Document:

THIS WARRANT AND THE SHARES OF PREFERRED STOCK ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AND MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH AN AVAILABLE EXEMPTION
FROM REGISTRATION. THE COMPANY MAY REFUSE TO AUTHORIZE ANY TRANSFER OF THE
SECURITIES IN RELIANCE ON AN EXEMPTION FROM REGISTRATION UNTIL IT HAS RECEIVED
AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.

THE COMPANY IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OF STOCK OR MORE THAN ONE
SERIES OF ANY CLASS OF STOCK. THE DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF THE SHARES OF EACH CLASS OR
SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
RIGHTS, ARE SET FORTH IN THE ARTICLES OF INCORPORATION OF THE COMPANY. A COPY OF
SAID ARTICLES OF INCORPORATION WILL BE FURNISHED FREE OF CHARGE TO THE HOLDER OF
THIS CERTIFICATE UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.

THIS WARRANT AND THE SHARES OF PREFERRED STOCK ISSUABLE UPON EXERCISE HEREOF MAY
BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE HOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.

                          SERIES P WARRANT TO PURCHASE

                            SHARES OF PREFERRED STOCK

                                       OF

                      BIOFORCE NANOSCIENCES HOLDINGS, INC.

                             Expires August 31, 2012

No.: W-P-07- ___                                        Number of Shares: ______
Date of Issuance: August 31, 2007

      FOR VALUE RECEIVED, the undersigned, BioForce Nanosciences Holdings, Inc.,
a Nevada corporation (together with its successors and assigns, the "Issuer"),
hereby certifies that _______ or its registered assigns is entitled to subscribe
for and purchase, during the Term (as hereinafter defined), up to _________
(______) shares (subject to adjustment as hereinafter provided, the "Warrant
Share Number") of the duly authorized, validly issued, fully paid and

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non-assessable Preferred Stock of the Issuer, at an exercise price per share
equal to the Warrant Price then in effect, subject, however, to the provisions
and upon the terms and conditions hereinafter set forth. Capitalized terms used
in this Warrant and not otherwise defined herein shall have the respective
meanings specified in Section 9 hereof.

      1. Term. The term of this Warrant shall commence on August 31, 2007 and
shall expire at 6:00 p.m., eastern time, on August 31, 2012 (such period being
the "Term").

      2. Method of Exercise; Payment; Issuance of New Warrant; Transfer and
Exchange.

      (a) Time of Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part during the Term.

      (b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
shares of Warrant Stock with respect to which this Warrant is then being
exercised (the "Exercise Price"), payable at such Holder's election (i) by
certified or official bank check or by wire transfer to an account designated by
the Issuer, (ii) by "cashless exercise" in accordance with the provisions of
subsection (c) of this Section 2, but only when a registration statement under
the Securities Act providing for the resale of the Warrant Stock is not then in
effect, or (iii) by a combination of the foregoing methods of payment selected
by the Holder of this Warrant.

      (c) Cashless Exercise. Commencing one (1) year following the Original
Issue Date if (i) the Per Share Market Value of one share of Common Stock is
greater than the Warrant Price (at the date of calculation as set forth below)
and (ii) a registration statement under the Securities Act providing for the
resale of the Warrant Stock is not in effect pursuant to and in accordance with
the terms of the Registration Rights Agreement on the date the Holders desires
to exercise this Warrant, unless the registration statement is not effective as
a result of the Issuer exercising its rights under Section 3(n) of the
Registration Rights Agreement, in lieu of exercising this Warrant by payment of
cash, the Holder may exercise this Warrant by a cashless exercise and shall
receive the number of restricted shares of Preferred Stock equal to an amount
(as determined below) by surrender of this Warrant at the principal office of
the Issuer together with the properly endorsed Notice of Exercise in which event
the Issuer shall issue to the Holder a number of restricted shares of Preferred
Stock computed using the following formula:

            X = Y - (A)(Y)
                    ------
                      B

Where       X =   the number of restricted shares of Preferred Stock to be
                  issued to the Holder.

            Y =   the number of shares of Preferred Stock purchasable upon
                  exercise of all of the Warrant or, if only a portion of the
                  Warrant is being exercised, the portion of the Warrant being
                  exercised.

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<PAGE>

            A =   the Warrant Price.

            B =   the Per Share Market Value of one share of Common Stock.

      (d) Issuance of Stock Certificates. In the event of any exercise of this
Warrant in accordance with and subject to the terms and conditions hereof,
certificates for the shares of Warrant Stock so purchased shall be dated the
date of such exercise and delivered to the Holder hereof within a reasonable
time, not exceeding three (3) Trading Days after the Issuer and its transfer
agent have received from the Holder this Warrant, a duly executed exercise form,
the Exercise Price and all fees and expenses required hereby in support of such
exercise (the "Delivery Date") or, at the request of the Holder (provided that a
registration statement under the Securities Act providing for the resale of the
Warrant Stock is then in effect), issued and delivered to the Depository Trust
Company ("DTC") account on the Holder's behalf via the Deposit Withdrawal Agent
Commission System ("DWAC") no later than the Delivery Date, and the Holder
hereof shall be deemed for all purposes to be the holder of the shares of
Warrant Stock so purchased as of the date of such exercise. Notwithstanding the
foregoing to the contrary, the Issuer or its transfer agent shall only be
obligated to issue and deliver the shares to the DTC on the Holder's behalf via
DWAC if such exercise is in connection with a sale and the Issuer and its
transfer agent are participating with DTC through the DWAC system. The Holder
shall deliver this original Warrant (or an indemnification undertaking with
respect to such Warrant in the case of its loss, theft or destruction), along
with a duly executed exercise form, the Exercise Price and all fees and expenses
required hereby in support of such exercise, at such time that this Warrant is
exercised. If this Warrant shall have been exercised in part, the Issuer shall
deliver to the Holder by the Delivery Date a new Warrant evidencing the rights
of Holder to purchase the unpurchased Warrant Shares called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant.

      (e) Compensation for Buy-In on Failure to Timely Deliver Certificates Upon
Exercise. In addition to any other rights available to the Holder, if the Issuer
fails to cause its transfer agent to transmit to the Holder a certificate or
certificates representing the Warrant Stock issuable pursuant to an exercise
(the "Exercise Shares") on or before the Delivery Date and the Issuer or its
transfer agent are solely at fault for such failure, and if after such date the
Holder is required by its broker to purchase (in an open market transaction or
otherwise) shares of Preferred Stock (the "Substitute Shares") to deliver in
satisfaction of a sale by the Holder of the Exercise Shares (a "Buy-In"), then
the Issuer shall (1) pay in cash to the Holder the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for the
Substitute Shares exceeds (y) the amount obtained by multiplying (A) the number
of Exercise Shares by (B) the per share price at which the Holder was to sell
shares of Preferred Stock in the Buy-In (pursuant to the executed sell order
associated with the Buy-In), and (2) at the option of the Holder, either
reinstate to the Warrant the number of Exercise Shares not transmitted to the
Holder on or before the Delivery Date or deliver the Exercise Shares to the
Holder. For example, if the Holder purchases Preferred Stock having a total
purchase price of $11,000 to cover a Buy-In for the sale of Exercise Shares for
$10,000, under clause (1) of the immediately preceding sentence the Issuer shall

                                      -3-
<PAGE>

be required to pay the Holder $1,000. The Holder shall provide the Issuer
written notice indicating the amounts payable to the Holder in respect of the
Buy-In, together with applicable confirmations and other evidence reasonably
requested by the Issuer. Nothing herein shall limit a Holder's right to pursue
any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief
with respect to the Issuer's failure to timely deliver certificates representing
the Exercise Shares as required pursuant to the terms hereof.

      (f) Transferability of Warrant. Subject to Section 2(h) hereof, this
Warrant may be transferred by a Holder, in whole or in part, without the consent
of the Issuer. If transferred pursuant to this paragraph, this Warrant may be
transferred on the books of the Issuer by the Holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant at the principal office of
the Issuer, properly endorsed (by the Holder executing an assignment in the form
attached hereto) and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. This Warrant is exchangeable at
the principal office of the Issuer for new Warrants to purchase the same
aggregate number of shares of Warrant Stock, each new Warrant to represent the
right to purchase such number of shares of Warrant Stock as the Holder shall
designate at the time of such exchange. All Warrants issued on transfers or
exchanges shall be dated the Original Issue Date and shall be identical with
this Warrant except as to the number of shares of Warrant Stock issuable
pursuant thereto.

      (g) Intentionally Omitted.

      (h) Compliance with Securities Laws.

            (i) The Holder of this Warrant, by acceptance hereof, acknowledges
      that this Warrant and the shares of Warrant Stock to be issued upon
      exercise hereof are being acquired solely for the Holder's own account and
      not as a nominee for any other party, and for investment, and that the
      Holder will not offer, sell or otherwise dispose of this Warrant or any
      shares of Warrant Stock to be issued upon exercise hereof except pursuant
      to an effective registration statement, or an exemption from registration,
      under the Securities Act and any applicable state securities laws.

            (ii) Except as provided in paragraph (iii) below, this Warrant and
      all certificates representing shares of Warrant Stock issued upon exercise
      hereof shall be stamped or imprinted with a legend in substantially the
      following form:

            THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
            UNITED STATES SECURITIES ACT OF 1933, AND MAY NOT BE SOLD,
            TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE
            REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH AN AVAILABLE
            EXEMPTION FROM REGISTRATION. THE COMPANY MAY REFUSE TO AUTHORIZE ANY

                                      -4-
<PAGE>

            TRANSFER OF THE SECURITIES IN RELIANCE ON AN EXEMPTION FROM
            REGISTRATION UNTIL IT HAS RECEIVED AN OPINION OF COUNSEL,
            SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION
            IS NOT REQUIRED.

            THE COMPANY IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OF STOCK OR
            MORE THAN ONE SERIES OF ANY CLASS OF STOCK. THE DESIGNATIONS,
            PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
            RIGHTS OF THE SHARES OF EACH CLASS OR SERIES THEREOF AND THE
            QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH RIGHTS, ARE SET
            FORTH IN THE ARTICLES OF INCORPORATION OF THE COMPANY. A COPY OF
            SAID ARTICLES OF INCORPORATION WILL BE FURNISHED FREE OF CHARGE TO
            THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST TO THE SECRETARY
            OF THE COMPANY.

            THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
            ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND
            THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
            THE COMPANY.

            (iii) The Issuer agrees to reissue this Warrant or certificates
      representing any shares of the Warrant Stock without the legend set forth
      above, if at such time, prior to making any transfer of any such
      securities, the Holder shall give written notice to the Issuer describing
      the manner and terms of such transfer. Such proposed transfer will not be
      effected until: (a) either (i) the Issuer has received an opinion of
      counsel reasonably satisfactory to the Issuer, to the effect that the
      registration of such securities under the Securities Act is not required
      in connection with such proposed transfer, (ii) a registration statement
      under the Securities Act covering such proposed disposition has been filed
      by the Issuer with the Securities and Exchange Commission and has become
      effective under the Securities Act and the Holder has represented that the
      shares of Warrant Stock have been or will be sold, (iii) the Issuer has
      received other evidence reasonably satisfactory to the Issuer that such
      registration and qualification under the Securities Act and state
      securities laws are not required, or (iv) the Holder provides the Issuer
      with reasonable assurances that such security can be sold pursuant to Rule
      144 under the Securities Act; and (b) either (i) the Issuer has received
      an opinion of counsel, reasonably satisfactory to the Issuer, to the
      effect that registration or qualification under the securities or "blue
      sky" laws of any state is not required in connection with such proposed
      disposition, or (ii) compliance with applicable state securities or "blue
      sky" laws has been effected or a valid exemption exists with respect
      thereto. The Issuer will respond to any such notice from the Holder within

                                      -5-
<PAGE>

      three (3) Trading Days. In the case of any proposed transfer under this
      Section 2(h), the Issuer will use reasonable efforts to comply with any
      such applicable state securities or "blue sky" laws, but shall in no event
      be required, (x) to qualify to do business in any state where it is not
      then qualified, (y) to take any action that would subject it to tax or to
      the general service of process in any state where it is not then subject,
      or (z) to comply with state securities or "blue sky" laws of any state for
      which registration by coordination is unavailable to the Issuer. The
      restrictions on transfer contained in this Section 2(h) shall be in
      addition to, and not by way of limitation of, any other restrictions on
      transfer contained in any other section of this Warrant. Whenever a
      certificate representing the shares of Warrant Stock is required to be
      issued to a the Holder without a legend, in lieu of delivering physical
      certificates representing the shares of Warrant Stock, the Issuer shall
      use its reasonable best efforts to cause its transfer agent to
      electronically transmit the shares of Warrant Stock to the Holder by
      crediting the account of the Holder's prime broker with DTC through its
      DWAC system (to the extent not inconsistent with any provisions of this
      Warrant or the Purchase Agreement). Notwithstanding the foregoing to the
      contrary, the Issuer or its transfer agent shall only be obligated to
      issue and deliver the shares to the DTC on the Holder's behalf via DWAC if
      such exercise is in connection with a sale and the Issuer and its transfer
      agent are participating in DTC through the DWAC system.

      (i) Accredited Investor Status. In no event may the Holder exercise this
Warrant in whole or in part unless the Holder is an "accredited investor" as
defined in Regulation D under the Securities Act.

      3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.

      (a) Stock Fully Paid. The Issuer represents, warrants, covenants and
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this Warrant or otherwise hereunder will, when issued in accordance with the
terms of this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges created by or through
the Issuer. The Issuer further covenants and agrees that during the period
within which this Warrant may be exercised, the Issuer will at all times have
authorized and reserved for the purpose of issuance upon exercise of this
Warrant a sufficient number of shares of Preferred Stock to provide for the
exercise of this Warrant.

      (b) Listing. The Issuer shall list the shares of Common Stock, issuable
upon conversion of the Warrant Stock on the OTC Bulletin Board (or any other
securities exchange, quotation system or market, if any, on which shares of
Common Stock issued by the Company are then listed or traded), all in accordance
with the terms of the Registration Rights Agreement.

      (c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Articles of Incorporation or the by-laws of the Issuer,
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and

                                      -6-
<PAGE>

in the taking of all such actions as may be necessary or appropriate to protect
the rights of the Holder hereof against dilution (to the extent specifically
provided herein) or impairment. Without limiting the generality of the
foregoing, the Issuer will (i) not permit the par value, if any, of its
Preferred Stock to exceed the then effective Warrant Price, (ii) not amend or
modify any provision of the Articles of Incorporation or by-laws of the Issuer
in any manner that would adversely affect the rights of the Holders of the
Warrants, (iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Preferred Stock, free and clear of any liens, claims, encumbrances and
restrictions (other than as provided herein) upon the exercise of this Warrant,
and (iv) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
reasonably necessary to enable the Issuer to perform its obligations under this
Warrant.

      (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Preferred Stock.

      4. Adjustment of Warrant Price and Number of Shares Issuable Upon
Exercise. The Warrant Price and the Warrant Share Number shall be subject to
adjustment from time to time as set forth in this Section 4. The Issuer shall
give the Holder notice of any event described below which requires an adjustment
pursuant to this Section 4 in accordance with the notice provisions set forth in
Section 5.

      (a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.

            (i) In case the Issuer after the Original Issue Date shall do any of
      the following (each, a "Triggering Event"): (a) consolidate or merge with
      or into any other Person and the Issuer shall not be the continuing or
      surviving corporation of such consolidation or merger, or (b) permit any
      other Person to consolidate with or merge into the Issuer and the Issuer
      shall be the continuing or surviving Person but, in connection with such
      consolidation or merger, any Capital Stock of the Issuer shall be changed
      into or exchanged for Securities of any other Person or cash or any other
      property, or (c) transfer all or substantially all of its properties or
      assets to any other Person, or (d) effect a capital reorganization or
      reclassification of its Capital Stock, then, and in the case of each such
      Triggering Event, proper provision shall be made to the Warrant Price and
      the Warrant Share Number so that, upon the basis and the terms and in the
      manner provided in this Warrant, the Holder of this Warrant shall be
      entitled, upon the exercise hereof at any time after the consummation of
      such Triggering Event (to the extent this Warrant is not exercised prior
      to such Triggering Event), to receive at the Warrant Price (as adjusted to
      take into account the consummation of such Triggering Event), in lieu of
      the Preferred Stock issuable upon such exercise of this Warrant prior to

                                      -7-
<PAGE>

      such Triggering Event, the Securities, cash and property to which such
      Holder would have been entitled upon the consummation of such Triggering
      Event if such Holder had exercised the rights represented by this Warrant
      immediately prior thereto (including the right, if any, of a shareholder
      to elect the type of consideration it will receive in connection with the
      Triggering Event), subject to adjustments (subsequent to such corporate
      action) as nearly equivalent as possible to the adjustments provided for
      elsewhere in this Section 4. Immediately upon the occurrence of a
      Triggering Event, the Issuer shall notify the Holder in writing of such
      Triggering Event and provide the calculations in determining the number of
      shares of Warrant Stock, if any, issuable upon exercise of the new warrant
      and the adjusted Warrant Price. Upon the Holder's request, the continuing
      or surviving corporation as a result of such Triggering Event shall issue
      to the Holder a new warrant of like tenor, if any, evidencing the right to
      purchase the adjusted number of shares of Warrant Stock and the adjusted
      Warrant Price pursuant to the terms and provisions of this Section
      4(a)(i). Notwithstanding the foregoing to the contrary, this Section
      4(a)(i) shall only apply if the surviving entity pursuant to any such
      Triggering Event is a company that has a class of equity securities
      registered pursuant to the Securities Exchange Act of 1934, as amended,
      and its common stock is listed or quoted on a national securities
      exchange, national automated quotation system or the OTC Bulletin Board.

            (ii) In the event that the Holder has elected not to exercise this
      Warrant prior to the consummation of a Triggering Event, so long as the
      surviving entity pursuant to any Triggering Event is a company that has a
      class of equity securities registered pursuant to the Securities Exchange
      Act of 1934, as amended, and its common stock is listed or quoted on a
      national securities exchange, national automated quotation system or the
      OTC Bulletin Board, the surviving entity and/or each Person (other than
      the Issuer) which may be required to deliver any Securities, cash or
      property upon the exercise of this Warrant as provided herein shall
      assume, by written instrument delivered to, and reasonably satisfactory
      to, the Holder of this Warrant, (A) the obligations of the Issuer under
      this Warrant (and if the Issuer shall survive the consummation of such
      Triggering Event, such assumption shall be in addition to, and shall not
      release the Issuer from, any continuing obligations of the Issuer under
      this Warrant) and (B) the obligation to deliver to the Holder such
      Securities, cash or property as, in accordance with the foregoing
      provisions of this subsection (a), the Holder shall be entitled to
      receive; and the surviving entity and/or each such Person shall have
      similarly delivered to the Holder an opinion of counsel for the surviving
      entity and/or each such Person, which counsel shall be reasonably
      satisfactory to such Holder, or in the alternative, a written
      acknowledgement executed by the President or Chief Financial Officer of
      the Issuer, stating that this Warrant shall thereafter continue in full
      force and effect and the terms hereof (including, without limitation, all
      of the provisions of this subsection (a)) shall be applicable to the
      Securities, cash or property which the surviving entity and/or each such
      Person may be required to deliver upon any exercise of this Warrant or the
      exercise of any rights pursuant hereto.

      (b) Stock Dividends, Subdivisions and Combinations. If at any time the
Issuer shall:

                                      -8-
<PAGE>

            (i) make or issue or set a record date for the holders of the
      Preferred Stock for the purpose of entitling them to receive a dividend
      payable in, or other distribution of, shares of Common Stock,

            (ii) subdivide its outstanding shares of Preferred Stock into a
      larger number of shares of Preferred Stock, or

            (iii) combine its outstanding shares of Preferred Stock into a
      smaller number of shares of Preferred Stock,

then (1) the Warrant Share Number immediately after the occurrence of any such
event shall be adjusted to equal the number of shares of Preferred Stock which a
record holder of the same number of shares of Preferred Stock for which this
Warrant is exercisable immediately prior to the occurrence of such event would
own or be entitled to receive after the happening of such event, and (2) the
Warrant Price then in effect shall be adjusted to equal (A) the Warrant Price
then in effect multiplied by the Warrant Share Number immediately prior to the
adjustment divided by (B) the Warrant Share Number immediately after such
adjustment.

      (c) Certain Other Distributions. If at any time the Issuer shall make or
issue or set a record date for the holders of the Preferred Stock for the
purpose of entitling them to receive any dividend or other distribution of:

            (i) cash (other than a cash dividend payable out of earnings or
      earned surplus legally available for the payment of dividends under the
      laws of the jurisdiction of incorporation of the Issuer),

            (ii) any evidences of its indebtedness, any shares of stock of any
      class or any other securities or property of any nature whatsoever (other
      than cash, Preferred Stock Equivalents or Additional Shares of Preferred
      Stock), or

            (iii) any warrants or other rights to subscribe for or purchase any
      evidences of its indebtedness, any shares of stock of any class or any
      other securities or property of any nature whatsoever (other than cash,
      Preferred Stock Equivalents or Additional Shares of Preferred Stock),

then (1) the number of shares of Preferred Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares of
Preferred Stock for which this Warrant is exercisable immediately prior to such
adjustment multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Per Share Market Value minus the amount
allocable to one share of Preferred Stock of any such cash so distributable and
of the fair value (as determined in good faith by the Board and supported by an
opinion from an investment banking firm mutually agreed upon by the Issuer and
the Holder) of any and all such evidences of indebtedness, shares of stock,
other securities or property or warrants or other subscription or purchase

                                      -9-
<PAGE>

rights so distributable, and (2) the Warrant Price then in effect shall be
adjusted to equal (A) the Warrant Price then in effect multiplied by the number
of shares of Preferred Stock for which this Warrant is exercisable immediately
prior to the adjustment divided by (B) the number of shares of Preferred Stock
for which this Warrant is exercisable immediately after such adjustment. A
reclassification of the Preferred Stock (other than a change in par value, or
from par value to no par value or from no par value to par value) into shares of
Preferred Stock and shares of any other class of stock shall be deemed a
distribution by the Issuer to the holders of its Preferred Stock of such shares
of such other class of stock within the meaning of this Section 4(c) and, if the
outstanding shares of Preferred Stock shall be changed into a larger or smaller
number of shares of Preferred Stock as a part of such reclassification, such
change shall be deemed a subdivision or combination, as the case may be, of the
outstanding shares of Preferred Stock within the meaning of Section 4(b).

      (d) Issuance of Additional Shares of Preferred Stock.

            (i) In the event the Issuer shall at any time following the Original
      Issue Date issue any Additional Shares of Preferred Stock (otherwise than
      as provided in the foregoing subsections (a) through (c) of this Section
      4), at a price per share less than the Warrant Price then in effect or
      without consideration, then the Warrant Price upon each such issuance
      shall be adjusted to that price determined by multiplying the Warrant
      Price then in effect by a fraction:

                  (A) the numerator of which shall be equal to the sum of (x)
            the number of shares of Outstanding Preferred Stock immediately
            prior to the issuance of such Additional Shares of Preferred Stock
            plus (y) the number of shares of Preferred Stock (rounded to the
            nearest whole share) which the aggregate consideration received by
            the Issuer for such Additional Shares of Preferred Stock would
            purchase at a price per share equal to the Warrant Price then in
            effect, and

                  (B) the denominator of which shall be equal to the number of
            shares of Outstanding Preferred Stock immediately after the issuance
            of such Additional Shares of Preferred Stock.

            (ii) No adjustment of the Warrant Share Number shall be made under
      paragraph (i) of Section 4(d) upon the issuance of any Additional Shares
      of Preferred Stock which are issued pursuant to the exercise of any
      Preferred Stock Equivalents, if any such adjustment shall previously have
      been made upon the issuance of such Preferred Stock Equivalents (or upon
      the issuance of any warrant or other rights therefor) pursuant to Section
      4(e).

      (e) Issuance of Preferred Stock Equivalents. If at any time the Issuer
shall take a record of the holders of its Preferred Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which the Issuer is the surviving
corporation) issue or sell, any Preferred Stock Equivalents, whether or not the
rights to exchange or convert thereunder are immediately exercisable, and the
price per share for which Additional Shares of Preferred Stock are issuable upon

                                      -10-
<PAGE>

conversion or exchange thereof shall be less than the Warrant Price in effect
immediately prior to the time of such issue or sale, or if, after any such
issuance of Preferred Stock Equivalents, the price per share for which
Additional Shares of Preferred Stock may be issued thereunder is amended or
adjusted, and such price as so amended shall be less than the Warrant Price in
effect at the time of such amendment or adjustment, then the Warrant Price then
in effect shall be adjusted as provided in Section 4(d). No further adjustments
of the Warrant Share Number and the Warrant Price then in effect shall be made
upon the actual issue of such Preferred Stock upon conversion or exchange of
such Preferred Stock Equivalents.

      (f) Superseding Adjustment. If, at any time after any adjustment of the
Warrant Share Number and the Warrant Price then in effect shall have been made
pursuant to Section 4(e) as the result of any issuance of Preferred Stock
Equivalents, and (i) such Preferred Stock Equivalents, or the right of
conversion or exchange associated with such Preferred Stock Equivalents, shall
expire, and all or a portion of such or the right of conversion or exchange with
respect to all or a portion of such Preferred Stock Equivalents, as the case may
be, shall not have been exercised, or (ii) the consideration per share for which
shares of Preferred Stock are issuable pursuant to such Preferred Stock
Equivalents shall be increased, then such previous adjustment shall be rescinded
and annulled and the Additional Shares of Preferred Stock which were deemed to
have been issued by virtue of the computation made in connection with such prior
adjustment so rescinded and annulled shall no longer be deemed to have been
issued by virtue of such computation. Upon the occurrence of an event set forth
in this Section 4(f), there shall be a recomputation made of the effect of such
Preferred Stock Equivalents on the basis of: (i) treating the number of
Additional Shares of Preferred Stock theretofore actually issued or issuable
pursuant to the previous exercise of Preferred Stock Equivalents or any such
right of conversion or exchange, as having been issued on the date or dates of
any such exercise and for the consideration actually received and receivable
therefor, and (ii) treating any such Preferred Stock Equivalents which then
remain outstanding as having been granted or issued immediately after the time
of such increase of the consideration per share for which Additional Shares of
Preferred Stock are issuable under such Preferred Stock Equivalents; whereupon a
new adjustment of the Warrant Share Number and the Warrant Price then in effect
shall be made, which new adjustment shall supersede the previous adjustment so
rescinded and annulled.

      (h) Other Provisions applicable to Adjustments under this Section. The
following provisions shall be applicable to the making of adjustments of the
Warrant Share Number and the Warrant Price then in effect provided for in this
Section 4:

            (i) Computation of Consideration. To the extent that any Additional
      Shares of Preferred Stock or any Preferred Stock Equivalents (or any
      warrants or other rights therefor) shall be issued for cash consideration,
      the consideration received by the Issuer therefor shall be the amount of
      the cash received by the Issuer therefor, or, if such Additional Shares of
      Preferred Stock or Preferred Stock Equivalents are offered by the Issuer
      for subscription, the subscription price, or, if such Additional Shares of
      Preferred Stock or Preferred Stock Equivalents are sold to underwriters or
      dealers for public offering without a subscription offering, the initial
      public offering price (in any such case subtracting any amounts paid or
      receivable for accrued interest or accrued dividends and without taking
      into account any compensation, discounts or expenses paid or incurred by

                                      -11-
<PAGE>

      the Issuer for and in the underwriting of, or otherwise in connection
      with, the issuance thereof). In connection with any merger or
      consolidation in which the Issuer is the surviving corporation (other than
      any consolidation or merger in which the previously outstanding shares of
      Preferred Stock of the Issuer shall be changed to or exchanged for the
      stock or other securities of another corporation), the amount of
      consideration therefore shall be, deemed to be the fair value, as
      determined reasonably and in good faith by the Board, of such portion of
      the assets and business of the nonsurviving corporation as the Board may
      determine to be attributable to such shares of Preferred Stock or
      Preferred Stock Equivalents, as the case may be. The consideration for any
      Additional Shares of Preferred Stock issuable pursuant to any warrants or
      other rights to subscribe for or purchase the same shall be the
      consideration received by the Issuer for issuing such warrants or other
      rights plus the additional consideration payable to the Issuer upon
      exercise of such warrants or other rights. The consideration for any
      Additional Shares of Preferred Stock issuable pursuant to the terms of any
      Preferred Stock Equivalents shall be the consideration received by the
      Issuer for issuing warrants or other rights to subscribe for or purchase
      such Preferred Stock Equivalents, plus the consideration paid or payable
      to the Issuer in respect of the subscription for or purchase of such
      Preferred Stock Equivalents, plus the additional consideration, if any,
      payable to the Issuer upon the exercise of the right of conversion or
      exchange associated with such Preferred Stock Equivalents. In the event of
      any consolidation or merger of the Issuer in which the Issuer is not the
      surviving corporation or in which the previously outstanding shares of
      Preferred Stock of the Issuer shall be changed into or exchanged for the
      stock or other securities of another corporation, or in the event of any
      sale of all or substantially all of the assets of the Issuer for stock or
      other securities of any corporation, the Issuer shall be deemed to have
      issued a number of shares of its Preferred Stock for stock or securities
      or other property of the other corporation computed on the basis of the
      actual exchange ratio on which the transaction was predicated, and for a
      consideration equal to the fair market value on the date of such
      transaction of all such stock or securities or other property of the other
      corporation. In the event any consideration received by the Issuer for any
      securities consists of property other than cash, the fair market value
      thereof at the time of issuance or as otherwise applicable shall be as
      determined in good faith by the Board. In the event Preferred Stock is
      issued with other shares or securities or other assets of the Issuer for
      consideration which covers both, the consideration computed as provided in
      this Section 4(h)(i) shall be allocated among such securities and assets
      as determined in good faith by the Board.

            (ii) When Adjustments to Be Made. The adjustments required by this
      Section 4 shall be made whenever and as often as any specified event
      requiring an adjustment shall occur, except that any adjustment of the
      Warrant Share Number that would otherwise be required may be postponed
      (except in the case of a subdivision or combination of shares of the
      Preferred Stock, as provided for in Section 4(b)) up to, but not beyond
      the date of exercise if such adjustment either by itself or with other
      adjustments not previously made adds or subtracts less than one percent
      (1%) of the Warrant Share Number immediately prior to the making of such
      adjustment. Any adjustment representing a change of less than such minimum
      amount (except as aforesaid) which is postponed shall be carried forward
      and made as soon as such adjustment, together with other adjustments
      required by this Section 4 and not previously made, would result in a
      minimum adjustment or on the date of exercise. For the purpose of any
      adjustment, any specified event shall be deemed to have occurred at the
      close of business on the date of its occurrence.

                                      -12-
<PAGE>

            (iii) Fractional Interests. In computing adjustments under this
      Section 4, fractional interests in Preferred Stock shall be taken into
      account to the nearest one one-hundredth (1/100th) of a share.

            (iv) When Adjustment Not Required. If the Issuer shall take a record
      of the holders of its Preferred Stock for the purpose of entitling them to
      receive a dividend or distribution or subscription or purchase rights and
      shall, thereafter and before the distribution to stockholders thereof,
      legally abandon its plan to pay or deliver such dividend, distribution,
      subscription or purchase rights, then thereafter no adjustment shall be
      required by reason of the taking of such record and any such adjustment
      previously made in respect thereof shall be rescinded and annulled.

      (i) Form of Warrant after Adjustments. The form of this Warrant need not
be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.

      (j) Escrow of Warrant Stock. If after any property becomes distributable
pursuant to this Section 4 by reason of the taking of any record of the holders
of Preferred Stock, but prior to the occurrence of the event for which such
record is taken, the Holder exercises this Warrant, any shares of Preferred
Stock otherwise issuable upon exercise of this Warrant because of an adjustment
to the Warrant Share Number or the Warrant Price resulting from such event shall
be deemed the last shares of Preferred Stock for which this Warrant is exercised
(notwithstanding any other provision to the contrary herein) and such shares or
other property shall be held in escrow for the Holder by the Issuer to be issued
to the Holder upon and to the extent that the event actually takes place, upon
payment of the then-current Exercise Price. Notwithstanding any other provision
to the contrary herein, if the event for which such record was taken fails to
occur or is rescinded, then such escrowed shares shall be cancelled by the
Issuer and escrowed property returned.

      5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable detail
and to extent such is not material non-public information, the event requiring
the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Board made any determination hereunder), and the Warrant Price and Warrant Share
Number after giving effect to such adjustment, and shall cause copies of such
certificate to be delivered to the Holder of this Warrant promptly after each
adjustment. Any dispute between the Issuer and the Holder of this Warrant with
respect to the matters set forth in such certificate may at the option of the
Holder of this Warrant be submitted to a national or regional accounting firm
reasonably acceptable to the Issuer and the Holder. The firm selected by the
Holder as provided in the preceding sentence shall be instructed to deliver a
written opinion as to such matters to the Issuer and the Holder within thirty
(30) days after submission to it of such dispute. Such opinion shall be final
and binding on the parties hereto. The costs and expenses of the initial
accounting firm shall be paid equally by the Issuer and the Holder.

                                      -13-
<PAGE>

      6. Fractional Shares. No fractional shares of Warrant Stock will be issued
in connection with any exercise hereof, but in lieu of such fractional shares,
the Issuer shall round the number of shares to be issued upon exercise up to the
nearest whole number of shares.

      7. Ownership Cap and Exercise Restriction. Notwithstanding anything to the
contrary set forth in this Warrant, at no time may the Holder exercise this
Warrant if the number of shares of Preferred Stock to be issued pursuant to such
exercise would, when aggregated with all other shares of Preferred Stock owned
by the Holder at such time, result in such Holder beneficially owning (as
determined in accordance with Section 13(d) of the Exchange Act and the rules
thereunder) in excess of 9.9% of the then issued and outstanding shares of
Preferred Stock; provided, however, that upon the Holder providing the Issuer
with sixty-one (61) days notice (pursuant to Section 13 hereof) (the "Waiver
Notice") that such Holder would like to waive this Section 7 with regard to any
or all shares of Warrant Stock issuable hereunder, this Section 7 will be of no
force or effect with regard to all or a portion of the Warrant referenced in the
Waiver Notice; provided, further, that this provision shall be of no further
force or effect during the sixty-one (61) days immediately preceding the
expiration of the term of this Warrant.

      8. Registration Rights. The shares of Common Stock issuable upon
conversion of the Preferred Stock underlying this Warrant shall have the same
registration rights as those shares underlying the Warrants issued pursuant to
the Purchase Agreement.

      9. Definitions. For the purposes of this Warrant, the following terms have
the following meanings:

            "Additional Shares of Preferred Stock" means all shares of Preferred
      Stock issued by the Issuer after the Original Issue Date, and all shares
      of Other Common, if any, issued by the Issuer after the Original Issue
      Date, except: (i) securities issued (other than for cash) in connection
      with a merger, acquisition, or consolidation, (ii) securities issued
      pursuant to the conversion or exercise of convertible or exercisable
      securities issued or outstanding on or prior to the date of the Purchase
      Agreement or issued pursuant to the Purchase Agreement (so long as the
      conversion or exercise price in such securities are not amended to lower
      such price and/or adversely affect the Holders), (iii) the Warrant Stock,
      (iv) securities issued in connection with bona fide strategic license
      agreements or other partnering arrangements so long as such issuances are
      not for the purpose of raising capital, (v) Common Stock issued or the
      issuance or grants of options to purchase Common Stock pursuant to the
      Issuer's stock option plans and employee stock purchase plans outstanding
      as they exist on the date of the Purchase Agreement, (vi) Common Stock
      issued as payment of dividends on the Series A Convertible Preferred Stock
      issued pursuant to the Purchase Agreement, and (vii) any warrants issued
      to the placement agent and its designees for the transactions contemplated
      by the Purchase Agreement.

                                      -14-
<PAGE>

            "Articles of Incorporation" means the Articles of Incorporation of
      the Issuer as in effect on the Original Issue Date, and as hereafter from
      time to time amended, modified, supplemented or restated in accordance
      with the terms hereof and thereof and pursuant to applicable law.

            "Board" shall mean the Board of Directors of the Issuer.

            "Capital Stock" means and includes (i) any and all shares,
      interests, participations or other equivalents of or interests in (however
      designated) corporate stock, including, without limitation, shares of
      preferred or preference stock, (ii) all partnership interests (whether
      general or limited) in any Person which is a partnership, (iii) all
      membership interests or limited liability company interests in any limited
      liability company, and (iv) all equity or ownership interests in any
      Person of any other type.

            "Common Stock" means the Common Stock, $0.001 par value per share,
      of the Issuer and any other Capital Stock into which such stock may
      hereafter be changed.

            "Convertible Securities" means evidences of shares of Capital Stock
      or other Securities which are or may be at any time convertible into or
      exchangeable for Additional Shares of Preferred Stock. The term
      "Convertible Security" means one of the Convertible Securities.

            "Governmental Authority" means any governmental, regulatory or
      self-regulatory entity, department, body, official, authority, commission,
      board, agency or instrumentality, whether federal, state or local, and
      whether domestic or foreign.

            "Holders" mean the Persons who shall from time to time own any
      Warrant. The term "Holder" means one of the Holders.

            "Independent Appraiser" means a nationally recognized or major
      regional investment banking firm or firm of independent certified public
      accountants of recognized standing (which may be the firm that regularly
      examines the financial statements of the Issuer) that is regularly engaged
      in the business of appraising the Capital Stock or assets of corporations
      or other entities as going concerns, and which is not affiliated with
      either the Issuer or the Holders.

            "Issuer" means BioForce Nanosciences Holdings, Inc., a Nevada
      corporation, and its successors.

            "Majority Holders" means at any time the Holders of Warrants
      exercisable for a majority of the shares of Warrant Stock issuable under
      the Warrants at the time outstanding.

            "Original Issue Date" means August 31, 2007.

                                      -15-
<PAGE>

            "OTC Bulletin Board" means the over-the-counter electronic bulletin
      board.

            "Other Common" means any other Capital Stock of the Issuer of any
      class which shall be authorized at any time after the date of this Warrant
      (other than Common Stock) and which shall have the right to participate in
      the distribution of earnings and assets of the Issuer without limitation
      as to amount.

            "Outstanding Preferred Stock" means, at any given time, the
      aggregate amount of outstanding shares of Preferred Stock, assuming full
      exercise, conversion or exchange (as applicable) of all options, warrants
      and other Securities which are convertible into or exercisable or
      exchangeable for, and any right to subscribe for, shares of Preferred
      Stock that are outstanding at such time.

            "Person" means an individual, corporation, limited liability
      company, partnership, joint stock company, trust, unincorporated
      organization, joint venture, Governmental Authority or other entity of
      whatever nature.

            "Per Share Market Value" means on any particular date (a) the last
      closing bid price per share of the Common Stock on such date on the OTC
      Bulletin Board or another registered national stock exchange on which the
      Common Stock is then listed, or if there is no such price on such date,
      then the closing bid price on such exchange or quotation system on the
      date nearest preceding such date, or (b) if the Common Stock is not listed
      then on the OTC Bulletin Board or any registered national stock exchange,
      the last closing bid price for a share of Common Stock in the
      over-the-counter market, as reported by the National Quotation Bureau
      Incorporated (or similar organization or agency succeeding to its
      functions of reporting prices) at the close of business on such date, or
      (c) if the Common Stock is not then reported by the OTC Bulletin Board or
      the National Quotation Bureau Incorporated (or similar organization or
      agency succeeding to its functions of reporting prices), then the average
      of the "Pink Sheet" quotes for the five (5) Trading Days preceding such
      date of determination, or (d) if the Common Stock is not then publicly
      traded the fair market value of a share of Common Stock as determined by
      an Independent Appraiser selected in good faith by the Majority Holders,
      at the Holders sole expense; provided, however, that the Issuer, after
      receipt of the determination by such Independent Appraiser, shall have the
      right to select an additional Independent Appraiser (at its sole expense),
      in which case, the fair market value shall be equal to the average of the
      determinations by each such Independent Appraiser; and provided, further
      that all determinations of the Per Share Market Value shall be
      appropriately adjusted for any stock dividends, stock splits or other
      similar transactions during such period. The determination of fair market
      value by an Independent Appraiser shall be based upon the fair market
      value of the Issuer determined on a going concern basis as between a
      willing buyer and a willing seller and taking into account all relevant
      factors determinative of value, and shall be final and binding on all
      parties. In determining the fair market value of any shares of Common
      Stock, no consideration shall be given to any restrictions on transfer of
      the Common Stock imposed by agreement or by federal or state securities
      laws, or to the existence or absence of, or any limitations on, voting
      rights.

                                      -16-
<PAGE>

            "Preferred Stock Equivalent" means any Convertible Security,
      warrant, option or other right to subscribe for or purchase any Additional
      Shares of Preferred Stock or any Convertible Security.

            "Purchase Agreement" means the Series A Convertible Preferred Stock
      and Warrant Purchase Agreement dated as of August 31, 2007, among the
      Issuer and the Purchasers.

            "Purchasers" means the purchasers of the Series A Convertible
      Preferred Stock and the Warrants issued by the Issuer pursuant to the
      Purchase Agreement.

            "Registration Rights Agreement" means the Registration Rights
      Agreement dated as of August 31, 2007, among the Issuer and the Purchasers
      pursuant to the Purchase Agreement.

            "Securities" means any debt or equity securities of the Issuer,
      whether now or hereafter authorized, any instrument convertible into or
      exchangeable for Securities or a Security, and any option, warrant or
      other right to purchase or acquire any Security. "Security" means one of
      the Securities.

            "Securities Act" means the Securities Act of 1933, as amended, or
      any similar federal statute then in effect.

            "Subsidiary" means any corporation at least 50% of whose outstanding
      Voting Stock shall at the time be owned directly or indirectly by the
      Issuer or by one or more of its Subsidiaries, or by the Issuer and one or
      more of its Subsidiaries.

            "Term" has the meaning specified in Section 1 hereof.

            "Trading Day" means (a) a day on which the Common Stock is traded on
      the OTC Bulletin Board, or (b) if the Common Stock is not traded on the
      OTC Bulletin Board, a day on which the Common Stock is quoted in the
      over-the-counter market as reported by the National Quotation Bureau
      Incorporated (or any similar organization or agency succeeding its
      functions of reporting prices); provided, however, that in the event that
      the Common Stock is not listed or quoted as set forth in (a) or (b)
      hereof, then Trading Day shall mean any day except Saturday, Sunday and
      any day which shall be a legal holiday or a day on which banking
      institutions in the State of Delaware are authorized or required by law or
      other government action to close.

            "Voting Stock" means, as applied to the Capital Stock of any
      corporation, Capital Stock of any class or classes (however designated)
      having ordinary voting power for the election of a majority of the members
      of the board of directors (or other governing body) of such corporation,
      other than Capital Stock having such power only by reason of the happening
      of a contingency.

                                      -17-
<PAGE>

            "Warrants" means the Warrants issued and sold pursuant to the
      Purchase Agreement, including, without limitation, this Warrant, and any
      other warrants of like tenor issued in substitution or exchange for any
      thereof pursuant to the provisions of Section 2(b), 2(c), 2(d) or 2(e)
      hereof or of any of such other Warrants.

            "Warrant Price" initially means $0.50, as such price may be adjusted
      from time to time as shall result from the adjustments specified in this
      Warrant, including Section 4 hereto.

            "Warrant Stock" means Preferred Stock issuable upon exercise of any
      Warrant or Warrants or otherwise issuable pursuant to any Warrant or
      Warrants.

      10. Other Notices. In case at any time:

                        (A)   the Issuer shall make any distributions to the
                              holders of Common Stock; or

                        (B)   the Issuer shall authorize the granting to all
                              holders of its Common Stock of rights to subscribe
                              for or purchase any shares of Capital Stock of any
                              class or other rights; or

                        (C)   there shall be any reclassification of the Capital
                              Stock of the Issuer; or

                        (D)   there shall be any capital reorganization by the
                              Issuer; or

                        (E)   there shall be any (i) consolidation or merger
                              involving the Issuer or (ii) sale, transfer or
                              other disposition of all or substantially all of
                              the Issuer's property, assets or business (except
                              a merger or other reorganization in which the
                              Issuer shall be the surviving corporation and its
                              shares of Capital Stock shall continue to be
                              outstanding and unchanged and except a
                              consolidation, merger, sale, transfer or other
                              disposition involving a wholly-owned Subsidiary);
                              or

                        (F)   there shall be a voluntary or involuntary
                              dissolution, liquidation or winding-up of the
                              Issuer or any partial liquidation of the Issuer or
                              distribution to holders of Common Stock;

then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,

                                      -18-
<PAGE>

dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the action in question and not less than ten (10) days prior
to the record date or the date on which the Issuer's transfer books are closed
in respect thereto. This Warrant entitles the Holder to receive copies of all
financial and other information distributed or required to be distributed to the
holders of the Common Stock.

      11. Amendment and Waiver. Any term, covenant, agreement or condition in
this Warrant may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Issuer and the Majority Holders; provided, however, that no such amendment or
waiver shall reduce the Warrant Share Number, increase the Warrant Price,
shorten the period during which this Warrant may be exercised or modify any
provision of this Section 11 without the consent of the Holder of this Warrant.
No consideration shall be offered or paid to any person to amend or consent to a
waiver or modification of any provision of this Warrant unless the same
consideration is also offered to all Holders.

      12. Governing Law; Jurisdiction. This Warrant shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without
giving effect to any of the conflicts of law principles which would result in
the application of the substantive law of another jurisdiction. This Warrant
shall not be interpreted or construed with any presumption against the party
causing this Warrant to be drafted. The Issuer and the Holder agree that venue
for any dispute arising under this Warrant will lie exclusively in the state or
federal courts located in the State of Delaware, and the parties irrevocably
waive any right to raise forum non conveniens or any other argument that
Delaware is not the proper venue. The Issuer and the Holder irrevocably consent
to personal jurisdiction in the state and federal courts of the State of
Delaware. The Issuer and the Holder consent to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Warrant and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 12 shall affect or limit any right to serve
process in any other manner permitted by law. The Issuer and the Holder hereby
agree that the prevailing party in any suit, action or proceeding arising out of
or relating to this Warrant or the Purchase Agreement, shall be entitled to
reimbursement for reasonable legal fees from the non-prevailing party. The
parties hereby unconditionally and irrevocably waive all rights to a trial by
jury in any suit, action or proceeding arising out of or relating to this
Warrant or the transactions contemplated hereby.

      13. Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be
effective (a) upon delivery when sent by hand delivery, telecopy or facsimile at
the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first

                                      -19-
<PAGE>

business day following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received) or (b) on the
second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The addresses for such communications
shall be:

If to the Company:      BioForce Nanosciences Holdings, Inc.
                        1615 Golden Aspen Drive, Suite 101
                        Ames, Iowa, 50010
                        Attn: Eric Henderson
                        Tel. No.: (515) 233-8333
                        Fax No.:  (515) 233-8337

with copies (which      McCarter & English, LLP
shall not constitute    Four Gateway Center
notice) to:             100 Mulberry Street
                        Newark, New Jersey 07102-4056
                        Attention: Jeffrey A. Baumel, Esq.
                        Tel. No.:  (973) 848-5304
                        Fax No.:  (973) 297-3814

If to any Holder:       Any party hereto may from time to time change its
                        address for notices by giving written notice of such
                        changed address to the other party hereto.

      14. Warrant Agent. The Issuer may, by written notice to the Holder of this
Warrant, appoint an agent having an office in _______, ________ for the purpose
of issuing shares of Warrant Stock on the exercise of this Warrant pursuant to
subsection (b) of Section 2 hereof, exchanging this Warrant pursuant to
subsection (d) of Section 2 hereof or replacing this Warrant pursuant to
subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.

      15. Remedies. Each of the Issuer and the Holder (the "Defaulting Party")
stipulates to the other (the "Harmed Party") that the remedies at law of the
Harmed Party in the event of any default or threatened default by the Defaulting
Party in the performance of or compliance with any of the terms of this Warrant
are not and will not be adequate and that, to the fullest extent permitted by
law, such terms may be specifically enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.

      16. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and assigns of
the Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.

      17. Modification and Severability. If, in any action before any court or
agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be

                                      -20-
<PAGE>

deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.

      18. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -21-
<PAGE>

      IN WITNESS WHEREOF, the Issuer has executed this Series P Warrant as of
the day and year first above written.

                                            BIOFORCE NANOSCIENCES HOLDINGS, INC.

                                            By:
                                                ------------------------------
                                                Name: Eric Henderson
                                                Title: Chief Executive Officer

Accepted and Agreed:

--------------------------
Holder:
By:
Title:

                                      -22-
<PAGE>

                                  EXERCISE FORM
                                SERIES P WARRANT

                      BIOFORCE NANOSCIENCES HOLDINGS, INC.

The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Preferred Stock of BioForce
Nanosciences Holdings, Inc. covered by the within Warrant.

Dated: _________________            Signature        ___________________________

                                    Address          _____________________

                                                     _____________________

Number of shares of Preferred Stock beneficially owned or deemed beneficially
owned by the Holder on the date of Exercise: _________________________

The undersigned is an "accredited investor" as defined in Regulation D under the
Securities Act of 1933, as amended.

The undersigned intends that payment of the Warrant Price shall be made as
(check one):

            Cash Exercise_______

            Cashless Exercise_______

If the Holder has elected a Cash Exercise, the Holder shall pay the sum of
$________ by certified or official bank check (or via wire transfer) to the
Issuer in accordance with the terms of the Warrant.

                            [Continued on next page]

                                      -23-
<PAGE>

If the Holder has elected a Cashless Exercise, a certificate shall be issued to
the Holder for the number of shares equal to the whole number portion of the
product of the calculation set forth below, which is ___________. The Issuer
shall pay a cash adjustment in respect of the fractional portion of the product
of the calculation set forth below in an amount equal to the product of the
fractional portion of such product and the Per Share Market Value on the date of
exercise, which product is ____________.

      X = Y - (A)(Y)
              ------
                B

Where:

The number of shares of Preferred Stock to be issued to the Holder
__________________("X").

The number of shares of Preferred Stock purchasable upon exercise of all of the
Warrant or, if only a portion of the Warrant is being exercised, the portion of
the Warrant being exercised ___________________________ ("Y").

The Warrant Price ______________ ("A").

The Per Share Market Value of one share of Common Stock _________________ ("B").

                                      -24-
<PAGE>

                                   ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

Dated: _________________            Signature        ___________________________

                                    Address          _____________________

                                                     _____________________

                                      -25-
<PAGE>

                               PARTIAL ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

Dated: _________________            Signature        ___________________________

                                    Address          _____________________

                                                     _____________________

                                      -26-
<PAGE>

                           FOR USE BY THE ISSUER ONLY:

This Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
___________, _____, shares of Preferred Stock issued therefor in the name of
_______________, Warrant No. W-_____ issued for ____ shares of Preferred Stock
in the name of _______________.

                                      -27-SERIES A CONVERTIBLE PREFERRED STOCK AND WARRANT PURCHASE

                                    AGREEMENT

                           Dated as of August 31, 2007

                                      among

                      BIOFORCE NANOSCIENCES HOLDINGS, INC.

                                       and

                       THE PURCHASERS LISTED ON EXHIBIT A

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

ARTICLE I Purchase and Sale of Preferred Stock.................................1

        Section 1.1   Purchase and Sale of Stock...............................1
        Section 1.2   Warrants.................................................1
        Section 1.3   Conversion Shares........................................1
        Section 1.4   Purchase Price and Closing...............................2

ARTICLE II Representations and Warranties......................................2

        Section 2.1   Representations and Warranties of the Company............2
        Section 2.2   Representations and Warranties of the Purchasers........13

ARTICLE III Covenants.........................................................16

        Section 3.1   Securities Compliance...................................16
        Section 3.2   Registration and Listing................................16
        Section 3.3   Inspection Rights.......................................17
        Section 3.4   Compliance with Laws....................................17
        Section 3.5   Keeping of Records and Books of Account.................17
        Section 3.6   Reporting Requirements..................................17
        Section 3.7   Amendments..............................................17
        Section 3.8   Other Agreements........................................17
        Section 3.9   Distributions...........................................17
        Section 3.10  Status of Dividends.....................................17
        Section 3.11  Use of Proceeds.........................................18
        Section 3.12  Reservation of Shares...................................18
        Section 3.13  Transfer Agent Instructions.............................18
        Section 3.14  Disposition of Assets...................................19
        Section 3.15  Reporting Status........................................19
        Section 3.16  Disclosure of Transaction ..............................19
        Section 3.17  Disclosure of Material Information......................19
        Section 3.18  Pledge of Securities....................................19
        Section 3.19  Form SB-2 Eligibility...................................20
        Section 3.20  Lock-Up Agreements......................................20
        Section 3.21  Subsequent Financings...................................20

ARTICLE IV Conditions.........................................................23

        Section 4.1   Conditions Precedent to the Obligation of the
               Company to Sell the Shares.....................................23
        Section 4.2   Conditions Precedent to the Obligation of the
               Purchasers to Purchase the Shares..............................24

ARTICLE V Stock Certificate Legend............................................26

        Section 5.1   Legend..................................................26

ARTICLE VI Indemnification....................................................28

        Section 6.1   General Indemnity.......................................28
        Section 6.2   Indemnification Procedure...............................28

ARTICLE VII Miscellaneous.....................................................29

        Section 7.1   Fees and Expenses.......................................29
        Section 7.2   Specific Enforcement, Consent to Jurisdiction...........30
        Section 7.3   Entire Agreement; Amendment.............................30
        Section 7.4   Notices.................................................31
        Section 7.5   Waivers.................................................32
        Section 7.6   Headings................................................32
        Section 7.7   Successors and Assigns..................................32
        Section 7.8   No Third Party Beneficiaries............................32
        Section 7.9   Governing Law...........................................32
        Section 7.10  Survival................................................32
        Section 7.11  Counterparts............................................32
        Section 7.12  Publicity...............................................32
        Section 7.13  Severability............................................33
        Section 7.14  Further Assurances......................................33

<PAGE>

        SERIES A CONVERTIBLE PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

      This SERIES A CONVERTIBLE  PREFERRED STOCK AND WARRANT PURCHASE  AGREEMENT
(the  "Agreement")  is  dated  as of  August  31,  2007  by and  among  BioForce
Nanosciences Holdings,  Inc., a Nevada corporation (the "Company"),  and each of
the  Purchasers  of Units,  as  described  below,  whose  names are set forth on
Exhibit  A  hereto   (individually,   a  "Purchaser"   and   collectively,   the
"Purchasers").

      The parties hereto agree as follows:

                                    ARTICLE I

                           Purchase and Sale of Units

      Section  1.1  Purchase  and Sale of Stock.  Upon the  following  terms and
conditions,  the Company shall issue and sell to the  Purchasers and each of the
Purchasers  shall purchase from the Company,  the number of units (the "Units"),
consisting  of:  (i)  two (2)  shares  of the  Company's  Series  A  Convertible
Preferred  Stock,   par  value  $0.001  per  share  (the  "Preferred   Shares"),
convertible  into shares of the  Company's  common  stock,  par value $0.001 per
share (the "Common Stock"),  (ii) a Series A Warrant,  in substantially the form
attached  hereto  as  Exhibit  C-1 (the  "Series A  Warrant"),  (iii) a Series B
Warrant, in substantially the form attached hereto as Exhibit C-2 (the "Series B
Warrant"),  (iv) two (2) Series C Warrants,  in substantially  the form attached
hereto as Exhibit C-3 (the "Series C  Warrant"),  (v) two (2) Series J Warrants,
in  substantially  the form  attached  hereto  as  Exhibit  C-4 (the  "Series  J
Warrants"),  (vi) a Series D Warrant,  in substantially the form attached hereto
as  Exhibit  C-5 (the  "Series D  Warrant"),  and (vii) a Series E  Warrant,  in
substantially  the form  attached  hereto as Exhibit C-6 (the "Series E Warrant"
and,  together  with the  Series A Warrant,  the Series B Warrant,  the Series C
Warrant,  the Series J Warrant and the Series D Warrant,  the  "Warrants"),  set
forth  opposite  such  Purchaser's  name on Exhibit A hereto.  The  designation,
rights,  preferences  and other terms and provisions of the Series A Convertible
Preferred  Stock are set forth in the Certificate of Designation of the Relative
Rights and  Preferences  of the Series A Convertible  Preferred  Stock  attached
hereto as Exhibit B (the  "Certificate  of  Designation").  The  Company and the
Purchasers are executing and delivering this Agreement in accordance with and in
reliance upon the exemption from securities registration afforded by Rule 506 of
Regulation D ("Regulation D") as promulgated by the United States Securities and
Exchange  Commission  (the  "Commission")  under the  Securities Act of 1933, as
amended (the "Securities Act"), or Section 4(2) of the Securities Act.

      Section 1.2 Warrants.  Each of the Warrants  shall have a term of five (5)
years, except for the Series J Warrant, which shall have a term of one (1) year.
Each of the Warrants has an exercise  price per share equal to the Warrant Price
(as defined in the applicable Warrant) and shall be exercisable as stated in the
applicable Warrant.  The number of shares of Common Stock issuable upon exercise
of  the  Warrants  issuable  to  each  Purchaser  is  set  forth  opposite  such
Purchaser's name on Exhibit A attached hereto.

<PAGE>

      Section 1.3 Conversion Shares. The Company has authorized and has reserved
and  covenants  to  continue  to reserve,  free of  preemptive  rights and other
similar  contractual rights of stockholders,  a number of shares of Common Stock
equal to one  hundred  twenty  percent  (120%) of the number of shares of Common
Stock as shall from time to time be sufficient  to effect the  conversion of all
of the  Preferred  Shares and exercise of the  Warrants  then  outstanding.  Any
shares of Common Stock  issuable upon  conversion  of the  Preferred  Shares and
exercise of the Warrants (and such shares when issued) are herein referred to as
the "Conversion  Shares" and the "Warrant Shares",  respectively.  The Preferred
Shares, the Conversion Shares and the Warrant Shares are sometimes  collectively
referred to as the "Shares".

      Section  1.4  Purchase  Price  and  Closing.  Subject  to  the  terms  and
conditions  hereof,  in  consideration  of  and in  express  reliance  upon  the
representations,  warranties, covenants, terms and conditions of this Agreement,
the  Company  agrees to issue  and sell to the  Purchasers  and the  Purchasers,
severally but not jointly, agree to purchase the Units for an aggregate purchase
price of Five Hundred Thousand Dollars  ($500,000) (the "Purchase  Price").  The
closing of the purchase  and sale of the Units to be acquired by the  Purchasers
from the Company under this Agreement  shall take place at the offices of Leser,
Hunter,  Taubman & Taubman, 17 State Street,  Floor 16, New York, New York 10004
(the  "Closing")  at 10:00 a.m.,  New York time (i) on or before  September  14,
2007;  provided,  that all of the  conditions set forth in Article IV hereof and
applicable  to the Closing  shall have been  fulfilled  or waived in  accordance
herewith, or (ii) at such other time and place or on such date as the Purchasers
and the Company may agree upon (the  "Closing  Date").  Subject to the terms and
conditions of this Agreement,  at the Closing the Company shall deliver or cause
to be delivered to each Purchaser (x) a certificate  for the number of Preferred
Shares set forth  opposite the name of such  Purchaser on Exhibit A hereto,  (y)
Warrants  corresponding to the number of Units as is set forth opposite the name
of such  Purchaser  on  Exhibit A attached  hereto  and (z) any other  documents
required to be delivered  pursuant to Article IV hereof.  At the  Closing,  each
Purchaser  shall  deliver its  Purchase  Price by wire  transfer in  immediately
available funds to an account designated by the Company.

                                   ARTICLE II

                         Representations and Warranties

      Section 2.1  Representations  and  Warranties of the Company.  The Company
hereby represents and warrants to the Purchasers,  as of the date hereof and the
Closing  Date  (except  as set  forth on the  Disclosure  Schedule  prepared  in
connection  with this Agreement (the  "Disclosure  Schedule") with each numbered
section of the Disclosure Schedule  corresponding to the section number herein),
as  follows:

      (a)  Organization,  Good Standing and Power.  The Company is a corporation
duly  incorporated,  validly existing and in good standing under the laws of the
State of Nevada and has the requisite  corporate power to own, lease and operate
its  properties  and  assets  and to  conduct  its  business  as it is now being
conducted. The Company does not have any subsidiaries except as set forth in the
Company's  Form  10-KSB for the year ended  December  31,  2006,  including  the

                                       2
<PAGE>

accompanying  financial statements (the "Form 10-KSB"), or in the Company's Form
10-QSB  for the  fiscal  quarters  ended  March  31,  2007  and  June  30,  2007
(collectively,  the "Form  10-QSB"),  or in  Section  2.1(g)  of the  Disclosure
Schedule.  The Company and each such  subsidiary is duly  qualified as a foreign
corporation  to do business  and is in good  standing in every  jurisdiction  in
which the nature of the business  conducted  or property  owned by it makes such
qualification  necessary  except  for  any  jurisdiction(s)  (alone  or  in  the
aggregate)  in which the  failure  to be so  qualified  will not have a Material
Adverse Effect (as defined in Section 2.1(c) hereof) on the Company's  financial
condition.

      (b) Authorization;  Enforcement.  The Company has the requisite  corporate
power and authority to enter into and perform this Agreement,  the  Registration
Rights  Agreement in the form  attached  hereto as Exhibit D (the  "Registration
Rights  Agreement"),  the Lock-Up Agreements (as defined in Section 3.20 hereof)
in the form  attached  hereto  as  Exhibit  E, the  Irrevocable  Transfer  Agent
Instructions (as defined in Section 3.13) in the form attached hereto as Exhibit
F,  the  Certificate  of  Designation,  and  the  Warrants  (collectively,   the
"Transaction  Documents")  and to issue and sell the Shares and the  Warrants in
accordance with the terms hereof. The execution, delivery and performance of the
Transaction  Documents  by  the  Company  and  the  consummation  by it  of  the
transactions  contemplated  hereby  and  thereby  have  been  duly  and  validly
authorized by all necessary  corporate action, or will be so authorized prior to
the Closing, and no further consent or authorization of the Company or its Board
of Directors or stockholders will be required as of the Closing.  This Agreement
has been duly  executed  and  delivered by the  Company.  The other  Transaction
Documents  will have been duly  executed  and  delivered  by the  Company at the
Closing. Each of the Transaction Documents constitutes, or shall constitute when
executed  and  delivered,   a  valid  and  binding  obligation  of  the  Company
enforceable against the Company in accordance with its terms, except (a) as such
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization,   moratorium,  liquidation,  conservatorship,   receivership  or
similar laws relating to, or affecting  generally the enforcement of, creditor's
rights  and  remedies,  (b) as  such  enforceability  may be  limited  by  other
equitable  principles  of  general  application,   or  (c)  to  the  extent  the
indemnification provisions contained in the Registration Rights Agreement may be
limited by applicable federal or state securities laws.

      (c)  Capitalization.  The authorized  capital stock of the Company and the
shares thereof  currently  issued and  outstanding as of the date hereof are set
forth in  Section  2.1(c) of the  Disclosure  Schedule.  All of the  outstanding
shares of the Common Stock and the  Preferred  Shares have been duly and validly
authorized.  Except as set forth in Section 2.1(c) of the  Disclosure  Schedule,
(a) no shares of Common Stock are entitled to preemptive  rights or registration
rights  and  there  are no  outstanding  options,  warrants,  scrip,  rights  to
subscribe to, call or  commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company;  and  (b)  there  are no  contracts,  commitments,  understandings,  or
arrangements  by which the  Company is or may become  bound to issue  additional
shares of the  capital  stock of the Company or  options,  securities  or rights
convertible  into shares of capital  stock of the Company.  The Company is not a
party to any agreement granting  anti-dilution rights to any person with respect
to any of its equity or debt  securities.  The Company is not a party to, and it
has no knowledge  of, any  agreement  restricting  the voting or transfer of any

                                       3
<PAGE>

shares of the capital  stock of the  Company.  The offer and sale of all capital
stock,  convertible  securities,  rights,  warrants,  or options of the  Company
issued  between  February  24,  2006 and the Closing  complied  in all  material
respects with all  applicable  Federal and state  securities  laws,  and, to the
Company's  knowledge,  no  stockholder  has a right of  rescission  or claim for
damages  with respect  thereto  which would have a Material  Adverse  Effect (as
defined below). The Company has furnished, or will furnish prior to the Closing,
or made  available to the  Purchasers  true and correct  copies of the Company's
Articles of Incorporation as in effect on the date hereof (the "Articles"),  and
the  Company's  Bylaws as in effect on the date hereof (the  "Bylaws").  For the
purposes of this Agreement, "Material Adverse Effect" means any material adverse
effect on the business,  operations,  properties,  or financial condition of the
Company and its subsidiaries  and/or any condition,  circumstance,  or situation
that would  prohibit or otherwise  materially  interfere with the ability of the
Company to perform any of its  obligations  under this Agreement in any material
respect.

      (d) Issuance of Shares. The Preferred Shares and the Warrants to be issued
at the Closing have been duly authorized by all necessary  corporate  action, or
will be so authorized prior to the Closing,  and the Preferred Shares, when paid
for, issued and delivered in accordance with the terms hereof,  shall be validly
issued and outstanding,  fully paid and nonassessable and entitled to the rights
and preferences set forth in the Certificate of Designation. When the Conversion
Shares and the  Warrant  Shares are issued in  accordance  with the terms of the
Certificate of Designation and the Warrants,  respectively,  such shares will be
duly  authorized  by all  necessary  corporate  action  and  validly  issued and
outstanding, fully paid and nonassessable,  and the holders shall be entitled to
all rights accorded to a holder of Common Stock.

      (e) No Conflicts.  Except as set forth in Section 2.1(e) of the Disclosure
Schedule,  the execution,  delivery and performance of the Transaction Documents
by the Company,  the  performance  by the Company of its  obligations  under the
Certificate  of  Designation  and  the   consummation  by  the  Company  of  the
transactions contemplated herein and therein do not and will not (i) violate any
provision of the Company's Articles or Bylaws, (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,
acceleration  or  cancellation  of,  any  agreement,  mortgage,  deed of  trust,
indenture,  note, bond,  license,  lease agreement,  instrument or obligation to
which the  Company  is a party or by which it or its  properties  or assets  are
bound, (iii) create or impose a lien,  mortgage,  security  interest,  charge or
encumbrance  of any nature on any property of the Company under any agreement or
any  commitment to which the Company is a party or by which the Company is bound
or by which any of its respective properties or assets are bound, or (iv) result
in a  violation,  to its  knowledge,  of any  federal,  state,  local or foreign
statute,  rule,  regulation,  order,  judgment or decree (including  Federal and
state securities laws and  regulations)  applicable to the Company or any of its
subsidiaries  or by which any  property  or asset of the  Company  or any of its
subsidiaries are bound or affected,  except,  in all cases other than violations
pursuant  to clause  (i)  above,  for such  conflicts,  defaults,  terminations,
amendments,   accelerations,   cancellations   and   violations  as  would  not,
individually or in the aggregate, have a Material Adverse Effect. The Company is
not required under Federal, state or local law, rule or regulation to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute,  deliver or perform any
of its  obligations  under  the  Transaction  Documents,  or issue  and sell the
Preferred Shares, the Warrants,  the Conversion Shares and the Warrant Shares in
accordance with the terms hereof or thereof (other than any filings which may be

                                       4
<PAGE>

required  to be made by the  Company  with the  Commission  or state  securities
administrators subsequent to the Closing,  including but not limited to a Form D
and the  Certificate  of  Designation,  all of which  shall be filed on a timely
basis); provided that, for purposes of the representation made in this sentence,
the  Company  is  assuming  and  relying  upon  the  accuracy  of  the  relevant
representations and agreements of the Purchasers herein.

      (f) Commission Documents,  Financial Statements.  Since February 24, 2006,
the Company has timely filed all reports, schedules, forms, statements and other
documents  required  to be  filed  by it with  the  Commission  pursuant  to the
reporting  requirements of the Securities  Exchange Act of 1934, as amended (the
"Exchange Act"),, including material filed pursuant to Section 13(a) or 15(d) of
the  Exchange  Act  (all of the  foregoing  including  filings  incorporated  by
reference therein being referred to herein as the "Commission  Documents").  The
Company has not provided to the Purchasers any material  non-public  information
or other information which, according to applicable law, rule or regulation, was
required to have been  disclosed  publicly by the Company but which has not been
so disclosed,  other than with respect to the transactions  contemplated by this
Agreement.  At the times of their respective  filings,  or as of the date of the
last  amendment  thereto if amended after  filing,  the Form 10-KSB and the Form
10-QSB,  complied in all material  respects with the applicable  requirements of
the Exchange Act and the rules and  regulations  of the  Commission  promulgated
thereunder,  and, as of their  respective  dates,  or as of the date of the last
amendment thereto if amended after filing,  none of the Form 10-KSB and the Form
10-QSB  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
Commission  Documents,  as such  financial  statements may have been restated in
subsequent  filings,  comply as to form in all material respects with applicable
accounting   requirements  and  the  published  rules  and  regulations  of  the
Commission or other applicable rules and regulations with respect thereto.  Such
financial  statements  have been  prepared  in  accordance  with  United  States
generally accepted accounting  principles ("GAAP") applied on a consistent basis
during the periods  involved  (except (i) as may be otherwise  indicated in such
financial  statements  or the  notes  thereto  or (ii) in the case of  unaudited
interim  statements,  to the extent  they may not  include  footnotes  or may be
condensed or summary  statements),  and fairly present in all material  respects
the  financial  position  of the Company  and its  subsidiaries  as of the dates
thereof and the results of operations  and cash flows for the periods then ended
(subject,  to any adjustments  described in the Commission  Documents and in the
case of unaudited statements, to normal year-end audit adjustments).

      (g)  Subsidiaries.  Section 2.1(g) of the  Disclosure  Schedule sets forth
each subsidiary of the Company, showing the jurisdiction of its incorporation or
organization  and showing the  percentage  of each person's  ownership.  For the
purposes of this  Agreement,  "subsidiary"  shall mean any  corporation or other
entity  of  which at  least a  majority  of the  securities  or other  ownership
interest  having  ordinary  voting power  (absolutely or  contingently)  for the
election of directors or other persons  performing  similar functions are at the
time  owned  directly  or  indirectly  by the  Company  and/or  any of its other
subsidiaries.  All of the outstanding shares of capital stock of each subsidiary
have  been  duly  authorized  and  validly  issued,   and  are  fully  paid  and
nonassessable.  There are no outstanding preemptive, conversion or other rights,

                                       5
<PAGE>

options,  warrants  or  agreements  granted  or  issued by or  binding  upon any
subsidiary for the purchase or acquisition of any shares of capital stock of any
subsidiary  or  any  other  securities  convertible  into,  exchangeable  for or
evidencing the rights to subscribe for any shares of such capital stock. Neither
the Company  nor any  subsidiary  is subject to any  obligation  (contingent  or
otherwise)  to  repurchase  or  otherwise  acquire  or retire  any shares of the
capital stock of any subsidiary or any convertible securities,  rights, warrants
or options of the type described in the preceding sentence.  Neither the Company
nor any  subsidiary  is  party  to,  nor has any  knowledge  of,  any  agreement
restricting  the voting or transfer  of any shares of the  capital  stock of any
subsidiary.

      (h) No Material  Adverse Change.  Since June 30, 2007, the Company has not
experienced or suffered any Material Adverse Effect.

      (i)  No  Undisclosed  Liabilities.  Neither  the  Company  nor  any of its
subsidiaries  has  any  liabilities,  obligations,  claims  or  losses  (whether
liquidated or unliquidated,  secured or unsecured, absolute, accrued, contingent
or otherwise)  other than those incurred in the ordinary course of the Company's
or its  subsidiaries  respective  businesses  since  June 30,  2007  and  which,
individually  or in the aggregate,  do not or would not have a Material  Adverse
Effect on the Company or its subsidiaries.

      (j) No Undisclosed  Events or Circumstances.  No event or circumstance has
occurred or exists  with  respect to the  Company or its  subsidiaries  or their
respective businesses, properties, prospects, operations or financial condition,
which,  under applicable law, rule or regulation,  requires public disclosure or
announcement  by the  Company but which has not been so  publicly  announced  or
disclosed.

      (k) Indebtedness. The Form 10-KSB or Form 10-QSB sets forth as of a recent
date all  outstanding  secured and unsecured  Indebtedness of the Company or any
subsidiary, or for which the Company or any subsidiary has commitments.  For the
purposes of this  Agreement,  "Indebtedness"  shall mean (a) any liabilities for
borrowed money or amounts owed in excess of $100,000  (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 $25,000 due under leases required to be capitalized in accordance with
GAAP.  Neither the Company nor any  subsidiary is in default with respect to any
Indebtedness.

                                       6
<PAGE>

      (l) Title to Assets. Each of the Company and the subsidiaries has good and
marketable title to all of its real and personal property  reflected in the Form
10-KSB,  free and clear of any  mortgages,  pledges,  charges,  liens,  security
interests or other encumbrances,  except for those disclosed in the Form 10-KSB,
statutory  liens for which the payment of current taxes are not yet  delinquent,
those set forth in  Section  2.1(l) of the  Disclosure  Schedule,  or such that,
individually or in the aggregate,  do not cause a Material  Adverse Effect.  All
leases of the Company and each of its subsidiaries are valid and subsisting and,
to its knowledge, in full force and effect.

      (m)  Actions  Pending.  There is no action,  suit,  claim,  investigation,
arbitration,  alternate  dispute  resolution  proceeding or any other proceeding
pending or, to the knowledge of the Company,  threatened in writing  against the
Company or any subsidiary  which questions the validity of this Agreement or any
of the other Transaction  Documents or the transactions  contemplated  hereby or
thereby or any action taken or to be taken pursuant hereto or thereto. Except as
set  forth  in the  Form  10-KSB,  Form  10-QSB,  or in  Section  2.1(m)  of the
Disclosure   Schedule,   there  is  no  action,   suit,  claim,   investigation,
arbitration,  alternate  dispute  resolution  proceeding or any other proceeding
pending or, to the knowledge of the Company,  threatened in writing,  against or
involving the Company,  any subsidiary or any of their respective  properties or
assets. To the Company's knowledge,  there are no outstanding orders, judgments,
injunctions,  awards or decrees  of any court,  arbitrator  or  governmental  or
regulatory  body  against  the  Company or any  subsidiary  or any  officers  or
directors of the Company or subsidiary in their capacities as such.

      (n) Compliance with Law. To the Company's  knowledge,  the business of the
Company  and the  subsidiaries  has been and is  presently  being  conducted  in
accordance  with all  applicable  federal,  state and local  governmental  laws,
rules,   regulations  and  ordinances,   except  for  such  noncompliance  that,
individually or in the aggregate,  would not cause a Material Adverse Effect. To
the  Company's  knowledge,  the  Company and each of its  subsidiaries  have all
franchises,  permits,  licenses,  consents and other  governmental or regulatory
authorizations  and  approvals  necessary for the conduct of its business as now
being  conducted by it unless the failure to possess such  franchises,  permits,
licenses,  consents and other  governmental  or  regulatory  authorizations  and
approvals, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

      (o)  Taxes.  Except  as set  forth in  Section  2.1(o)  of the  Disclosure
Schedule,  the Company and each of the subsidiaries has accurately  prepared and
filed all  federal,  state and other tax returns  required by law to be filed by
it, has paid or made provisions for the payment of all taxes shown to be due and
all additional assessments,  and adequate provisions have been and are reflected
in the financial  statements of the Company and the subsidiaries for all current
taxes and other  charges to which the Company or any  subsidiary  is subject and
which are not currently due and payable.  None of the federal income tax returns
of the  Company or any  subsidiary  have been  audited by the  Internal  Revenue
Service. The Company has no knowledge of any additional assessments, adjustments
or contingent tax liability (whether federal or state) of any nature whatsoever,
whether  pending or  threatened  against the Company or any  subsidiary  for any
period, nor of any basis for any such assessment, adjustment or contingency.

      (p) Certain Fees.  Except as set forth in Section 2.1(p) of the Disclosure
Schedule, no brokers,  finders or financial advisory fees or commissions will be
payable by the Company or any  subsidiary  or, to the Company's  knowledge,  any
Purchaser with respect to the transactions contemplated by this Agreement.

      (q) Disclosure.  Neither this Agreement or the Disclosure Schedule nor any
other documents,  certificates or instruments  furnished to the Purchasers by or
on behalf of the Company or any subsidiary in connection  with the  transactions

                                       7
<PAGE>

contemplated by this Agreement  contain any untrue  statement of a material fact
or omit to state a material fact necessary in order to make the statements  made
herein or therein,  in the light of the circumstances under which they were made
herein or therein, not misleading.  It is understood that this representation is
qualified by the fact that the Company has not delivered to the Purchasers,  and
has not been requested to deliver,  a private placement or similar memorandum or
any written  disclosure  of the types of  information  customarily  furnished to
purchasers of securities.

      (r) Operation of Business.  The Company and each of the subsidiaries  owns
or possesses,  has the right to use, or believes it can acquire on  commercially
reasonable  terms,  all  patents,  trademarks,  domain  names  (whether  or  not
registered) and any patentable  improvements or  copyrightable  derivative works
thereof,  websites and intellectual  property rights relating  thereto,  service
marks, trade names, copyrights,  licenses and authorizations as set forth in the
Form 10-KSB,  and all rights with respect to the foregoing,  which are necessary
for the conduct of its business as now  conducted  without any conflict with the
rights of others.

      (s) Environmental  Compliance.  Except as could not reasonably be expected
to have a Material Adverse Effect, to the Company's  knowledge,  the Company and
each of its subsidiaries  have obtained all material  approvals,  authorization,
certificates,   consents,   licenses,   orders  and  permits  or  other  similar
authorizations of all governmental  authorities,  or from any other person, that
are  required  under any  Environmental  Laws.  The Form  10-KSB or Form  10-QSB
describes all material permits,  licenses and other authorizations  issued under
any Environmental Laws to the Company or its subsidiaries.  "Environmental Laws"
shall mean all  applicable  laws relating to the  protection of the  environment
including,   without  limitation,  all  requirements  pertaining  to  reporting,
licensing,  permitting,  controlling,  investigating  or remediating  emissions,
discharges,  releases or threatened releases of hazardous  substances,  chemical
substances,  pollutants,  contaminants or toxic substances, materials or wastes,
whether  solid,  liquid or  gaseous  in  nature,  into the air,  surface  water,
groundwater or land, or relating to the manufacture,  processing,  distribution,
use,  treatment,   storage,   disposal,   transport  or  handling  of  hazardous
substances, chemical substances,  pollutants,  contaminants or toxic substances,
material or wastes,  whether solid, liquid or gaseous in nature. Except as could
not reasonably be expected to have a Material  Adverse Effect,  to the Company's
knowledge,  the Company (i) has all necessary  governmental  approvals  required
under all Environmental  Laws and used in its business or in the business of any
of its  subsidiaries;  and, (ii) along with each of its subsidiaries are also in
compliance  with all other  limitations,  restrictions,  conditions,  standards,
requirements,   schedules   and   timetables   required  or  imposed  under  all
Environmental  Laws.  Except for such instances as would not  individually or in
the aggregate have a Material Adverse Effect, to the Company's knowledge,  there
are no past or present events, conditions, circumstances,  incidents, actions or
omissions  relating to or in any way affecting  the Company or its  subsidiaries
that violate or may violate any Environmental Law after the Closing Date or that
may give rise to any environmental liability, or otherwise form the basis of any
claim, action,  demand, suit,  proceeding,  hearing,  study or investigation (i)
under any  Environmental  Law,  or (ii) based on or related to the  manufacture,
processing,  distribution, use, treatment, storage (including without limitation
underground storage tanks),  disposal,  transport or handling,  or the emission,
discharge, release or threatened release of any hazardous substance.

                                       8
<PAGE>

      (t)  Books and  Records.  The books and  records  of the  Company  and its
subsidiaries  accurately  reflect  in  all  material  respects  the  information
relating to the business of the Company and the  subsidiaries,  the location and
collection of their assets,  and the nature of all  transactions  giving rise to
the obligations or accounts receivable of the Company or any subsidiary.  Except
as set forth in Section 2.1(t) of the Disclosure Schedule,  the Company and each
of  its  subsidiaries   maintain  a  system  of  internal   accounting  controls
sufficient, in the judgment of the Company, 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 actions is taken with respect to any differences.  The
preceding  sentence  shall not serve as a  representation  or warranty  that the
Company or any of its  subsidiaries  is in compliance  with any securities  laws
that are not  applicable to the Company,  or that are not in effect with respect
to the Company, as of the date of this Agreement.

      (u) Material Agreements. Neither the Company nor any subsidiary is a party
to any written or oral contract, instrument, agreement, commitment,  obligation,
plan or  arrangement,  a copy of which  would be  required  to be filed with the
Commission as an exhibit to the Commission  Documents  (collectively,  "Material
Agreements")  but  that  has not been so  filed.  As a party  to all such  filed
Material Agreements, the Company and each of its subsidiaries,  to the Company's
knowledge,  has in all material respects performed all the obligations  required
to be performed by such  agreements,  has not received any notice of default and
is not in default  under any  Material  Agreement  now in effect,  the result of
which  could  cause a Material  Adverse  Effect.  No  written or oral  contract,
instrument,  agreement,  commitment,  obligation,  plan  or  arrangement  of the
Company or of any  subsidiary  limits or shall limit the payment of dividends on
the Company's  Preferred  Shares,  other preferred  stock, if any, or its Common
Stock.

      (v) Transactions  with  Affiliates.  Except as required to be set forth in
the Commission  Documents,  there are no loans, leases,  agreements,  contracts,
royalty  agreements,  management  contracts or arrangements or other  continuing
transactions between (a) the Company and any subsidiary on the one hand, and (b)
on the other hand, the Company, any officer, employee, consultant or director of
the Company, or any of its subsidiaries,  or any person owning any capital stock
of the Company or any  subsidiary or any member of the immediate  family of such
officer,  employee,  consultant,  director or stockholder or any  corporation or
other entity  controlled  by such  officer,  employee,  consultant,  director or
stockholder,  or a member of the  immediate  family of such  officer,  employee,
consultant,  director or stockholder,  other than (x) standard employee benefits
generally  made available to all  employees,  (y) standard  director and officer
indemnification  agreements  and (z) the  purchase of shares of common stock and
the  issuance  of options to  purchase  shares of common  stock  pursuant to the
Company's stock option plan.

      (w)   Securities   Act  of  1933.   Based  in   material   part  upon  the
representations  herein of the  Purchasers,  the Company has  complied  and will
comply with all applicable  federal and state securities laws in connection with
the offer,  issuance and sale of the Shares and the Warrants hereunder.  Neither

                                       9
<PAGE>

the Company  nor, to its  knowledge,  anyone  acting on its behalf,  directly or
indirectly,  has or  will,  prior to the  Closing  Date  sell,  offer to sell or
solicit  offers to buy any of the Shares or the Warrants  to, or solicit  offers
with  respect  thereto  from,  or enter into any  preliminary  conversations  or
negotiations  relating thereto with, any person,  or has taken or will, prior to
the Closing Date, take any action so as to bring the issuance and sale of any of
the Shares and the Warrants under the registration  provisions of the Securities
Act and applicable state securities laws, and neither the Company nor any of its
affiliates, nor, to its knowledge, any person acting on its or their behalf, has
engaged in any form of general  solicitation or general  advertising (within the
meaning of Regulation D under the Securities  Act) in connection  with the offer
or sale of any of the Shares and the Warrants.

      (x) Intentionally Omitted.

      (y)  Employees.  Neither the Company nor any subsidiary has any collective
bargaining arrangements or agreements covering any of its employees.  Other than
as set forth in Section  2.1(y) of the  Disclosure  Schedule,  (a)  neither  the
Company nor any  subsidiary  has any employment  contract,  agreement  regarding
proprietary information,  non-competition agreement, non-solicitation agreement,
confidentiality   agreement,  or  any  other  similar  contract  or  restrictive
covenant,  relating to the right of any officer,  employee or  consultant  to be
employed  or engaged  by the  Company or such  subsidiary,  and (b) no  officer,
consultant or key employee of the Company or any subsidiary  whose  termination,
either  individually or in the aggregate,  could have a Material Adverse Effect,
has terminated or, to the knowledge of the Company, has any present intention of
terminating  his or  her  employment  or  engagement  with  the  Company  or any
subsidiary.

      (z)  Absence  of  Certain  Developments.  Except  as set forth in the Form
10-KSB, the Form 10-QSB or in Section 2.1(z) of the Disclosure  Schedule,  since
June 30, 2007, neither the Company nor any subsidiary has:

            (i) issued any stock,  bonds or other  corporate  securities  or any
rights, options or warrants with respect thereto;

            (ii)  borrowed  any  amount or  incurred  or become  subject  to any
liabilities  (absolute or contingent) except current liabilities incurred in the
ordinary  course of business  which are  comparable  in nature and amount to the
current  liabilities  incurred in the  ordinary  course of  business  during the
comparable  portion of its prior fiscal year, as adjusted to reflect the current
nature and volume of the Company's or such subsidiary's business;

            (iii)  discharged or satisfied any lien or  encumbrance  or paid any
obligation or liability (absolute or contingent), other than current liabilities
paid in the ordinary course of business;

            (iv) declared or made any payment or  distribution  of cash or other
property to stockholders with respect to its stock, or purchased or redeemed, or
made any agreements so to purchase or redeem, any shares of its capital stock;

                                       10
<PAGE>

            (v) sold,  assigned or  transferred  any other tangible  assets,  or
canceled any debts or claims, except in the ordinary course of business;

            (vi) sold,  assigned or transferred  any patent rights,  trademarks,
trade  names,   copyrights,   trade  secrets  or  other  intangible   assets  or
intellectual   property  rights,  or  disclosed  any  proprietary   confidential
information to any person except to customers in the ordinary course of business
or to the Purchasers or their representatives;

            (vii)  suffered  any  substantial  losses  or waived  any  rights of
material value,  whether or not in the ordinary course of business,  or suffered
the loss of any material amount of prospective business;

            (viii)  made any  changes  in  employee  compensation  except in the
ordinary course of business and consistent with past practices;

            (ix)  made  capital   expenditures  or  commitments   therefor  that
aggregate in excess of $100,000;

            (x) entered  into any other  transaction  other than in the ordinary
course of business, or entered into any other material  transaction,  whether or
not in the ordinary course of business;

            (xi) made charitable contributions or pledges in excess of $25,000;

            (xii)  suffered any material  damage,  destruction or casualty loss,
whether or not covered by insurance;

            (xiii) experienced any material problems with labor or management in
connection with the terms and conditions of their employment;

            (xiv) effected any two or more events of the foregoing kind which in
the aggregate would be material to the Company or its subsidiaries; or

            (xv) entered into an agreement, written or otherwise, to take any of
the foregoing actions.

      (aa) Public Utility Holding Company Act and Investment Company Act Status.
The  Company is not a "holding  company" or a "public  utility  company" as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
The Company is not, and as a result of and immediately upon the Closing will not
be,  an  "investment  company"  or a  company  "controlled"  by  an  "investment
company," within the meaning of the Investment Company Act of 1940, as amended.

      (bb) ERISA. No liability to the Pension Benefit  Guaranty  Corporation has
been incurred with respect to any Plan (as defined  below) by the Company or any
of its subsidiaries  which is or would be materially  adverse to the Company and
its subsidiaries.  The execution and delivery of this Agreement and the issuance
and sale of the  Preferred  Shares  will not involve  any  transaction  which is

                                       11
<PAGE>

subject to the  prohibitions of Section 406 of ERISA or in connection with which
a tax could be imposed  pursuant to Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"),  provided that, if any of the Purchasers,  or any
person or entity that owns a beneficial interest in any of the Purchasers, is an
"employee  pension  benefit  plan" (within the meaning of Section 3(2) of ERISA)
with respect to which the Company is a "party in  interest"  (within the meaning
of Section 3(14) of ERISA), the requirements of Sections 407(d)(5) and 408(e) of
ERISA, if applicable,  are met. As used in this Section 2.1(bb), the term "Plan"
shall mean an "employee pension benefit plan" (as defined in Section 3 of ERISA)
which is or has been established or maintained, or to which contributions are or
have been made,  by the Company or any  subsidiary  or by any trade or business,
whether or not incorporated, which, together with the Company or any subsidiary,
is under common control, as described in Section 414(b) or (c) of the Code.

      (cc) Dilutive Effect.  The Company  understands and acknowledges  that its
obligation to issue Conversion Shares upon conversion of the Preferred Shares in
accordance  with this  Agreement  and the  Certificate  of  Designation  and its
obligations  to issue the Warrant  Shares upon the  exercise of the  Warrants in
accordance with this Agreement and the Warrants,  is, in each case, absolute and
unconditional  regardless of the dilutive  effect that such issuance may have on
the ownership interest of other stockholders of the Company.

      (dd)  No  Integrated  Offering.  Neither  the  Company,  nor  any  of  its
affiliates, nor, to its knowledge, 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 the offering of
the Shares  pursuant to this Agreement to be integrated  with prior offerings by
the Company for purposes of the  Securities  Act which would prevent the Company
from selling the Shares  pursuant to Rule 506 under the  Securities  Act, or any
applicable  exchange-related  stockholder  approval  provisions,  nor  will  the
Company or any of its affiliates or  subsidiaries  take any action or steps that
would cause the offering of the Shares to be  integrated  with other  offerings.
The  Company  does  not have  any  registration  statement  pending  before  the
Commission or currently  under the  Commission's  review and since  February 19,
2007,  the Company has not offered or sold any of its equity  securities or debt
securities convertible into shares of Common Stock.

      (ee)  Sarbanes-Oxley Act. The Company is in compliance with the applicable
provisions of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), and the
rules and regulations promulgated thereunder, that are in effect with respect to
the Company as of the date of this Agreement.

      (ff) Independent Nature of Purchasers.  The Company  acknowledges that the
obligations of each Purchaser  under the  Transaction  Documents are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser under the Transaction  Documents.  The Company  acknowledges  that the
decision of each Purchaser to purchase securities pursuant to this Agreement has
been  made  by  such   Purchaser   independently   of  any  other  purchase  and
independently  of any information,  materials,  statements or opinions as to the
business,  affairs,  operations,  assets,  properties,  liabilities,  results of
operations, condition (financial or otherwise) or prospects of the Company or of

                                       12
<PAGE>

its Subsidiaries  which may have been made or given by any other Purchaser or by
any agent or employee of any other  Purchaser,  and no  Purchaser  or any of its
agents or  employees  shall have any  liability to any  Purchaser  (or any other
person) relating to or arising from any such information,  materials, statements
or opinions.  The Company  acknowledges that nothing contained herein, or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant hereto or
thereto,  shall be deemed to  constitute  the  Purchasers as a  partnership,  an
association,  a  joint  venture  or any  other  kind  of  entity,  or  create  a
presumption  that the  Purchasers are in any way acting in concert or as a group
with  respect  to  such  obligations  or the  transactions  contemplated  by the
Transaction  Documents.  The Company  acknowledges  that each Purchaser shall be
entitled to  independently  protect and  enforce its rights,  including  without
limitation,  the  rights  arising  out of  this  Agreement  or out of the  other
Transaction Documents,  and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.

      (gg) Transfer Agent.  The name,  address,  telephone  number,  fax number,
contact person and email address of the Company's transfer agent is set forth in
Section 2.1(gg) of the Disclosure Schedule.

      Section 2.2 Representations and Warranties of the Purchasers.  Each of the
Purchasers  hereby makes the  following  representations  and  warranties to the
Company  with  respect  solely  to  itself  and not with  respect  to any  other
Purchaser:

      (a)  Organization  and Standing of the Purchasers.  If the Purchaser is an
entity,  such  Purchaser is a corporation or partnership  duly  incorporated  or
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction of its incorporation or organization.

      (b)  Authorization  and Power.  Each Purchaser has the requisite power and
authority to enter into and perform this Agreement and to purchase the Preferred
Shares and Warrants  being sold to it  hereunder.  The  execution,  delivery and
performance  of this  Agreement and the  Registration  Rights  Agreement by such
Purchaser and the consummation by it of the transactions contemplated hereby and
thereby have been duly  authorized  by all  necessary  corporate or  partnership
action,  and no further consent or  authorization of such Purchaser or its Board
of Directors,  stockholders,  or partners, as the case may be, is required. Each
of  this  Agreement  and  the  Registration   Rights  Agreement  has  been  duly
authorized,  executed and delivered by such Purchaser and constitutes,  or shall
constitute  when executed and delivered,  a valid and binding  obligation of the
Purchaser  enforceable  against  the  Purchaser  in  accordance  with the  terms
thereof.

      (c)  No  Conflicts.  The  execution,  delivery  and  performance  of  this
Agreement and the  Registration  Rights  Agreement and the  consummation by such
Purchaser of the transactions contemplated hereby and thereby or relating hereto
do not and  will not (i)  result  in a  violation  of such  Purchaser's  charter
documents or bylaws or other organizational  documents or (ii) conflict with, or
constitute  a default  (or an event  which with  notice or lapse of time or both
would  become a default)  under,  or give to others  any rights of  termination,
amendment,   acceleration  or  cancellation  of  any  agreement,   indenture  or
instrument  or  obligation  to which such  Purchaser  is a party or by which its
properties  or assets are bound,  or result in a violation of any law,  rule, or

                                       13
<PAGE>

regulation, or any order, judgment or decree of any court or governmental agency
applicable  to such  Purchaser  or its  properties  (except for such  conflicts,
defaults and violations as would not,  individually or in the aggregate,  have a
material adverse effect on such Purchaser). Such Purchaser is not required under
any  foreign,  Federal,  state or local law,  rule or  regulation  to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute,  deliver or perform any
of its obligations under this Agreement or the Registration  Rights Agreement or
to purchase the Preferred  Shares or acquire the Warrants in accordance with the
terms hereof or thereof,  provided that to the extent a  representation  made in
this sentence relies on a relevant  representation  or agreement of the Company,
such  Purchaser  is assuming  and  relying  upon the  accuracy  of the  relevant
representations and agreements of the Company herein.

      (d) Acquisition for Investment.  Each Purchaser is acquiring the Preferred
Shares and the Warrants solely for its own account for the purpose of investment
and  not  with a view to or for  sale  in  connection  with  distribution.  Each
Purchaser does not have a present  intention to sell the Preferred Shares or the
Warrants,  nor a  present  arrangement  (whether  or  not  legally  binding)  or
intention to effect any  distribution of the Preferred Shares or the Warrants to
or  through  any  person  or  entity;  provided,  however,  that by  making  the
representations  herein and subject to Section 2.2(h) below, such Purchaser does
not agree to hold the Shares or the Warrants  for any minimum or other  specific
term and reserves the right to dispose of the Shares or the Warrants at any time
in accordance with the applicable  provisions of the  Transaction  Documents and
Federal, foreign and state securities laws applicable to such disposition.  Each
Purchaser  acknowledges  that it is able to bear the financial risks  associated
with an investment in the Preferred Shares and the Warrants and that it has been
given full access to such records of the Company and the subsidiaries and to the
officers of the Company and the subsidiaries and received such information as it
has deemed  necessary or appropriate to conduct its due diligence  investigation
and has sufficient knowledge and experience in investing in companies similar to
the Company in terms of the Company's  stage of  development so as to be able to
evaluate the risks and merits of its investment in the Company.

      (e) Status of Purchasers.  Such  Purchaser is an "accredited  investor" as
defined in Regulation D promulgated  under the Securities Act. Such Purchaser is
not  required  to be  registered  as a  broker-dealer  under  Section  15 of the
Exchange Act and such Purchaser is not a  broker-dealer.  Such Purchaser has not
been formed for the specific  purpose of acquiring the Preferred  Shares and the
Warrants.

      (f) Opportunities for Additional Information.  Each Purchaser acknowledges
that such  Purchaser  has had the  opportunity  to ask  questions of and receive
answers from, or obtain additional  information from, the executive  officers of
the Company  concerning  the financial and other affairs of the Company,  and to
the extent deemed necessary in light of such Purchaser's  personal  knowledge of
the Company's  affairs,  such  Purchaser  has asked such  questions and received
answers to the full  satisfaction of such Purchaser,  and such Purchaser desires
to invest in the Company.

      (g)  No  General  Solicitation.   Each  Purchaser  acknowledges  that  the
Preferred Shares and the Warrants were not offered to such Purchaser by means of

                                       14
<PAGE>

any form of general or public solicitation or general  advertising,  or publicly
disseminated   advertisements   or   sales   literature,   including   (i)   any
advertisement,   article,   notice  or  other  communication  published  in  any
newspaper, magazine, or similar media, or broadcast over television or radio, or
(ii) any  seminar or meeting to which such  Purchaser  was invited by any of the
foregoing means of communications.

      (h) Rule 144.  Such  Purchaser  understands  that the Shares  must be held
indefinitely  unless such Shares are  registered  under the Securities Act or an
exemption from registration is available.  Such Purchaser acknowledges that such
Purchaser  is  familiar  with  Rule  144 of the  rules  and  regulations  of the
Commission, as amended, promulgated pursuant to the Securities Act ("Rule 144"),
and that such person has been advised  that Rule 144 permits  resales only under
certain  circumstances.  Such Purchaser understands that to the extent that Rule
144 is not  available,  such Purchaser will be unable to sell any Shares without
either  registration  under  the  Securities  Act or the  existence  of  another
exemption from such registration  requirement.  Such Purchaser acknowledges that
the  Company  has no  obligation  to  register  or qualify the Shares for resale
except as set forth in the Registration Rights Agreement. Such Purchaser further
acknowledges  that  if  an  exemption  from  registration  or  qualification  is
available,  it may be conditioned  on various  requirements  including,  but not
limited to, the time and manner of sale, the holding period for the Shares,  and
on  requirements  relating to the Company  which are outside of the  Purchaser's
control,  and which the  Company is under no  obligation  and may not be able to
satisfy.

      (i) General.  Such Purchaser understands that the Preferred Shares and the
Warrants  are being  offered and sold in reliance on a  transactional  exemption
from the  registration  requirement of Federal and state securities laws and the
Company  is  relying  upon  the  truth  and  accuracy  of  the  representations,
warranties, agreements, acknowledgments and understandings of such Purchaser set
forth herein in order to determine the  applicability of such exemptions and the
suitability of such Purchaser to acquire the Preferred Shares and the Warrants.

      (j) Independent Investment. Except as may be disclosed in any filings with
the  Commission  by the  Purchasers  under  Section 13 and/or  Section 16 of the
Exchange  Act, no Purchaser  has agreed to act with any other  Purchaser for the
purpose of acquiring,  holding,  voting or disposing of the Preferred Shares and
the  Warrants  purchased  hereunder  for  purposes  of Section  13(d)  under the
Exchange  Act, and each  Purchaser is acting  independently  with respect to its
investment in the Preferred Shares and the Warrants.

      (k) Trading Activities. No Purchaser nor any of its affiliates has an open
short position in the Common Stock and each Purchaser  agrees that it shall not,
and that it will cause its  affiliates  not to,  engage in any short  sales with
respect to the Common Stock.

      (l)  Certain  Fees.  No brokers,  finders or  financial  advisory  fees or
commissions  will be payable by any Purchaser  with respect to the  transactions
contemplated by this Agreement.

                                       15
<PAGE>

      (m) Foreign  Investors.  If a Purchaser is not a United  States person (as
defined by Section  7701(a)(30) of the Code),  such Purchaser hereby  represents
that it has  satisfied  itself  as to the  full  observance  of the  laws of its
jurisdiction  in connection  with any  invitation to subscribe for the Preferred
Shares and the Warrants or any use of this  Agreement,  including  (i) the legal
requirements  within its  jurisdiction  for the purchase of the Preferred Shares
and the  Warrants,  (ii) any foreign  exchange  restrictions  applicable to such
purchase, (iii) any governmental or other consents that may need to be obtained,
and (iv) the income tax and other tax consequences, if any, that may be relevant
to the  purchase,  holding,  redemption,  sale,  or transfer  of the Units,  the
Preferred Shares and the Warrants. The Purchaser's  subscription and payment for
and continued beneficial ownership of the Preferred Shares and the Warrants will
not  violate  any  applicable  securities  or  other  laws  of  the  Purchaser's
jurisdiction.

      (n)  Residence.  If the Purchaser is an  individual,  then such  Purchaser
resides in the state or province  identified in the address of the Purchaser set
forth on Exhibit A; if the  Purchaser  is a  partnership,  corporation,  limited
liability  company or other entity,  then the office or offices of the Purchaser
in which its principal place of business is located is identified in the address
or addresses of the Purchaser set forth on Exhibit A.

                                   ARTICLE III

                                    Covenants

      Section 3.1 Covenants of the Company.  The Company  covenants with each of
the Purchasers as follows, which covenants are for the benefit of the Purchasers
and their permitted assignees (as defined herein):

      a.  Securities  Compliance.  The Company  shall notify the  Commission  in
accordance with their rules and regulations, of the transactions contemplated by
any of the Transaction Documents,  including filing a Form D with respect to the
Preferred  Shares,  Warrants,  Conversion  Shares and Warrant Shares as required
under  Regulation D, and shall use commercially  reasonable  efforts to take all
other  necessary  action and  proceedings  as may be required  and  permitted by
applicable  law, rule and  regulation,  for the legal and valid  issuance of the
Preferred Shares, the Warrants,  the Conversion Shares and the Warrant Shares to
the Purchasers or subsequent holders.

      b. Registration and Listing. The Company shall use commercially reasonable
efforts to comply in all  respects  with its  reporting  and filing  obligations
under  the  Exchange  Act,  to  comply  with  all  requirements  related  to any
registration  statement  filed  pursuant to this  Agreement or the  Registration
Rights  Agreement,  and to not take any action or file any document  (whether or
not permitted by the  Securities  Act or the rules  promulgated  thereunder)  to
terminate or suspend such  registration or to terminate or suspend its reporting
and filing  obligations  under the Exchange  Act or  Securities  Act,  except as
permitted herein or therein.  The Company will take all commercially  reasonable
action  necessary  to continue the listing or trading of its Common Stock on the
OTC  Bulletin  Board or other  exchange  or market on which the Common  Stock is

                                       16
<PAGE>

trading.  Subject to the terms of the Transaction Documents, the Company further
covenants that it will take such further  commercially  reasonable action as the
Purchasers may reasonably request,  all to the extent required from time to time
to enable the  Purchasers  to sell the  Shares  without  registration  under the
Securities  Act within the  limitation  of the  exemptions  provided by Rule 144
promulgated  under the Securities Act. Upon the request of the  Purchasers,  the
Company  shall  deliver  to the  Purchasers  a written  certification  of a duly
authorized officer as to whether it has complied with such requirements.

      c.  Reporting  Requirements.  If the  Commission  ceases  making  periodic
reports  filed under the  Exchange Act  available  via the  Internet,  then at a
Purchaser's request the Company shall furnish the following to such Purchaser so
long as such Purchaser shall beneficially own any Preferred Shares that have not
been fully  converted or any Warrants  that have not been fully  exercised:  (i)
Quarterly  Reports filed with the Commission on Form 10-QSB as soon as practical
after the  document is filed with the  Commission,  and in any event within five
(5) business days after the document is filed with the  Commission;  (ii) Annual
Reports filed with the Commission on Form 10-KSB as soon as practical  after the
document is filed with the Commission, and in any event within five (5) business
days after the  document is filed with the  Commission;  and (iii) Copies of all
notices  and  information,   including  without  limitation  notices  and  proxy
statements  in  connection  with any  meetings,  that are provided to holders of
shares of Common  Stock,  within five (5)  business  days after the  document is
filed with the Commission.

      d. Other  Agreements.  The Company  shall not enter into any  agreement in
which the terms of such  agreement  would prevent the Company or any  subsidiary
from performing under any Transaction Document.

      e.  Status of  Dividends.  The  Company  covenants  and agrees that (i) no
Federal  income tax  return or claim for  refund of Federal  income tax or other
submission to the Internal Revenue Service (the "Service") will adversely affect
the Preferred  Shares,  any other series of its Preferred  Stock,  or the Common
Stock,  and no  deduction  shall  operate  to  jeopardize  the  availability  to
Purchasers of the dividends  received deduction provided by Section 243(a)(1) of
the Code or any successor provision, (ii) in no report to shareholders or to any
governmental  body having  jurisdiction  over the Company or  otherwise  will it
treat the Preferred  Shares other than as equity  capital or the dividends  paid
thereon other than as dividends paid on equity capital unless  required to do so
by a governmental  body having  jurisdiction over the accounts of the Company or
by a change in generally accepted accounting  principles required as a result of
action by an authoritative  accounting standards setting body, and (iii) it will
take no action  which would result in the  dividends  paid by the Company on the
Preferred  Shares out of the  Company's  current  or  accumulated  earnings  and
profits  being  ineligible  for the  dividends  received  deduction  provided by
Section  243(a)(1) of the Code.  The preceding  sentence  shall not be deemed to
prevent  the  Company  from  designating  the  Preferred  Stock as  "Convertible
Preferred Stock" in its annual and quarterly financial  statements in accordance
with its  prior  practice  concerning  other  series of  preferred  stock of the
Company.  In the event that the Purchasers have reasonable cause to believe that
dividends  paid by the  Company on the  Preferred  Shares  out of the  Company's
current or accumulated  earnings and profits will not be treated as eligible for
the dividends  received  deduction provided by Section 243(a)(1) of the Code, or
any successor  provision,  the Company will,  at the  reasonable  request of the
Purchasers of 51% of the outstanding  Preferred Shares, join with the Purchasers

                                       17
<PAGE>

in the  submission to the Service of a request for a ruling that  dividends paid
on the Shares  will be so  eligible  for  Federal  income tax  purposes,  at the
Purchasers expense. In addition,  the Company will reasonably cooperate with the
Purchasers  (at  Purchasers'  expense)  in  any  litigation,   appeal  or  other
proceeding  challenging or contesting any ruling,  technical advice,  finding or
determination  that  earnings  and profits are not  eligible  for the  dividends
received  deduction  provided by Section 243(a)(1) of the Code, or any successor
provision  to the extent that the  position to be taken in any such  litigation,
appeal,  or other  proceeding  is not  contrary  to any  provision  of the Code.
Notwithstanding  the  foregoing,  nothing  herein  contained  shall be deemed to
preclude the Company from claiming a deduction with respect to such dividends if
(i)  the  Code  shall  hereafter  be  amended,  or  final  Treasury  regulations
thereunder  are issued or modified,  to provide that  dividends on the Preferred
Shares or  Conversion  Shares  should not be treated as  dividends  for  Federal
income tax purposes or that a deduction  with respect to all or a portion of the
dividends on the Shares is allowable for Federal income tax purposes, or (ii) in
the  absence  of  such  an  amendment,  issuance  or  modification  and  after a
submission of a request for ruling or technical advice,  the Service shall issue
a published  ruling or advise that dividends on the Shares should not be treated
as  dividends  for Federal  income tax  purposes.  If the  Service  specifically
determines that the Preferred Shares or Conversion  Shares  constitute debt, the
Company may file protective claims for refund.

      f. Use of Proceeds.  In  accordance  with the  directions of the Company's
Board of  Directors,  the Company will use the net proceeds from the sale of the
Shares hereunder for working capital, sales and marketing, and general corporate
purposes,  including  fees  associated  with  research  applications  (including
without limitation, the ViriChip device and the Chip-on-a-Tip system).

      g.  Transfer  Agent  Instructions.  The Company  shall  issue  irrevocable
instructions to its transfer agent, and any subsequent  transfer agent, to issue
certificates,  registered  in the  name  of  each  Purchaser  or its  respective
nominee(s), subject in all cases to compliance with Section 3.3 and 5.1, for the
Conversion  Shares and the Warrant Shares in such amounts as specified from time
to time by each Purchaser to the Company upon conversion of the Preferred Shares
or  exercise  of the  Warrants  in the form of  Exhibit F attached  hereto  (the
"Irrevocable  Transfer  Agent  Instructions").  Prior  to  registration  of  the
Conversion  Shares and the Warrant  Shares  under the  Securities  Act, all such
certificates  shall bear the restrictive legend specified in Section 5.1 of this
Agreement.  The Company warrants that no instruction  other than the Irrevocable
Transfer Agent Instructions  referred to in this Section 3.1(g) and instructions
given  pursuant  to  Sections  3.3 and 5.1 will be given by the  Company  to its
transfer agent and that the Shares shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this Agreement
and the Registration Rights Agreement.  If a Purchaser provides the Company with
a written opinion of legal counsel, who shall, and whose legal opinion shall, be
reasonably satisfactory to the Company,  addressed to the Company, to the effect
that a public  sale,  assignment  or transfer of the Shares may be made  without
registration under the Securities Act or the Purchaser provides the Company with
reasonable assurances reasonably satisfactory to counsel to the Company that the
Shares can be sold pursuant to Rule 144  promulgated  under the  Securities  Act
("Rule 144") without any restriction as to the number of securities  acquired as
of a particular  date that can then be  immediately  sold, and the provisions of
Section 5.1 shall have been  satisfied,  the Company  shall permit the transfer,
and,  in the case of the  Conversion  Shares and the  Warrant  Shares,  promptly

                                       18
<PAGE>

instruct its transfer agent to issue one or more  certificates  in such name and
in such denominations as specified by such Purchaser and without any restrictive
legend.  The Company  acknowledges  that a breach by it of its obligations under
this Section 3.1(g) will cause  irreparable  harm to the Purchasers by violating
the intent and purpose of the transaction contemplated hereby. Accordingly,  the
Company  acknowledges  that the  remedy at law for a breach  of its  obligations
under this  Section  3.1(g) will be  inadequate  and  agrees,  in the event of a
breach or  threatened  breach by the Company of the  provisions  of this Section
3.1(g),  that the  Purchasers  shall  be  entitled,  in  addition  to all  other
available  remedies,  to an order and/or  injunction  restraining any breach and
requiring  immediate  issuance and  transfer,  without the  necessity of showing
economic loss and without any bond or other security being required.

      h.  Disclosure  of  Transaction.  The Company  shall issue a press release
describing  the  material  terms of the  transactions  contemplated  hereby (the
"Press Release") as soon as practicable  after the Closing but in no event later
than 9:00 A.M. Eastern Time on the first Trading Day following the Closing Date.
The Company  shall also file with the  Commission  a Current  Report on Form 8-K
(the "Form 8-K") describing the material terms of the transactions  contemplated
hereby (and  attaching as exhibits  thereto  this  Agreement,  the  Registration
Rights Agreement,  the Certificate of Designation,  the Lock-Up  Agreement,  the
form of each  series of Warrant and the Press  Release)  as soon as  practicable
following  the  Closing  Date but in no event  more than four (4)  Trading  Days
following the Closing Date, which Press Release and Form 8-K shall be subject to
prior review and comment by the  Purchasers.  "Trading Day" means any day during
which the Commission shall be open for business.

      i. Disclosure of Material  Information.  The Company  covenants and agrees
that neither it nor any other  person  acting on its behalf has provided or will
provide any  Purchaser  or its agents or counsel with any  information  that the
Company believes  constitutes material non-public  information,  other than with
respect  to  the  transactions  contemplated  by  this  Agreement.  The  Company
understands  and confirms that each Purchaser  shall be relying on the foregoing
representations in effecting transactions in securities of the Company.

      j.  Pledge of  Securities.  The Company  acknowledges  and agrees that the
Shares may be pledged  by a  Purchaser  in  connection  with a bona fide  margin
agreement or other loan or financing  arrangement  that is secured by the Common
Stock. The pledge of Common Stock shall not be deemed to be a transfer,  sale or
assignment of the Common Stock hereunder, and no Purchaser effecting a pledge of
Common Stock shall be required to provide the Company with any notice thereof or
otherwise  make any  delivery to the Company  pursuant to this  Agreement or any
other Transaction  Document;  provided that a Purchaser and its pledgee shall be
required to comply with the  provisions of Article V hereof in order to effect a
sale, transfer or assignment of Common Stock to such pledgee. At the Purchasers'
expense  (including  attorney's  fees and costs),  the Company  hereby agrees to
execute  and deliver  such  documentation  as a pledgee of the Common  Stock may
reasonably  request  in  connection  with a pledge of the  Common  Stock to such
pledgee by a Purchaser.

      k.  Lock-Up  Agreements.  The  persons  listed  in  Section  3.1(k) of the
Disclosure  Schedule  shall be subject to the terms and  provisions of a lock-up
agreement  in  substantially   the  form  as  Exhibit  E  hereto  (the  "Lock-Up

                                       19
<PAGE>

Agreements"),  each of which shall provide the manner in which such persons will
sell, transfer or dispose of their shares of Common Stock.

      l. Subsequent Financings.

            (i) For a period of one (1) year following the effective date of the
registration statement providing for the resale of the Conversion Shares and the
Warrant Shares, the Company covenants and agrees to promptly notify (in no event
later than twenty (20) days after making or accepting  an  applicable  offer) in
writing (a "Rights  Notice") the  Purchasers of the terms and  conditions of any
proposed offer or sale to, or exchange with (or other type of  distribution  to)
any third  party (a  "Subsequent  Financing"),  of  Common  Stock or any debt or
equity  securities  convertible,  exercisable or exchangeable into Common Stock.
The Rights Notice shall describe,  in reasonable detail, the proposed Subsequent
Financing,  the names and investment  amounts of all investors  participating in
the Subsequent Financing, the proposed closing date of the Subsequent Financing,
which  shall be within  ninety  (90)  calendar  days from the date of the Rights
Notice,  and all of the terms and  conditions  thereof and  proposed  definitive
documentation  to be entered into in  connection  therewith.  The Rights  Notice
shall provide each Purchaser an option (the "Rights Option") during the ten (10)
Trading Days  following  delivery of the Rights Notice (the "Option  Period") to
inform the  Company  whether  such  Purchaser  will  purchase up to its pro rata
portion of all or a portion of the securities  being offered in such  Subsequent
Financing on the same,  absolute  terms and conditions as  contemplated  by such
Subsequent Financing. For purposes of this Section, all references to "pro rata"
means, for any Purchaser  electing to participate in such Subsequent  Financing,
the  percentage  obtained by dividing  (x) the number of  Conversion  Shares and
Warrant Shares  underlying the Units  purchased by such Purchaser at the Closing
by (y) the  total  number  of all of the  shares  of  common  stock  issued  and
outstanding  on a fully  diluted  basis,  on the Closing  Date.  Delivery of any
Rights  Notice  constitutes  a  representation  and warranty by the Company that
there are no other material terms and  conditions,  arrangements,  agreements or
otherwise except for those disclosed in the Rights Notice, to provide additional
compensation to any party  participating in any proposed  Subsequent  Financing,
including,  but not limited to, additional  compensation based on changes in the
Purchase  Price or any type of reset or  adjustment  of a purchase or conversion
price or to issue additional  securities at any time after the closing date of a
Subsequent Financing.  If the Company does not receive notice of exercise of the
Rights Option from the Purchasers  within the Option  Period,  the Company shall
have the right to close the Subsequent  Financing on the scheduled  closing date
with a third party;  provided that all of the material  terms and  conditions of
the  closing  are the same as those  provided  to the  Purchasers  in the Rights
Notice.  If the  closing of the  proposed  Subsequent  Financing  does not occur
within  thirty  (30) days of the  scheduled  closing  date,  any  closing of the
contemplated  Subsequent  Financing or any other  Subsequent  Financing shall be
subject to all of the provisions of this Section 3.1(l)(i),  including,  without
limitation,  the delivery of a new Rights Notice. The provisions of this Section
3.1(l)(i) shall not apply to issuances of securities in a Permitted Financing.

            (ii) For  purposes  of this  Agreement,  a Permitted  Financing  (as
defined  hereinafter)  shall  not  be  considered  a  Subsequent  Financing.   A
"Permitted  Financing" shall mean (i) securities issued (other than for cash) in

                                       20
<PAGE>

connection with a merger, acquisition, or consolidation,  (ii) securities issued
pursuant to the conversion or exercise of convertible or exercisable  securities
issued  or  outstanding  on or  prior to the date of this  Agreement  or  issued
pursuant to this  Agreement (so long as the conversion or exercise price in such
securities  are not  amended  to lower such price  and/or  adversely  affect the
Purchasers),  (iii) securities issued as compensation to consultants,  advisors,
suppliers or third-party  service  providers in connection with the provision of
goods or services  (including  without  limitation  placement agent and investor
relations  services),  and  securities  issued  in  connection  with  bona  fide
strategic license agreements or other partnering or contracting  arrangements so
long as such issuances are not for the purpose of raising  capital,  (iv) Common
Stock  issued or the  issuance  or grants of options to  purchase  Common  Stock
pursuant to the Company's  stock option plans and employee stock purchase plans,
(v) the payment of dividends on the Preferred  Shares in shares of Common Stock,
(vi)  any  warrants  issued  to the  placement  agent  and  finders  (and  their
respective designees) and Purchaser designees for the transactions  contemplated
by this Agreement and, (vii) securities  issued to banks,  equipment  lessors or
other financial  institutions,  or to real property lessors,  pursuant to a debt
financing, equipment leasing or real property leasing transaction.

            (iii) For a period of two (2) years  following the Closing Date, the
Company  shall be  prohibited  from  effecting or entering  into an agreement to
effect any Subsequent  Financing involving a "Variable Rate Transaction" without
the  prior  written  consent  of  the   Purchasers.   The  term  "Variable  Rate
Transaction"  shall mean a transaction  in which the Company (i) issues or sells
any  debt or  equity  securities  that are  convertible  into,  exchangeable  or
exercisable  for,  or include the right to receive  additional  shares of Common
Stock either (A) at a conversion,  exercise or exchange rate or other price that
is based upon and/or  varies with the trading  prices of or  quotations  for the
shares of Common  Stock at any time after the  initial  issuance of such debt or
equity securities, or (B) with a conversion,  exercise or exchange price that is
subject to being reset at some  future  date after the initial  issuance of such
debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly  related to the business of the Company or the market for
the Common Stock or (ii) enters into any agreement,  including,  but not limited
to, an equity  line of credit,  whereby the  Company  may sell  securities  at a
future determined price.

            (iv) For the period commencing on the Closing Date and ending on the
date that is one hundred  eighty (180) days  following the effective date of the
Registration  Statement (as defined in the Registration  Rights Agreement),  the
Company  shall not file any  registration  statement  under the  Securities  Act
without the prior written  consent of the  Purchasers.  The  preceding  sentence
shall not be applicable to any  registration  relating to the sale of securities
to employees of the Company or a subsidiary  pursuant to a stock  option,  stock
purchase,  or similar  plan;  a  registration  on any form that does not include
substantially  the same  information  as would be  required  to be included in a
registration  statement  covering the sale of the Registrable  Securities;  or a
registration  in which the only Common  Stock being  registered  is Common Stock
issuable upon conversion of debt securities that are also being registered.

                                       21
<PAGE>

      Section 3.2 Covenants of the Purchasers.

      (a) Trading Activities.  Each of the Purchasers covenants with the Company
that for so long as such  Purchaser  owns the Warrants or the Shares,  and for a
period of six (6) months  thereafter,  (i) such Purchaser's  trading  activities
with respect to the Shares shall be in compliance  with all applicable  federal,
state and foreign  securities laws, and (ii) such Purchaser agrees that it shall
not, and it will cause its  Affiliates  (as defined below) not to, engage in any
short sales with respect to the Common Stock.

      (b)  Confidentiality.  Each Purchaser agrees that such Purchaser will keep
confidential and will not disclose,  divulge, or use for any purpose (other than
to monitor its investment in the Company) any confidential  information obtained
from the Company pursuant to the terms of the Transaction  Documents  (including
notice of the Company's intention to file a registration statement), unless such
confidential  information (i) is known or becomes known to the public in general
(other than as a result of a breach of this Section  3.2(b) by such  Purchaser),
(ii) is or has  been  independently  developed  or  conceived  by the  Purchaser
without use of the Company's confidential  information,  or (iii) is or has been
made known or  disclosed to the  Purchaser by a third party  without a breach of
any  obligation  of  confidentiality  such third party may have to the  Company;
provided, however, that a Purchaser may disclose confidential information (w) to
its attorneys,  accountants,  consultants, and other professionals to the extent
necessary to obtain their services in connection  with monitoring its investment
in the Company; (x) to any prospective  purchaser of any Registrable  Securities
from such Purchaser,  if such  prospective  purchaser  agrees to be bound by the
provisions of this Section  3.2(b),  provided that no Purchaser may disclose any
confidential  information obtained from the Company to any prospective purchaser
that is a competitor  of the Company or to any other Person that is a competitor
of the Company; (y) to any Affiliate,  partner, member,  stockholder,  or wholly
owned subsidiary of such Purchaser in the ordinary course of business,  provided
that such Purchaser  informs such Person that such  information is  confidential
and directs such Person to maintain the confidentiality of such information;  or
(z) as may otherwise be required by law,  provided  that the Purchaser  promptly
notifies the Company of such disclosure and takes  reasonable  steps to minimize
the extent of any such  required  disclosure.  For  purposes of this  Agreement,
"Affiliate" means, with respect to any specified person or entity (collectively,
a  "Person"),  any other  Person  who,  directly  or  indirectly,  controls,  is
controlled  by, or is under common control with such Person,  including  without
limitation any general  partner,  managing  member,  officer or director of such
Person, or, in the case of natural persons,  any Immediate Family Member of such
Person. For purposes of this Agreement, "Immediate Family Member" means a child,
stepchild,   grandchild,  parent,  stepparent,   grandparent,  spouse,  sibling,
mother-in-law,  father-in-law,  son-in-law, daughter-in-law,  brother-in-law, or
sister-in-law, including adoptive relationships, of a natural person referred to
herein.

                                       22
<PAGE>

      Section 3.3 Restrictions on Transfer.

      a. The Preferred Shares,  the Warrants and the Registrable  Securities (as
defined in the Registration  Rights  Agreement) shall not be sold,  pledged,  or
otherwise  transferred,  and the  Company  shall not  recognize  and shall issue
stop-transfer  instructions to its transfer agent with respect to any such sale,
pledge,  or transfer,  except upon the  conditions  specified in this  Agreement
(including  without  limitation  Section 5.1),  which conditions are intended to
ensure  compliance  with the  provisions of the  Securities  Act. A transferring
Purchaser  will cause any proposed  purchaser,  pledgee,  or  transferee  of the
Preferred  Shares,  the Warrants  and the  Registrable  Securities  held by such
Purchaser to agree to take and hold such  securities  subject to the  provisions
and upon the conditions  specified in this Agreement and to provide  information
reasonably requested by the Company about such purchaser, pledgee or transferee.
The  Purchasers  consent to the  Company  making a notation  in its  records and
giving instructions to any transfer agent of the Restricted  Securities in order
to implement the restrictions on transfer set forth in this Section 3.3.

                                   ARTICLE IV

                                   CONDITIONS

      Section 4.1 Conditions  Precedent to the Obligation of the Company to Sell
the  Shares.  The  obligation  hereunder  of the  Company  to issue and sell the
Preferred  Shares  and  the  Warrants  to  the  Purchasers  is  subject  to  the
satisfaction or waiver, at or before the Closing,  of each of the conditions set
forth below.  These  conditions  are for the  Company's  sole benefit and may be
waived by the Company at any time in its sole discretion.

      (a)  Accuracy of Each  Purchaser's  Representations  and  Warranties.  The
representations  and warranties of each  Purchaser  shall be true and correct in
all  respects as of the date when made and as of the Closing Date as though made
at that time, except for  representations and warranties that are expressly made
as of a particular  date,  which shall be true and correct in all respects as of
such date.

      (b)  Performance by the  Purchasers.  Each Purchaser shall have performed,
satisfied  and  complied in all  respects  with all  covenants,  agreements  and
conditions  required by this  Agreement to be  performed,  satisfied or complied
with by such Purchaser at or prior to the Closing.

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

      (d) Delivery of Purchase Price.  The Purchase Price for the Units has been
delivered to the Company at the Closing Date.

                                       23
<PAGE>

      (e) Delivery of Transaction Documents. The Transaction Documents have been
duly executed and delivered by the Purchasers to the Company.

      (f) Qualifications.  All authorizations,  approvals or permits, if any, of
any  governmental  authority or  regulatory  body of the United States or of any
state that are required in connection  with the lawful  issuance and sale of the
Preferred  Shares and the Warrants  pursuant to this Agreement shall be obtained
and effective as of the Closing.

      Section 4.2  Conditions  Precedent to the  Obligation of the Purchasers to
Purchase the Shares.  The obligation  hereunder of each Purchaser to acquire and
pay for the Preferred  Shares and the Warrants is subject to the satisfaction or
waiver,  at or before the Closing,  of each of the  conditions  set forth below.
These conditions are for each Purchaser's sole benefit and may be waived by such
Purchaser at any time in its sole discretion.

      (a) Accuracy of the Company's Representations and Warranties.  Each of the
representations  and  warranties  of the  Company  in  this  Agreement  and  the
Registration  Rights  Agreement  shall be true and correct in all respects as of
the date  when  made and as of the  Closing  Date as  though  made at that  time
(except for  representations  and  warranties  that are  expressly  made as of a
particular  date),  which shall be true and  correct in all  respects as of such
date.

      (b)  Performance  by  the  Company.  The  Company  shall  have  performed,
satisfied  and  complied in all  respects  with all  covenants,  agreements  and
conditions  required by this  Agreement to be  performed,  satisfied or complied
with by the Company at or prior to the Closing.

      (c) No Suspension,  Etc.  Trading in the Company's  Common Stock shall not
have been  suspended by the Commission or the OTC Bulletin Board (except for any
suspension  of trading  of  limited  duration  agreed to by the  Company,  which
suspension  shall be terminated  prior to the applicable  Closing),  and, at any
time prior to the Closing Date,  trading in securities  generally as reported by
Bloomberg  Financial  Markets  ("Bloomberg")  shall not have been  suspended  or
limited,  or minimum prices shall not have been  established on securities whose
trades are reported by Bloomberg, or on the New York Stock Exchange, nor shall a
banking  moratorium  have been declared  either by the United States or New York
State  authorities,  nor shall  there have  occurred  any  material  outbreak or
escalation of hostilities or other national or international  calamity or crisis
that each cause a material adverse change in any financial  market which,  could
reasonably  be  expected  to have a  material  adverse  effect on the  Preferred
Shares.

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

                                       24
<PAGE>

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

      (f)  Certificate of Designation  of Rights and  Preferences.  Prior to the
Closing, the Certificate of Designation in the form of Exhibit B attached hereto
shall have been filed with the Secretary of State of Nevada.

      (g) Intentionally Left Blank.

      (h) Registration Rights Agreement.  At the Closing, the Company shall have
executed and delivered the Registration Rights Agreement to each Purchaser.

      (i)  Certificates.  The Company  shall have  executed and delivered to the
Purchasers the  certificates  (in such  denominations  as such  Purchaser  shall
request)  for the  Preferred  Shares and the  Warrants  being  acquired  by such
Purchaser  at the  Closing  (in  such  denominations  as  such  Purchaser  shall
request).

      (j) Resolutions.  The Board of Directors of the Company shall have adopted
resolutions   consistent  with  Section  2.1(b)  hereof  in  a  form  reasonably
acceptable to such Purchaser (the "Resolutions").

      (k) Reservation of Shares.  As of the Closing Date, the Company shall have
reserved out of its authorized and unissued Common Stock, solely for the purpose
of effecting  the  conversion  of the  Preferred  Shares and the exercise of the
Warrants, a number of shares of Common Stock equal to one hundred twenty percent
(120%) of the aggregate number of Conversion  Shares issuable upon conversion of
the Preferred  Shares  outstanding on the Closing Date and the number of Warrant
Shares  issuable upon exercise of the number of Warrants  assuming such Warrants
were granted on the Closing Date.

      (l)  Transfer  Agent   Instructions.   The   Irrevocable   Transfer  Agent
Instructions,  in the  form of  Exhibit  F  attached  hereto,  shall  have  been
delivered to and acknowledged in writing by the Company's transfer agent.

      (m) Lock-Up  Agreements.  As of the Closing  Date,  the persons  listed in
Section 3.1(k) of the Disclosure Schedule shall have delivered to the Purchasers
a fully executed Lock-Up Agreement in the form of Exhibit E attached hereto.

      (n)  Secretary's  Certificate.  The Company  shall have  delivered to such
Purchaser a secretary's certificate, dated as of the Closing Date, as to (i) the
Resolutions,  (ii) the  Articles,  (iii) the  Bylaws,  (iv) the  Certificate  of
Designation,  each as in  effect  at the  Closing,  and (iv) the  authority  and
incumbency of the officers of the Company  executing the  Transaction  Documents

                                       25
<PAGE>

and any other  documents  required  to be executed or  delivered  in  connection
therewith.

      (o)  Officer's  Certificate.  The  Company  shall  have  delivered  to the
Purchasers a certificate of an executive officer of the Company, dated as of the
Closing  Date,  confirming  the  accuracy  of  the  Company's   representations,
warranties  and covenants as of such Closing Date and  confirming the compliance
by the Company with the conditions  precedent set forth in Section 4.2 as of the
Closing Date.

      (p)  Material  Adverse  Effect.  No  Material  Adverse  Effect  shall have
occurred at or before the Closing Date.

      (q) Qualifications.  All authorizations,  approvals or permits, if any, of
any  governmental  authority or  regulatory  body of the United States or of any
state that are required in connection  with the lawful  issuance and sale of the
Preferred  Shares and the Warrants  pursuant to this Agreement shall be obtained
and effective as of the Closing.

                                    ARTICLE V

                            Stock Certificate Legend

      Section  5.1  Legend.  Each  certificate  representing  (a) the  Preferred
Shares,  (b) the Warrants,  (c) the  Registrable  Securities,  and (d) any other
securities  issued in respect of the  securities  referenced in clauses (a), (b)
and  (c),  upon any  stock  split,  stock  dividend,  recapitalization,  merger,
consolidation,  or similar event,  (collectively,  the "Restricted  Securities")
shall be stamped  or  otherwise  imprinted  with a legend  substantially  in the
following  form  (in  addition  to  any  legend  required  by  applicable  state
securities or "blue sky" laws):

      THE  SECURITIES  REPRESENTED  HEREBY  HAVE NOT BEEN  REGISTERED  UNDER THE
      UNITED STATES  SECURITIES ACT OF 1933,  AND MAY NOT BE SOLD,  TRANSFERRED,
      ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF
      UNDER  SUCH  ACT  OR   COMPLIANCE   WITH  AN  AVAILABLE   EXEMPTION   FROM
      REGISTRATION.  THE COMPANY  MAY REFUSE TO  AUTHORIZE  ANY  TRANSFER OF THE
      SECURITIES  IN RELIANCE ON AN  EXEMPTION  FROM  REGISTRATION  UNTIL IT HAS
      RECEIVED  AN OPINION  OF  COUNSEL,  SATISFACTORY  TO THE  COMPANY  AND ITS
      COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

      THE  COMPANY IS  AUTHORIZED  TO ISSUE MORE THAN ONE CLASS OF STOCK OR MORE
      THAN ONE SERIES OF ANY CLASS OF STOCK. THE  DESIGNATIONS,  PREFERENCES AND
      RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF THE SHARES OF
      EACH  CLASS OR  SERIES  THEREOF  AND THE  QUALIFICATIONS,  LIMITATIONS  OR

                                       26
<PAGE>

      RESTRICTIONS   OF  SUCH   RIGHTS,   ARE  SET  FORTH  IN  THE  ARTICLES  OF
      INCORPORATION  OF THE COMPANY.  A COPY OF SAID  ARTICLES OF  INCORPORATION
      WILL BE FURNISHED  FREE OF CHARGE TO THE HOLDER OF THIS  CERTIFICATE  UPON
      WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.

      THE SECURITIES  REPRESENTED  HEREBY MAY BE TRANSFERRED  ONLY IN ACCORDANCE
      WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER,  A
      COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

      The  Company  agrees  to  reissue  certificates  representing  any  of the
Restricted Securties,  without the legend set forth above if at such time, prior
to making any transfer of any such  securities,  such holder  thereof shall give
written  notice to the Company  describing the manner and terms of such transfer
and removal as the Company may reasonably  request.  Such proposed  transfer and
removal  will not be effected  until:  (a) either (i) the Company has received a
written  opinion of legal  counsel who shall,  and whose legal opinion shall be,
reasonably satisfactory to the Company,  addressed to the Company, to the effect
that the registration of such Restricted  Securities under the Securities Act is
not required in connection  with such  proposed  transfer,  (ii) a  registration
statement  under the Securities Act covering such proposed  disposition has been
filed by the Company  with the  Commission  and has become  effective  under the
Securities  Act,  (iii) the  Company  has  received  other  evidence  reasonably
satisfactory to the Company that such registration and  qualification  under the
Securities Act and state  securities  laws are not required,  or (iv) the holder
provides the Company  with  reasonable  assurances  reasonably  satisfactory  to
counsel to the  Company,  that such  security  can be sold  pursuant to Rule 144
under the Securities Act without any  restriction as to the number of securities
acquired as of a  particular  date that can then be  immediately  sold;  and (b)
either (i) the  Company  has  received a written  opinion of legal  counsel  who
shall, and whose legal opinion shall be reasonably  satisfactory to the Company,
addressed to the Company to the effect that registration or qualification  under
the  securities  or "blue sky" laws of any state is not  required in  connection
with such proposed disposition,  or (ii) the Company has received other evidence
reasonably  satisfactory to the Company that  compliance  with applicable  state
securities or "blue sky" laws has been effected or a valid exemption exists with
respect  thereto.  The  Company  will  respond to any such  notice from a holder
within five (5) business  days. In the case of any proposed  transfer under this
Section 5.1, the Company will use commercially reasonable efforts to comply with
any such applicable  state  securities or "blue sky" laws, but shall in no event
be  required,  (x) to qualify to do  business  in any state where it is not then
qualified, (y) to take any action that would subject it to tax or to the general
service of process in any state where it is not then  subject,  or (z) to comply
with state securities or "blue sky" laws of any state for which  registration by
coordination  is  unavailable  to the  Company.  The  restrictions  on  transfer
contained  in this  Section  5.1  shall  be in  addition  to,  and not by way of
limitation of, any other restrictions on transfer contained in any other section
of this Agreement. Whenever a certificate representing the Restricted Securities
is required to be issued to a Purchaser  without a legend, in lieu of delivering
physical   certificates   representing  the  applicable   Restricted  Securities

                                       27
<PAGE>

(provided that a registration  statement  under the Securities Act providing for
the resale of the Restricted Securities is then in effect and such request is in
connection  with a  sale),  the  Company  shall  cause  its  transfer  agent  to
electronically  transmit such Restricted  Securities to a Purchaser by crediting
the account of such  Purchaser's  Prime Broker with the Depository Trust Company
("DTC") through its Deposit Withdrawal Agent Commission  ("DWAC") system (to the
extent not inconsistent with any provisions of this Agreement) provided that the
Company and the Company's  transfer agent are  participating  in DTC through the
DWAC system.

                                   ARTICLE VI

                                 Indemnification

         Section 6.1 General Indemnity. The Company agrees to indemnify
and hold harmless the  Purchasers  (and their  respective  directors,  officers,
managers, partners, members,  shareholders,  affiliates,  agents, successors and
assigns) from and against any and all losses, liabilities,  deficiencies, costs,
damages and expenses (including, without limitation, reasonable attorneys' fees,
charges and disbursements) to a third party incurred by the Purchasers solely as
a  result  and to the  extent  of a  material  inaccuracy  in or  breach  of the
representations,  warranties  or  covenants  made by the  Company  herein.  Each
Purchaser  severally  but not jointly  agrees to indemnify and hold harmless the
Company and its directors,  officers, affiliates, agents, successors and assigns
from and against any and all losses, liabilities,  deficiencies,  costs, damages
and expenses (including, without limitation, reasonable attorneys' fees, charges
and disbursements) to a third party incurred by the Company solely as result and
to the  extent of a  material  inaccuracy  in or breach of the  representations,
warranties  or  covenants  made by such  Purchaser  herein.  In  addition,  each
Purchaser  agrees  to  indemnify  and to hold  harmless  the  Company  from  any
liability  for any  commission  or  compensation  in the nature of a finder's or
broker's fee arising from the  transactions  contemplated by this Agreement (and
the  costs  and  expenses  of  defending  against  such  liability  or  asserted
liability)  for which  each  Purchaser  or any of its  officers,  employees,  or
representatives  is responsible.  The maximum aggregate  liability of each Party
pursuant  to its  indemnification  obligations  under this  Article VI shall not
exceed the portion of the Purchase Price paid by such Purchaser hereunder.

      Section   6.2   Indemnification   Procedure.   Any   party   entitled   to
indemnification  under this Article VI (an  "indemnified  party") will  promptly
give written  notice to the  indemnifying  party of any matters giving rise to a
claim for indemnification;  provided,  that the failure of any party entitled to
indemnification  hereunder  to give notice as provided  herein shall not relieve
the  indemnifying  party of its obligations  under this Article VI except to the
extent that the  indemnifying  party is actually  prejudiced  by such failure to
give  notice.  In case any  action,  proceeding  or claim is brought  against an
indemnified party in respect of which  indemnification is sought hereunder,  the
indemnifying  party  shall be  entitled  to  participate  in and,  unless in the
reasonable  judgment of the indemnified  party a conflict of interest between it
and the indemnifying party may exist with respect of such action,  proceeding or
claim, to assume the defense thereof with counsel reasonably satisfactory to the
indemnified  party.  In  the  event  that  the  indemnifying  party  advises  an

                                       28
<PAGE>

indemnified  party  that  it  will  contest  such a  claim  for  indemnification
hereunder,  or fails,  within thirty (30) days of receipt of any indemnification
notice to notify, in writing,  such person of its election to defend,  settle or
compromise,  at its sole cost and expense,  any action,  proceeding or claim (or
discontinues its defense at any time after it commences such defense),  then the
indemnified party may, at its option,  defend, settle or otherwise compromise or
pay such action or claim. In any event,  unless and until the indemnifying party
elects in writing to assume  and does so assume the  defense of any such  claim,
proceeding or action, the indemnified  party's costs and expenses arising out of
the defense,  settlement or  compromise of any such action,  claim or proceeding
shall be losses subject to  indemnification  hereunder.  The  indemnified  party
shall  cooperate  fully  with  the  indemnifying  party in  connection  with any
negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information  reasonably available to
the indemnified  party which relates to such action or claim.  The  indemnifying
party shall keep the  indemnified  party  fully  apprised at all times as to the
status of the defense or any settlement  negotiations  with respect thereto.  If
the  indemnifying  party  elects to defend  any such  action or claim,  then the
indemnified  party shall be entitled to participate in such defense with counsel
of its choice at its sole cost and expense.  The indemnifying party shall not be
liable for any settlement of any action,  claim or proceeding  effected  without
its prior written  consent,  which consent shall not be  unreasonably  withheld.
Notwithstanding  anything in this Article VI to the contrary,  the  indemnifying
party shall not, without the indemnified  party's prior written consent,  settle
or compromise  any claim or consent to entry of any judgment in respect  thereof
which imposes any future  obligation on the indemnified  party or which does not
include,  as an  unconditional  term thereof,  the giving by the claimant or the
plaintiff to the indemnified party of a release from all liability in respect of
such claim.  The  indemnification  required by this  Article VI shall be made by
periodic  payments of the amount thereof during the course of  investigation  or
defense, as and when bills are received or expense, loss, damage or liability is
incurred,  so long as the indemnified  party  irrevocably  agrees to refund such
moneys if it is ultimately determined by a court of competent  jurisdiction that
such  party  was not  entitled  to  indemnification.  The  indemnity  agreements
contained  herein  shall be in  addition  to (a) any cause of action or  similar
rights of the indemnified  party against the indemnifying  party or others,  and
(b) any  liabilities  the  indemnifying  party may be subject to pursuant to the
law.

                                   ARTICLE VII

                                  Miscellaneous

      Section  7.1 Fees and  Expenses.  Except  as  otherwise  set forth in this
Agreement and the other Transaction Documents, each party shall pay the fees and
expenses of its advisors,  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 this  Agreement,  provided
that the Company shall pay all actual  attorneys'  fees and expenses  (including
disbursements  and out-of-pocket  expenses)  incurred in connection with (i) the
preparation, negotiation, execution and delivery of this Agreement and the other
Transaction  Documents  and  the  transactions  contemplated  thereunder,  which
payment  shall be made at Closing and shall not exceed  $30,000 (such payment to
represent  the  maximum  amount that the  Company  shall pay to Lester,  Hunter,
Taubman  &  Taubman  for  legal  fees  in  connection   with  the   transactions

                                       29
<PAGE>

contemplated  by this  Agreement,  whether such fees shall have been incurred on
behalf  of  the  Purchasers  or  the  Placement  Agent),  (ii)  the  filing  and
declaration of effectiveness by the Commission of the Registration Statement (as
defined  in  the  Registration  Rights  Agreement)  and  (iii)  any  amendments,
modifications  or  waivers  of this  Agreement  or any of the other  Transaction
Documents requested by the Company.

      Section 7.2 Specific Enforcement, Consent to Jurisdiction;  Waiver of Jury
Trial.

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

      (b) Each of the Company and the Purchasers (i) hereby irrevocably  submits
to the  jurisdiction of the United States District Court sitting in the Delaware
and the courts of the State of Delaware for the purposes of any suit,  action or
proceeding  arising  out of or relating  to this  Agreement  or any of the other
Transaction  Documents or the  transactions  contemplated  hereby or thereby and
(ii)  hereby  waives,  and  agrees  not to  assert in any such  suit,  action or
proceeding,  any claim that it is not personally  subject to the jurisdiction of
such court,  that the suit,  action or proceeding is brought in an  inconvenient
forum or that the venue of the suit,  action or proceeding is improper.  Each of
the Company and the  Purchasers  consents  to process  being  served in any such
suit,  action or  proceeding  by  mailing a copy  thereof  to such  party at the
address in effect for  notices to it under this  Agreement  and agrees that such
service  shall  constitute  good and  sufficient  service of process  and notice
thereof.  Nothing in this  Section 7.2 shall  affect or limit any right to serve
process in any other manner permitted by law.

      (c) Waiver of Jury Trial. EACH OF THE PARTIES HEREBY  UNCONDITIONALLY  AND
IRREVOCABLY  WAIVES  THE  RIGHT  TO A  TRIAL  BY  JURY  IN ANY  ACTION,  SUIT OR
PROCEEDING  ARISING  OUT OF OR RELATING TO THIS  AGREEMENT  OR THE  TRANSACTIONS
CONTEMPLATED HEREBY.

      Section  7.3  Entire   Agreement;   Amendment.   This  Agreement  and  the
Transaction  Documents  contains the entire  understanding  and agreement of the
parties with respect to the matters  covered hereby and,  except as specifically
set forth herein or in the Transaction Documents, neither the Company nor any of
the Purchasers makes any representations, warranty, covenant or undertaking with
respect  to such  matters  and  they  supersede  all  prior  understandings  and
agreements with respect to said subject matter,  all of which are merged herein.
No provision of this  Agreement may be waived or amended other than by a written
instrument  signed  by the  Company  and the  holders  of at least  seventy-five
percent (75%) of the Preferred Shares then outstanding,  and no provision hereof
may be waived other than by an a written  instrument signed by the party against
whom  enforcement of any such  amendment or waiver is sought.  No such amendment

                                       30
<PAGE>

shall be effective to the extent that it applies to less than all of the holders
of the Preferred Shares then outstanding.  No consideration  shall be offered or
paid to any  person  to amend or  consent  to a waiver  or  modification  of any
provision of any of the Transaction  Documents unless the same  consideration is
also  offered to all of the parties to the  Transaction  Documents or holders of
Preferred Shares, as the case may be.

      Section  7.4  Notices.  Any  notice,  demand,  request,  waiver  or  other
communication  required or permitted to be given  hereunder  shall be in writing
and shall be effective (a) upon hand delivery by telex (with correct answer back
received),  telecopy or facsimile at the address or number  designated below (if
delivered on a business day during normal business hours where such notice is to
be received),  or the first  business day following  such delivery (if delivered
other than on a business day during normal  business  hours where such notice is
to be received) or (b) on the second  business day following the date of mailing
by express courier service,  fully prepaid,  addressed to such address,  or upon
actual receipt of such mailing,  whichever shall first occur.  The addresses for
such communications shall be:

                  If to the Company:      BioForce Nanosciences Holdings, Inc.
                                          1615 Golden Aspen Drive, Suite 101
                                          Ames, Iowa, 50010
                                          Attn: Eric Henderson
                                          Tel. No.: (515) 233-8333
                                          Fax No.:  (515) 233-8337

                  with copies (which      McCarter & English, LLP
                  shall not constitute    Four Gateway Center
                  notice) to:             100 Mulberry Street
                                          Newark, New Jersey 07102-4056
                                          Attention: Jeffrey A. Baumel, Esq.
                                          Tel. No.:  (973) 848-5304
                                          Fax No.:  (973) 297-3814

                  If to any  Purchaser:   At the address of such Purchaser set
                                          forth on Exhibit A to this Agreement,
                                          with copies to Purchaser's counsel as
                                          set forth on Exhibit A, or as
                                          specified in writing by such
                                          Purchaser.

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

      Section 7.5 Waivers. No waiver by either party of any default with respect
to any provision,  condition or requirement of this Agreement shall be deemed to
be a  continuing  waiver in the  future  or a waiver  of any  other  provisions,
condition or requirement hereof, nor shall any delay or omission of any party to

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exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.

      Section 7.6 Headings. The article, section and subsection headings in this
Agreement  are for  convenience  only and  shall not  constitute  a part of this
Agreement  for any other  purpose and shall not be deemed to limit or affect any
of the provisions hereof.

      Section 7.7 Successors and Assigns.  This Agreement  shall be binding upon
and inure to the benefit of the parties and their successors and assigns.

      Section 7.8 No Third Party  Beneficiaries.  This Agreement is intended for
the benefit of the parties hereto and their respective  permitted successors and
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other person.

      Section  7.9  Governing  Law.  This  Agreement  shall be  governed  by and
construed in accordance with the internal laws of the State of Delaware, without
giving  effect to any of the conflicts of law  principles  which would result in
the application of the substantive law of another  jurisdiction.  This Agreement
shall not be  interpreted or construed  with any  presumption  against the party
causing this Agreement to be drafted.

      Section 7.10 Survival.  The  representations and warranties of the Company
and the  Purchasers  shall  survive the  execution  and delivery  hereof and the
Closing until the first  anniversary of the Closing Date,  except the agreements
and  covenants  set forth in Articles  I, III,  V, VI and VII of this  Agreement
shall survive the execution and delivery hereof and the Closing hereunder.

      Section 7.11 Counterparts. This Agreement may be executed in any number of
counterparts,  each of which when so executed  shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement and
shall  become  effective  when  counterparts  have been signed by each party and
delivered to the other parties hereto, it being understood that all parties need
not sign the same  counterpart.  In the event that any signature is delivered by
facsimile  transmission,  such signature shall create a valid binding obligation
of the party  executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile  signature were the original
thereof.

      Section 7.12  Publicity.  Other than as set forth in Section  3.1(f),  the
Company  agrees that it will not include in any Press  Release,  the name of the
Purchasers  without  the  consent  of  the  Purchasers  unless  and  until  such
disclosure  is required by law or  applicable  regulation,  and then only to the
extent of such requirement.

      Section  7.13  Severability.  The  provisions  of this  Agreement  and the
Transaction  Documents  are  severable  and,  in the  event  that  any  court of
competent jurisdiction shall determine that any one or more of the provisions or
part of the provisions contained in this Agreement or the Transaction  Documents
shall,  for any reason,  be held to be invalid,  illegal or unenforceable in any
respect,  such invalidity,  illegality or unenforceability  shall not affect any
other  provision  or part of a provision of this  Agreement  or the  Transaction
Documents and such provision  shall be reformed and construed as if such invalid
or illegal or unenforceable provision, or part of such provision, had never been

                                       32
<PAGE>

contained herein, so that such provisions would be valid,  legal and enforceable
to the maximum extent possible.

      Section  7.14  Further  Assurances.  From  and  after  the  date  of  this
Agreement, upon the request of any Purchaser or the Company, each of the Company
and the  Purchasers  shall  execute and deliver such  instrument,  documents and
other writings as may be reasonably  necessary or desirable to confirm and carry
out and to  effectuate  fully the intent and  purposes  of this  Agreement,  the
Preferred Shares, the Conversion  Shares, the Warrants,  the Warrant Shares, the
Certificate of Designation, and the Registration Rights Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       33
<PAGE>

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

                                       BIOFORCE NANOSCIENCES HOLDINGS, INC.

                                       By: -------------------------------
                                           Name: Eric Henderson
                                           Title:  Chief Executive Officer

                                       PURCHASER

                                       By: -------------------------------
                                           Name:
                                           Title:

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