of Common Stock, as measured on the
date that the shares of Common Stock become free trading shares AND are eligible
for trading on the OTCBB, AMEX, NASDAQ or NYSE Stock Market, whichever listing
or quotation occurs first.  In addition, if the trading strike price
falls below Two Dollars ($2.00) during the first (1st)
year of trading, Purchaser agrees to provide both Sellers with an additional
Thirty Thousand (30,000) Shares of Common Stock, to be divided equally pursuant
to the Sellers individual ownership percentage.

    

    5.2           Capital Restructuring
Post-Closing.  Sellers and Purchaser specifically acknowledge
and agree that, during the six (6) month period following the Closing Date, the
Purchaser may effect a reverse split or a forward split event (each a
“Recapitalization Event”) so long as such Recapitalization Event effects all
shareholders immediately prior to the recapitalization on a pro rata
basis.  Any rights provided to Sellers pursuant to this Section 5.2, if any,
shall automatically terminate after such six (6) month period following the
Closing Date.

    

    5.3           No Brokers. Each of
the Sellers on the one hand and the Purchaser on the other hand represent and
warrant to the other that each there will be no liability upon the Purchaser for
any broker, finder or similar agent and no person or entity with which each has
had any dealings or communications of any kind is entitled to any brokerage,
finder’s or placement fee or any similar compensation in connection with this
Agreement or the transaction contemplated hereby from the
Purchaser.

    

    5.4           Expenses. Each of the
parties hereto agrees to bear his, her or its own expenses in connection with
the negotiation, preparation, execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby.

    

    5.5           SEC
Filings.  Purchaser agrees (i) to exercise his or her best
efforts (a) to cause the Company to remain a reporting company under either
Section 12(g) or 15(d) of the Exchange Act and (b) to file all necessary reports
with the SEC and any other regulatory body as required to maintain the Company
as a current reporting Company under the Exchange Act and any other applicable
rules and regulations, (ii) to cause the Company to file with the SEC a Report
on Form 8-K relating to the consummation of the transaction contemplated
hereunder and (iii) to provide the Sellers with one copy of such Report on Form
8-K as filed pursuant to clause (ii) above.

    

    5.6           Cooperation; Further
Assurances.  Each of the parties hereto will cooperate with the
other and execute and deliver to the other parties hereto such other instruments
and documents, provide such other notices or communications and take such other
actions as may be reasonably requested from time to time by any other party
hereto as necessary to carry out the intended purposes of this
Agreement.

    

    6.            NATURE
AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

    

    6.1           Nature of Statements.
All statements contained in any Schedule, certificate or other instruments
delivered by or on behalf of any party hereto pursuant to this Agreement, shall
be deemed representations and warranties by such party.

    

    6.2           Survival of Representations
and Warranties. Regardless of any investigation at any time made by or on
behalf of any party hereto or of any information any party may have in respect
thereof, all covenants, agreements, representations and warranties made
hereunder or pursuant hereto or in connection with the transaction contemplated
hereby shall survive the execution and delivery of this Agreement and continue
in effect through the first anniversary of this Agreement except that the
representations and warranties set forth in Section 3.1 shall
continue in effect until the expiration of the applicable statute of
limitations, and the agreements of indemnity for claims set forth in Sections 7 and 8
shall survive the execution and delivery of this Agreement and continue in
effect for the period during which such claims are enforceable.

     

    
      
         

      

      
        - 8
-

        
          

        

      

      
         

      

    

    

    7.           INDEMNIFICATION
BY THE SELLERS.

    

    7.1           Claims Against the
Company. For a period of one year after the Closing, the Sellers (the
“Indemnifying Party”) severally and not jointly agree to indemnify the Purchaser
(each an “Indemnified Party”), against any loss, liability, claim, damage or
expense (including, but not limited to, any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever) to which it or
they may become subject arising out of or based on either (i) any breach of or
inaccuracy in any of the representations and warranties or covenants or
conditions made by the Sellers herein in this Agreement; or (ii) any and all
liabilities arising out of or in connection with: (A) any of the assets of the
Company prior to the Closing; or (B) the operations of the Company prior to the
Closing.

    

    7.2           Claims Against the
Company. The Indemnifying Party shall indemnify and hold the Purchaser
harmless from and against any loss, damage or expense (including reasonable
attorneys’ fees) caused by or arising out of any claim made against the
Company:

    

    (i)           for
any foreign, Federal, state or local tax of any kind arising out of or by reason
of the existence or operations of the Company prior to the date of this
Agreement;

    

    (ii)           in
respect of transactions occurring prior to the date of this Agreement arising
under the Securities Act, the Exchange Act, or any state blue sky or securities
law;

    

    (iii)           in
respect of any salary, bonus, wages or other compensation of any kind owed by
the Company to its employees for services rendered on or prior to the date of
this Agreement;

    

    (iv)           for
any damages to the environment caused by or arising out of any pollution
resulting from or otherwise attributable to the operation of the business of the
Company prior to the date of this Agreement;

    

    (v)           in
respect of any payable of the Company to the Sellers incurred prior to the date
of this Agreement; and

    

    (vi)           in
respect of any liability or indebtedness for borrowed money or otherwise
incurred on or before the date of this Agreement except as provided in Section 2.11
hereof.

    

    7.3           Other Matters. The
Indemnifying Party shall indemnify and hold the Purchaser harmless from and
against any loss, damage or expense (including reasonable attorneys’ fees)
caused by or arising out of (i) any breach or default in the performance by
Sellers of any covenant or agreement of Sellers contained in this Agreement,
(ii) any breach of warranty or inaccurate or erroneous representation made by
Sellers herein or in any Schedule, certificate or other instrument delivered by
or on behalf of Sellers pursuant hereto, and (iii) any and all actions, suits,
proceedings, claims, demands, judgments, costs and expenses (including
reasonable legal and accounting fees) incident to any of the
foregoing.

    

    8.            INDEMNIFICATION
BY THE PURCHASER.

    

    8.1           Claims Against
Sellers. For a period of one year after the Closing, Purchaser agrees to
indemnify and hold harmless Sellers from and against all loss, damage or expense
(including reasonable attorneys’ fees) caused by or arising out of (i) any
breach or default in the performance by the Purchaser of any covenant or
agreement of the Purchaser contained in this Agreement, (ii) any breach of
warranty or inaccurate or erroneous representation made by the Purchaser herein
or in any certificate or other instrument delivered by or on behalf of the
Purchaser pursuant hereto and (iii) any and all actions, suits, proceedings,
claims, demands, judgments, costs and expenses (including reasonable legal and
accounting fees) incident to the foregoing.

     

    
      
         

      

      
        - 9
-

        
          

        

      

      
         

      

    

    

    9.            NOTICE
AND OPPORTUNITY TO DEFEND.

    

    9.1           Participation.
Promptly after the receipt by the Purchaser or the Sellers of notice of any
action, proceeding, claim or potential claim (any of which is hereinafter
individually referred to as a “Circumstance”) which could give rise to a right
to indemnification under this Agreement, the Indemnified Party shall give prompt
written notice to the party or parties who may become obligated to provide
indemnification hereunder; i.e., the Indemnifying Party.
Such notice shall specify in reasonable detail the basis and amount, if
ascertainable, of any claim that would be based upon the Circumstance. The
failure to give such notice promptly shall relieve the Indemnifying Party of its
indemnification obligations under this Agreement, unless the Indemnified Party
establishes that the Indemnifying Party either had knowledge of the Circumstance
or was not prejudiced by the failure to give notice of the Circumstance. The
Indemnifying Party shall have the right, at its option, to compromise or defend
the claim, at its own expense and by its own counsel, and otherwise control any
such matter involving the asserted liability of the Indemnified Party, provided
that any such compromise or control shall be subject to obtaining the prior
written consent of the Indemnified Party which consent shall not be unreasonably
withheld. An Indemnifying Party shall not be liable for any costs of settlement
incurred without the written consent of the Indemnifying Party. If any
Indemnifying Party undertakes to compromise or defend any asserted liability, it
shall promptly notify the Indemnified Party of its intention to do so, and the
Indemnified Party agrees to cooperate fully with the Indemnifying Party and its
counsel in the compromise of or defense against any such asserted liability. All
costs and expenses incurred in connection with such cooperation shall be borne
by the Indemnifying Party, provided such costs and expenses have been previously
approved by the Indemnifying Party. In any event, the Indemnified Party shall
have the right at its own expense to participate in the defense of an asserted
liability.

    

    10.            MISCELLANEOUS.

    

    10.1.           Successors and
Assigns. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, successors and
assigns. No assignment of this Agreement or of any rights hereunder shall
relieve the assigning party of any of its obligations or liabilities
hereunder.

    

    10.2           Resignation as Director of
the Company. The Sellers shall deliver or cause to be delivered to the
Purchaser a letter of resignation from Robert Papiri, whereby such person shall
resign as the sole officer and director of the Company.

    

    10.3           Notices. All notices
or other communications required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand, sent
prepaid overnight by Federal Express or the like, in writing, or mailed first
class, postage prepaid, by certified mail, return receipt requested as
follows:

    

    
      	 
      	
              (a)

            	
              If
      to Sellers, as follows:

            

    

     

    Narayan
Capital Funding Corp.

    Willowhuasca
Wellness, Inc.

    c/o Law
Offices of Michael H. Hoffman, P.A.

    1521
Alton Road, No. 284

    Miami
Beach, Florida 33139

    (786)
280-7575 – Telephone

    (305)
865-3430 - Facsimile

     

     

    
      
         

      

      
        - 10
-

        
          

        

      

      
         

      

    

    
 

    
      	 
      	
              (b)

            	
              If
      to Purchaser, as follows:

            

    

     

    Advanced
Water Technologies, Inc.

    1001
Bayhill Drive, 2nd
Floor

    San
Bruno, California 94066

    (650)
438-0928 - Telephone

    (650)
351-6901 - Facsimile

    Attn:           Basilio
Chen, Chairman/CEO

    

    or in any
case to such other address or addresses as hereafter shall be furnished as
provided in this Section 10.3 by any
of the parties hereto to any other party hereto.

    

    10.4           Waiver; Remedies. No
delay on the part of the Sellers or the Purchaser in exercising any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of Sellers or the Purchaser of any right, power or privilege
hereunder operate as a waiver of any other right, power or privilege hereunder,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise of any other right, power or
privilege hereunder. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies which the parties hereto may
otherwise have at law or in equity.

    

    10.5           Entire Agreement.
This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreements or
understandings of the parties relating thereto.

    

    10.6           Amendment. This
Agreement may be modified or amended only by written agreement of the parties
hereto.

    

    10.7           Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original but all of which together shall constitute a single
instrument. Any signature page to be given hereunder shall be in writing and
shall be effective upon hand delivery by electronic mail or
facsimile.

    

    10.8           Governing Law; Venue.
This Agreement shall be governed and construed in accordance with the laws of
the State of Florida.  Each party irrevocably and unconditionally: (a)
agrees that any legal proceeding relating to this Agreement must be brought in
the state courts in Miami-Dade County, Florida, or the United States District
Court located in Miami, Florida; (b) consents to the jurisdiction of each such
court in any suit, action or proceeding; (c) waives any objection which it may
have to the laying of venue of any proceeding in any such court; and (d) agrees
that service of any court paper may be effected on it by mail, or in such other
manner as may be provided under applicable laws or court rules in the State of
Florida.

    

    10.9           Captions. All section
titles or captions contained in this Agreement, in any Schedule referred to
herein or in any Exhibit attached hereto are for convenience only, shall not be
deemed a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement.

    

    

    

    

    

    

    [SIGNATURE
PAGE TO FOLLOW]

    
      
         

      

      
        - 11
-

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties have caused this Agreement to be duly executed and delivered on the day
and year first above written.

     

     

    SELLERS:                                                                                                          
PURCHASER:

     

    
      NARAYAN
CAPITAL FUNDING
CORP.                                                    
ADVANCED
WATER TECHNOLOGIES, INC.

    

    
    

    

    
    

     

    By: /s/  Robert
Papiri                                                                By: /s/
Basilio
Chen                                             

    Name: 
Robert
Papiri                       
                                                                 
Name:  Basilio Chen

    Title:    President                                                                                                Title:   Chairman
and Chief Executive Officer

     

    

    WILLOWHUASCA
WELLNESS, INC.

    

    

    

    By: /s/
Colleen
Foyo                                        

        Colleen Foyo,
President

    

    COMPANY:

    

    ALCHEMICAL
CAPITAL CORP.

    

    

    

    By: /s/ Robert
Papiri                                           

    Robert Papiri, President

    

    

    
      
         

      

      
        - 12
-PREFERRED STOCK PURCHASE
AGREEMENT

       

      This
Preferred Stock Purchase Agreement (“Agreement”) is
entered into and effective as of December 4, 2009 (“Effective Date”), by
and among MedClean Technologies, Inc., a Delaware corporation (“Company”), and Socius Capital Group, LLC, a Delaware
limited liability company, dba Socius Life Sciences Capital Group, LLC
(including its designees, successors and assigns, “Investor”).

       

      RECITALS

       

      A.          The
parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue to Investor, and Investor shall purchase from
the Company, from time to time as provided herein, up to $7,500,000.00 of shares
of Series C Preferred Stock; and

       

      B.           The
offer and sale of the Securities provided for herein are being made without
registration under the Act, in reliance upon the provisions of Section 4(2) of
the Act, Regulation D promulgated under the Act, and such other exemptions from
the registration requirements of the Act as may be available with respect to any
or all of the purchases of Securities to be made hereunder.

       

      AGREEMENT

       

      In
consideration of the premises, the mutual provisions of this Agreement, and
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, Company and Investor agree as follows:

       

      ARTICLE 1

      DEFINITIONS

       

      In
addition to the terms defined elsewhere in this Agreement:  (a)
capitalized terms that are not otherwise defined herein have the meanings given
to such terms in the Certificate of Designations, and (b) the following terms
have the meanings indicated in this ARTICLE
1:

       

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

       

      “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with a Person, as such
terms are used in and construed under Rule 144 under the Act.  With
respect to Investor, without limitation, any Person owning, owned by, or under
common ownership with Investor, and any investment fund or managed account that
is managed on a discretionary basis by the same investment manager as Investor
will be deemed to be an Affiliate.

       

      “Agreement” means this
Preferred Stock Purchase Agreement.

       

      “Bloomberg” means
Bloomberg Financial Markets.

       

      “Change in Control”
has the meaning set forth within the definition of Fundamental Transaction,
below.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      “Certificate of
Designations” means the certificate to be filed with the Secretary of
State of the State of Delaware, in the form attached hereto as Exhibit
B.

       

      “Closing” means any
one of (i) the Commitment Closing and (ii) each Tranche Closing.

       

      “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 Trading
Market, as reported by Bloomberg, or, if the Trading 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., Eastern time, as
reported by Bloomberg, or, if the Trading 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 Investor.  If the Company and Investor are unable to
agree upon the fair market value of such security, then such dispute shall be
resolved pursuant to Section
6.7.  All such determinations to be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.

       

      “Commitment Closing”
has the meaning set forth in Section 2.2(a).

       

      “Commitment
Fee”  means a non-refundable fee of $375,000.00 (5.0% of the
Maximum Placement), payable by the Company to Investor in consideration of
Investor’s commitment to fund the investment contemplated by this
Agreement.  The Commitment Fee is payable on the earliest of (i) the
first Tranche Closing Date, (ii) the date that the Registration Statement is
declared effective by the SEC, or (iii) the six-month anniversary of the
Effective Date, at the Company’s election either (a) in cash, by offset from the
first Tranche Proceeds or wire transfer of immediately available funds to an
account designated by the Investor, or (b) by issuance and delivery of
registered and freely tradable shares of Common Stock, valued based upon the
Commitment Share VWAP Price.  If not paid earlier, the Commitment Fee
shall be due and payable in full on the six-month anniversary of the Effective
Date, whether or not any Tranche Closings have then occurred.  The
Commitment Fee is non-refundable.

       

      “Commitment Fee
Shares” means any shares of Common Stock issued to Investor in payment of
the Commitment Fee.

       

      “Commitment Share VWAP
Price” means 87% of the VWAP of the Common Stock for the five Trading
Days immediately preceding the date that the Commitment Fee is first payable to
Investor.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      “Common Shares”
includes the Warrant Shares and any Commitment Fee Shares.

       

      “Common Stock” means
the common stock, par value $0.0001 per share, of the Company, and any
replacement or substitute thereof, or any share capital into which such Common
Stock shall have been changed or any share capital resulting from a
reclassification of such Common Stock.

       

      “Company Termination”
has the meaning set forth in Section 3.2.

       

      “Delisting Event”
means any time during the term of this Agreement, that the Common Stock is not
listed for and actively and/or regularly trading on a Trading Market, or is
suspended or delisted with respect to the trading of the shares of Common Stock
on a Trading Market.

       

      “Disclosure Schedules”
means the disclosure schedules of the Company delivered concurrently herewith,
attached hereto, and incorporated herein by reference.  The Disclosure
Schedules shall contain no material non-public information.

      

      “DTC” means The
Depository Trust Company, or any successor performing substantially the same
function for Company.

       

      “DWAC Shares” means,
following the earlier of the date that the Registration Statement is declared
effective by the SEC or the six-month anniversary of issuance, all Common Shares
or other shares of Common Stock issued or issuable to Investor or any Affiliate,
successor or assign of Investor pursuant to any of the Transaction Documents,
all of which shall be (a) issued in electronic form, (b) freely tradable and
without restriction on resale, and (c) timely credited by Company to the
specified Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast
Automated Securities Transfer (FAST) Program or any similar program hereafter
adopted by DTC performing substantially the same function, in accordance with
irrevocable instructions issued to and countersigned by the Transfer Agent, in
the form attached hereto as Exhibit C or in such
other form agreed upon by the parties.

       

      “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

       

      “Fundamental
Transaction” means and shall be deemed to have occurred at such time upon
any of the following events:

       

      (i)           a
consolidation, merger or other business combination or event or transaction
following which the holders of Common Stock immediately preceding such
consolidation, merger, combination or event either (a) no longer hold a majority
of the shares of Common Stock or (b) no longer have the ability to elect a
majority of the board of directors of the Company (a “Change in
Control”);

       

      (ii)          the
sale or transfer of all or substantially all of the Company’s assets, other than
in the ordinary course of business; or

       

      (iii)         a
purchase, tender or exchange offer made to the holders of the outstanding shares
of Common Stock.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      “GAAP” means United
States generally accepted accounting principles applied on a consistent basis
during the periods involved.

       

      “Indebtedness” means
(a) any liabilities for borrowed money or amounts owed in excess of $250,000
(other than trade accounts payable incurred in the ordinary course of business),
(b) all guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (c) the present value of
any lease payments in excess of $250,000 due under leases required to be
capitalized in accordance with GAAP.

       

      “Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction.

       

      “Material Adverse
Effect” means any material adverse effect on (i) the legality, validity
or enforceability of any Transaction Document, (ii) the results of operations,
assets, business, prospects or financial condition of the Company and the
Subsidiaries, taken as a whole, or (iii) a the Company’s ability to perform in
any material respect on a timely basis its obligations under any Transaction
Document.

       

      “Material Agreement”
means any material loan agreement, financing agreement, equity investment
agreement or securities instrument to which Company is a party, any agreement or
instrument to which Company and Investor or any Affiliate of Investor is a
party, and any other material agreement listed, or required to be listed, on any
of Company’s reports filed or required to be filed with the SEC, including
without limitation Forms 10-K, 10-Q or 8-K.

       

      “Maximum Placement”
means $7,500,000.00.

       

      “Maximum Tranche
Amount” means, subject to any other applicable limitations set forth in
this Agreement, the Maximum Placement less the amount of any previously noticed
and funded Tranches.

       

       “Officer’s Closing
Certificate” means a certificate in customary form reasonably acceptable
to Investor, executed by an authorized officer of the Company.

       

      “Opinion” means an
opinion from Company’s independent legal counsel, in the form attached as Exhibit D or in such
other form agreed upon by the parties, to be delivered in connection with the
Commitment Closing and any Tranche Closing.

       

      “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

       

      “Preferred Shares”
means shares of Series C Preferred Stock of the Company provided for in the
Certificate of Designations, to be issued to Investor pursuant to this
Agreement.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      “Prospectus” includes
each prospectus and prospectus supplement (within the meaning of the Act)
related to the sale or offering of any Common Shares, including without
limitation any prospectus or prospectus supplement contained within the
Registration Statement.

       

      “Registration
Statement” means a valid, current and effective shelf or other
registration statement registering for resale the shares of Common Stock to be
issued as Warrant Shares and Commitment Fee Shares hereunder, and except where
the context otherwise requires, means such registration statement, as amended,
including (i) all documents filed as a part thereof or incorporated by reference
therein, and (ii) any information contained or incorporated by reference in a
prospectus filed with the SEC in connection with such registration statement, to
the extent such information is deemed under the Act to be part of such
registration statement.

       

      “Regulation D” means
Regulation D promulgated under the Act.

       

      “Required Approval”
means any approval of the Trading Market or the Company’s stockholders required
to be obtained by Company prior to issuing the Securities pursuant to any
applicable rules of the Trading Market.

       

      “Required Tranche
Documents” has the meaning set forth in Section
2.3(e).

       

      “Rule 144” means Rule
144 promulgated by the SEC pursuant to the Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the SEC
having substantially the same effect.

       

      “Rule 144 Eligible”
means eligible for immediate resale under Rule 144 without limitation on the
amount of securities sold under Rule 144(e) and without  requiring
discharge by payment in full of any promissory notes given to the Company prior
to the sale of the securities under Rule 144(d)(2)(iii).

       

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

       

      “SEC Reports” includes
all reports required to be filed by the Company under the Act and/or the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the Effective Date (or such shorter period as the Company was
required by law to file such material) and for the period in which this
Agreement is in effect.

       

      “Securities” includes
the Warrant, the Common Shares and the Preferred Shares issuable pursuant to
this Agreement.

       

      “Subsidiary” means any
Person the Company owns or controls, or in which the Company, directly or
indirectly, owns a majority of the capital stock or similar interest that would
be disclosable pursuant to Regulation S-K, Item 601(b)(21).

       

      “Termination” has the
meaning set forth in Section 3.1.

       

      “Termination Date”
means the earlier of (i) the date that is the two-year anniversary of the
Effective Date, or (ii) the Tranche Closing Date on which the sum of the
aggregate Tranche Purchase Price for all Tranche Shares equals the Maximum
Placement.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      “Termination Notice”
has the meaning as set forth in Section 3.2.

       

      “Trading Day” means
any day on which the Common Stock is traded on the Trading Market; provided that
it shall not include any day on which the Common Stock is (a) scheduled to trade
for less than 5 hours, or (b) suspended from trading.

       

      “Trading Market” means
the OTC Bulletin Board, the NASDAQ Capital Market, the NASDAQ Global Market, the
NASDAQ Global Select Market, the NYSE Amex, or the New York Stock Exchange,
whichever is at the time the principal trading exchange or market for the Common
Stock, but does not include the Pink Sheets inter-dealer electronic quotation
and trading system.

       

      “Tranche” has the
meaning set forth in Section 2.3.

       

      “Tranche Amount” means
the amount of any individual purchase of Preferred Shares under this Agreement,
as specified by the Company, and shall not exceed the Maximum Tranche
Amount.

       

      “Tranche Closing” has
the meaning set forth in Section
2.3(f).

       

      “Tranche Closing Date”
has the meaning set forth in Section
2.3(f).

       

      “Tranche Notice” has
the meaning set forth in Section
2.3(b).

       

      “Tranche Notice Date”
has the meaning set forth in Section
2.3(b).

       

      “Tranche Purchase
Price” has the meaning set forth in Section 2.3(b), and
shall be specified in writing by the Company.

       

      “Tranche Share Price”
means $10,000.00 per Preferred Share.  The Company may not issue
fractional Preferred Shares.

       

      “Tranche Shares” means
the Preferred Shares that are purchased by Investor pursuant to a
Tranche.  For the Maximum Placement, the Company shall issue 750
Preferred Shares to Investor.

       

      “Transaction
Documents” means this Agreement, the other agreements and documents
referenced herein, and the exhibits and schedules hereto and
thereto.

       

      “Transfer Agent” means
Securities Transfer Corporation or any successor transfer agent for the Common
Stock.

       

      “Use of Proceeds
Certificate” means a certificate, in substantially the form attached as
Exhibit E,
signed by an officer of the Company, setting forth how the Tranche Purchase
Price will be applied by the Company.

       

      “VWAP” means, for any
date, the volume-weighted average price, calculated by dividing the aggregate
value of Common Stock traded on the Trading Market (price multiplied by number
of shares traded) by the total volume (number of shares) of Common Stock traded
on the Trading Market for such date, or the nearest preceding Trading
Day.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      “Warrant Shares” means
the shares of Common Stock issuable upon exercise of the Warrant.

       

      “Warrant” means the
warrant issuable under this Agreement, in the form attached hereto as Exhibit A, to
purchase shares of Common Stock with an aggregate exercise price equal to 135.0%
of the Maximum Placement (subject to adjustment as set forth
therein).

       

      ARTICLE 2

      PURCHASE AND
SALE

       

      2.1        
Agreement to
Purchase.  Subject
to the terms and conditions herein and the satisfaction of the conditions to
closing set forth in this ARTICLE 2:

       

      (a)           Investor
hereby agrees to purchase such amounts of Preferred Shares as the Company may,
in its sole and absolute discretion, from time to time elect to issue and sell
to Investor according to one or more Tranches pursuant to Section 2.3 below;
and

       

      (b)           The
Company agrees to pay the Commitment Fee and to issue the Preferred Shares, the
Common Shares, the Commitment Fee Shares, and the Warrant to Investor as
provided herein.

       

      2.2        
Investment
Commitment

       

      (a)          Investment
Commitment. The closing of this Agreement (the “Commitment Closing”)
shall be deemed to occur when this Agreement has been duly executed by both
Investor and the Company, and the other Conditions to the Commitment Closing set
forth in Section
2.2(b)(i) and
Section 2.2(c) have been met.

       

      (b)          Commitment Fee
Shares.

       

      (i)           As
a condition to the Commitment Closing, on or prior to the Effective Date the
Company shall issue to Investor, as an estimate of the maximum number of
Commitment Fee Shares to which Investor may become entitled under this
Agreement, 19,121,282 Commitment Fee Shares.  The Commitment Fee
Shares shall be evidenced by a stock certificate, titled in the name of Investor
or its designee, and bearing a legend substantially in the form set forth in
Section 5.1(b)
hereof and an additional legend indicating that such shares are subject to the
contractual restrictions set forth in this Agreement.

       

      (ii)         A
total of 19,121,282 shares of Common Stock shall be included in the Registration
Statement for use by the Company in satisfaction of the Commitment
Fee.  Any such shares that are registered for resale but are not used
in payment of the Commitment Fee shall be cancelled by the
Company.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      (iii)        If
the Company elects to pay the Commitment Fee in cash, then upon Investor’s
receipt of funds the Commitment Fee Shares shall be returned to the Company for
cancellation.  If the Company elects to pay the Commitment Fee in
stock, or if the Company fails to pay the Commitment Fee in cash for any reason,
then on the date that the Commitment Fee is payable,  the legends
shall be removed from the certificate for the Commitment Fee
Shares.  If necessary to make the aggregate number of shares delivered
to Investor equal to the total Commitment Fee divided by the then-applicable
Commitment Share VWAP Price, on the date the Commitment Fee is payable, the
Company shall deliver to Investor (A) if more shares are required, a second
legend-free certificate for the balance of the required shares, or (B) if less
shares are required, a legend-free replacement certificate for the total
required number of shares and, in such case, the original certificate shall be
returned to the Company for cancellation.  Prior to the date that
Investor is entitled to receive legend-free certificates, neither Investor nor
the Company shall be entitled to sell, pledge, assign or otherwise transfer any
of the Commitment Fee Shares.

       

      (iv)         If
the Commitment Fee has not been paid by the six-month anniversary of the
Effective Date (whether because the first Tranche Closing has not occurred or
for any other reason), then on such date the legend shall be removed from the
certificate for the Commitment Fee Shares.  If necessary to make the
aggregate number of shares delivered to Investor equal to the total Commitment
Fee divided by the then-applicable Commitment Share VWAP Price, on the date the
Commitment Fee is payable, the Company shall deliver to Investor (A) if more
shares are required, a second legend-free certificate for the balance of the
required shares, or (B) if less shares are required, a legend-free replacement
certificate for the total required number of shares and, in such case, the
original certificate shall be returned to the Company for
cancellation.

       

      (c)          Conditions to Investment
Commitment. As a condition precedent to the Commitment Closing, all of
the following (the “Conditions to Commitment
Closing”) shall have been satisfied prior to or concurrently with the
Company’s execution and delivery of this Agreement:

       

      (i)           the
following documents shall have been delivered to Investor:  (A) this
Agreement, executed by the Company; (B) a Secretary’s Certificate as to (x) the
resolutions of the Company’s board of directors authorizing this Agreement and
the Transaction Documents, and the transactions contemplated hereby and thereby,
(y) a copy of the Company’s current Certificate or Articles of Incorporation,
and (z) a copy of the Company’s current Bylaws; (C) the Certificate of
Designations executed by the Company and filed with the Delaware Secretary of
State; (D) the Opinion; and (E) a copy of (1) the Company’s press release (if
any) announcing the transactions contemplated by this Agreement; and (F) a copy
of the Company’s Current Report on Form 8-K, as filed with the SEC, describing
the transaction contemplated by, and attaching a complete copy of, the
Transaction Documents;

       

      (ii)         other
than for losses incurred in the ordinary course of business, there has not been
any Material Adverse Effect on the Company since the date of the last SEC Report
filed by the Company, including but not limited to incurring material
liabilities;

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      (iii)        the
representations and warranties of the Company in this Agreement shall be true
and correct in all material respects and the Company shall have delivered an
Officer’s Closing Certificate to such effect to Investor, signed by an officer
of the Company;

       

      (iv)         the
Warrant to purchase shares of Common Stock with an aggregate exercise price
equal to 135.0% of the Maximum Placement (subject to adjustment as set forth
therein) shall have been delivered to Investor;

       

      (v)          the
certificate for the Commitment Fee Shares shall have been delivered to Investor;
and

       

      (vi)         any
Required Approval has been obtained.

       

      (d)          Investor’s Obligation to
Purchase. Subject to the prior satisfaction of all conditions set forth
in this Agreement, following Investor’s receipt of a validly delivered Tranche
Notice, Investor shall be required to purchase from the Company a number of
Tranche Shares equal to the permitted Tranche Share Amount, in the manner
described below.

       

      2.3         Tranches to
Investor

       

      (a)           Procedure to Elect a
Tranche. Subject to the Maximum Tranche Amount, the Maximum Placement and
the other conditions and limitations set forth in this Agreement, at any time
beginning on the effective date of the Registration Statement, the Company may,
in its sole and absolute discretion, elect to exercise one or more individual
purchases of Preferred Shares under this Agreement (each a “Tranche”) according
to the following procedure.

       

      (b)           Delivery of Tranche
Notice.  The Company shall deliver an irrevocable written
notice (the “Tranche
Notice”), in the form attached hereto as Exhibit F, to
Investor stating that the Company shall exercise a Tranche and stating the
number of Preferred Shares which the Company will sell to Investor at the
Tranche Share Price, and the aggregate purchase price for such Tranche (the
“Tranche Purchase
Price”).  A Tranche Notice delivered by the Company to Investor
by 4:30 p.m. Eastern time on any Trading Day shall be deemed delivered on the
same day.  A Tranche Notice delivered by the Company to Investor after
4:30 p.m. Eastern time on any Trading Day, or at any time on a non-Trading Day,
shall be deemed delivered on the next Trading Day.  The date that the
Tranche Notice is deemed delivered is the “Tranche Notice
Date”.  Each Tranche Notice shall be delivered via facsimile or
electronic mail, with confirming copy by overnight carrier, in each case to the
address set forth in Section
6.2.  Except for the first Tranche Closing, the Company may not
give a Tranche Notice unless the Tranche Closing for the prior Tranche has
occurred or has been cancelled by the Company pursuant to Section
2.3(g).

       

      (c)           Warrant.  On
each Tranche Notice Date, that portion of the Warrant equal to 135% of the
Tranche Amount shall vest and become exercisable, and such vested portion may be
exercised at any time on or after such Tranche Notice Date.  Any
portion of the Warrant that becomes exercisable in connection with the delivery
of the Tranche Notice and is exercised by Investor in accordance with Section 1.1 of the
Warrant shall be deemed exercised (i) on the applicable Tranche Notice Date, if
the Company receives the Exercise Delivery Documents from Investor by 6:30 p.m.
Eastern time on the Tranche Notice Date, or (ii) on the next Trading Day, if the
Company receives the Exercise Delivery Documents from Investor after 6:30 p.m.
Eastern Time on the applicable Tranche Notice Date or on any subsequent
date.

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      (d)          Conditions Precedent to
Right to Deliver a Tranche Notice.  The right of the Company to
deliver a Tranche Notice is subject to the satisfaction (or written waiver by
Investor in its sole discretion), on the date of delivery of such Tranche
Notice, of each of the following conditions:

       

      (i)           the
Common Stock (including without limitation any shares of Common Stock that may
be issued to Investor in payment of the Commitment Fee) shall be listed for and
currently trading on the Trading Market, and to the Company’s knowledge there is
no notice of any suspension or delisting with respect the trading of the shares
of Common Stock on such Trading Market;

       

      (ii)         the
representations and warranties of the Company set forth in this Agreement shall
be true and correct in all material respects as if made on such date (except for
any representations and warranties that are expressly made as of a particular
date, in which case such representations and warranties shall be true and
correct as of such particular date), and no default shall have occurred under
this Agreement, or any other agreement with Investor or any Affiliate of
Investor, or any other Material Agreement, and the Company shall deliver an
Officer’s Closing Certificate to such effect to Investor, signed by an officer
of the Company;

       

      (iii)        other
than losses incurred in the ordinary course of business, there has been no
Material Adverse Effect on the Company since the Commitment
Closing;

       

      (iv)         the
Company is not, and will not be as a result of the applicable Tranche, in
default of this Agreement, any other agreement with Investor or any Affiliate of
Investor, or any other Material Agreement;

       

      (v)          there
is not then in effect any law, rule or regulation prohibiting or restricting the
transactions contemplated in this Agreement or any other Transaction Document,
or requiring any consent or approval which shall not have been obtained, nor is
there any pending or threatened proceeding or investigation which may have the
effect of prohibiting or adversely affecting any of the transactions
contemplated by this Agreement; no statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
adopted by any court or governmental authority of competent jurisdiction that
prohibits the transactions contemplated by this Agreement, and no actions, suits
or proceedings shall be in progress, pending or, to the Company’s knowledge
threatened, by any person (other than Investor or any Affiliate of Investor),
that seek to enjoin or prohibit the transactions contemplated by this
Agreement;

       

      (vi)         all
Common Shares shall have been timely delivered at the times provided for in this
Agreement, including all Warrant Shares issuable pursuant to any Exercise Notice
delivered to Company prior to the Tranche Notice Date;

       

      (vii)       all
previously-issued and issuable Common Shares are DWAC Shares, are DTC eligible,
and can be immediately converted into electronic form without restriction on
resale;

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (viii)      Company
is in compliance with all requirements to maintain its then-current listing on
the Trading Market;

       

      (ix)        
Company has a current, valid and effective Registration Statement permitting the
lawful resale of all previously-issued and issuable Common Shares (including
without limitation all Warrant Shares issuable upon exercise of the Warrant
delivered in connection with such Tranche and any Commitment Fee
Shares);

       

      (x)          Company
has a sufficient number of duly authorized shares of Common Stock reserved for
issuance in such amount as may be required to fulfill its obligations pursuant
to the Transaction Documents and any outstanding agreements with Investor and
any Affiliate of Investor, including without limitation all Warrant Shares
issuable upon exercise of the Warrant issued in connection with such
Tranche;

       

      (xi)        
the aggregate number of Warrant Shares issuable upon exercise of the Warrant
issued on the Tranche Notice Date, when aggregated with all other shares of
Common Stock deemed beneficially owned by Investor and its Affiliates (whether
acquired in connection with the transactions contemplated by the Transaction
Documents or otherwise), would not result in Investor owning more than 9.99% of
all Common Stock outstanding on the Tranche Notice Date, as determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder; and

       

      (xii)       for
any Tranche Notice delivered after the earlier of (A) the first Tranche Closing,
or (B) the six-month anniversary of the Effective Date, Investor shall have
previously received the Commitment Fee.

       

      (e)          Documents to be Delivered at
Tranche Closing. The Closing of any Tranche and Investor’s obligations
hereunder shall additionally be conditioned upon the delivery to Investor of
each of the following (the “Required Tranche
Documents”) on or before the applicable Tranche Closing
Date:

       

      (i)           a
number of Preferred Shares equal to the Tranche Purchase Price divided by the
Tranche Share Price shall have been delivered to Investor or an account
specified by Investor for the Tranche Shares;

       

      (ii)         the
executed Opinion and Officer’s Certificate;

       

      (iii)        a
Use of Proceeds Certificate, signed by an officer of the Company, and setting
forth how the Tranche Purchase Price will be applied by the
Company;

       

      (iv) 
       all Warrant Shares shall have been
timely delivered in accordance with any Exercise Notice delivered to Company
prior to the Tranche Closing Date;

       

      (v)          all
documents, instruments and other writings required to be delivered by the
Company to Investor on or before the Tranche Closing Date pursuant to any
provision of this Agreement or in order to implement and effect the transactions
contemplated herein; and

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (vi)         payment
of a $5,000.00 non-refundable administrative fee to Investor’s counsel, by
offset against the Tranche Amount, or wire transfer of immediately available
funds.

       

      (f)           Mechanics of Tranche
Closing.

       

      (i) 
         Each of the Company and
Investor shall deliver all documents, instruments and writings required to be
delivered by either of them pursuant to Section 2.3(e) of
this Agreement at or prior to each Tranche Closing. Subject to such delivery and
the satisfaction of the conditions set forth in Section 2.3(d) as of the
Tranche Closing Date, the closing of the purchase by Investor of Preferred
Shares shall occur by 5:00 p.m. Eastern time, on the date which is 10 Trading
Days following (and not counting) the Tranche Notice Date (each a “Tranche Closing
Date”) at the offices of Investor.

       

      (ii)         If
any portion of the Warrant is exercised by Investor on or after the Tranche
Notice Date and prior to or on the Tranche Closing Date (which exercise shall be
effected by Investor sending the Exercise Delivery Documents to the Company in
accordance with Section 1.1 of the
Warrant), the Company shall send Investor an electronic copy of its share
issuance instructions to the Transfer Agent and shall cause the requisite number
of Warrant Shares to be credited to Investor’s account with DTC as DWAC Shares
by 12:00 p.m. Eastern time on the Trading Day after the date the Company
receives the Exercise Delivery Documents from Investor.  If DWAC
shares are not timely credited pursuant to this Section 2.3(f)(ii), then the
Tranche Closing Date shall be extended by one Trading Day for each Trading Day
that such timely credit of DWAC Shares is not made.

       

      (iii)        On
or before each Tranche Closing Date, Investor shall deliver to the Company, in
cash or immediately available funds, the Tranche Purchase Price to be paid for
such Tranche Shares.

       

      (iv)         The
closing (each a “Tranche Closing”) for
each Tranche shall occur on the date that both (i) the Company has delivered to
Investor all Required Tranche Documents, and (ii) Investor has delivered to the
Company the Tranche Purchase Price.

       

      (g)          Limitation on Obligations to
Purchase and Sell.  Notwithstanding any other provision, in the
event the Closing Bid Price or Closing Sale Price of the Common Stock during any
one or more of the 9 Trading Days following the Tranche Notice Date falls below
75.0% of the Closing Bid Price on the Tranche Notice Date, except as otherwise
agreed in writing between the Company and Investor:  (i) the Company
may, at its option, and without penalty, terminate the Tranche Notice and
decline to sell any Tranche Shares on the Tranche Closing Date; and (ii)
Investor may, at its option, decline to purchase any Tranche Shares on the
Tranche Closing Date.

       

      2.4         Maximum
Placement.  Investor
shall not be obligated to purchase any additional Tranche Shares once the
aggregate Tranche Purchase Price paid by Investor equals the Maximum
Placement.

       

      
        
          
             

          

          
            12

            
              

            

          

          
             

          

        

      

       

      2.5        Share
Sufficiency.  On
or before the date on which any portion of the Warrant become exercisable, the
Company shall have a sufficient number of duly authorized shares of Common Stock
for issuance in such amount as may be required to fulfill its obligations
pursuant to the Transaction Documents and any outstanding agreements with
Investor and any Affiliate of Investor.

       

      ARTICLE 3

      TERMINATION

       

      3.1         Termination.  The
Investor may elect to terminate this Agreement and the Company’s right to
initiate subsequent Tranches to Investor under this Agreement (each, a “Termination”) upon
the occurrence of any of the following:

       

      (a)           if,
at any time, either the Company or any director or executive officer of the
Company has engaged in a transaction or conduct related to the Company that has
resulted in (i) a SEC enforcement action, including without limitation such
director or executive officer being sanctioned by the SEC, or (ii) a civil
judgment or criminal conviction for fraud or misrepresentation, or for any other
offense that, if prosecuted criminally, would constitute a felony under
applicable law;

       

      (b)           on
any date after a Delisting Event that lasts for an aggregate of 20 Trading Days
during any calendar year;

       

      (c)           if
at any time the Company has filed for and/or is subject to any bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for
relief under any bankruptcy law or any law for the relief of debtors instituted
by or against the Company or any Subsidiary of the Company;

       

      (d)           the
Company is in breach or default of any Material Agreement, which breach or
default could have a Material Adverse Effect;

       

      (e)           the
Company is in breach or default of this Agreement, any Transaction Document, or
any agreement with Investor or any Affiliate of Investor;

       

      (f)    
       upon the occurrence of a Fundamental
Transaction;

       

      (g)           so
long as any Preferred Shares are outstanding, the Company effects or publicly
announces its intention to create a security senior to the Series C Preferred
Stock, or substantially altering the capital structure of the Company in a
manner that materially adversely affects the rights or preferences of the Series
C Preferred Stock; and

       

      (h)           on
the Termination Date.

       

      3.2        Company
Termination.  The
Company may at any time in its sole discretion terminate (a “Company Termination”)
this Agreement and its right to initiate future Tranches by providing 30 days
advanced written notice (“Termination Notice”)
to Investor.

       

      
        
          
             

          

          
            13

            
              

            

          

          
             

          

        

      

       

      3.3        
Effect of
Termination.  Except
as otherwise provided herein, the termination of this Agreement will have no
effect on any Common Shares, Preferred Shares, Commitment Fee Shares, Warrant,
Warrant Shares, or DWAC Shares previously issued, delivered or credited, or on
any then-existing rights of any holder thereof.  Notwithstanding any
other provision of this Agreement and regardless of whether the first Tranche
has closed, the Commitment Fee is payable despite any termination of this
Agreement and all fees paid to Investor or its counsel are
non-refundable.

       

      ARTICLE 4

      REPRESENTATIONS AND
WARRANTIES

       

      4.1         Representations and
Warranties of the Company.  Except
as set forth under the corresponding section of the Disclosure Schedules, which
shall be deemed a part hereof and which shall not contain any material
non-public information, the Company hereby represents and warrants to, and as
applicable covenants with, Investor as of each Closing:

       

      (a)           Subsidiaries.  All
of the direct and indirect subsidiaries of the Company are set forth on Section 4.1(a) to the
Disclosure Schedule.  The Company owns, directly or indirectly, all of
the capital stock or other equity interests of each Subsidiary, and all of such
directly or indirectly owned capital stock or other equity interests are owned
free and clear of any Liens.  All the issued and outstanding shares of
capital stock of each Subsidiary are duly authorized, validly issued, fully
paid, non-assessable and free of preemptive and similar rights to subscribe for
or purchase securities.

       

      (b)           Organization and
Qualification.  Each of the Company and each Subsidiary is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, as applicable, with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation or
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter
documents.  Each of the Company and each Subsidiary is duly qualified
to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in a Material Adverse Effect and no
proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.

       

      (c)           Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder or thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby or thereby have been duly authorized by all
necessary action on the part of the Company and no further consent or action is
required by the Company other than the filing of the Certificate of
Designations.  Each of the Transaction Documents has been, or upon
delivery will be, duly executed by the Company and, when delivered in accordance
with the terms hereof, will constitute the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.  Neither the Company nor
any Subsidiary is in violation of any of the provisions of its respective
certificate or articles of incorporation, by-laws or other organizational or
charter documents.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      (d)           No
Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company, the issuance and sale of the Securities
and the consummation by the Company of the other transactions contemplated
thereby do not and will not (i) conflict with or violate any provision of the
Company’s or any Subsidiary’s certificate or articles of incorporation, articles
of association, bylaws, or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) conflict with or result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is bound or affected,
or (iv) conflict with or violate the terms of any agreement by which the Company
or any Subsidiary is bound or to which any property or asset of the Company or
any Subsidiary is bound or affected; except in the case of each of clauses (ii)
and (iii), such as could not have or reasonably be expected to result in a
Material Adverse Effect.

       

      (e)           Filings, Consents and
Approvals.  Neither the Company nor any Subsidiary is required
to obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
other than the filing of the Certificate of Designations and required federal
and state securities filings and such filings and approvals as are required to
be made or obtained under the applicable Trading Market rules in connection with
the transactions contemplated hereby, each of which has been, or (if not yet
required to be filed) shall be, timely filed.

       

      (f)         
  Issuance
of the Securities.  The Securities are duly authorized and,
when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens.  The Company has reserved from its duly
authorized capital stock a number of shares of Common Stock and Preferred Stock
for issuance of the Securities at least equal to the number of Securities which
could be issued pursuant to the terms of the Transaction Documents, based on the
then-anticipated exercise prices of the Warrant.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (g)           Capitalization.  The
capitalization of the Company is as described in the Company’s most recently
filed periodic SEC Report.  The Company had previously issued and
outstanding shares of Series A preferred stock and Series B preferred stock, all
of which have been retired and none of which is currently
outstanding.  Except for the Preferred Shares to be issued pursuant to
this Agreement, the Company has no currently issued or outstanding shares of
preferred stock.  Other than as set forth in Section 4.1(g) of the
Disclosure Schedule, the Company has not issued any capital stock since such
filing.  No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents.  Except as a result of the
purchase and sale of the Securities or as set forth in the SEC Reports, there
are no outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or
securities convertible into or exercisable for shares of Common
Stock.  The issuance and sale of the Securities will not obligate the
Company to issue shares of Common Stock or other securities to any Person (other
than Investor) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange, or reset price under
such securities. All of the outstanding shares of capital stock of the Company
are validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe
for or purchase securities.  No further approval or authorization of
any stockholder, the Board of Directors of the Company or others is required for
the issuance and sale of the Securities.  Except as set forth in the
SEC Reports, there are no stockholders agreements, voting agreements or other
similar agreements with respect to the Company’s capital stock to which the
Company is a party or, to the knowledge of the Company, between or among any of
the Company’s stockholders.

       

      (h)           SEC Reports; Financial
Statements.  The Company has filed all required SEC Reports for
the two years preceding the Effective Date (or such shorter period as the
Company was required by law to file such SEC Reports) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension.  As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Act and the Exchange Act and the rules and regulations of
the SEC promulgated thereunder, as applicable, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  The financial statements of the Company included in
the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto as in
effect at the time of filing.  Such financial statements have been
prepared in accordance with GAAP, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.

       

      
        
          
          

        

        
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      (i)    
       Material
Changes.  Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports, (i) there has been no event, occurrence or development that has
had, or that could reasonably be expected to result in, a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice, and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or required to be disclosed in filings made with the SEC, (iii) the Company
has not altered its method of accounting, (iv) the Company has not declared or
made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company equity
incentive plans as disclosed in the SEC Reports.  The Company does not
have pending before the SEC any request for confidential treatment of
information.

       

      (j)       
    Litigation.  There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”), which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities, or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect.  Neither the Company nor any Subsidiary, nor to the
knowledge of the Company any director or officer thereof, is or has been the
subject of any Action involving a claim of violation of or liability under
federal or state securities laws or a claim of breach of fiduciary
duty.  There has not been, and to the knowledge of the Company, there
is not pending or contemplated, any investigation by the SEC involving the
Company or any current or former director or officer of the
Company.  The SEC has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the Exchange Act or the Act.

       

      (k)           Labor
Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse
Effect.

       

      (l)    
       Compliance.  Neither
the Company nor any Subsidiary (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other similar agreement or instrument to which it is a party or
by which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its
business, except in each case under clauses (i)-(iii) above as could not have a
Material Adverse Effect.

       

      
        
          
          

        

        
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      (m)          Regulatory
Permits.  The Company and each Subsidiary possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material
Permit.

       

      (n)           Title to
Assets.  The Company and each Subsidiary have good and
marketable title in fee simple to all real property owned by them that is
material to the business of the Company and each Subsidiary and good and
marketable title in all personal property owned by them that is material to the
business of the Company and each Subsidiary, in each case free and clear of all
Liens, except for Liens that do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and each Subsidiary and Liens for the payment of
federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties.  Any real property and facilities held under
lease by the Company and each Subsidiary are held by them under valid,
subsisting and enforceable leases of which the Company and each Subsidiary are
in compliance.

       

      (o)           Patents and
Trademarks.  The Company and each Subsidiary have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights that are necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure to
so have could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”).  Neither the Company nor any Subsidiary has
received a written notice that the Intellectual Property Rights used by the
Company or any Subsidiary violates or infringes upon the rights of any Person.
To the knowledge of the Company, all such Intellectual Property Rights are
enforceable and there is no existing infringement by another Person of any of
the Intellectual Property Rights of the Company or each
Subsidiary.

      (p)           Insurance.  The
Company and each Subsidiary are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and each Subsidiary are
engaged, including but not limited to directors and officers insurance coverage
at least equal to the Maximum Placement.  To the best of Company’s
knowledge, such insurance contracts and policies are accurate and
complete.  Neither the Company nor any Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in
cost.

       

      (q)           Transactions With Affiliates
and Employees.  Except as set forth in the SEC Reports, none of
the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each case in excess
of $120,000 other than (i) for payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company and
(iii) for other employee benefits, including stock option agreements under any
equity incentive plan of the Company.

       

      
        
          
          

        

        
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      (r)           Sarbanes-Oxley; Internal
Accounting Controls.  The Company is in material compliance
with all provisions of the Sarbanes-Oxley Act of 2002, which are applicable to
it as of the date of the Commitment Closing.  The Company and each
Subsidiary maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.  The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and designed such disclosure controls and procedures
to ensure that material information relating to the Company, including its
Subsidiaries, is made known to the certifying officers by others within those
entities, particularly during the period in which the Company’s most recently
filed periodic report under the Exchange Act, as the case may be, is being
prepared.  The Company’s certifying officers have evaluated the
effectiveness of the Company’s disclosure controls and procedures as of the date
prior to the filing date of the most recently filed periodic report under the
Exchange Act (such date, the “Evaluation
Date”).  The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the Company’s disclosure controls and
procedures based on their evaluations as of the Evaluation
Date.  Since the Evaluation Date, there have been no significant
changes in the Company’s internal accounting controls or its disclosure controls
and procedures or, to the Company’s knowledge, in other factors that could
materially affect the Company’s internal accounting controls or its disclosure
controls and procedures.

      (s)           Certain
Fees.  Except for the payment of the Commitment Fee, no
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement.  Investor shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of
other Persons for fees of a type contemplated in this Section 4.1(s) that may be
due in connection with the transactions contemplated by this Agreement or the
other Transaction Documents.

       

      (t)      
     Private Placement.
Assuming the accuracy of Investor representations and warranties set forth in
Section 4.2, no
registration under the Act is required for the offer and sale of the Securities
by the Company to Investor as contemplated hereby. The issuance and sale of the
Securities hereunder does not contravene the rules and regulations of any
Trading Market.

       

      (u)           Investment Company.
The Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.  The Company shall conduct its business in a manner so that
it will not become subject to the Investment Company Act.

       

      
        
          
          

        

        
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    (v)           Registration
Rights.  No Person (other than Investor pursuant to the
Transaction Documents) has any right to cause the Company to effect the
registration under the Act of any securities of the Company.

     

    (w)           Listing and Maintenance
Requirements.  The Common Stock is registered pursuant to
Section 12 of the Exchange Act, and the Company has taken no action designed to,
or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company
received any notification that the SEC is contemplating terminating such
registration.  The Company has not, in the 12 months preceding the
Effective Date, received notice from any Trading Market on which the Common
Stock is or has been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading Market.
The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance
requirements.

     

    (x)           Application of Takeover
Protections.  The Company and its Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti takeover provision under the Company’s
Certificate of Incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to Investor as a
result of Investor and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents, including without limitation the
Company’s issuance of the Securities and Investor’s ownership of the
Securities.

     

    (y)           Disclosure; Non-Public
Information.  Except with respect to the information that will
be, and to the extent that it actually is timely publicly disclosed by the
Company pursuant to Section 2.2(c)(i),
and notwithstanding any other provision in this Agreement or the other
Transaction Documents, neither the Company nor any other Person acting on its
behalf has provided Investor or its agents or counsel with any information that
constitutes or might constitute material, non-public information, including
without limitation this Agreement and the Exhibits, Appendices and Schedules
hereto, unless prior thereto Investor shall have executed a written agreement
regarding the confidentiality and use of such information.  The
Company understands and confirms that neither Investor nor any Affiliate of
Investor shall have any duty of trust or confidence that is owed directly,
indirectly, or derivatively to the Company or the shareholders of the Company or
to any other Person who is the source of material non-public information
regarding the Company.  No information contained in the Disclosure
Schedules constitutes material non-public information.  There is no
adverse material information regarding the Company that has not been publicly
disclosed.  The Company understands and confirms that Investor will
rely on the foregoing representations and covenants in effecting transactions in
securities of the Company.  All disclosure provided to Investor
regarding the Company, its business and the transactions contemplated hereby,
including the Disclosure Schedules to this Agreement, furnished by or on behalf
of the Company with respect to the representations and warranties made herein
are true and correct in all material respects and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.

     

    
      
        
        

      

      
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    (z)           No Integrated
Offering. Neither the Company, nor any of its Affiliates, nor any Person
acting on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Securities to be integrated
with prior offerings by the Company for purposes of the Act or which could
violate any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of the Trading Market.

     

    (aa)         Financial
Condition.  Based on the financial condition of the Company as
of the date of the Commitment Closing: (i) the fair saleable market value of the
Company’s assets exceeds the amount that will be required to be paid on or in
respect of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature; (ii) the Company’s assets do not
constitute unreasonably small capital to carry on its business for the current
fiscal year as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the
business conducted by the Company, and projected capital requirements and
capital availability thereof; and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its debt when such amounts
are required to be paid.  The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its debt). The
Company has no knowledge of any facts or circumstances, which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the date of the
Commitment Closing.  The SEC Reports set forth as of the dates thereof
all outstanding secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has
commitments.  Neither the Company nor any Subsidiary is in default
with respect to any Indebtedness.

     

    (bb)         Tax
Status.  The Company and each of its Subsidiaries has made or
filed all federal, state and foreign income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply.  There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.  The
Company has not executed a waiver with respect to the statute of limitations
relating to the assessment or collection of any foreign, federal, statue or
local tax.  None of the Company’s tax returns is presently being
audited by any taxing authority.

    
      
         

      

      
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    (cc)         No General Solicitation or
Advertising.  Neither the Company nor, to the knowledge of the
Company, any of its directors or officers (i) has conducted or will conduct any
general solicitation (as that term is used in Rule 502(c) of Regulation D) or
general advertising with respect to the sale of the Securities, or (ii) made any
offers or sales of any security or solicited any offers to buy any security
under any circumstances that would require registration of the Securities under
the Act or made any “directed selling efforts” as defined in Rule 902 of
Regulation S.

     

    (dd)         Foreign Corrupt
Practices.  Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any corrupt funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is  in violation of law, or (iv)
violated in any material respect any provision of the Foreign Corrupt Practices
Act of 1977, as amended.

     

    (ee)         Acknowledgment Regarding
Investor’s Purchase of Securities.  The Company acknowledges
and agrees that Investor is acting solely in the capacity of arm’s length
purchaser with respect to this Agreement and the transactions contemplated
hereby.  The Company further acknowledges that Investor is not acting
as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any
statement made by Investor or any of its representatives or agents in connection
with this Agreement and the transactions contemplated hereby is not advice or a
recommendation and is merely incidental to Investor’s purchase of the
Securities.  The Company further represents to Investor that the
Company’s decision to enter into this Agreement has been based solely on the
independent evaluation of the Company and its representatives.

     

    (ff)          
Accountants.  The
Company’s accountants are set forth in the SEC Reports and such accountants are
an independent registered public accounting firm as required by the
Act.

     

    (gg)         No Disagreements with
Accountants and Lawyers.  There are no disagreements of any
kind presently existing, or reasonably anticipated by the Company to arise,
between the accountants and lawyers formerly or presently employed by the
Company, and the Company is current with respect to any fees owed to its
accountants and lawyers, except for any past-due amounts that may be owed in the
ordinary course of business.

     

    (hh)         Registration Statements and
Prospectuses.

     

    (i)          
The offer and sale of the Common Shares as contemplated hereby complies with the
requirements of Rule 415 under the Act.

     

    (ii)          The
Company has not, directly or indirectly, used or referred to any “free writing
prospectus” (as defined in Rule 405 under the Act) except in compliance with
Rules 164 and 433 under the Act.

    
      
         

      

      
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    (iii)         The
Company is not an “ineligible issuer” (as defined in Rule 405 under the Act) as
of the eligibility determination date for purposes of Rules 164 and 433 under
the Act with respect to the offering of the Common Shares contemplated by any
Registration Statement filed or to be filed, without taking into account any
determination by the SEC pursuant to Rule 405 under the Act that it is not
necessary under the circumstances that the Company be considered an “ineligible
issuer.”

     

    (ii)       
   Section 5 Compliance.
No representation or warranty or other statement made by Company in the
Transaction Documents contains any untrue statement or omits to state a material
fact necessary to make any of them, in light of the circumstances in which it
was made, not misleading. The Company
is not aware of any facts or circumstances that would cause the transactions
contemplated by the Transaction Documents, when consummated, to violate Section
5 of the Act or other federal or state securities laws or
regulations.

     

    4.2         Representations and
Warranties of Investor. Investor hereby represents and warrants as of the
Effective Date as follows:

     

    (a)           Organization;
Authority.  Investor is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with full right, company power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations thereunder.  The execution,
delivery and performance by Investor of the transactions contemplated by this
Agreement have been duly authorized by all necessary company or similar action
on the part of Investor.  Each Transaction Document to which it is a
party has been (or will be) duly executed by Investor, and when delivered by
Investor in accordance with the terms hereof, will constitute the valid and
legally binding obligation of Investor, enforceable against it in accordance
with its terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.

     

    (b)           Investor
Status.  At the time Investor was offered the Securities, it
was, and at the Effective Date it is an “accredited investor” as defined in Rule
501(a) under the Act.

     

    (c)           Experience of
Investor.  Investor, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment.  Investor is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.

     

    (d)           General
Solicitation.  Investor is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding
the Securities published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

    
      
         

      

      
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    The
Company acknowledges and agrees that Investor does not make or has not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section
4.2.

     

    ARTICLE 5

    OTHER AGREEMENTS OF THE
PARTIES

     

    5.1         Transfer
Restrictions

     

    (a)           The
Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of Securities other
than (i) pursuant to an effective Registration Statement or Rule 144, (ii) to
the Company, (iii) to an Affiliate of Investor, or (iv) in connection with a
pledge as contemplated in Section 5.1(b), the Company
may require the transferor thereof to provide to the Company an opinion of Luce
Forward Hamilton & Scripps LLP (“Luce Forward”), or
other counsel selected by the transferor and reasonably acceptable to the
Company, to the effect that such transfer does not require registration of such
transferred Securities under the Act.

     

    (b)           Investor
agrees to the imprinting, so long as is required by this Section 5.1, of the following
legend, or substantially similar legend, on any certificate evidencing
Securities other than DWAC Shares:

     

    NEITHER
THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

     

    The
Company agrees to cause such legend to be removed immediately upon effectiveness
of a Registration Statement, or when any Common Shares are eligible for sale
under Rule 144.  Company further acknowledges and agrees that Investor
may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the
Securities to a financial institution that is an “accredited investor” as
defined in Rule 501(a) under the Act and who agrees to be bound by the
provisions of this Agreement and, if required under the terms of such
arrangement, Investor may transfer pledged or secured Securities to the pledgees
or secured parties.  Such a pledge or transfer would not be subject to
approval of the Company and no legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection
therewith.  Further, no notice shall be required of such
pledge.  At Investor’s reasonable expense, the Company will execute
and deliver such documentation as a pledgee or secured party of Securities may
reasonably request in connection with a pledge or transfer of the
Securities.

    
      
         

      

      
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    5.2   
     Furnishing of
Information.  As
long as Investor owns Securities, the Company covenants to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the Effective Date
pursuant to the Exchange Act.  Upon the request of Investor, the
Company shall deliver to Investor a written certification of a duly authorized
officer as to whether it has complied with the preceding sentence. As long as
Investor owns Securities, if the Company is not required to file reports
pursuant to such laws, it will prepare and furnish to Investor and make publicly
available in accordance with Rule 144(c) such information as is required for
Investor to sell the Securities under Rule 144.  The Company further
covenants that it will take such further action as any holder of Securities may
reasonably request, all to the extent required from time to time to enable such
Person to sell such Securities without registration under the Act within the
limitation of the exemptions provided by Rule 144.

     

    5.3         Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Act) that
would be integrated with the offer or sale of the Securities in a manner that
would require the registration under the Act of the sale of the Securities to
Investor or that would be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market such that it
would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such
subsequent transaction.

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    5.4         Securities Laws Disclosure;
Publicity.  The
Company shall timely file a Current Report on Form 8-K as required by this
Agreement, and in the Company’s discretion shall file a press release, in each
case reasonably acceptable to Investor, disclosing the material terms of the
transactions contemplated hereby.  The Company and Investor shall
consult with each other in issuing any press releases with respect to the
transactions contemplated hereby, and neither the Company nor Investor shall
issue any such press release or otherwise make any such public statement without
the prior consent of the Company, with respect to any such press release of
Investor, or without the prior consent of Investor, with respect to any such
press release of the Company, which consent shall not unreasonably be withheld
or delayed, except if such disclosure is required by law or Trading Market
regulations, in which case the disclosing party shall promptly provide the other
party with prior notice of such public statement or
communication.  Notwithstanding the foregoing, the Company shall not
publicly disclose the name of Investor, or include the name of Investor in any
filing with the SEC or any regulatory agency or Trading Market, without the
prior written consent of Investor, except (i) as contained in the Current Report
on Form 8-K and press release described above, (ii) as required by federal
securities law in connection with any registration statement under which the
Common Shares are registered, (iii) to the extent such disclosure is required by
law or Trading Market regulations, in which case the Company shall provide
Investor with prior notice of such disclosure, or (iv) to the extent such
disclosure is required in any SEC Report filed by the Company.

     

    5.5         Shareholders Rights
Plan.  No
claim will be made or enforced by the Company or, to the knowledge of the
Company, any other Person that Investor is an “Acquiring Person” under any
shareholders rights plan or similar plan or arrangement in effect or hereafter
adopted by the Company, or that Investor could be deemed to trigger the
provisions of any such plan or arrangement, by virtue of receiving Securities
under the Transaction Documents or under any other agreement between the Company
and Investor. The Company shall conduct its business in a manner so that it will
not become subject to the Investment Company Act of 1940, as
amended.

     

    5.6         Non-Public
Information.  The
Company covenants and agrees that neither it nor any other Person acting on its
behalf will provide Investor or its agents or counsel with any information that
the Company believes or reasonably should believe constitutes material
non-public information, unless prior thereto Investor shall have executed a
written agreement regarding the confidentiality and use of such
information.  On and after the Effective Date, neither Investor nor
any Affiliate Investor shall have any duty of trust or confidence that is owed
directly, indirectly, or derivatively, to the Company or the shareholders of the
Company, or to any other Person who is the source of material non-public
information regarding the Company.  The Company understands and
confirms that Investor shall be relying on the foregoing in effecting
transactions in securities of the Company.

     

    5.7         Reimbursement.  If
Investor becomes involved in any capacity in any proceeding by or against any
Person who is a stockholder of the Company (except as a result of sales,
pledges, margin sales and similar transactions by Investor to or with any
current stockholder), solely as a result of Investor’s acquisition of the
Securities under this Agreement, the Company will reimburse Investor for its
reasonable legal and other expenses (including the cost of any investigation
preparation and travel in connection therewith) incurred in connection
therewith, as such expenses are incurred, or will assume the defense of Investor
in such matter.  The reimbursement obligations of the Company under
this Section
5.7 shall be in addition to any liability which the Company may otherwise
have, shall extend upon the same terms and conditions to any Affiliates of
Investor who are actually named in such action, proceeding or investigation, and
partners, directors, agents, employees and controlling persons (if any), as the
case may be, of Investor and any such Affiliate, and shall be binding upon and
inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, Investor and any such Affiliate and any such
Person.  The Company also agrees that neither Investor nor any such
Affiliates, partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any Person asserting claims on behalf of or
in right of the Company solely as a result of acquiring the Securities under
this Agreement.

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    5.8  
      Indemnification of
Investor

     

    (a)           Company Indemnification
Obligation.  Subject to the provisions of this Section 5.8, the
Company will indemnify and hold Investor and any Warrant holder, their
Affiliates and attorneys, and each of their directors, officers, shareholders,
partners, employees, agents, and any person who controls Investor within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act
(collectively, the “Investor Parties” and
each an “Investor
Party”), harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation (collectively, “Losses”) that any
Investor Party may suffer or incur as a result of or relating to (i) any breach
of any of the representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents, (ii) any action
instituted against any Investor Party, or any of them or their respective
Affiliates, by any stockholder of the Company who is not an Affiliate of an
Investor Party, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of Investor’s
representations, warranties or covenants under the Transaction Documents or any
agreements or understandings Investor may have with any such stockholder or any
violations by Investor of state or federal securities laws or any conduct by
Investor which constitutes fraud, gross negligence, willful misconduct or
malfeasance), (iii)  any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement (or in a Registration
Statement as amended by any post-effective amendment thereof by the Company) or
arising out of or based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and/or (iv) any untrue statement or alleged untrue
statement of a material fact included in any Prospectus ( or any amendments or
supplements to any Prospectus ), in any free writing prospectus, in any “issuer
information” (as defined in Rule 433 under the Act) of the Company, or in any
Prospectus together with any combination of one or more of the  free
writing prospectuses, if any, or arising out of or based upon any omission or
alleged omission to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

     

    (b)           Indemnification
Procedures.  If any action shall be brought against an Investor
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Investor Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of its
own choosing.  The Investor Parties shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the Investor
Parties except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company has failed
after a reasonable period of time to assume such defense and to employ counsel
or (iii) in such action there is, in the reasonable opinion of such separate
counsel, a material conflict with respect to the dispute in question on any
material issue between the position of the Company and the position of the
Investor Parties such that it would be inappropriate for one counsel to
represent the Company and the Investor Parties.  The Company will not
be liable to the Investor Parties under this Agreement (i) for any settlement by
an Investor Party effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed; or (ii) to the extent, but only
to the extent that a loss, claim, damage or liability is either attributable to
Investor’s breach of any of the representations, warranties, covenants or
agreements made by Investor in this Agreement or in the other Transaction
Documents.

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    5.9         Reservation of
Securities.  The
Company shall maintain a reserve from its duly authorized shares of Common Stock
for issuance pursuant to the Transaction Documents in such amount as may be
required to fulfill its obligations in full under the Transaction
Documents.

     

    5.10      Prospectus Availability and
Changes.  The
Company will make available to Investor upon request, and thereafter from time
to time will furnish Investor, as many copies of any Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the applicable
Registration Statement) as Investor may request for the purposes contemplated by
the Act; and in case Investor is required to deliver  a prospectus
after the nine-month period referred to in Section 10(a)(3) of the Act in
connection with the sale of the Common Shares, or after the time a
post-effective amendment to the applicable Registration Statement is required
pursuant to Item 512(a) of Regulation S-K under the Act, the Company will
prepare, at its expense, promptly upon request such amendment or amendments to
the Registration Statement and the Prospectus as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Act or Item 512(a)
of Regulation S-K under the Act, as the case may be.

     

    The
Company will advise Investor promptly of the happening of any event within the
time during which a Prospectus is required to be delivered under the Act which
could require the making of any change in the Prospectus then being used so that
the Prospectus would not include an untrue statement of material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading, and to
advise Investor promptly if, during such period, it shall become necessary to
amend or supplement any Prospectus to cause such Prospectus to comply with the
requirements of the Act, and in each case, during such time, to prepare and
furnish, at the Company’s expense, to Investor promptly such amendments or
supplements to such Prospectus as may be necessary to reflect any such change or
to effect such compliance.

    
      
         

      

      
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    5.11      Required
Approval.  No
transactions contemplated under this Agreement or the Transaction Documents
shall be consummated for an amount that would require approval by any Trading
Market or Company stockholders under any approval provisions, rules or
regulations of any Trading Market applicable to the Company, unless and until
such approval is obtained.  Company shall use best efforts to obtain
any required approval as soon as possible.

     

    5.12      Activity
Restrictions.  For
so long as Investor or any of its Affiliates holds any Preferred Shares,
Commitment Fee Shares, Warrant, Warrant Shares, or DWAC Shares, neither Investor
nor any Affiliate will:  (i) vote any shares of Common Stock owned or
controlled by it, solicit any proxies, or seek to advise or influence any Person
with respect to any voting securities of the Company; (ii) engage or participate
in any actions, plans or proposals which relate to or would result in (a)
acquiring additional securities of the Company, alone or together with any other
Person, which would result in beneficially owning or controlling more than 9.99%
of the total outstanding Common Stock or other voting securities of the Company,
(b) an extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving Company or any of its subsidiaries, (c) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries, (d) any change in the present board of directors or management of
the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board, (e) any material
change in the present capitalization or dividend policy of the Company, (f) any
other material change in the Company’s business or corporate structure,
including but not limited to, if the Company is a registered closed-end
investment company, any plans or proposals to make any changes in its investment
policy for which a vote is required by Section 13 of the Investment Company Act
of 1940, (g) changes in the Company’s charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Company by any Person, (h) causing a class of securities of the
Company to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association, (i) a class of equity securities of the Company
becoming eligible for termination of registration pursuant  to Section
12(g)(4) of the Act, or (j) any action, intention, plan or arrangement similar
to any of those enumerated above; or (iii) request the Company or its directors,
officers, employees, agents or representatives to amend or waive any provision
of this Section 5.12.

     

    5.13      Registration Statements and
Prospectuses.

     

    (a)           Unless
its shelf registration statement is then effective, the Company will use its
best efforts to file within 30 calendar days after the Effective Date (or as
soon as possible thereafter), to cause to become effective as soon as possible
thereafter, and to remain effective until all Common Shares have been sold or
are Rule 144 Eligible, a Registration Statement for the resale of all Common
Shares issued or issuable hereunder (including without limitation all Warrant
Shares underlying the Warrant and any Common Shares that may be issued to
Investor in payment of the Commitment Fee).  Each Registration
Statement shall comply when it becomes effective, and, as amended or
supplemented, at the time of any Tranche Notice Date, Tranche Closing Date, or
issuance of any Common Shares, and at all times during which a prospectus is
required by the Act to be delivered in connection with any sale of Common
Shares, will comply, in all material respects, with the requirements of the
Act.

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    (b)           Each
Registration Statement, as of its respective effective time, will not, as
applicable, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.

     

    (c)           Each
Prospectus will comply, as of its date and the date it  will be filed
with the SEC,  and, at the time of any Tranche Notice Date, Tranche
Closing Date, or issuance of any Common Shares, and at all times during which a
prospectus is required by the Act to be delivered in connection with any sale of
Common Shares, will comply, in all material respects, with the requirements of
the Act.

     

    (d)           
At no time during the period that begins on the date a Prospectus is filed with
the SEC and ends at the time a Prospectus is no longer required by the Act to be
delivered in connection with any sale of Common Shares will any such Prospectus,
as then amended or supplemented, include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

     

    (e)           Each
Registration Statement will meet, and the offering and sale of the Common Shares
as contemplated hereby will comply with, the requirements of Rule 415 under the
Act.

     

    (f)           The
Company will not, directly or indirectly, use or refer to any “free writing
prospectus” (as defined in Rule 405 under the Act) except in compliance with
Rules 164 and 433 under the Act.

     

    (g)           The
Company will not be an “ineligible issuer” (as defined in Rule 405 under the
Act) as of the eligibility determination date for purposes of Rules 164 and 433
under the Act with respect to the offering of the Common Shares contemplated by
any Registration Statement that is filed, without taking into account any
determination by the SEC pursuant to Rule 405 under the Act that it is not
necessary under the circumstances that the Company be considered an “ineligible
issuer.”

     

    5.14      Investor Due
Diligence.  Investor
shall have the right and opportunity to conduct due diligence, at its own
expense, with respect to any Registration Statement or Prospectus in which the
name of Investor or any Affiliate of Investor appears.

     

    ARTICLE 6

    MISCELLANEOUS

     

    6.1         Fees and
Expenses.  Except
for the $20,000.00 non-refundable document preparation fee previously paid by
the Company to counsel for Investor, the receipt of which is hereby
acknowledged, and the $5,000.00 non-refundable administrative fee payable to
counsel for Investor at each Tranche Closing, or as may be otherwise provided in
this Agreement, each party shall pay the fees and expenses of its own advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of the Transaction Documents.  The Company acknowledges
and agrees that Luce Forward solely represents Investor, and does not represent
the Company or its interests in connection with the Transaction Documents or the
transactions contemplated thereby.  The Company shall pay all stamp
and other taxes and duties levied in connection with the sale of the Securities,
if any.

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    6.2       
 Notices.  Unless
a different time of day or method of delivery is set forth in the Transaction
Documents, any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given
and effective on the earliest of:  (a) the date of transmission, if
such notice or communication is delivered via facsimile or electronic mail prior
to 5:30 p.m. Eastern time on a Trading Day and an electronic confirmation of
delivery is received by the sender, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered later than 5:30 p.m.
Eastern time or on a day that is not a Trading Day, (c) three Trading Days
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is
required to be given.  The addresses for such notices and
communications are those set forth following the signature page hereof, or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.

     

    6.3         Amendments;
Waivers.  No
provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and Investor or,
in the case of a waiver, by the party against whom enforcement of any such
waiver is sought.  No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.

     

    6.4         Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof

     

    6.5         Successors and
Assigns.  This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns.  The Company may not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of Investor, which consent shall not be unreasonably withheld or
delayed.  Investor may assign any or all of its rights under this
Agreement (a) to any Affiliate, or (b) to any Person to whom Investor assigns or
transfers any Securities.

     

    6.6         No Third-Party
Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as otherwise set forth
in Section
5.8.

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    6.7         Governing Law; Dispute
Resolution.  All
questions concerning the construction, validity, enforcement and interpretation
of the Transaction Documents shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without regard to the
principles of conflicts of law that would require or permit the application of
the laws of any other jurisdiction.  Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York.  Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or inconvenient venue for such
proceeding.  Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.  The
parties hereby waive all rights to a trial by jury.  If either party
shall commence an action or proceeding to enforce any provisions of the
Transaction Documents, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its reasonable attorneys’ fees and
other costs and expenses reasonably incurred in connection with the
investigation, preparation and prosecution of such action or
proceeding.

     

    6.8         Survival.  The
representations and warranties contained herein shall survive the Closing and
the delivery and exercise of the Securities.

    
      
         

      

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

     

    6.10       Severability.  If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

     

    6.11       Replacement of
Securities.  If
any certificate or instrument evidencing any Securities is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested.  The
applicants for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs associated with the issuance of such
replacement Securities.

     

    6.12       Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of Investor and the Company will be
entitled to specific performance under the Transaction Documents.  The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be
adequate.

     

    6.13       Payment Set
Aside.  To
the extent that the Company makes a payment or payments to Investor pursuant to
any Transaction Document or Investor enforces or exercises its rights
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other person under any law (including, without limitation, any
bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    6.14       Liquidated
Damages.  The
Company’s obligations to pay any partial liquidated damages or other amounts
owing under the Transaction Documents is a continuing obligation of the Company
and shall not terminate until all unpaid partial liquidated damages and other
amounts have been paid notwithstanding the fact that the instrument or security
pursuant to which such partial liquidated damages or other amounts are due and
payable shall have been cancelled.

     

    6.15       Time of the
Essence.  Time
is of the essence with respect to all provisions of this Agreement that specify
a time for performance.

     

    6.16       Construction.  The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.

     

    6.17       Entire
Agreement.  This
Agreement, together with the Exhibits, Appendices and Schedules hereto, contains
the entire agreement and understanding of the parties, and supersedes all prior
and contemporaneous agreements, term sheets, letters, discussions,
communications and understandings, both oral and written, which the parties
acknowledge have been merged into this Agreement.  No party,
representative, attorney or agent has relied upon any collateral contract,
agreement, assurance, promise, understanding or representation not expressly set
forth hereinabove.  The parties hereby expressly waive all rights and
remedies, at law and in equity, directly or indirectly arising out of or
relating to, or which may arise as a result of, any Person’s reliance on any
such assurance.

    
      
         

      

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

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            MEDCLEAN
      TECHNOLOGIES, INC.

                                          	 
      
	 
      	 
      	 
      
	
                                            By:

                                          	 
      	 
      
	
                                            Name:

                                          	 
      	 
      
	
                                            Title:

                                          	 
      	 
      
	 
      	 
      	 
      
	
                                            By:

                                          	 
      	 
      
	
                                            Name:

                                          	 
      	 
      
	
                                            Title:

                                          	 
      	 
      
	 
      	 
      	 
      
	
                                            SOCIUS
      LIFE SCIENCES CAPITAL GROUP, LLC

                                          	 
      
	 
      	 
      	 
      
	
                                            By:

                                          	 
      	 
      
	
                                            Name:

                                          	 
      	 
      
	
                                            Title:

                                          	 
      	 
      

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Addresses
for Notice

    

    
      	
              To
      Company:

            
	 
      
	
              MedClean
      Technologies, Inc.

            
	
              1812
      Front Street

            
	
              Scotch
      Plains, New Jersey 07076

            
	
              Attention:
      David J. Laky

            
	
              Fax
      No.: (908) 663-2443

            
	
              Email:
      dlaky@medcleantechnologies.com

            
	 
      
	
              with
      a copy to:

            
	 
      
	
              Macpherson
      Counsel LLP

            
	
              168
      Sunset Hill Road

            
	
              Redding,
      Connecticut 06896

            
	
              Attention:
      Sean Macpherson, Esq.

            
	
              Fax
      No.: (203) 286-1289

            
	
              Email:
      smaclaw@optonline.net

            

    

    

    
      
        	 
      	
                To
      Investor:

              
	 
      	 
      
	 
      	
                Socius
      Life Sciences Capital Group, LLC

              
	 
      	
                11150
      Santa Monica Boulevard, Suite 1500

              
	 
      	
                Los
      Angeles, California 90025

              
	 
      	
                Fax
      No.:  (310) 444-5300

              
	 
      	
                Email:
      info@sociuscg.com

              
	 
      	 
      
	 
      	
                with
      a copy to:

              
	 
      	 
      
	 
      	
                Luce
      Forward Hamilton & Scripps LLP

              
	 
      	
                601
      South Figueroa Street, Suite 3900

              
	 
      	
                Los
      Angeles, California 90017

              
	 
      	
                Attention:  John
      C. Kirkland, Esq.

              
	 
      	
                Fax
      No.:  (213) 452-8035

              
	 
      	
                Email:  jkirkland@luce.com

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Exhibit
A

     

    Form
of Warrant

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, 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.

     

    MedClean
Technologies, Inc.

     

    Warrant
To Purchase Common Stock

     

    
      
        	
                Warrant
      No.: 2009-1

              	
                Issuance
      Date:  December 4,
2009

              

      

    

    

    Number of
Warrant Shares: 262,987,013

    

    Initial
Exercise Price:  $0.038 per share

    

    MedClean
Technologies, Inc., a Delaware corporation (“Company”), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Socius CG II, Ltd., a Bermuda exempted
company, the holder hereof or its designees or assigns (“Holder”), is
entitled, subject to the terms set forth herein, to purchase from the Company,
at the Exercise Price then in effect, upon exercise of this Warrant to Purchase
Common Stock (including any Warrant to Purchase Common Stock issued in exchange,
transfer or replacement hereof, the “Warrant”), at any
time or times after issuance of the Warrant and until 11:59 p.m. Eastern time on
the fifth anniversary of the Tranche Notice Date for each applicable Warrant
Tranche, subject to acceleration pursuant to Section 3.3 hereof,
that number of duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock set forth above and as adjusted herein (the “Warrant Shares”);
provided, however, that this
Warrant may only be exercised, from time to time, for that number of shares of
Common Stock with an Aggregate Exercise Price equal to 135% of the cumulative
amount of Tranche Purchase Prices under Tranche Notices delivered prior to or on
the date of exercise.  Except as otherwise defined herein, capitalized
terms in this Warrant shall have the meanings set forth in ARTICLE 13
hereof.

    
      
         

      

      
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    This
Warrant is issued pursuant to the Preferred Stock Purchase Agreement dated
December 4, 2009, by and among the Company and the investor referred to therein
(the “Purchase Agreement”).

     

    This
Warrant shall consist of and be exercisable in tranches (each, a “Warrant Tranche”),
with a separate tranche being created upon each delivery of a Tranche Notice
under the Purchase Agreement.  Each Warrant Tranche will grant to the
Holder the right, for a five-year period commencing on the applicable Tranche
Notice Date, to exercise the Warrant and purchase up to a number of shares of
Common Stock with an Aggregate Exercise Price equal to 135% of the Tranche
Purchase Price for the applicable Tranche Notice.  Attached to this
Warrant is a schedule (the “Warrant Tranche
Schedule”) that sets forth the issuance date, the number of Warrant
Shares, and the Exercise Price for each Warrant Tranche.  The Warrant
Tranche Schedule shall be updated by the Company, with an updated copy provided
to the Holder, promptly following each exercise of this Warrant.  No
portion of this Warrant shall vest or be exercisable except under the Warrant
Tranches.

     

    ARTICLE 1

    EXERCISE OF
WARRANT.

     

    1.1         Mechanics
of Exercise.

     

    1.1.1      Subject
to the terms and conditions hereof, this Warrant may be exercised by the Holder
on any day on or after the Issuance Date, in whole or in part, by (i) delivery
of a written notice to the Company, in the form attached hereto as Appendix 1 (the
“Exercise
Notice”), of the Holder’s election to exercise this Warrant, and (ii)
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”), with such payment made, at Investor’s option, (x) in cash or by
wire transfer of immediately available funds, (y) by the issuance and delivery
of a recourse promissory note substantially in the form attached hereto as Appendix 2 (each, a
“Recourse
Note”), or (z) if applicable, by cashless exercise pursuant to Section
1.3.

     

    1.1.2      The
Holder shall not be required to deliver the original Warrant in order to effect
an exercise hereunder.  Execution and delivery of the Exercise Notice
with respect to less than all of the Warrant Shares shall have the same effect
as cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares.

    
      
         

      

      
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    1.1.3      On
the Trading Day on which the Company has received each of the Exercise Notice
and the Aggregate Exercise Price (the “Exercise Delivery
Documents”) from the Holder by 6:30 p.m. Eastern time, or on the next
Trading Day if the Exercise Delivery Documents are received after 6:30 p.m.
Eastern time or on a non-Trading Day (in each case, the “Exercise Delivery
Date”), the Company shall transmit (i) a facsimile acknowledgment of
confirmation of receipt of the Exercise Delivery Documents to the Holder, and
(ii) an electronic copy of its share issuance instructions to the Holder and to
the Company’s transfer agent (the “Transfer Agent”),
with such transmissions to comply with the notice provisions contained in Section 6.2 of the
Purchase Agreement, and shall instruct and authorize the Transfer Agent to
credit such aggregate number of freely-tradable Warrant Shares to which the
Holder is entitled to receive upon such exercise to the Holder’s or its
designee’s balance account with The Depository Trust Company (DTC) through the
Fast Automated Securities Transfer (FAST) Program through its Deposit Withdrawal
Agent Commission (DWAC) system, with such credit to occur no later than 12:00
p.m. Eastern Time on the Trading Day following the Exercise Delivery Date, time
being of the essence; provided, however, that if the
Warrant Shares are not credited as DWAC Shares by 12:00 p.m. Eastern Time on the
Trading Day following the Exercise Delivery Date, then the Tranche Closing Date
applicable to the Exercise Notice shall be extended by one Trading Day for each
Trading Day that timely credit of DWAC Shares is not made.

     

    1.1.4      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.  Any
Warrant delivered in connection with a Tranche Notice and exercised by Holder
shall be deemed exercised (i) on the Tranche Notice Date, if exercised by 6:30
p.m. Eastern time on the Tranche Notice Date, or (ii) on the next Trading Day,
if exercised by Investor after 6:30 p.m. Eastern Time on the Tranche Notice Date
or on any other date, in each case with Holder deemed to be a holder of record
as of such date.

     

    1.1.5      If
this Warrant is exercised and the number of Warrant Shares represented by this
Warrant is greater than the number of Warrant Shares being acquired upon such
exercise, then the Company shall, as soon as practicable and in no event later
than one Trading Day after such exercise, update the Tranche Exercise Schedule
to reflect the revised number of Warrant Shares for which this Warrant is then
exercisable and deliver a copy of the updated Tranche Exercise Schedule to the
Holder.  No fractional shares of Common Stock are to be issued upon
the exercise of this Warrant, but rather the number of shares of Common Stock to
be issued shall be rounded up to the nearest whole number.  The
Company shall pay any and all taxes which may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this
Warrant.

     

    1.2         Adjustments
to Exercise Price and Number of Shares.  In addition to other
adjustments specified herein, the Exercise Price of this Warrant and the number
of shares of Common Stock issuable upon exercise shall be adjusted as
follows:

     

    1.2.1   
   Exercise
Price.  The “Exercise Price” per
share of Common Stock underlying this Warrant, subject to further adjustment as
provided herein, shall be as follows: (i) with
respect to the portion of this Warrant issued on the Effective Date and until
the first Tranche Notice Date, the amount per Warrant Share set forth on the
face of this Warrant, which is equal to Closing Bid Price for the Common Stock
on the Trading Day prior to the Effective Date, and (ii) with respect to the
portion of this Warrant that becomes exercisable on any Tranche Notice Date
(including the first Tranche Notice Date), an amount per Warrant Share equal to
the Closing Bid Price of a share of Common Stock on such Tranche Notice
Date.

    
      
         

      

      
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    1.2.2      
Number of
Shares.  The number of Warrant Shares underlying this Warrant
and each Warrant Tranche, subject to further adjustment as provided herein,
shall be as follows: (i) with respect to the portion of this Warrant issued on
the Effective Date and until the first Tranche Notice Date, the number of shares
set forth on the face of this Warrant, which is a number of shares of Common
Stock equal to the Maximum Placement multiplied by 135%, with the resulting sum
divided by the Closing Bid Price of a share of Common Stock on the Trading Day
prior to the Effective Date, and (ii) with respect to the portion of this
Warrant issued on any Tranche Notice Date including the first Tranche Notice
Date, a number of shares equal to the Tranche Purchase Price set forth in the
applicable Tranche Notice multiplied by 135%, with the resulting sum divided by
the Closing Bid Price of a share of Common Stock on the Tranche Notice
Date.  For example, if the Tranche Purchase Price is $1,000,000 and
the Closing Bid Price is $0.50, then the number of Warrant Shares underlying
that Warrant Tranche shall be $1,000,000 x 135% = $1,350,000 divided by $0.50 =
2,700,000 shares of Common Stock.  On each Tranche Notice Date, the
number of Warrant Shares underlying the related Warrant Tranche shall vest and
become exercisable, and the aggregate number of Warrant Shares underlying this
Warrant that are currently exercisable shall automatically adjust up or down to
account for the change in the number of Warrant Shares covered by the new
Warrant Tranche and for any Warrant Shares issued upon any prior or simultaneous
exercise of this Warrant.  If at any time the Holder reasonably
believes that the number of Warrant Shares included in the Registration
Statement is not sufficient to cover all exercises under this Warrant, then the
Company shall amend such Registration Statement to include the additional number
of Warrant Shares that may be required to provide such coverage.

     

    1.3         Cashless
Exercise.  Notwithstanding anything contained herein to the
contrary, if at any time there is not a current, valid and effective
registration statement covering the Warrant Shares that are the subject of the
Exercise Notice (the “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 = (B-C) x
A

      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
average of the Closing Sale Prices of the shares of Common Stock (as reported by
Bloomberg) for the five (5) consecutive Trading Days ending on the date
immediately preceding the date of the Exercise Notice.

    
      
         

      

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

     

    1.4         Company’s
Failure to Timely Deliver Securities.  If the Company
shall fail for any reason or for no reason to credit to the Holder’s balance
account with DTC, by 12:00 p.m. Eastern time on the Trading Day following the
Exercise Delivery Date, the number of shares of Common Stock to which the Holder
is entitled upon the Holder’s exercise of this Warrant, then, in addition to all
other remedies available to the Holder, the Company shall pay in cash to the
Holder on each day after such Trading Day that the issuance of such shares of
Common Stock is not timely effected an amount equal to 1.5% of the product of
(A) the sum of the number of shares of Common Stock not issued to the Holder on
a timely basis and to which the Holder is entitled and (B) the Closing Bid Price
of the shares of Common Stock on the Trading Day immediately preceding the last
possible date which the Company could have issued such shares of Common Stock to
the Holder without violating Section
1.1.  In addition to the foregoing, if after the Company’s
receipt of an Exercise Notice the Company shall fail to timely (pursuant to
Section 1.1.3
hereof) credit the Holder’s balance account with DTC for the number of shares of
Common Stock to which the Holder is entitled upon the Holder’s exercise
hereunder, and 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, then the Company shall, within one Trading Day after
the Holder’s request and in the Holder’s discretion, either (i) pay cash to the
Holder in an amount equal to the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased (the
“Buy-In
Price”), at which point the Company’s obligation to credit such Holder’s
balance account with DTC for the number of Warrant Shares to which the Holder is
entitled upon the Holder’s exercise hereunder and to issue such Warrant Shares
shall terminate, or (ii) promptly honor its obligation to credit such Holder’s
balance account with DTC for the number of Warrant Shares to which the Holder is
entitled upon the Holder’s exercise hereunder 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 sold by Holder in satisfaction of its
obligations, times (B) the Closing Bid Price on the date of
exercise.

     

    1.5         Exercise
Limitation.  Notwithstanding
any other provision, at no time may the Holder (a) exercise this Warrant such
that the number of Warrant Shares to be received pursuant to such exercise
exceeds 135.0% of the aggregate of all Tranche Purchase Prices under and in
connection with all Tranche Notices delivered pursuant to the Purchase Agreement
prior to the date of exercise; or (b) exercise this Warrant such that the number
of Warrant Shares to be received pursuant to such exercise, aggregated with all
other shares of Common Stock then owned by the Holder beneficially or deemed
beneficially owned by the Holder, would result in the Holder owning more than
4.99% of all of such Common Stock as would be outstanding on the date of
exercise, as determined in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder.  In addition, as of any
date, the aggregate number of shares of Common Stock into which this Warrant is
exercisable within 61 days, together with all other shares of Common Stock then
beneficially owned (as such term is defined in Rule 13(d) under the Exchange
Act) by Holder and its affiliates, shall not exceed 9.99% of the total
outstanding shares of Common Stock as of such date.

    
      
         

      

      
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    1.6         Activity
Restrictions.  For so long as
Holder or any of its affiliates holds this Warrant or any Warrant Shares,
neither Holder nor any affiliate will:  (i) vote any shares of Common
Stock owned or controlled by it, solicit any proxies, or seek to advise or
influence any Person with respect to any voting securities of the Company; (ii)
engage or participate in any actions, plans or proposals which relate to or
would result in (a) acquiring additional securities of the Company, alone or
together with any other Person, which would result in beneficially owning or
controlling more than 9.99% of the total outstanding Common Stock or other
voting securities of the Company, (b) an extraordinary corporate transaction,
such as a merger, reorganization or liquidation, involving Company or any of its
subsidiaries, (c) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries, (d) any change in the present board of
directors or management of the Company, including any plans or proposals to
change the number or term of directors or to fill any existing vacancies on the
board, (e) any material change in the present capitalization or dividend policy
of the Company, (f) any other material change in the Company’s business or
corporate structure, including but not limited to, if the Company is a
registered closed-end investment company, any plans or proposals to make any
changes in its investment policy for which a vote is required by Section 13 of
the Investment Company Act of 1940, (g) changes in the Company’s charter, bylaws
or instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any Person, (h) causing a class of
securities of the Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (i) a class of equity securities of
the Company becoming eligible for termination of registration
pursuant  to Section 12(g)(4) of the Act, or (j) any action,
intention, plan or arrangement similar to any of those enumerated above; or
(iii) request the Company or its directors, officers, employees, agents or
representatives to amend or waive any provision of this Section
1.5.

     

    1.7         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.

     

    1.8         Insufficient
Authorized Shares.  If at any time
while any portion of this Warrant remains outstanding the Company does not have
a sufficient number of authorized and unreserved shares of Common Stock to
satisfy its obligation to reserve for issuance upon exercise of this Warrant at
least a number of shares of Common Stock equal to 110% of the number of shares
of Common Stock as shall from time to time be necessary to effect the exercise
of the portion of the Warrant then outstanding (the “Required Reserve
Amount”) (an “Authorized Share
Failure”), then the Company shall immediately take all action necessary
to increase the Company’s authorized shares of Common Stock to an amount
sufficient to allow the Company to reserve the Required Reserve Amount for the
portion of the Warrant 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 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 best efforts to solicit its stockholders’ approval of such
increase in authorized shares of Common Stock and to cause its board of
directors to recommend to the stockholders that they approve such
proposal.

    
      
         

      

      
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    ARTICLE 2

    ADJUSTMENT UPON SUBDIVISION
OR COMBINATION OF COMMON STOCK

     

    If the
Company at any time on or after the Issuance 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 Issuance 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 ARTICLE 2 shall
become effective at the close of business on the date the subdivision or
combination becomes effective.

     

    ARTICLE 3

    PURCHASE RIGHTS; FUNDAMENTAL
TRANSACTIONS

     

    3.1          Purchase
Rights.  In addition to
any adjustments pursuant to ARTICLE 2 above, if
at any time the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common Stock (the
“Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without regard to any
limitations on 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.

     

    
      
         

      

      
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    3.2          Subsequent
Equity Sales. In addition to any adjustments made pursuant to ARTICLE 2 above, if
the Company or any Subsidiary thereof, as applicable, at any time while this
Warrant is outstanding, shall sell or grant any option to purchase, or sell or
grant any right to reprice, or otherwise dispose of or issue (or announce any
offer, sale, grant or any option to purchase or other disposition) any Common
Stock or Common Stock Equivalents entitling any Person to acquire shares of
Common Stock, at an effective price per share less than the then Exercise Price
(such lower price, the “Base Share Price” and
such issuances, collectively, a “Dilutive Issuance”),
then the Exercise Price shall be reduced and only reduced to equal the Base
Share Price and the number of Warrant Shares issuable hereunder shall be
increased such that the aggregate Exercise Price payable hereunder, after taking
into account the decrease in the Exercise Price, shall be equal to the aggregate
Exercise Price prior to such adjustment.  Such adjustment shall be
made whenever such Common Stock or Common Stock Equivalents are
issued.  If the holder of the Common Stock or Common Stock Equivalents
so issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to warrants, options or rights per share which are issued in connection
with such issuance, be entitled to receive shares of Common Stock at an
effective price per share which is less than the Exercise Price, such issuance
shall be deemed to have occurred for less than the Exercise Price on such date
of the Dilutive Issuance.  Notwithstanding the foregoing, no
adjustments shall be made, paid or issued under this Section 3.2 in
respect of an Exempt Issuance, subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of the Purchase Agreement. The
Company shall notify the Holder in writing, no later than the Trading Day
following the issuance of any Common Stock or Common Stock Equivalents subject
to this Section
3.2, indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing terms (such
notice the “Dilutive
Issuance Notice”).  For purposes of clarification, whether or
not the Company provides a Dilutive Issuance Notice pursuant to this Section 3.2, upon the
occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance
the Holder is entitled to receive a number of Warrant Shares based upon the Base
Share Price regardless of whether the Holder accurately refers to the Base Share
Price in the Notice of Exercise.

    
      
         

      

      
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    3.3          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 in accordance with the provisions of this Section 3.3 pursuant to written
agreements in form and substance satisfactory to the Required Holders and
approved by the Required Holders prior to such Fundamental Transaction,
including agreements to deliver to each Holder of this Warrant in exchange for
such Warrant 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) prior to such Fundamental Transaction, and satisfactory to the
Required Holders.  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), 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) purchasable upon the exercise of this 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 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, in lieu of the
shares of the Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of this 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 this Warrant been exercised immediately
prior to such Fundamental Transaction; provided, however, that in the
event the Fundamental Transaction involves the issuance of cash or freely
tradable securities by an issuer listed on the New York Stock Exchange or the
Nasdaq Stock Market, then the ability to exercise this Warrant shall expire on
the consummation of that Fundamental Transaction.  Provision made
pursuant to the preceding sentence shall be in a form and substance reasonably
satisfactory to the Required Holders.  The provisions of this Section 3.3  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.

     

    3.4          Notwithstanding
the foregoing Section
3.3, in the event of a Fundamental Transaction other than one in which
the Successor Entity is a Public Successor Entity that assumes this Warrant such
that this Warrant shall be exercisable for the publicly traded common stock of
such Public Successor Entity, at the request of the Holder delivered before the
90th day after the effective date of such Fundamental Transaction, the Company
(or the Successor Entity) shall purchase this Warrant from the Holder by paying
to the Holder, within five (5) Trading Days after such request (or, if later, on
the effective date of the Fundamental Transaction), cash in an 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 using a volatility equal to the 100 day average historical
price volatility prior to the date of the public announcement of such
Fundamental Transaction.

    
      
         

      

      
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    ARTICLE 4

    NONCIRCUMVENTION

     

    The
Company hereby covenants and agrees that the Company will not, by amendment of
its certificate or articles of incorporation, articles of association, bylaws,
or any other organization documents, 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
portion of this Warrant remains 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, 110% of
the number of shares of Common Stock as shall from time to time be necessary to
effect the exercise of this Warrant then outstanding (without regard to any
limitations on exercise).

     

    ARTICLE 5

    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 ARTICLE 5, 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.

     

    ARTICLE 6

    REISSUANCE OF
WARRANTS

     

    6.1          Transfer
of Warrant.  If this Warrant
is to be transferred, the Holder shall surrender this Warrant to the Company,
whereupon the Company will forthwith issue and deliver upon the order of the
Holder a new Warrant (in accordance with Section 6.4),
registered as the Holder may request, 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 6.4) to the
Holder representing the right to purchase the number of Warrant Shares not being
transferred.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    6.2          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 6.4)
representing the right to purchase the Warrant Shares then underlying this
Warrant.

     

    6.3          Exchangeable
for Multiple Warrant.  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 6.4)
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 Warrant for fractional
shares of Common Stock shall be given.

     

    6.4          Issuance
of New Warrant.  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 6.1 or Section 6.3, the Warrant
Shares designated by the Holder which, when added to the number of shares of
Common Stock underlying the other new Warrant 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.

     

    ARTICLE 7

    NOTICES

     

    Whenever
notice is required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with Section 6.2 of the
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 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 as such 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

        
          

        

      

      
         

      

    

    ARTICLE 8

    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 Required Holders; provided that except
as set forth in this Warrant 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 this Warrant.

     

    ARTICLE 9

    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.

     

    ARTICLE 10

    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.

     

    ARTICLE 11

    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 2
Trading 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 Trading Days of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company shall,
within 2 Trading Days submit via facsimile (a) the disputed determination of the
Exercise Price or arithmetic calculation to an independent, reputable investment
bank or independent registered public accounting firm selected by Holder subject
to Company’s approval, which may not be unreasonably withheld or delayed, or (b)
the disputed arithmetic calculation of the Warrant Shares to the Company’s
independent registered public accounting firm.  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 3 Trading 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

        
          

        

      

      
         

      

    

    ARTICLE 12

    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, 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.

     

    ARTICLE 13

    DEFINITIONS

     

    For
purposes of this Warrant, in addition to the terms defined elsewhere herein, the
following terms shall have the following meanings:

     

    13.1        “Bloomberg” means
Bloomberg Financial Markets.

     

    13.2        “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 Trading
Market, as reported by Bloomberg, or, if the Trading 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., Eastern time, as
reported by Bloomberg, or, if the Trading 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 Holder.  If the Company and Holder are unable to agree
upon the fair market value of such security, then such dispute shall be resolved
pursuant to ARTICLE
11.  All such determinations to be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    13.3         “Common Stock” means
(i) the Company’s shares of Common Stock, par value $0.0001 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.

     

    13.4         “Common Stock Deemed
Outstanding” means, at any given time, the number of shares of Common
Stock actually outstanding at such time, plus the number of shares of Common
Stock deemed to be outstanding pursuant to Section 3.1 hereof regardless of
whether the Options or Convertible Securities are actually exercisable at such
time, but excluding any shares of Common Stock owned or held by or for the
account of the Company or issuable upon exercise of this Warrant.

     

    13.5         “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

     

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

     

    13.7         “DWAC Shares” means
all Warrant Shares issued or issuable to Holder or any Affiliate, successor or
assign of Holder pursuant to this Warrant, all of which shall be (a) issued in
electronic form, (b) freely tradable and without restriction on resale, and (c)
timely credited by Company to the specified Deposit/Withdrawal at Custodian
(DWAC) account with DTC under its Fast Automated Securities Transfer (FAST)
Program or any similar program hereafter adopted by DTC performing substantially
the same function, in accordance with instructions issued to and countersigned
by the Transfer Agent of the Company.

     

    13.8         “Eligible Market”
means the Trading Market, The New York Stock Exchange, Inc., The NASDAQ Global
Select Market, The NASDAQ Global Market, The NASDAQ Capital Market, the NYSE
Amex or the OTC Bulletin Board, but does not include the Pink
Sheets.

     

    13.9         “Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees,
officers or directors of the Company pursuant to any stock or option plan duly
adopted for such purpose, by a majority of the non-employee members of the Board
of Directors or a majority of the members of a committee of non-employee
directors established for such purpose, (b) securities upon the exercise or
exchange of or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common
Stock issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange price
or conversion price of such securities (except as a result of anti-dilution
provisions therein), and (c) securities issued pursuant to acquisitions or
strategic transactions approved by a majority of the disinterested directors of
the Company, provided that any such issuance shall only be to a Person (or to
the equity holders of a Person) which is, itself or through its subsidiaries, an
operating company or an asset in a business synergistic with the business of the
Company and shall provide to the Company additional benefits in addition to the
investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    13.10      “Fundamental
Transaction” has the meaning set forth in the Purchase
Agreement.

     

    13.11      “Maximum Placement”
has the meaning set forth in the Purchase Agreement.

     

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

     

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

     

    13.14      “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.

     

    13.15      “Public Successor
Entity” means a Successor Entity that is a publicly traded corporation
whose stock is quoted or listed for trading on an Eligible Market.

     

    13.16      “Required Holders”
means the Holders of this Warrant representing at least a majority of shares of
Common Stock underlying this Warrant as then outstanding.

     

    13.17      “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.

     

    13.18      “Trading Day” means
any day on which the Common Stock is traded on an Eligible Market; provided that
it shall not include any day on which the Common Stock (a) is suspended from
trading, or (b) is scheduled to trade on such exchange or market for less than 5
hours.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    13.19      “Trading Market” means
the OTC Bulletin Board, the NASDAQ Capital Market, the NASDAQ Global Market, the
NASDAQ Global Select Market, the NYSE Amex, or the New York Stock Exchange,
whichever is at the time the principal trading exchange or market for the Common
Stock, but does not include the Pink Sheets inter-dealer electronic quotation
and trading system.

     

    13.20      “Tranche Closing Date”
has the meaning set forth in the Purchase Agreement.

     

    13.21      “Tranche Notice” has
the meaning set forth in the Purchase Agreement.

     

    13.22      “Tranche Notice Date”
has the meaning set forth in the Purchase Agreement.

     

    13.23      “Tranche Purchase
Price” has the meaning set forth in the Purchase
Agreement.

    
      
         

      

      
        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.

     

    
      
        
          
            
              
                
                  
                    
                      	 	
                              MEDCLEAN
      TECHNOLOGIES, INC.

                            
	 	 
      
	 	
                              By:

                            	 
      	 
      
	 	
                              Name: 

                            	 
      	 
      
	 	
                              Title:

                            	 
      	 
      
	 	 
      	 
      	 
      
	 	
                              By:

                            	 
      	 
      
	 	
                              Name:

                            	 
      	 
      
	 	
                              Title:

                            	 
      	 
      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Warrant Exercise
Schedule

     

    
      
        
          
            
              
                
                  	
                          Exercise Date

                        	 
      	
                          Number of

                          Warrant Shares

                        	 
      	
                          Exercise Price 

                          Per Share

                        	 
      	
                          Aggregate 

                          Exercise Price

                        	 
      	
                          Dollar Amount

                          Remaining

                        
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                            

                        	 
      	
                            

                        	 
      	
                            

                        	 
      	
                            

                        	 
      

                

              

            

          

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    APPENDIX
1

     

    EXERCISE
NOTICE

     

    MEDCLEAN
TECHNOLOGIES, INC.

     

    The
undersigned hereby exercises the right to purchase ________________ shares of
Common Stock (“Warrant
Shares”) of MedClean Technologies, Inc., a Delaware corporation (“Company”), evidenced
by the attached Warrant to Purchase Common Stock (“Warrant”).  Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.  The Holder intends that payment of the
Exercise Price shall be made as:

     

    ___         Cash
Exercise with respect to ____________ Warrant Shares

    

    ___         Cashless
Exercise with respect to ____________ Warrant Shares

    

    ___         Recourse
Note Exercise with respect to ____________ Warrant Shares

    

    Please
issue

    

    
      	
            	
              ___ 

            	
              A
      certificate or certificates representing said shares of Common Stock in
      the name specified below

            

    

    

    
      	
               
      

            	
              ___

            	
              Said
      shares in electronic form to the Deposit/Withdrawal at Custodian (DWAC)
      account with Depository Trust Company (DTC) specified
    below.

            

    

     

    
      
        
          
            
              
                
                  
                    
                      	 
      	 
      
	 
      	 
      
	
                              By:

                            	 
      
	
                              Name: 

                            	 
      
	
                              Title:

                            	 
      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ACKNOWLEDGMENT

     

    The
Company hereby acknowledges the foregoing Exercise Notice and hereby directs
[_______________________________] to issue the above indicated number of shares
of Common Stock as specified above, in accordance with the Transfer Agent
Instructions dated [_________] from the Company, and acknowledged and agreed to
by the transfer agent.

     

    
      
        
          
            
              	 	
                      MEDCLEAN
      TECHNOLOGIES, INC.

                    
	 	 
      
	 	
                      By:

                    	 
      	 
      
	 	
                      Name: 

                    	 
      	 
      
	 	
                      Title:

                    	 
      	 
      

            

          

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    APPENDIX
2

     

    FORM OF
NOTE

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    SECURED
PROMISSORY NOTE

    

    
      	
              $[_____________]

            	
              Date:
      [________], 20[__]

            

    

    

    FOR VALUE
RECEIVED, [_____________] (“Borrower”) promises
to pay to the order of MedClean Technologies, Inc. (“Lender”), at
[________], or at such other place as Lender may from time to time designate in
writing, the principal sum of $[________], with interest, as
follows:

    

    1.           Interest.  The
principal balance outstanding from time to time under this Secured Promissory
Note (this “Note”), shall bear
interest from and after the date hereof at the rate of 2.0% per
year.  Interest shall be calculated on a simple interest basis and the
number of days elapsed during the period for which interest is being
calculated.  Payments of interest will be due on each annual
anniversary of the date of this Note; provided that
Borrower will not be in default hereunder for failure to make any annual
interest payment when due (other than on the Maturity Date) and the amount of
interest not paid when due shall be added to the principal balance of this Note
and such amount will thereafter accrue interest at the rate set forth
above.

     

    2.           Payments.  If
not sooner paid, the entire unpaid principal balance, interest thereon and any
other charges due and payable under this Note shall be due and payable on the
fourth anniversary of the date of this Note (“Maturity
Date”); provided, however, that no
payments on this Note will be due or payable so long as either (a) Lender is in
default under any preferred stock purchase agreement for Series C Preferred
Stock with Borrower or any Warrant issued pursuant thereto, any loan
agreement or other material agreement entered into with Borrower, or (b)
there are any shares of Series C Preferred Stock of Lender issued or outstanding
(each, a “Non-Payment
Event”).  Upon the termination or cure of any Non-Payment
Event, Borrower’s obligation to pay amounts outstanding on this Note will
immediately be reinstated.  Borrower shall have the right to prepay
all or any part of the principal balance of this Note at any time without
penalty or premium.  In the event that Lender redeems all or a portion
of any shares of Series C Preferred Stock then held by Borrower, the proceeds of
any such redemption will be applied by Borrower to pay down the accrued interest
and outstanding principal of this Note and Lender will be permitted to offset
the full amount of such proceeds against amounts outstanding under this
Note.  All payments on this Note shall be first applied to interest,
then to reduce the outstanding principal balance hereof.

     

    3.           Full Recourse
Note.  THIS IS A FULL RECOURSE PROMISSORY
NOTE.  Accordingly, notwithstanding that Borrower’s obligations under
this Note are secured by the Collateral, in the event of a material default
hereunder, Lender shall have full recourse to all the other assets of
Borrower.  Moreover, Lender shall not be required to proceed against
or exhaust any Collateral, or to pursue any Collateral in any particular order,
before Lender pursues any other remedies against Borrower or against any of
Borrower’s assets.

     

    4.           Security

     

    a.           Pledge.  As
security for the due and prompt payment and performance of all payment
obligations under this Note and any modifications, replacements and extensions
hereof (collectively, “Secured
Obligations”), Borrower hereby pledges and grants a security interest to
Lender in all of Borrower’s right, title, and interest in and to all of the
following, now owned or hereafter acquired or arising (together the “Collateral”):

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    i.            
Freely tradable shares of common stock, preferred stock, bonds, notes and/or
debentures (collectively, “Pledged Securities”)
with a fair market value on the date hereof at least equal to the principal
amount of this Note, based upon the trading price of such securities on the OTC
Bulletin Board, NASDAQ Capital Market, NASDAQ Global Market, NASDAQ Global
Select Market, NYSE Amex, or New York Stock Exchange;

     

    ii.          
 all rights of Borrower with respect to or arising out of the Pledged
Securities, including voting rights, and all equity and debt securities and
other property distributed or distributable with respect thereto as a result of
merger, consolidation, dissolution, reorganization, recapitalization, stock
split, stock dividend, reclassification, exchange, redemption, or other change
in capital structure; and

     

    iii.           all
proceeds, replacements, substitutions, accessions and increases in any of the
Collateral.

     

    b.           Replacement
Securities.  So long as any Secured Obligations remain
outstanding, in the event that Borrower sells or disposes of any Pledged
Securities, Borrower shall promptly provide replacement securities of equal or
greater value than such Pledged Securities.

     

    c.           Rights With Respect to
Distributions.  So long as no default shall have occurred and
be continuing under this Note, Borrower shall be entitled to receive any and all
dividends and distributions made with respect to the Pledged Securities and any
other Collateral.  However, upon the occurrence and during the
continuance of any default, Lender shall have the sole right (unless otherwise
agreed by Lender) to receive and retain dividends and distributions and apply
them to the outstanding balance of this Note or hold them as Collateral, at
Lender’s election.  

     

    d.           Voting
Rights.  So long as no default shall have occurred and be
continuing under this Note, Borrower shall be entitled to exercise all voting
rights pertaining to the Pledged Securities and any other
Collateral.  However, upon the occurrence and during the continuance
of any default, all rights of Borrower to exercise the voting rights that
Borrower would otherwise be entitled to exercise with respect to the Collateral
shall cease and (unless otherwise agreed by Lender) all such rights shall
thereupon become vested in Lender, which shall thereupon have the sole right to
exercise such rights.

     

    e.           Financing Statement; Further
Assurances.  Borrower agrees, concurrently with executing this
Note, that Lender may file a UCC-1 financing statement relating to the
Collateral in favor of Lender, and any similar financing statements in any
jurisdiction in which Lender reasonably determines such filing to be
necessary.  Borrower further agrees that at any time and from time to
time Borrower shall promptly execute and deliver all further instruments and
documents that Lender may request in order to perfect and protect the security
interest granted hereby, or to enable Lender to exercise and enforce its rights
and remedies with respect to any Collateral following an event of
default.  In addition, following an event of default, Borrower shall
deliver the Collateral, including original certificates or other instruments
representing the Pledged Securities, to Lender to hold as secured party, and
Borrower shall, if requested by Lender, execute a securities account control
agreement.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    f.       
    Powers of
Lender.  Borrower hereby appoints Lender as Borrower’s true and
lawful attorney-in-fact to perform any and all of the following acts, which
power is coupled with an interest, is irrevocable until the Secured Obligations
are paid and performed in full, and may be exercised from time to time by Lender
in its discretion:  To take any action and to execute any instrument
which Lender may deem reasonably necessary or desirable to accomplish the
purposes of this Section 4(f) and,
more broadly, this Note including, without limitation:  (i) to
exercise voting and consent rights with respect to Collateral in accordance with
this Note, (ii) during the continuance of any default hereunder, to receive,
endorse and collect all instruments or other forms of payment made payable to
Borrower representing any dividend, interest payment or other distribution in
respect of the Collateral or any part thereof and to give full discharge for the
same, when and to the extent permitted by this Note, (iii) to perform or cause
the performance of any obligation of Borrower hereunder in Borrower’s name or
otherwise, (iv) during the continuance of any default hereunder, to liquidate
any Collateral pledged to Lender hereunder and to apply proceeds thereof to the
payment of the Secured Obligations or to place such proceeds into a cash
collateral account or to transfer the Collateral into the name of Lender, all at
Lender’s sole discretion, (v)  to enter into any extension,
reorganization or other agreement relating to or affecting the Collateral, and,
in connection therewith, to deposit or surrender control of the Collateral, (vi)
to accept other property in exchange for the Collateral, (vii) to make any
compromise or settlement Lender deems desirable or proper, and (viii) to execute
on Borrower’s behalf and in Borrower’s name any documents required in order to
give Lender a continuing first lien upon the Collateral or any part
thereof.

     

    5.           Additional
Terms

     

    a.      
    No
Waiver.  The acceptance by Lender of payment of a portion of
any installment when due or an entire installment but after it is due shall
neither cure nor excuse the default caused by the failure of Borrower timely to
pay the whole of such installment and shall not constitute a waiver of Lender’s
right to require full payment when due of any future or succeeding
installments.

     

    b.       
   Default.  Any
one or more of the following shall constitute a “default” under this
Note:  (i) a default in the payment when due of any amount hereunder,
(ii) Borrower’s refusal to perform any material term, provision or covenant
under this Note, (iii) the commencement of any liquidation, receivership,
bankruptcy, assignment for the benefit of creditors or other debtor-relief
proceeding by or against Borrower, (iv) the transfer by Borrower of any Pledged
Securities without being replaced by Pledged Securities in accordance with Section 4(b), and
(iv) the levying of any attachment, execution or other process against Borrower,
the Collateral or any material portion thereof.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    c.       
   Default
Rights

     

    i.      
     Upon the occurrence of any payment default Lender
may, at its election, declare the entire balance of principal and interest under
this Note immediately due and payable.  A delay by Lender in
exercising any right of acceleration after a default shall not constitute a
waiver of the default or the right of acceleration or any other right or remedy
for such default.  The failure by Lender to exercise any right of
acceleration as a result of a default shall not constitute a waiver of the right
of acceleration or any other right or remedy with respect to any other default,
whenever occurring.

     

    ii.           Further,
upon the occurrence of any material non-monetary default, following 30 days
notice from Lender to Borrower specifying the default and demanded manner of
cure for any non-monetary default, Lender shall thereupon and thereafter have
any and all of the rights and remedies to which a secured party is entitled
after a default under the applicable Uniform Commercial Code, as then in
effect.  In addition to Lender’s other rights and remedies, Borrower
agrees that, upon the occurrence of default, Lender may in its sole discretion
do or cause to be done any one or more of the following:

     

    (a)           Proceed
to realize upon the Collateral or any portion thereof as provided by law, and
without liability for any diminution in price which may have occurred, sell the
Collateral or any part thereof, in such manner, whether at any public or private
sale, and whether in one lot as an entirety, or in separate portions, and for
such price and other terms and conditions as is commercially reasonable given
the nature of the Collateral.

     

    (b)           If
notice to Borrower is required, give written notice to Borrower at least ten
days before the date of sale of the Collateral or any portion
thereof.

     

    (c)           Transfer
all or any part of the Collateral into Lender’s name or in the name of its
nominee or nominees.

     

    (d)           Vote
all or any part of the Collateral (whether or not transferred into the name of
Lender ) and give all consents, waivers and ratifications in respect of the
Collateral and otherwise act with respect thereto, as though Lender were the
outright owner thereof.

     

    iii.           Borrower
acknowledges that all or part of foreclosure of the Collateral may be restricted
by state or federal securities laws, Lender may be unable to effect a public
sale of all or part of the Collateral, that a public sale is or may be
impractical and inappropriate and that, in the event of such restrictions,
Lender thus may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire the Collateral for their own account, for investment and not with a
view to its distribution or resale.  Borrower agrees that if
reasonably necessary Lender may resort to one or more sales to a single
purchaser or a restricted or limited group of purchasers.  Lender
shall not be obligated to make any sale or other disposition, unless the terms
thereof shall be satisfactory to it.

     

    iv.           If,
in the opinion of Lender based upon written advice of counsel, any consent,
approval or authorization of any federal, state or other governmental agency or
authority should be necessary to effectuate any sale or other disposition of any
Collateral, Borrower shall execute all such applications and other instruments
as may reasonably be required in connection with securing any such consent,
approval or authorization, and will otherwise use its commercially reasonable
best efforts to secure the same.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    v.           The
rights, privileges, powers and remedies of Lender shall be cumulative, and no
single or partial exercise of any of them shall preclude the further or other
exercise of any of them.  Any waiver, permit, consent or approval of
any kind by Lender of any default hereunder, or any such waiver of any
provisions or conditions hereof, must be in writing and shall be effective only
to the extent set forth in writing.  Any proceeds of any disposition
of the Collateral, or any part thereof, may be applied by Lender to the payment
of expenses incurred by Lender in connection with the foregoing, and the balance
of such proceeds shall be applied by Lender toward the payment of the Secured
Obligations.

     

    d.           No Oral Waivers or
Modifications.  No provision of this Note may be waived or
modified orally, but only in a writing signed by Lender and
Borrower.

     

    e.           Attorney
Fees.  The prevailing party in any action by Lender to collect
any amounts due under this Note shall be entitled to recover its reasonable
attorneys fees and costs.

     

    f.           Governing
Law.  This Note has been executed and delivered in, and is to
be construed, enforced, and governed according to the internal laws of, the
State of New York without regard to its principles of conflict of laws that
would require or permit the application of the laws of any other
jurisdiction.

     

    g.           Severability.  Whenever
possible, each provision of this Note shall be interpreted in such manner as to
be effective and valid under applicable law.  However, if any
provision of this Note shall be held to be prohibited by or invalid under
applicable law, it shall be ineffective only to the extent of such prohibition
or invalidity without invalidating the remainder of that provision or the other
provisions of this Note.

     

    h.           Entire
Agreement.  This Note contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such
matters. 

     

    
      
        
          
            
              
                
                  
                    	 
      
	 
      
	
                            By:

                          	 
      

                  

                

              

            

          

        

      

    

    
      
        
          
            
              	
                      Name:

                    	 
      

            

          

        

      

    

    
      
        
          
            
              	
                      Title:

                    	 
      

            

          

        

      

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Exhibit
B

     

    Certificate
of Designations

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    MEDCLEAN
TECHNOLOGIES, INC.

     

    CERTIFICATE
OF DESIGNATIONS

    OF
PREFERENCES, RIGHTS AND LIMITATIONS

    OF

    SERIES C
PREFERRED STOCK

     

    The
undersigned, David J. Laky and Cheryl K. Sadowski, hereby certify
that:

     

    1.           They
are the President and Chief Executive Officer, and Treasurer and Chief Financial
Officer, respectively, of MedClean Technologies, Inc., a Delaware corporation
(the “Corporation”).

     

    2.           The
Corporation is authorized to issue 60,000,000 shares of preferred stock, none of
which is issued or outstanding.

     

    3.           The
following resolutions were duly adopted by the Board of Directors:

     

    WHEREAS,
the Certificate of Incorporation of the Corporation provides for a class of its
authorized stock known as preferred stock, comprised of 60,000,000 shares,
$0.0001 par value per share (the Preferred Stock”),
issuable from time to time in one or more series;

     

    WHEREAS,
the Board of Directors of the Corporation is authorized to fix the dividend
rights, dividend rate, voting rights, conversion rights, rights and terms of
redemption and liquidation preferences of any wholly unissued series of
Preferred Stock and the number of shares constituting any series and the
designation thereof, of any of them; and

     

    WHEREAS,
it is the desire of the Board of Directors of the Corporation, pursuant to its
authority as aforesaid, to fix the rights, preferences, restrictions and other
matters relating to a series of Preferred Stock, which shall consist of up to
1,500 shares of the Preferred Stock which the Corporation has the authority to
issue, as follows:

     

    NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for
the issuance of a series of Preferred Stock for cash or exchange of other
securities, rights or property and does hereby fix and determine the rights,
preferences, restrictions and other matters relating to such series of Preferred
Stock as follows:

     

    TERMS OF
PREFERRED STOCK

     

    1.           Designation, Amount and Par
Value.  The series of Preferred Stock shall be designated as
the Corporation’s Series C Preferred Stock (the “Series C Preferred
Stock”) and the number of shares so designated shall be 1,500 (which
shall not be subject to increase without any consent of the holders of the
Series C Preferred Stock (each a “Holder” and
collectively, the “Holders”) that may be
required by applicable law.  Each share of Series C Preferred Stock
shall have a par value of $0.0001 per share.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    2.           Ranking and
Voting.

     

    a.           Ranking.  The
Series C Preferred Stock shall, with respect to dividend rights and rights upon
liquidation, winding-up or dissolution, rank: (i) senior to the Corporation’s
common stock, par value $0.0001 per share (“Common Stock”), and
any other class or series of Preferred Stock of the Corporation (collectively,
together with any warrants, rights, calls or options exercisable for or
convertible into such Preferred Stock, the “Junior Securities”);
and (ii)
junior to all existing and future indebtedness of the Corporation.

     

    b.           Voting.  Except
as required by applicable law or as set forth herein, the holders of shares of
Series C Preferred Stock will have no right to vote on any matters, questions or
proceedings of this Corporation including, without limitation, the election of
directors.

     

    3.           Dividends and Other
Distributions.  Commencing on the date of the issuance of any
such shares of Series C Preferred Stock (each respectively an “Issuance Date”),
Holders of Series C Preferred Stock shall be entitled to receive dividends on
each outstanding share of Series C Preferred Stock (“Dividends”), which
shall accrue in shares of Series C Preferred Stock at a rate equal to 10.0% per annum from
the Issuance Date.  Accrued Dividends shall be payable upon redemption
of the Series C Preferred Stock in accordance with Section 6.

     

    a.           Any
calculation of the amount of such Dividends payable pursuant to the provisions
of this Section
3 shall be made based on a 365-day year and on the number of days
actually elapsed during the applicable period, compounded annually.

     

    b.           So
long as any shares of Series C Preferred Stock are outstanding, no dividends or
other distributions will be paid, declared or set apart with respect to any
Junior Securities.  The Common Stock shall not be redeemed while the
Series C Preferred Stock is outstanding.

     

    4.           Protective
Provision.  So long as any shares of Series C Preferred Stock
are outstanding, the Corporation shall not, without the affirmative approval of
the Holders of a majority of the shares of the Series C Preferred Stock then
outstanding (voting as a class), (a) alter
or change adversely the powers, preferences or rights given to the Series C
Preferred Stock or alter or amend this Certificate of Designations, (b)
authorize or create any class of stock ranking as to distribution of assets upon
a liquidation senior to or otherwise pari passu with the Series C Preferred
Stock, (c) amend its certificate or articles of incorporation, articles of
association, or other charter documents in breach of any of the provisions
hereof, (d) increase the authorized number of shares of Series C Preferred
Stock, (e) liquidate, dissolve or wind-up the business and affairs of the
Corporation, or effect any Deemed Liquidation Event (as defined below), or (f)
enter into any agreement with respect to the foregoing.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    a.           A
“Deemed Liquidation
Event” shall mean:  (i) a merger or consolidation in which the
Corporation is a constituent party or a subsidiary of the Corporation is a
constituent party and the Corporation issues shares of its capital stock
pursuant to such merger or consolidation, except any such merger or
consolidation involving the Corporation or a subsidiary in which the shares of
capital stock of the Corporation outstanding immediately prior to such merger or
consolidation continue to represent, or are converted into or exchanged for
shares of capital stock that represent, immediately following such merger or
consolidation, at least a majority, by voting power, of the capital stock of the
surviving or resulting corporation or if the surviving or resulting corporation
is a wholly owned subsidiary of another corporation immediately following such
merger or consolidation, the parent corporation of such surviving or resulting
corporation; or (ii) the sale, lease, transfer, exclusive license or other
disposition, in a single transaction or series of related transactions, by the
Corporation or any subsidiary of the Corporation of all or substantially all the
assets of the Corporation and its subsidiaries taken as a whole,  or
the sale or disposition (whether by merger or otherwise) of one or more
subsidiaries of the Corporation if substantially all of the assets of the
Corporation and its subsidiaries taken as a whole are held by such subsidiary or
subsidiaries, except where such sale, lease, transfer, exclusive license or
other disposition is to a wholly owned subsidiary of the
Corporation.

     

    b.           The
Corporation shall not have the power to effect a Deemed Liquidation Event
referred to in Section 4(a) unless the agreement or plan of merger or
consolidation for such transaction provides that the consideration payable to
the stockholders of the Corporation shall be allocated among the holders of
capital stock of the Corporation in accordance with Section
5.

     

    5.           Liquidation.

     

    a.           Upon
any liquidation, dissolution or winding up of the Corporation, whether voluntary
or involuntary, after payment or provision for payment of debts and other
liabilities of the Corporation, before any distribution or payment shall be made
to the holders of any Junior Securities by reason of their ownership thereof,
the Holders of Series C Preferred Stock shall first be entitled to be paid out
of the assets of the Corporation available for distribution to its stockholders
an amount with respect to each outstanding share of Series C Preferred Stock
equal to $10,000.00 (the
“Original Series C
Issue Price”), plus any accrued but unpaid Dividends thereon
(collectively, the “Series C Liquidation
Value”).  If, upon any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the amounts payable with
respect to the shares of Series C Preferred Stock are not paid in full, the
holders of shares of Series C Preferred Stock shall share equally and ratably in
any distribution of assets of the Corporation in proportion to the liquidation
preference and an amount equal to all accumulated and unpaid Dividends, if any,
to which each such holder is entitled

     

    b.           After
payment has been made to the Holders of the Series C Preferred Stock of the full
amount of the Series C Liquidation Value, any remaining assets of the
Corporation shall be distributed among the holders of the Corporation’s Junior
Securities in accordance with the Corporation’s Certificates of Designation and
Certificate of Incorporation.

     

    c.           If,
upon any liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation shall be insufficient to make payment in full to all Holders,
then such assets shall be distributed among the Holders at the time outstanding,
ratably in proportion to the full amounts to which they would otherwise be
respectively entitled.

     

    6.           Redemption.

     

    a.           Corporation’s Redemption
Option.  Upon or after the fourth anniversary of the initial
Issuance Date, the Corporation shall have the right, at the Corporation’s
option, to redeem all or a portion of the shares of Series C Preferred Stock, at
a price per share (the “Corporation Redemption
Price”) equal to 100% of the Series C Liquidation Value.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    b.           Early
Redemption.  Prior to redemption pursuant to Section 6(a)
hereof, the Corporation shall have the right, at the Corporation’s option, to
redeem all or a portion of the shares of Series C Preferred Stock, at a price
per share equal to: (i) 127% of the Series C Liquidation Value if redeemed on or
after the first anniversary but prior to the second anniversary of the initial
Issuance Date, (ii) 118% of the Series C Liquidation Value if redeemed on or
after the second anniversary but prior to the third anniversary of the initial
Issuance Date, and (iii) 109% of the Series C Liquidation Value if redeemed on
or after the third anniversary but prior to the fourth anniversary of the
initial Issuance Date.

     

    c.           Mandatory
Redemption.  If the Corporation determines to liquidate,
dissolve or wind-up its business and affairs, or effect any Deemed Liquidation
Event, the Corporation shall redeem the Series C Preferred Stock at the prices
set forth in Section 6(b) including the premium for early redemption set forth
therein.

     

    d.           Mechanics of
Redemption.  If the Corporation elects to redeem any of the
Holders’ Series C Preferred Stock then outstanding, it shall do so by delivering
written notice thereof via facsimile and overnight courier (“Notice of Redemption at
Option of Corporation”) to each Holder, which Notice of Redemption at
Option of Corporation shall indicate (A) the number of shares of Series C
Preferred Stock that the Corporation is electing to redeem and (B) the
Corporation Redemption Price (plus the premium for early redemption pursuant to
Section 6(b) if
applicable).

     

    e.           Payment of Redemption
Price.  Upon receipt by any Holder of a Notice of Redemption at
Option of Corporation, such Holder shall promptly submit to the Corporation such
Holder’s Series C Preferred Stock certificates.  Upon receipt of such
Holder’s Series C Preferred Stock certificates, the Corporation shall pay the
Corporation Redemption Price (plus the premium for early redemption pursuant to
Section 6(b) if
applicable), to such Holder, at the Corporation’s option either (i) in cash, or
(ii) by offset against any outstanding note payable from Holder to the
Corporation that was issued by Holder in connection with the exercise of
warrants by such Holder.

     

    7.           Transferability. The
Series C Preferred Stock may only be sold, transferred, assigned, pledged or
otherwise disposed of (“Transfer”) in
accordance with state and federal securities laws.  The Corporation
shall keep at its principal office, or at the offices of the transfer agent, a
register of the Series C Preferred Stock.  Upon the surrender of any
certificate representing Series C Preferred Stock at such place, the
Corporation, at the request of the record Holder of such certificate, shall
execute and deliver (at the Corporation’s expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number of
shares represented by the surrendered certificate.  Each such new
certificate shall be registered in such name and shall represent such number of
shares as is requested by the Holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    8.           Miscellaneous.

     

    a.           Notices.  Any
and all notices to the Corporation shall be addressed to the Corporation’s
President or Chief Executive Officer at the Corporation’s principal place of
business on file with the Secretary of State of the State of
Delaware.  Any and all notices or other communications or deliveries
to be provided by the Corporation to any Holder hereunder shall be in writing
and delivered personally, by facsimile, sent by a nationally recognized
overnight courier service addressed to each Holder at the facsimile telephone
number or address of such Holder appearing on the books of the Corporation, or
if no such facsimile telephone number or address appears, at the principal place
of business of the Holder. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section 8 prior to
5:30 p.m. Eastern time, (ii) the date after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified in this section later than 5:30 p.m. but prior to 11:59 p.m.
Eastern time on such date, (iii) the second business day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be
given.

     

    b.           Lost or Mutilated Preferred
Stock Certificate.  Upon receipt of evidence reasonably
satisfactory to the Corporation (an affidavit of the registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing shares of Series C Preferred Stock, and in the case
of any such loss, theft or destruction upon receipt of indemnity reasonably
satisfactory to the Corporation (provided that if the Holder is a financial
institution or other institutional investor its own agreement shall be
satisfactory) or in the case of any such mutilation upon surrender of such
certificate, the Corporation shall, at its expense, execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.

     

    c.           Headings.  The
headings contained herein are for convenience only, do not constitute a part of
this Certificate of Designations and shall not be deemed to limit or affect any
of the provisions hereof.

     

    RESOLVED,
FURTHER, that the chairman, chief executive officer, president or any
vice-president, and the secretary or any assistant secretary, of the Corporation
be and they hereby are authorized and directed to prepare and file a Designation
of Preferences, Rights and Limitations of Series C Preferred Stock in accordance
with the foregoing resolution and the provisions of Delaware
law.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the undersigned have executed this Certificate this 3rd day of
December 2009.

    

    
      
        
          
            	
                    By:

                  	 
      
	
                    Name: 

                  	
                    David
      J. Laky

                  
	
                    Title:

                  	
                    President
      and Chief Executive Officer

                  
	 
      	 
      
	
                    By:

                  	 
      
	
                    Name:

                  	
                    Cheryl
      K. Sadowski

                  
	
                    Title:

                  	
                    Treasurer
      and Chief Financial
Officer

                  

          

        

      

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    Exhibit
C

     

    Transfer
Agent Instructions

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    [Date]

     

    Securities
Transfer Corporation

    2591
Dallas Parkway

    Frisco,
Texas 75034

    

    Re:  MedClean
Technologies, Inc.

     

    Ladies
and Gentlemen:

     

    In
accordance with the Preferred Stock Purchase Agreement (“Purchase Agreement”),
dated December 4, 2009, by and between MedClean Technologies, Inc., a Delaware
corporation (“Company”), and Socius
Life Sciences Capital Group, LLC, a Delaware limited liability company (“Buyer”), pursuant to
which Company may issue and deliver shares of Common Stock, par value $0.0001
per share, in payment of the Commitment Fee payable thereunder (the “Commitment Fee
Shares”), and a warrant (the “Warrant”) to purchase
additional shares of Common Stock (the “Warrant Shares”) (the
Commitment Fee Shares and Warrant Shares, collectively, the “Common Shares”), this
shall serve as our irrevocable authorization and direction to you (provided that
you are the transfer agent of the Company at such time) to issue the Commitment
Fee Shares and, in the event the holder of the Warrant elects or has elected to
exercise all or any portion of the Warrant, from time to time, upon surrender to
you of a notice of exercise of the Warrant, the Warrant Shares. Capitalized
terms used herein without definition shall have the respective meanings ascribed
to them in the Purchase Agreement.

     

    Specifically,
this shall constitute an irrevocable instruction to you to process any notice of
exercise of the Warrant in accordance with the terms of these instructions as
soon as practicable. Upon your receipt of a copy of the executed notice of
exercise of the Warrant, you shall use your best efforts to, within one (1)
Trading Day following the date of receipt of the notice of exercise, (A) issue
and surrender to a common carrier for overnight delivery to the address as
specified in the notice of exercise a certificate, registered in the name of the
Buyer or its designee, for the number of shares of Common Stock to which the
Buyer is entitled upon exercise of the Warrant as set forth in the notice of
exercise, or (B) provided you are participating in The Depository Trust Company
(DTC) Fast Automated Securities Transfer (FAST) Program, upon the request of the
Buyer, credit such aggregate number of shares of Common Stock to which the Buyer
is entitled to the Buyer’s or its designee’s balance account with DTC through
its Deposit Withdrawal At Custodian (DWAC) system provided the Buyer causes its
bank or broker to initiate the DWAC transaction.

     

    The
Company hereby confirms that the Common Shares should not be subject to any
stop-transfer restrictions and shall otherwise be freely transferable on the
books and records of the Company.  If the Common Shares are
certificated, the certificates shall not bear any legend restricting transfer of
the shares represented thereby.

     

    The
Company hereby confirms and you acknowledge that, in the event counsel to the
Company does not issue any opinion of counsel required to issue any Common
Shares free of legend, the Company authorizes you to accept an opinion of
counsel from Luce Forward Hamilton & Scripps LLP.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    The
Company hereby confirms that no instructions other than as contemplated herein
will be given to you by the Company with respect to the Common Shares. The
Company hereby agrees that it shall not replace you as the Company’s transfer
agent, until such time as the Company provides written notice to you
and Buyer that a suitable replacement has agreed to serve as transfer agent
and to be bound by the terms and conditions of this letter agreement regarding
Irrevocable Transfer Agent Instructions (this “Agreement”).

     

    The
Company and you hereby acknowledge and confirm that complying with the terms of
this Agreement does not and shall not prohibit you from satisfying any and all
fiduciary responsibilities and duties you may owe to the Company.

     

    The
Company and you acknowledge that the Buyer is relying on the representations and
covenants made by the Company and you hereunder and that such representations
and covenants are a material inducement to the Buyer to enter into the Purchase
Agreement. The Company and you further acknowledge that without such
representations and covenants made hereunder, the Buyer would not enter
into the Purchase Agreement and purchase Securities pursuant
thereto.

     

    Each
party hereto specifically acknowledges and agrees that a breach or threatened
breach of any provision hereof will cause irreparable damage and that damages at
law would be an inadequate remedy if this Agreement were not specifically
enforced.  Therefore, in the event of a breach or threatened breach by
a party hereto, including, without limitation, the attempted termination of the
agency relationship created by this instrument, in addition to all other rights
or remedies, an injunction restraining such breach and granting specific
performance of the provisions of this Agreement should issue without any
requirement to show any actual damage or to post any bond or other
security.

     

    You may
at any time resign as transfer agent hereunder by giving fifteen (15) days prior
written notice of resignation to the Company and the Buyer. Prior to the
effective date of the resignation as specified in such notice, the Company will
issue to you instructions authorizing delivery of Common Shares to a substitute
transfer agent selected by, and in the sole discretion of, the Company. If no
successor transfer agent is named by the Company, you may apply to a court of
competent jurisdiction in the State of Delaware for appointment of a successor
transfer agent and for an order to deposit Common Shares with the clerk of any
such court.

     

    The
Company must keep its bill current with you – if the Company is not current and
is on suspension, the Buyer will have the right to pay the Company’s outstanding
bill, in order for you to act upon this Agreement. If the outstanding bill is
not paid by the Company or the Buyer, you have no further obligation under this
Agreement.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties have caused this letter agreement regarding
Irrevocable Transfer Agent Instructions to be duly executed and delivered as of
the date first written above.

     

    
      
        
          
            
              	
                      MEDCLEAN
      TECHNOLOGIES, INC.

                    
	 
      	 
      
	
                      By:

                    	 
      
	
                      Name:

                    	 
      
	
                      Title:

                    	 
      

            

          

        

      

    

    

    THE
FOREGOING INSTRUCTIONS ARE ACKNOWLEDGED AND AGREED TO:

     

    SECURITIES
TRANSFER CORPORATION

    
       

      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  By:

                                	 
      

                        

                      

                    

                  

                

              

            

          

        

      

      
        
          
            
              
                	
                        Name:

                      	 
      

              

            

          

        

      

      
        
          
            
              
                	
                        Title:

                      	 
      

              

            

          

        

      

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Exhibit
D

     

    Opinion

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      [LETTERHEAD
OF ________________]

    

     

    December
4, 2009

     

    Socius
Life Sciences Capital Group, LLC

    11150
Santa Monica Boulevard, Suite 1500

    Los
Angeles, CA 90025

     

    Re::
MedClean Technologies,
Inc.

    

    Ladies
and Gentlemen:

     

    We are
counsel to MedClean Technologies, Inc., a Delaware corporation (“Company”), in
connection with the sale and issuance of (a) up to 750 shares of its Series C
Preferred Stock, par value $0.0001 per share (“Preferred Shares”), along with
(b) shares (“Commitment Fee
Shares”) of the Company’s common stock, par value $0.0001 per share
(“Common
Stock”), (c)
warrants (the “Warrant”) to purchase
shares of Common Stock, and (d) shares of Common Stock issuable upon exercise of
the Warrant (the “Warrant Shares,” and
together with the Preferred Shares and the Warrant, the “Securities”), to
Socius Life Sciences Capital Group, LLC, a Delaware limited liability company
(“Investor”), pursuant to the terms of the Preferred Stock Purchase Agreement
dated as of December 4, 2009 (“Agreement”), by and between Company and
Investor.  Capitalized terms not otherwise defined herein have the
meanings set forth in the Agreement.

     

    In
reaching the opinion stated in this letter, we have reviewed originals or copies
of the Agreement, the Company’s Certificate of Incorporation and Bylaws, the
resolutions of the Board of Directors authorizing the Purchase Agreement and the
issuance of the Securities, the Certificate of Designations for the Preferred
Shares, and such other documents as we have considered relevant.

     

    Based
upon the foregoing, we are of the opinion that, as of the date
hereof:

     

    1.           Company
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware.

    

    2.           The
Securities are duly authorized, the Preferred Shares, Commitment Fee Shares and
Warrant are, and when issued in accordance with the terms and conditions of the
Agreement the Warrant Shares will be, validly issued, fully paid and
non-assessable.  The issuance of the Securities will not be subject to
any statutory or contractual preemptive rights of any stockholder of the
Company.

    

    3.           Company
has the corporate power and authority to (a) execute, deliver and perform all of
its obligations under the Agreement and the Transaction Documents, and (b)
issue, sell and deliver each of the Securities.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    4.           The
execution, delivery and performance of the Agreement and the Transaction
Documents have been duly authorized by all necessary corporate action on the
part of Company, and have been duly executed and delivered by
Company.

    

    5.           The
execution and delivery of the Transaction Documents by Company does not, and
Company’s performance of its obligations thereunder will not (a) violate the
certificate or articles of incorporation, articles of association, bylaws, or
other organizational or governing documents of Company, as in effect on the date
hereof, (b) violate in any material respect any federal or state law, rule or
regulation, or judgment, order or decree of any state or federal court or
governmental or administrative authority, in each case that, to our knowledge,
is applicable to Company or its properties or assets and which could have a
material adverse effect on Company’s business, properties, assets, financial
condition or results of operations or prevent the performance by Company of any
material obligation under the Agreement, or (c) require the authorization,
consent, approval of or other action of, notice to or filing or qualification
with, any state or federal governmental authority, except as have been, or will
be, made or obtained.

    

     

    
      
        
          
            	Very
      truly yours,
	 	 
      
	 	
                    [___________________________]

                  
	 	 
      	 
      
	 	
                    By:

                  	 
      

          

        

      

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Exhibit
E

     

    Use
of Proceeds Certificate

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    MEDCLEAN
TECHNOLOGIES, INC.

     

    USE OF
PROCEEDS CERTIFICATE

     

    

     

    The
undersigned, [ ] and [ ], hereby certify that:

     

    1.           They
are the [ ] and [  ], respectively, of MedClean Technologies,
Inc., a Delaware corporation (the “Company”).

     

    2.           This
Use of Proceeds Certificate (this “Certificate”) is being delivered to
Socius
Capital Group, LLC doing business as Socius Life Sciences Capital Group, LLC
(“Investor”),
by the Company, to fulfill the requirement under Section 2.3(d)(iii) of the
Preferred Stock Purchase Agreement, dated as of December 4, 2009, between
Investor and the Company (the “Purchase
Agreement”).  Terms used and not defined in this Certificate
have the meanings set forth in the Purchase Agreement.

     

    3.           On
or prior to the date hereof, the Company has delivered to Investor a Tranche
Notice for the purchase by Investor of Tranche Shares upon payment by the
Company to Investor of the Tranche Purchase Price.

     

    The undersigned do hereby certify that
the Tranche Purchase Price will be used for the following purpose or
purposes:

    

    [                                 ].

    

    IN
WITNESS WHEREOF, the undersigned have executed this Certificate this[__] day of _________, 2009.

    

    
      
        
          
            	
                    By:

                  	 
      
	
                    Name:

                  	 
      
	
                    Title:

                  	 
      
	 
      	 
      
	
                    By:

                  	 
      
	
                    Name:

                  	 
      
	
                    Title:

                  	 
      

          

        

      

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Exhibit
F

     

    Tranche
Notice

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

                    Dated: [________], 20[__]

     

    

    Socius
Life Sciences Capital Group, LLC

    11150
Santa Monica Boulevard, Suite 1500

    Los
Angeles, CA 90025

     

    Re:         Tranche
Notice

     

    Ladies
& Gentlemen:

     

    Pursuant
to the December 4, 2009 Preferred Stock Purchase Agreement (“Agreement”) between
MedClean Technologies, Inc., a Delaware corporation (“Company”), and Socius
Life Sciences Capital Group, LLC (“Investor”), Company
hereby elects to exercise a Tranche.  Capitalized terms not otherwise
defined herein shall have the meanings defined in the Agreement.

     

    At the
Tranche Closing, Company will sell to Investor [___________] Preferred Shares at $10,000.00 per share for a Tranche
Amount of $[___________].

     

    On behalf
of Company, the undersigned hereby certifies to Investor as
follows:

     

    1.           The
undersigned is a duly authorized officer of Company;

     

    2.           The
above Tranche Amount does not exceed the Maximum Tranche Amount;
and

     

    3.           All
of the conditions precedent to the right of the Company to deliver a Tranche
Notice set forth in Section 2.3(d) of the
Agreement have been satisfied.

     

    IN
WITNESS WHEREOF, the Company has executed and delivered this Tranche Notice as
of the date first written above.

     

    
      
        
          
            
              	
                      MEDCLEAN
      TECHNOLOGIES, INC.

                    
	 
      	 
      
	
                      By:

                    	 
      
	
                      Name:

                    	 
      
	
                      Title:

                    	 
      

            

          

        

      

    

    
      
         

      

      
        4

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