Document:

Unassociated Document

    SECURITIES
      PURCHASE AGREEMENT

    

    THIS
      SECURITIES PURCHASE AGREEMENT
      (the
“Agreement”)
      dated
      as of August 20, 2008 to be effective August 25, 2008 by and among Tia IV,
      Inc.,
      a Delaware corporation having its principal office at 7325 Oswego Road , Suite
      D, Liverpool, New York, 13090 (“Company”),
      Mary
      Passalaqua, the sole and controlling shareholder of Company, having an office
      at
      7325 Oswego Road, Suite D, Liverpool, New York, 13090 (“Shareholder ”), and
      Ralph Porretti, an individual residing at 364 Mosel Ave., Staten Island, NY
      10304 , Jim McAlinden, an individual residing at 2237 Tudor House St., #106,
      Wesley Chapel, FL 33544 and Peter Ng, an individual residing at 23 Mundy Ave.,
      Staten Island, NY 10310 (“the Purchasers”). Company, Shareholder and Purchasers
      are collectively referred to herein as Parties. Shareholder and Purchasers
      are
      referred herein collectively, after the Closing of this Agreement as (lower
      case) “shareholder”. 

    

    RECITALS 

    

    WHEREAS,
      the
      Shareholder currently owns all of the issued and outstanding equity interests
      of
      the Company, constituting One Million (1,000,000) common shares (“Shareholder
      Shares”); and 

    

    WHEREAS,
      Company
      is a reporting issuer (a “blank check company”) pursuant to Section 12(g) of the
      Securities Exchange Act 

    of
      1934,
      as amended (the “ Exchange Act ”); and 

    

    WHEREAS,
      the
      Shareholder owns all of the Company’s issued and outstanding common stock and
      has entered into this Agreement for the purpose of making certain
      representations, warranties, covenants, indemnifications and agreements; and
      

    

    WHEREAS,
      the
      Company wish to sell, to Purchasers and Purchasers wishes to acquire, Thirteen
      Million Five Hundred Thousand ( 13,500,000) shares of Company’s common stock, at
      a purchase price of $0.0001 par value per share (the “ Purchaser Shares ”),
      subject to and upon the terms and conditions hereinafter set forth herein (such
      purchase being herein referred to as the “ Purchase ”); and 

    

    WHEREAS,
      as a
      result of the consummation of the Purchase, the Shareholder will no longer
      control the business and/or corporate affairs of Company; and 

    

     WHEREAS,
      the
      Boards of Director of the Company deems it advisable and in the best interests
      of respectively, the Company and the Company, that the Purchase is effected
      pursuant to the terms and conditions of this Agreement. 

    

    NOW
      THEREFORE, in
      consideration of the premises and the mutual covenants, agreements,
      representations and warranties contained herein, and other good and valuable
      consideration, the receipt and sufficiency of which is hereby acknowledged,
      the
      parties hereto hereby agree as follows: 

    

    ARTICLE
      1

    SECURITIES
      PURCHASE 

    

    1.1
      Agreement to Purchase Securities.
      Subject
      to the terms and upon the conditions set forth herein, Company agrees to sell,
      assign, transfer and deliver to Purchasers, and Purchasers agree to purchase
      from Company, at the Closing, Thirteen Million Five Hundred Thousand common
      shares of Company (“Purchaser Shares”) for a Total Purchase price of One
      Thousand Three Hundred Fifty dollars and no/100 ($1,350.00) USD. 

    

    1.2
      Closing.
      The
      closing of the Purchase (the “Closing”) shall take place by overnight delivery
      (to the office of Ralph Porretti, at 364 Mosel Ave., Staten Island, NY 10304)
      on
      such date as is promptly as practicable following satisfaction or waiver of
      the
      conditions set forth in Section 6.4 hereof, or on such other date or at such
      other time and place as may be agreed to by the Company and Purchaser (“Closing
      Date ”). 

    

    1.3
      Closing Deliveries.
      At the
      Closing, the following deliveries shall be made: 

    

    (a)
      Documents. The documents and information required under Section 6.4; and

    

    (b)
      Purchaser Shares. Company shall issue to the Purchaser original certificates
      evidencing and representing 13,500,000 shares of Common Stock of Company (the
“
Purchaser Shares ”) and deliver the Purchaser Share to the address in Section
      1.2 hereinabove. 

    

    (c)
      Separation and Release Agreement. Immediately after Closing, Purchaser shall
      deliver to Shareholder a duly executed Separation and Release Agreement
      substantially in the form of Exhibit 1.1 hereto. 

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (d)
      Separation Shares. Immediately after Closing, Purchaser, shall issue and deliver
      to the Shareholder One Million Five Hundred Thousand (1,500,000) shares of
      Company required under the Separation and Release Agreement under Exhibit 1.1
      

    

    (e)
      Other
      Documents. The Company, Shareholder, and Purchaser shall each receive, in a
      form
      and substance reasonably satisfactory to it, all certificates and other
      documents, instruments and writings to evidence the transactions contemplated
      by
      this Agreement from any other party hereto as it may reasonably request.

    

    ARTICLE
      2

    REPRESENTATIONS
      AND WARRANTIES

    OF
      THE PURCHASER 

    

    Purchaser,
      represents, warrants and covenants to Company with respect to himself that
      the
      following are correct and complete as of the date hereof, except insofar as
      the
      representations and warranties relate expressly and solely to a particular
      date
      or period, in which case the Purchasers, warrant and covenant to Company that
      such representations and warranties were true, correct and complete with respect
      to such date or period: 

    

    2.1
      Power and Authority.
      Purchaser has all requisite power and authority, or legal capacity, as the
      case
      may be, to enter into and to carry out all of the terms of this Agreement and
      all other documents executed and delivered in connection herewith (collectively,
      the “ Documents ”). Any action on the part of the Purchaser necessary for the
      authorization, execution, delivery and performance of the Documents by the
      Purchaser has been taken and no further authorization is required to consummate
      the transactions provided for in the Documents. When executed and delivered
      by
      the Purchaser, the Documents shall constitute the valid and legally binding
      obligation of the Purchaser enforceable in accordance with their respective
      terms, subject to bankruptcy, moratorium, principles of equity and other
      limitations limiting the rights of creditors generally. Purchaser is a natural
      person is over the age of 21, has not been declared incompetent, and has the
      right to execute, deliver and perform this Agreement and the other Documents
      contemplated herein without the consent or joinder of any other Person or
      Authority. 

    

    2.2
      Investment and Related Representations. 

    

    (a)
      Securities Laws Compliance. The Purchaser is aware that neither the Purchaser
      Shares nor the offer or sale thereof to the Purchaser has been registered under
      the Securities Act, or under any state or foreign securities Laws. The Purchaser
      understands that the Purchaser Shares it will receive will be characterized
      as
“restricted” securities under United States federal securities Laws inasmuch as
      they are being acquired in a transaction not involving a public offering and
      that under such Laws and applicable regulations such securities may be resold
      without registration under the Securities Act only in certain limited
      circumstances. The Purchaser agrees that the Purchaser will not sell all or
      any
      portion of Purchaser Shares except pursuant to Regulations D or S under the
      Securities Act, pursuant to registration under the Securities Act or pursuant
      to
      an other available exemption from registration under the Securities Act. The
      Purchaser understands that each certificate for Purchaser Shares issued to
      the
      Purchaser shall bear a legend substantially as set forth below: 

    

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933 (THE “1933 ACT”) OR ANY STATE SECURITIES LAWS. THE
      SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED,
      HYPOTHECATED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE 1933 ACT WITH RESPECT TO SUCH SHARES, OR WITH
      AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER STATING THAT SUCH
      SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS BEING MADE IN ACCORDANCE WITH
      REGULATION S UNDER THE SECURITIES ACT OR IS EXEMPT FROM THE REGISTRATION
      REQUIREMENTS OF THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS; AND
      HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS
      IN
      COMPLIANCE WITH THE 1933 ACT. 

     

    (b)
      Investment Representation. This Agreement is made with the Company’s reliance
      upon the Purchaser’s representation, which by the Purchaser’s execution of this
      Agreement hereby confirms, that the Purchaser Shares to be received by the
      Purchaser are being acquired pursuant to this Agreement for his own account,
      for
      investment, and not with a view to the resale or distribution thereof (i) such
      that the Purchaser would be considered an “underwriter” as such term is defined
      in the Securities Act, and (ii) unless pursuant to an effective registration
      statement or exemption under the Securities Act. 

    

    (c)
      No
      Public Solicitation. The Purchaser is acquiring the Purchaser Shares after
      private negotiation and has not been attracted to the acquisition of the
      Purchaser Shares by any press release, advertising, publication, or other
      general solicitation or through any directed selling efforts (as such term
      is
      defined in Regulation S promulgated under the Securities Act) made in the United
      States. 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (d)
      Access to Information. The Purchaser acknowledges that the reports (collectively
      the “ SEC Reports ”) filed by Company with the SEC are publicly available, and
      that the Purchaser has reviewed the SEC Reports to the extent that the Purchaser
      deemed necessary and appropriate in making an investment decision hereunder.
      

    

    (e)
      Investor Solicitation and Ability to Bear Risk to Loss . The Purchaser
      acknowledges the acquisition of the Purchaser Shares is a highly speculative
      investment, involving a high degree of risk and that he can bear the economic
      risk of investment in such securities without producing a material adverse
      change in Purchaser’s financial condition. The Purchaser otherwise has such
      knowledge and experience in financial or business matters that the Purchaser
      is
      capable of evaluating the merits and risks of the investment in the Purchaser
      Shares. 

    

    (f)
      U.S.
      Person Status. Purchaser is a U.S. resident and as such is considered a U.
      S.
      Person as that term is defined in the U.
      S.
      securities laws and regulations. 

    

    ARTICLE
      3

    JOINT
      REPRESENTATIONS AND WARRANTIES OF COMPANY and SHAREHOLDER 

    

    Shareholder
      and Company hereby jointly and severally represent and warrant to Purchaser
      that
      the following are correct and complete as of the date hereof, except insofar
      as
      the representations and warranties relate expressly and solely to a particular
      date or period, in which case Company and Shareholder represent and warrant
      to
      the Purchaser that such representations and warranties were true, correct and
      complete with respect to such date or period: 

    

    3.1
      Corporate Organization, Standing and Power.
      Company
      is a corporation duly organized, validly existing and in good standing under
      the
      Laws of the State of Delaware with the requisite corporate power and authority
      to carry on its business as it is now being conducted and to own, operate and
      lease its properties and assets, is duly qualified or licensed to do business
      as
      a foreign corporation in good standing in every other jurisdiction in which
      the
      character or location of the properties and assets owned, leased or operated
      by
      it or the conduct of its business requires such qualification or licensing.
      Complete and correct copies of Company’s certificate of incorporation and bylaws
      have previously been made available to the Purchaser 

    

    3.2
      Capitalization; Subsidiaries.
      

    

    (a)
      Company is authorized by its Certificate of Incorporation to issue an aggregate
      of 260,000,000 shares of capital stock, of which 250,000,000 are shares of
      Common Stock, par value $.0001 per share and 10,000,000 are shares of Preferred
      Stock, par value $.0001 per share. Company has 1,000,000 shares of common stock
      issued and outstanding (the “ Shareholder Shares ”), all of which are owned of
      record by the Shareholder, and no other shares of any class or series of capital
      stock issued and outstanding. All of the Shareholder Shares have been duly
      authorized and are validly issued, fully paid and non-assessable and are
      without, and were not issued in violation of, preemptive rights. 

    

    (b)
      Company does not have any outstanding bonds, debentures, notes or other
      indebtedness which (i) have the right to vote (or are convertible or exercisable
      into securities having the right to vote) on any matter, or (ii) are or will
      become entitled to receive any payment in shares or equity as a result of the
      consummation of the transactions contemplated herein. Other than as above or
      as
      contemplated by this Agreement, there is no subscription, option, warrant,
      call,
      right, contract, agreement, commitment, understanding or arrangement to which
      Company is a party, or by which it is bound, with respect to the issuance,
      sale,
      delivery or transfer of the capital securities of Company, including any right
      of conversion or exchange under any security or other instrument. 

    

    (c)
      Company does not own, and has never owned, directly or indirectly, any equity
      interest in any other entity.

    

    3.3
      Authorization.
      Company
      has all requisite corporate power and authority to enter into, execute, deliver,
      and perform its obligations under this Agreement. The Board of Directors of
      Company has taken all action required by Law, Company's certificate of
      incorporation and bylaws or otherwise to authorize the execution, delivery
      and
      performance of this Agreement and the consummation of the transactions
      contemplated herein. This Agreement has been duly and validly executed and
      delivered by Company and is the valid and binding legal obligation of Company
      enforceable against Company in accordance with its terms, subject to bankruptcy,
      moratorium, principles of equity and other limitations limiting the rights
      of
      creditors generally. 

    

    3.4
      Non-Contravention.
      Neither
      the execution, delivery and performance of this Agreement, nor the consummation
      of the transactions contemplated herein will: 

    

    (a)
      violate any provision of the certificate of incorporation or bylaws of Company;
      or 

    

    (b)
      be in
      conflict with, or constitute a default, however defined (or an event which,
      with
      the giving of due notice or lapse of time, or both, would constitute such a
      default), under, or cause or permit the acceleration of the maturity of, or
      give
      rise to, any right of termination, cancellation, imposition of fees or penalties
      under, any debt, note, bond, lease, mortgage, indenture, license, obligation,
      contract, commitment, franchise, permit, instrument or other agreement or
      obligation to which Company is a party or by which Company or any of its

    properties
      or assets is or may be bound; 

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (c)
      result in the creation or imposition of any Encumbrance upon any property or
      assets of Company under any debt, obligation, contract, agreement or commitment
      to which Company is a party or by which Company or any of their respective
      assets or properties is or may be bound; or 

    

    (d)
      materially violate any Law of any Authority. 

    

    3.5
      Consents and Approvals.
      No
      Consent is required by any person or entity, including any Authority, in
      connection with the execution, delivery and performance of this Agreement by
      Company or the consummation of the transactions contemplated herein, other
      than
any
      Consent which have been obtained or are required pursuant to this Agreement
      or
      applicable securities Laws. 

    

    3.6
      Valid Issuance.
      The
      Purchaser Shares to be issued in connection with this Agreement have been duly
      authorized and, when issued and delivered and upon the delivery of the
      consideration therefore as provided in this Agreement, will be validly issued,
      fully paid and non-assessable and will not be subject to any restrictions,
      except those under United States federal and state securities Laws.

    

    3.7
      SEC Filings; Financial Statements. 

    

    (a)
      All
      statements, reports, schedules, forms and other documents required to have
      been
      filed by Company with the SEC have been so filed on a timely basis. As of the
      time it was filed with the SEC (or, if amended or superseded by a filing prior
      to the date of this Agreement, then on the date of such filing): (i) each of
      the
      SEC Reports complied in all material respects with the applicable requirements
      of the Securities Act or the Securities Exchange Act of 1934 (the “Exchange Act”
); and (ii) none of the SEC Reports contained any untrue statement of a material
      fact or omitted to state a material fact required to be stated therein or
      necessary in order to make the statements therein, in the light of the
      circumstances under which they were made, not misleading. 

    

    (b)
      The
      financial statements contained in the SEC Reports: (i) complied as to form
      in
      all material respects with the published rules and regulations of the SEC
      applicable thereto; (ii) were prepared in accordance with GAAP applied on a
      consistent basis throughout the periods covered (except as may be indicated
      in
      the notes to such financial statements and, in the case of unaudited statements,
      as permitted by Form 10-QSB of the SEC); and (iii) fairly present, in all
      material respects, the financial position of Company as of the respective dates
      thereof and the results of operations of Company for the periods covered
      thereby. All adjustments considered necessary for a fair presentation of such
      financial statements have been included. 

    

    3.8
      No Liabilities.
      Company
      has no liabilities, obligations, or contingencies (whether absolute, accrued,
      or
      contingent) (each a “ Liability ” and collectively, “ Liabilities ”) except for
      (i) Liabilities expressly stated in the most recent balance sheet included
      in
      the SEC Reports or the notes thereto and (ii) Liabilities which do not exceed
      US$48,000.00 in the aggregate. 

    

    3.9
      Assets.
      The sole
      assets of Company are any cash in any bank account of Company. There are no
      Encumbrances on any assets of
      Company. 

    

    3.10
      Real Property; Leases.
      Company
      owns no real property and is not party to any lease or sublease for any real
      property or personal property. 

    

    3.11
      Litigation. There
      is
      no legal, administrative, arbitration, or other proceeding, suit, claim or
      action of any nature or investigation, review or audit of any kind, or any
      judgment, decree, decision, injunction, writ or order pending, noticed,
      scheduled, or, to the knowledge of Company, threatened or contemplated by or
      against or involving Company, its assets, properties or business or its
      directors, officers, agents or employees (but only in their capacity as such),
      whether at law or in equity, before or by any person or entity or Authority,
      or
      which questions or challenges the validity of this Agreement or any action
      taken
      or to be taken by the parties hereto pursuant to this Agreement or in connection
      with the transactions contemplated herein. 

    

    3.12
      Contracts and Commitments; No Default. Company
      is not a party to, nor are any of its assets bound by, any contract, oral or
      written (each, a“ Company Contract ”), that is not disclosed in the SEC Reports.
      None of the Company Contracts contains a provision requiring the consent of
      any
      party with respect to the consummation of the transactions contemplated by
      this
      Agreement. Company is not in breach, violation or default, however defined,
      in
      the performance of any of its obligations under any of the Company Contracts,
      and no facts and circumstances exist which, whether with the giving of due
      notice, lapse of time, or both, would constitute such breach, violation or
      default thereunder or thereof, and, to the knowledge of Company or Shareholder,
      no other parties thereto are in a breach, violation or default, however defined,
      thereunder or thereof, and no facts or circumstances exist which, whether with
      the giving of due notice, lapse of time, or both, would constitute such a
      breach, violation or default thereunder or thereof. 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    3.13
      No Broker or Finder.
      No
      broker, finder or investment banker is entitled to any brokerage, finders or
      other fee or commission in connection with any of the transactions contemplated
      by this Agreement based upon arrangements made by or on behalf of Company.
      

    

    3.14
      Inter-company and Affiliate Transactions; Insider Interests.
Except
      as
      disclosed in the SEC Reports, there are, and during the last three years there
      have been, no transactions, agreements or arrangements of any kind, direct
      or
      indirect, between Company, on the one hand, and any director, officer, employee,
      stockholder, or affiliate of Company, on the other hand, including loans,
      guarantees or pledges to, by or for Company or from, to, by or for any of such
      persons, that are currently in effect. 

    

    3.15
      No Adverse Changes.
      There
      has been no material adverse change in the business, financial condition,
      prospects, assets or operations of Company since July 31, 2008. 

    

    3.16
      Compliance With Law; Permits and Other Operating Rights.
      The
      assets, properties, business and operations of Company are and have been in
      compliance in all respects with all Laws applicable to Company's assets,
      properties, business and operations. Company possesses all permits, licenses
      and
      other authorizations from all Authorities necessary to permit it to operate
      its
      business in the manner in which it presently is conducted and the consummation
      of the transactions contemplated by this Agreement will not prevent Company
      from
      being able to continue to use such permits and operating rights. Company has
      not
      received notice of any violation of any such applicable 

    Law,
      and
      is not in default with respect to any order, writ, judgment, award, injunction
      or decree of any Authority. 

    

    3.17
      Taxes. Company
      has duly filed when due all tax reports and returns in connection with and
      in
      respect of its business, assets and employees, and has timely paid and
      discharged all amounts shown as due thereon. Company has not received any notice
      of any tax deficiency outstanding, proposed or assessed against or allocable
      to
      it, and has not executed any waiver of any statute of limitations on the
      assessment or collection of any tax or executed or filed with any Authority
      any
      agreement now in effect extending the period for assessment or collection of
      any
      taxes against it. 

    

    3.18
      Accuracy of Information. No
      representation or warranty made by Company or Shareholder in this Agreement
      or
      in any agreement or certificate furnished or to be furnished to the Purchaser
      at
      the Closing by or on behalf of Company in connection with any of the
      transactions contemplated by this Agreement contains or will contain any untrue
      statement of material fact or omits or will omit to state any material fact
      necessary in order to make the statements herein or therein not misleading
      in
      light of the circumstances in which they are made, and all of the foregoing
      completely and correctly present the information required or purported to be
      set
      forth herein or therein. 

    

    ARTICLE
      4

    SEPARATE
      REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER 

    

    The
      Shareholder warrants and covenants to Purchaser as follows: 

    

    4.1
      Power and Authority.
      The
      Shareholder has all requisite power and authority to enter into and to carry
      out
      all of the terms of this Agreement and all other documents executed and
      delivered in connection herewith (collectively, the “ Documents ”). All action
      on the part of the Shareholder necessary for the authorization, execution,
      delivery and performance of the Documents by the Shareholder has been taken
      and
      no further authorization on the part of the Shareholder is required to
      consummate the transactions provided for in the Documents, except as set forth
      in Section 6.4. When executed and delivered by the Shareholder, the Documents
      shall constitute the valid and legally binding obligation of the Shareholder
      enforceable in accordance with their respective terms. 

    

    4.2.
      Ownership of and Title to Securities.
      The
      Shareholder as of the date hereof is the record owner of all of the Shareholder
      Shares, which constitute one hundred (100%) of Company’s issued and outstanding
      securities. The Shareholder has good and marketable title to the Shareholder
      Shares which she owns, free and clear of all pledges, security interests,
      mortgages, liens, claims, charges, restrictions or encumbrances of any kind,
      except for any restrictions imposed by federal or state securities laws.

    

    ARTICLE
      5

    COVENANTS
      OF THE COMPANY and COVENANTS of the PARTIES 

    

    5.1
      Conduct of Business.
      Except
      as contemplated by this Agreement, during the period from the date of this
      Agreement to the Closing
      Date, Company shall conduct its business and operations according to its
      ordinary and usual course of business consistent with past practices.
      Without limiting the generality of the foregoing, and, except as otherwise
      expressly provided in this Agreement, prior to the Closing Date, without the
      prior written consent of the Purchaser the Company shall not: 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (a)
      amend
      its certificate of incorporation, articles of association, bylaws or memorandum
      of association, as the case may be; 

    

    (b)
      issue, reissue, sell, deliver, or pledge, or authorize or propose the issuance,
      reissuance, sale, delivery or pledge of shares of capital stock of any class,
      or
      securities convertible into capital stock of any class, or any rights, warrants
      or options to acquire any convertible securities, or capital stock;

    

    (c)
      adjust, split, combine, subdivide, reclassify or redeem, purchase or otherwise
      acquire, or propose to redeem or purchase or otherwise acquire, any shares
      of
      its capital stock, or any of its other securities; 

    

    (d)
      declare, set aside or pay any dividend or distribution (whether in cash, stock
      or property or any combination thereof) in respect of its capital stock, redeem
      or otherwise acquire any shares of its capital stock or other securities, or
      alter any term of any of its outstanding securities; 

    

    (e)
      (i)
      increase in any manner the compensation of any of its directors, officers or
      other employees; (ii) pay or agree to pay any pension, retirement allowance
      or
      other employee benefit not required or permitted by any existing plan, agreement
      or arrangement to any such director, officer or employee, whether past or
      present; or (iii) create or commit itself to any additional pension,
      profit-sharing, bonus, incentive, deferred compensation, stock purchase, stock
      option, stock appreciation right, group insurance, severance pay, retirement
      or
      other employee benefit plan, agreement or arrangement, or to any employment
      agreement or consulting agreement (arising out of prior employment) with or
      for
      the benefit of any person, or, except to the extent required to comply with
      applicable law, amend any of such plans or any of such agreements in existence
      on the date of this Agreement; 

    

    (f)
      incur, assume, suffer or become subject to, whether directly or by way of
      guarantee or otherwise, any Liabilities which, individually or in the aggregate,
      exceed US$48,000.00; 

    

    (g)
      make
      or enter into any commitment for capital expenditures which, individually or
      in
      the aggregate, exceed US$48,000.00; 

    

    (h)
      pay,
      lend or advance any amount to, or sell, transfer or lease any properties or
      assets (real, personal or mixed, tangible or intangible) to, or enter into
      any
      agreement or arrangement with, any of its officers or directors or any affiliate
      or associate of any of its officers or directors; 

    

    (i)
      terminate, enter into or amend in any material respect any contract, agreement,
      lease, license or commitment, or take any action or omit to take any action
      which will cause a breach, violation or default (however defined) under any
      contract, except in the ordinary course of business and consistent with past
      practice; 

    

    (j)
      acquire any of the business or assets of any other person or entity;

    

    (k)
      permit any of its current insurance (or reinsurance) policies to be cancelled
      or
      terminated or any of the coverage thereunder to lapse, unless simultaneously
      with such termination, cancellation or lapse, replacement policies providing
      coverage equal to or greater than coverage remaining under those cancelled,
      terminated or lapsed are in full force and effect; 

    

    (l)
      enter
      into other material agreements, commitments or contracts not in the ordinary
      course of business or in excess of 

    current
      requirements; 

    

    (m)
      initiate, settle or compromise any suit, claim or dispute or threatened suit,
      claim or dispute; 

    

    (n)
      make
      any changes in accounting methods or policies or make any change in its
      auditors; or 

    

    (o)
      agree
      in writing or otherwise to take any of the foregoing actions or any action
      which
      would make any representation or warranty in this Agreement untrue or incorrect
      in any material respect. 

    

    5.2
      Full Access. Throughout
      the period prior to the Closing, Company shall afford to the Purchaser and
      his
      employees, counsel, accountants, investment advisors and other authorized
      representatives and agents, reasonable access to the facilities, properties,
      books and records of Company in order that Purchaser may have full opportunity
      to make such investigations as Purchaser shall desire to make of the affairs
      of
      the disclosing party. Company shall furnish Purchaser such additional financial
      and operating data and other information as the Purchaser, from time to time,
      reasonably request, including access to the working papers of its independent
      certified public accountants; provided, however , that any such investigation
      shall not affect or otherwise diminish or obviate in any respect any of the
      representations and warranties of the disclosing party. 

    

    5.3
      Confidentiality.
      Each of
      the parties hereto agrees that it shall not use, or permit the use of, any
      of
      the information relating to any
      other
      party hereto furnished to it in connection with the transactions contemplated
      herein ( “Information ”) in a manner or for a purpose detrimental to such other
      party or otherwise than in connection with the transaction, and that they shall
      not disclose, divulge, provide or make accessible (collectively, “ Disclose ”),
      or permit the Disclosure of, any of the Information to any person or entity,
      other than their respective directors, officers, employees, investment advisors,
      accountants, sources of financing, counsel and other authorized representatives
      and agents, except as may be required by judicial or administrative process
      or,
      in the opinion of such party's counsel, by other requirements of Law; provided
      ,
      however , that prior to any Disclosure of any Information permitted hereunder,
      the disclosing party will first obtain the recipients' agreement to comply
      with
      the provisions of this Section 5.3 with respect to such information.
      Notwithstanding the foregoing, the confidentiality obligations of this Section
      5.3 will not apply after the Closing to any Information furnished to the
      Purchaser regarding Company or its business. The term “ Information ” does not
      include any information relating to a party that the party disclosing such
      information can show: (i) to have been in its possession prior to its receipt
      from another party hereto; (ii) to be now or to later become generally available
      to the public through no fault of the disclosing party; (iii) to have been
      available to the public at the time of its receipt by the disclosing party;
      (iv)
      to have been received separately by the disclosing party in an unrestricted
      manner from a person entitled to disclose such information; or (v) to have
      been
      developed independently by the disclosing party without regard to any
      information received in connection with this transaction. Each party hereto
      agrees to promptly return to the party from whom it originally received such
      information all original and duplicate copies of written materials containing
      Information if the Purchase does not occur. A party hereto shall be deemed
      to
      have satisfied its obligations to hold the Information confidential if it
      exercises the same care as it takes with respect to its own similar information.
      

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    5.4
      Filings; Consents; Removal of Objections.
      Subject
      to the terms and conditions herein provided, the parties hereto shall use their
      reasonable best efforts to take or cause to be taken all actions and do or
      cause
      to be done all things necessary, proper or advisable under applicable Laws
      to
      consummate and make effective, as soon as reasonably practicable, the
      transactions contemplated hereby, including without limitation obtaining all
      Consents of any person or entity, whether private or governmental, required
      in
      connection with the consummation of the transactions contemplated herein. In
      furtherance, and not in limitation of the foregoing, it is the intent of the
      parties to consummate the transactions contemplated herein at the earliest
      practicable time, and they respectively agree to exert commercially reasonable
      efforts to that end, including without limitation: (i) the removal or
      satisfaction, if possible, of any objections to the validity or legality of
      the
      transactions contemplated herein; and (ii) the satisfaction of the conditions
      to
      consummation of the transactions contemplated hereby. 

    

    5.5
      Name & Address and RA and TA shall remain the same. The
      Company shall take all actions necessary, including, but not limited to,
      obtaining shareholder consent, on or prior or within five (5) days after Closing
      to: 

    

    (a)
      The
      Company shall change its address to 364 Mosel Ave., Staten Island, NY 10304
      on
      or prior to the Closing Date. 

    

    (b)
      the
      registered agent for Company shall remain. 

    

    (c)
      the
      Transfer Agent for Company shall remain. 

    

    5.6
      Further Assurances; Cooperation; Notification. 

    

    (a)
      Each
      party hereto shall, before, at and after Closing, execute and deliver such
      instruments and take such other actions as the other party or parties, as the
      case may be, may reasonably require in order to carry out the intent of this
      Agreement. Without limiting the generality of the foregoing, at any time after
      the Closing, at the reasonable request of Company and without further
      consideration, the Company and Shareholder shall execute and deliver such
      instruments of sale, transfer, conveyance, assignment and confirmation and
      take
      such action as Purchaser may reasonably deem necessary or desirable in order
      to
      more effectively consummate the transactions contemplated hereby. 

    

    (b)
      At
      all times from the date hereof until the Closing, each party shall promptly
      notify the other in writing of the occurrence of any event which it reasonably
      believes will or may result in a failure by such party to satisfy the conditions
      specified in this Article 5. 

    

    5.7
      Public Announcements. None
      of
      the parties hereto shall make any public announcement with respect to the
      transactions contemplated herein without the prior written consent of the
      Company, which consent shall not be unreasonably withheld or delayed; provided
      ,
      however , that any of the parties hereto may at any time make any announcements
      that are required by applicable Law so long as the party so required to make
      an
      announcement promptly upon learning of such requirement notifies the other
      parties of such requirement and discusses with the other parties in good faith
      the exact proposed wording of any such announcement. 

    

    5.8
      Satisfaction of Conditions Precedent.
      Each
      party shall use commercially reasonable efforts to satisfy or cause to be
      satisfied all the conditions precedent that are applicable to them, and to
      cause
      the transactions contemplated by this Agreement to be consummated, and, without
      limiting the generality of the foregoing, to obtain all material consents and
      authorizations of third parties and to make filings with, and give all notices
      to, third parties that may be necessary or reasonably required on its part
      in
      order to effect the transactions contemplated hereby. 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    5.9
      Delivery of Purchaser Shares.
      Company
      covenants and undertakes, following the Closing pursuant to Article 1 of this
      Agreement, to cause the original certificates evidencing the Purchaser Shares
      to
      be delivered to the Purchaser. 

    

    ARTICLE
      6

    CONDITIONS
      TO OBLIGATIONS OF THE COMPANY AND SHAREHOLDER 

    

    Notwithstanding
      anything in this Agreement to the contrary, the obligations of the Company
      and
      Shareholder to effect the transactions contemplated herein will be subject
      to
      the satisfaction at or prior to the Closing, or waiver by the Purchaser, of
      each
      of the following
      conditions: 

    

    6.1
      Representations and Warranties True.
      The
      representations and warranties of Company and Shareholder contained in this
      Agreement shall be true, complete and accurate in all material respects as
      of
      the date when made and at and as of the Closing, as though such representations
      and warranties were made at and as of such time, except for changes permitted
      or
      contemplated in this Agreement, and except insofar as the representations and
      warranties relate expressly and solely to a particular date or period, in which
      case they shall be true and correct at the Closing with respect to such date
      or
      period. 

    

    6.2
      Performance.
      Company
      and Shareholder shall have performed and complied in all material respects
      with
      all agreements, covenants, obligations and conditions required by this Agreement
      to be performed or complied with by, respectively, Company and the Shareholder,
      at or prior to the Closing. 

    

    6.3
      Required Approvals and Consents. 

    

    (a)
      All
      action required by law and otherwise to be taken by the directors and
      stockholders of Company to authorize the execution, delivery and performance
      of
      this Agreement and the consummation of the transactions contemplated hereby
      shall have been duly and validly taken. 

    

    (b)
      All
      Consents of or from all Authorities required hereunder to consummate the
      transactions contemplated herein, shall have been delivered, made or obtained,
      and the Company shall have received copies thereof. 

    

    (c)
      all
      Consents under all applicable Laws from all applicable Authorities in form
      and
      substance satisfactory to the Purchaser shall have been obtained and shall
      be in
      full force and effect. 

    

    6.4
      Agreements and Documents.
      The
      Purchaser shall have received the following agreements and documents, each
      of
      which shall be in full force and effect: 

    

    (a)
      a
      copy of the written consent of the board of directors of Company, executed
      by
      all such directors, approving the transactions contemplated by this Agreement,
      including the issuance of the Purchaser Shares; 

    

    (b)
      a
      certified list of the record holders of capital stock of Company as of the
      most
      recent practicable date evidencing all of the shares of Company’s capital stock
      issued and outstanding; 

    

    (c)
      a
      certificate of good standing of Company from the State of Delaware and any
      other
      states where Company is qualified to do business, as of the most recent
      practicable date; 

    

    (d)
      written resignations of the officers and directors of Company, effective as
      of
      the Closing, and evidence that prior to their resignations, the pre-Closing
      directors of Company appointed to the board of directors of Company the persons
      designated by the Purchaser, to be effective as of the Closing; 

    

    (e)
      a
      copy of a written consent of the board of directors of Company regarding the
      change of the list of authorized banking signatories for all bank and depositary
      accounts of Company to persons nominated by the Company; 

    

    (f)
      all
      books and records of Company; 

    

    (g)
      the
      agreements and documents contemplated in Article 1 hereof; 

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (h)
      the
      corporate recordbook and corporate deal of Company; and 

    

    (i)
      the
      Edgar codes for SEC filings 

    

    6.5
      Adverse Changes.
      No
      Material Adverse Effect shall have occurred with respect to Company since July
      31, 2008. 

    

    6.6
      No Proceeding or Litigation.
      No suit,
      action, investigation, inquiry or other proceeding by any Authority or other
      person or entity shall have been instituted or threatened which delays or
      questions the validity or legality of the transactions contemplated hereby
      or
      which, if successfully asserted, would, in the reasonable judgment of the
      Company, individually or in the aggregate, otherwise have a Material Adverse
      Effect on Company’s business, financial condition, prospects, assets or
      operations or prevent or delay the consummation of the transactions contemplated
      by this Agreement. 

    

    6.7
      Legislation.
      No Law
      shall have been enacted which prohibits, restricts or delays the consummation
      of
      the transactions contemplated hereby or any of the conditions to the
      consummation of such transaction. 

    

    6.8
      Filings; Press Releases.
      Company
      shall have made such filings and press releases, in form and substance
      satisfactory to the Company, as may be requested by the Purchaser to comply
      with
      any disclosure requirements under the U.S. securities regulations or other
      applicable Laws. 

    

    6.9
      Appropriate Documentation. The
      Company shall have received, in a form and substance reasonably satisfactory
      to
      Company, dated the Closing Date, copies of all documents, instruments and
      writings to evidence the fulfillment of the conditions set forth in this Article
      6 as the Purchaser may reasonably request.   

    

    6.10
      Charter Documents.
      The
      charter documents of Company shall be, or shall be amended to be, in form and
      substance, satisfactory to the Purchaser. 

    

    6.11
      SEC Filings.
      Company
      shall have prepared a Form 8-K and all other required filings with the SEC
      relating to the Closing and such filings shall be in form and substance
      satisfactory to the Purchaser and ready for filing. Company shall remain an
      Exchange Act reporting company and no action shall have been taken by Company
      or
      any Authority to terminate Company's Exchange Act registration of its common
      stock. 

    

    6.12
      Resignation.
      Each of
      the officers and directors of Company shall have tendered resignations in form
      and substance satisfactory to the Company, effective at the Closing, and such
      resignations shall not have been revoked or modified in any way. 

    

    ARTICLE
      7

    TERMINATION
      AND ABANDONMENT 

    

    7.1
      Termination by Either the Company or Purchaser.
      This
      Agreement may be terminated by either the Company or Purchaser at any time
      if
      there has been a breach by the other of any representation, warranty, or
      covenant which breach remains uncured for a period of 30 days following written
      notice thereof given in accordance with Section 8.6 hereof. This Agreement
      may
      be terminated at any time by the mutual consent of the Company and Purchaser.
      This Agreement shall automatically terminate if the Purchase has not been
      consummated by August 1, 2008. If this Agreement so terminates, all parties
      hereto shall be absolved from any claims or liabilities arising from and in
      connection with this Agreement. 

    

    7.2
      Procedure and Effect of Termination. If
      this
      Agreement is terminated as provided herein: 

    

    (a)
      Each
      of the parties shall, upon request, redeliver all documents, work papers and
      other material of the other parties relating to the transactions contemplated
      hereby, whether obtained before or after the execution hereof, to the party
      furnishing the same; 

    

    (b)
      No
      party shall have any liability for a breach of any representation, warranty,
      agreement, covenant or the provision of this Agreement, unless such breach
      was
      due to a willful or bad faith action or omission of such party or any
      representative, agent, employee or independent contractor thereof; and

    

    (c)
      All
      filings, applications and other submissions made pursuant to the terms of this
      Agreement shall, to the extent practicable, be withdrawn from the agency or
      other person to which made. 

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    ARTICLE
      8

    MISCELLANEOUS
      PROVISIONS 

    

    8.1
      Survival of Representations, Warranties and Covenants.
      All of
      the representations, warranties and covenants of the Company and the Shareholder
      in this Agreement in Articles 3, 4 and 5 or in any instrument delivered pursuant
      to this Agreement shall survive the Closing hereof. 

    

    8.2
      Expenses. Company,
      Shareholder, and the Purchaser shall each bear their own costs and expenses
      relating to the transactions contemplated hereby, including fees and expenses
      of
      legal counsel, accountants, investment bankers, brokers or finders, printers,
      copiers, consultants or other representatives for the services used, hired
      or
      connected with the transactions contemplated hereby. 

    

    8.3
      Amendment; Waivers. No
      provision of this Agreement may be waived or amended except in a written
      instrument signed, in the case of an amendment, by the Company, the Shareholder
      and the Purchaser; or, in the case of a waiver, by the party against whom
      enforcement of any such waiver is sought. 

    

    8.4
      Waiver of Compliance; Consents. Any
      failure of a party to comply with any obligation, covenant, agreement or
      condition herein may be expressly waived in writing by the Purchaser, but such
      waiver or failure to insist upon strict compliance with such obligation,
      covenant, agreement or condition shall not operate as a waiver of, or estoppel
      with respect to, any subsequent or other failure. No single or partial exercise
      of a right or remedy shall preclude any other or further exercise thereof or
      of
      any other right or remedy hereunder. Whenever this Agreement requires or permits
      the consent by or on behalf of a party, such consent shall be given in writing
      in the same manner as for waivers of compliance. 

    

     8.5
      “Piggy-back” Registration Rights.
      If at
      any time during the six-month period following the Closing Date there is not
      an
      effective registration statement (other than on Form S-4 or Form S-8, each
      as
      promulgated under the Securities Act) covering any of Company’s shares, the
      Shareholder may determine to prepare and file with the SEC a registration
      statement relating to an offering for her own account under the Securities
      Act
      of any of her equity securities, relating to Shareholder’s securities issued or
      to be issued in connection with this Agreement. Further any acquisition of
      any
      entity or business or equity securities issuable in connection with stock option
      or other employee benefit plans, then Company shall send to Shareholder written
      notice of such determination and, if within fifteen days after receipt of such
      notice, Shareholder shall so request in writing, and Company shall include
      in
      such registration statement all or any part of such the Shareholder Shares
      such
      holder requests to be registered. If, in connection with any underwritten
      offering for the account of Company the managing underwriter(s) thereof shall
      impose a limitation on the number of shares of Common Stock which may be
      included in the registration statement because, in such underwriter(s)'
      judgment, such limitation is necessary to effect an orderly public distribution
      of securities covered thereby, then Company shall be obligated to include in
      such registration statement only such limited portion of Shareholder

     

    Shares
      for which Shareholder has requested inclusion hereunder as such underwriter(s)
      shall permit. Other than this piggy-back registration obligation, nothing in
      this Agreement shall entitle any party hereto to any claim, cause of action,
      remedy or right of any kind with respect to the registration rights.

    

    8.6
      Notices.
      All
      notices, requests, demands and other communications required or permitted
      hereunder shall be made in writing and shall be deemed to have been duly given
      and effective: (i) on the date of delivery, if delivered personally; (ii) on
      the
      date of transmission, if sent by facsimile, telecopy, telex or other similar
      telegraphic communications equipment; (iii) one business day after delivery
      to
      an overnight delivery courier service for next-business day delivery; or (iv)
      on
      the fifth business day following the date of mailing, if sent by registered
      mail, return receipt requested, postage prepaid, and in each case addressed
      to
      such party at the following address: 

    

    If
      to the Purchaser or, following the Closing, to Company, at:
      

    

    To
      Purchasers: 

    

    Ralph
      Porretti 

    364
      Mosel
      Ave.

    Staten
      Island, NY 10304

    Phone:
      (917) 459-1021 

    

    Jim
      McAlinden

    2337
      Tudor House St., #106

    Wesley
      Chapel, FL 33544

    Phone:
      (813) 767-1411

    

    Peter
      Ng

    23
      Mundy
      Ave.

    Staten
      Island, NY 10310

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    To
      Company: 

     

    Tia
      IV,
      Inc. 

    364
      Mosel
      Ave.

    Staten
      Island, NY 10304

    

    If
      to
      Company (prior to Closing) or Shareholder: 

    

    To
      Company: 

    7325
      Oswego Road, Suite D

    Liverpool,
      New York 13090 

    Tel:
      (315) 451-7515 

    Fax:
      (315) 451-3964 

    

    To
      Shareholder: 

    

    Mary
      Passalaqua 

    7325
      Oswego Road, Suite D 

    Liverpool,
      New York 13090 

    Tel:
      (315) 451-7515 

    Fax:
      (315) 451-3964

    

    8.7
      Assignment.
      This
      Agreement and all of the provisions hereof shall be binding upon and inure
      to
      the benefit of the parties hereto
      and their respective successors and permitted assigns, but neither this
      Agreement nor any of the rights, interests or obligations hereunder shall be
      assigned (whether voluntarily, involuntarily, by operation of law or otherwise)
      by any of the parties hereto without the prior written consent of the other
      parties. The Shareholder prior to the Closing shall be a third party beneficiary
      of this Agreement. 

    

    8.8
      Severability.
      Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction,
      be ineffective to the extent of such prohibition or unenforceability without
      invalidating the remaining provisions hereof, and the parties
      will attempt to agree upon a valid and enforceable provision which shall be
      a
      reasonable substitute therefore, and upon so agreeing, shall incorporate such
      substitute provision in this Agreement. Any such prohibition or unenforceability
      in any jurisdiction shall not invalidate or render unenforceable such provision
      in any other jurisdiction. 

    

    8.9
      Counterparts.
      This
      Agreement may be executed in two or more counterparts, all of which shall be
      considered one and the same
      agreement and shall become effective when counterparts have been signed by each
      party and delivered to the other party. This Agreement,
      once executed by a party, may be delivered to the other parties hereto by
      facsimile transmission of a copy of this Agreement bearing
      the signature of the party so delivering this Agreement. In the event any
      signature is delivered by facsimile transmission, the party using
      such means of delivery shall cause the manually executed execution page(s)
      hereof to be physically delivered to the other party within five
      days
      of the execution hereof, provided that the failure to so deliver any manually
      executed execution page shall not affect the validity or enforceability
      of this Agreement. 

    

    8.10
      Headings. The
      headings herein are inserted for convenience only and do not constitute a part
      of this Agreement. Unless the context
      otherwise requires, all references to articles and sections refer to articles
      and sections of this Agreement, and all references to schedules are to schedules
      attached hereto, each of which is made a part hereof for all purposes. The
      descriptive headings of the several articles and sections of this Agreement
      are
      inserted for purposes of reference only, and shall not affect the meaning or
      construction of any of the provisions hereof. 

    

    8.11
      Entire Agreement.
      This
      Agreement, and any schedules and exhibits hereto and other writings referred
      to
      in this Agreement or
      any
      such exhibit or other writing are part of this Agreement, together they embody
      the entire agreement and understanding of the parties hereto
      in
      respect of the transactions contemplated by this Agreement and together they
      are
      referred to as this “Agreement” or the “Agreement.” There are no restrictions,
      promises, warranties, agreements, covenants or undertakings, other than those
      expressly set forth or referred to in this Agreement. This Agreement supersedes
      all prior agreements and understandings between the parties with respect to
      the
      transaction or transactions contemplated by this Agreement. 

    

    8.12
      Indemnification Obligations in favor of the Purchaser.
      From and
      after the Closing Date, the Shareholder shall reimburse, indemnify
      and hold harmless the Purchaser, (his heirs, executors, administrators, agents,
      successors and assigns is referred to herein as an “Indemnified
      Party ”) against and in respect of any and all damages, losses, settlement
      payments, in respect of deficiencies, liabilities, costs, expenses
      and claims suffered, sustained, incurred or required to be paid by any
      Indemnified Party, and any and all actions, suits, claims, or legal,
      administrative, arbitration, governmental or other procedures or investigation
      against any Indemnified Party, in respect of any breach of any
      representation, warranty, covenant, or other agreement made by the Company
      (prior to Closing) or the Shareholder. 

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    8.13
      Remedies and Injunctive Relief.
      It is
      expressly agreed among the parties hereto that monetary damages would be
      inadequate to
      compensate a party hereto for any breach b any other party of its covenants
      in
      Article 6 hereof. Accordingly, the parties agree and acknowledge
      that any such violation or threatened violation shall cause irreparable injury
      to the other and that, in addition to any other remedies
      which may be available, such party shall be entitled to injunctive relief
      against the threatened breach of Article 6 hereof or the continuation
      of any such breach without the necessity of proving actual damages and may
      seek
      to specifically enforce the terms thereof. 

    

    8.14
      Definition of Material Adverse Effect.“Material
      Adverse Effect ” with respect to a party means a material adverse change
in
      or
      effect on the business, operations, financial condition, properties or
      liabilities of the party taken as a whole; provided, however, that a
Material
      Adverse Effect shall not be deemed to include (i) changes as a result of the
      announcement of this transaction, (ii) events or conditions arising from changes
      in general business or economic conditions or (iii) changes in generally
      accepted accounting principles. 

    

    8.15
      Severability.
      The
      provisions of this Agreement will be deemed severable and the invalidity or
      unenforceability of any provision
      will not affect the validity or enforceability of the other provisions hereof;
      provided that if any provision of this Agreement, as applied
      to any party hereto or to any circumstance, is adjudged by an Authority,
      arbitrator, or mediator not to be enforceable in accordance with its terms,
      the
      parties hereto agree that the Authority, arbitrator, or mediator making such
      determination will have the power to modify the provision in a manner consistent
      with its objectives such that it is enforceable, and/or to delete specific
      words
      or phrases, and in its reduced form, such provision will then be enforceable
      and
      will be enforced. 

    

    8.16
      Construction.
      The
      parties hereto have participated jointly in the negotiation and drafting of
      this
      Agreement. If an ambiguity or
      question of intent or interpretation arises, this Agreement will be construed
      as
      if drafted jointly by the parties hereto and no presumption or burden
      of
      proof will arise favoring or disfavoring any party hereto because of the
      authorship of any provision of this Agreement. The words “include,”
      “includes,” and “including” will be deemed to be followed by “without
      limitation.” Pronouns in masculine, feminine, and neuter genders
      will be construed to include any other gender, and words in the singular form
      will be construed to include the plural and vice versa, unless
      the context otherwise requires. 

    

    8.17
      Governing Law.
      The
      corporate laws of the State of Delaware shall govern all issues concerning
      the
      relative rights of the Company
      and its shareholders. All other questions concerning the construction, validity,
      enforcement and interpretation of this Agreement shall be governed by the
      internal laws of the State of Florida, without giving effect to any choice
      of
      law or conflict of law provision or rule (whether of the State of New York
      or
      any other jurisdictions) that would cause the application of the laws of any
      jurisdictions other than the State of Florida. Each party hereby irrevocably
      submits to the exclusive jurisdiction of the state and federal courts sitting
      in
      the City and County of Orange, Florida for the adjudication of any dispute
      hereunder or in connection herewith or therewith, or with any transaction
      contemplated hereby or discussed herein, and hereby irrevocably waives, and
      agrees not to assert in any suit, action or proceeding, any claim that it is
      not
      personally subject to the jurisdiction of any such court, that such suit, action
      or proceeding is brought in an inconvenient forum or that the venue of such
      suit, action or proceeding is improper. Each party hereby irrevocably waives
      personal service of process and consents to process being served in any such
      suit, action or proceeding by mailing a copy thereof to such party at the
      address for such notices to it under this Agreement and agrees that such service
      shall constitute good and sufficient service of process and notice thereof.
      Nothing contained herein shall be deemed to limit in any way any right to serve
      process in any manner permitted by law. EACH
      PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
      REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
      CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
      CONTEMPLATED HEREBY. 

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this Agreement to be duly executed as of the day
      and
      year first 

    above
      written. 

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    
      	
              The
                Company: 

            	
              The
                Purchasers: 

            
	
              Tia
                IV Inc. 

            	 
	
               

            	 
	
              By:
                /s/ Mary Passalaqua

            	
              By:
                _/s/ Ralph Porretti

            
	 	 
	
              Name:
                Mary Passalaqua

            	
              Name:
                Ralph Porretti 

            
	
              Title:
                President, Secretary and Sole Director

            	 
	 	 
	 	
              By:
                _/s/ Jim McAlinden

            
	 	 
	 	
              Name:
                Jim McAlinden

            
	 	 
	 	 
	 	
              By:
                _/s/ Peter Ng

            
	 	 
	 	
              Name:
                Peter Ng

            

    

    

    The
      Shareholder: 

    

    /s/
      Mary
      Passalaqua

    Name:
      Mary Passalaqua 

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    Exhibit
      1.1 

    

    To
      the
      Securities Purchase Agreement dated as of August 20, 2008 (the “Agreement”)
      by and
      among Tia IV, Inc., Mary Passalaqua, and Ralph Porretti, Jim McAlinden and
      Peter
      Ng each of whom is a signatory thereto. 

     

    SEPARATION
      AGREEMENT AND RELEASE

    

    *
      * * * *

    

    SEPARATION
      AGREEMENT AND RELEASE
      dated as
      of August 25, 2008 (the “Agreement”) by and between Mrs. Mary Passalaqua, an
      individual currently having an office located at 7325 Oswego Road, Suite D,
      Liverpool, New York, 13090 (hereinafter, the “Executive”), and Tia IV, Inc., a
      Delaware corporation, currently having its principal place of business located
      at 7325 Oswego Road, Suite D, Liverpool, New York, 13090 (hereinafter, the
      “Company”) . Each of the Executive and the Company is, unless otherwise
      specifically identified, a “Party” and, collectively, the “Parties”). This
      Agreement is expressly for the benefit of the Parties and certain “Company
      Releasees,” each as respectively defined in Section 5 below. 

    

    R
      E C I T A L S: 

    

     WHEREAS,
      the
      Executive has served as the Company’s sole officer, director, principal and
      employee since inception; 

    

    WHEREAS,
      on
      August 25, 2008, the Executive ceased working for the Company (hereinafter,
      the
“Cessation Date”); and 

    

    WHEREAS,
      the
      Executive desires to separate from the Company, cede control and to settle
      fully
      and finally all differences, disputes and claims
      she may have against the Company and others including, but not limited to,
      those
      differences, disputes and claims based upon, arising out
      of,
      or relating to the Executive’s employment relationship with Company and the
      cessation thereof. 

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and conditions herein contained, it is
      hereby agreed by and between the Parties
      as follows: 

     

    

    1.
      Mutual
      Agreement to Terminate Relationship; Executive’s
      Resignation.
      Company
      and the Executive mutually desire to terminate Executive’s
      relationship with the Company, effective as of the Cessation Date. Further,
      and
      in connection with the termination of her relationship
      with the Company, the Executive shall resign all of her positions with the
      Company, namely her positions as a director of the Company
      and her official positions as President, Secretary and Treasurer of the Company,
      she having no other positions with the Company. Concurrently
      with the execution and delivery of this Agreement by the Parties, the Executive
      shall execute and deliver to Company a letter of resignation
      effective as of the Cessation Date (hereinafter, the “Executive’s Resignation
      Letter”). The Executive’s Resignation Letter shall be substantially
      in the form annexed hereto as Exhibit A . 

     

    2.
      Separation
      Consideration; Method of Delivery.  

    

    (a)
      The
      Company agrees to issue to the Executive, One Million Five Hundred Thousand
      (1,500,000) shares of Company solely as her separation compensation (Separation
      Shares). 

    

    (b)
      The
      Company shall deliver the Separation Shares to the Executive, at 7325 Oswego
      Road, Suite D Liverpool, New York 13090 within five (5) days of the Cessation
      Date. 

    

     3.
      No
      Filings.
      The
      Executive represents that up to and including the date of execution of this
      Agreement, she has not filed any action, claim,
      charge, or complaint against Company or any other Company Releasee identified
      in
      Section 5 below, with any local, state, or federal agency,
      self-regulatory organization ("SRO"), or court and that she will not make such
      a
      filing at any time hereafter based upon any events or omissions
      occurring prior to and up to the date of execution of this Agreement. In the
      event that any agency or court assumes jurisdiction of any
      lawsuit, claim, charge or complaint, or purports to bring any legal or
      regulatory proceedings against Company or any other Company Releasee
      identified in Section 5 below on the Executive’s behalf, she promptly will
      request that the agency, SRO, or court withdraw from or dismiss
      the lawsuit, claim, charge, or complaint with prejudice. Notwithstanding the
      foregoing provisions of this Section 3 to the contrary, the Executive
      expressly retains any and all rights that she may have: (a) to file and commence
      an action for indemnification arising under the Company’s
      certificate of incorporation or by-laws (collectively, “Indemnification Clam”);
provided,
      however,
      that
      such right shall not apply to any Indemnification Claim which is the basis
      or a
      part of a claim of the Company against the Executive under the Securities
      Purchase Agreement
      (as hereinafter defined in Section 5); (b) to file and commence an action to
      enforce issuance and delivery of the Separation Shares; and (c) to enforce
      any
      of her rights under the Securities Purchase Agreement (as hereinafter defined
      in
      Section 5) including any claims for indemnification thereunder to the extent
      in
      good faith she believes she is entitled thereto. 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

     4.
      Covenant Not to Sue.
      In
      consideration for the promises set forth in this Agreement, the Executive
      covenants that she will not file, participate
      in, or instigate the filing of any lawsuits, complaints or charges by herself
      or
      by any other person or party in any state or federal court
      or
      any proceedings before any local, state, or federal agency, or SRO, except
      as
      required by law, claiming that Company or any other Company
      Releasee identified in Section 5 below has violated any law or obligation,
      including, but not limited to, any claims that have been made
      or
      that could have been made, based upon events or omissions occurring prior to
      and
      including the effective date of this Agreement. Notwithstanding
      the foregoing provisions of this Section 4 to the contrary, the Executive
      expressly retains any and all rights that she may have: (a) to file and commence
      an action for an Indemnification Claim; provided , however , that such right
      shall not apply to any Indemnification Claim which is the basis or a part of
      a
      claim of the Company against the Executive under the Securities Purchase
      Agreement (as hereinafter defined in Section 5); (b) to sue to enforce issuance
      and delivery of the Separation Shares, and (c) to sue to enforce any of her
      rights under the Securities Purchase Agreement (as hereinafter defined in
      Section 5) including any claims for indemnification thereunder to the extent
      in
      good faith she believes she is entitled thereto. 

    

    5.
      Executive Release. 

    

    Subject
      to Company’s obligations in this Agreement or anything to the contrary stated
      herein, in consideration for the promises
      set forth in this Agreement, the Executive does hereby - for herself and for
      her
      heirs, representatives, attorneys, executors, administrators,
      successors, and assigns - release, acquit, and forever discharge Company and
      all
      of its affiliates, subsidiaries and divisions, and their respective
      stockholders, officers, directors, partners, servants, agents, employees,
      representatives, attorneys, employee welfare and retirement
      plans and the respective plan administrators and fiduciaries, past, present,
      and
      future, all persons acting under, by, through, or in concert
      with any of them, and each of them (all of whom are hereinafter referred to
      as
      the "Company Releasees"), from any and all actions, causes
      of
      action, grievances, obligations, costs, expenses, damages, losses, claims,
      liabilities, suits, debts, demands, and benefits (including attorneys'
      fees and costs actually incurred), of whatever character, in law or in equity,
      known or unknown, suspected or unsuspected, matured or
      unmatured, of any kind or nature whatsoever, based on any act, omission, event,
      occurrence, or nonoccurrence from the beginning of time to and including the
      effective date of this Agreement, including but not limited to any claims or
      causes of action arising out of or in any way relating
      to the Executive’s employment relationship with Company or any other Company
      Releasee. The Executive agrees that this release of claims
      includes, but is not limited to, claims for breach of any implied or express
      contract or covenant; claims for promissory estoppel; claims of
      entitlement to any pay (other than the Separation Consideration promised in
      Section 2); claims of wrongful denial of insurance and employee
      benefits, or any claims for wrongful termination, public policy violations,
      defamation, invasion of privacy, fraud, misrepresentation, unfair business
      practices, emotional distress or other common law or tort matters; claims of
      harassment, retaliation or discrimination under federal, state, or local law;
      claims based on any federal, state or other governmental statute, regulation
      or
      ordinance, including, without limitation, Title VII of the Civil Rights Act,
      as
      amended, the Age Discrimination in Employment Act of 1967, the Older Worker
      Benefit Protection Act, the National Labor Relations Act, the Occupational
      Safety Health Act, the Americans with Disabilities Act, the Family and Medical
      Leave Act, the Employee Retirement Income Security Act of 1974, New York State
      Wage and Hour Laws, the New York Occupational Safety and Health Laws, the New
      York Equal Pay Law, the New York Human Rights Law, the New York Civil Rights
      Act, the New York City Human Rights Act, and the New York City Administrative
      Code - Title 8. It is expressly understood by the executive that among the
      various rights and claims being waived by the Executive in this Agreement are
      those arising under the Age Discrimination in Employment Act of 1967 (29 U.S.C.
      sec. 621, et seq.), as amended. Executive’s release of Company under this
      Section 5 shall not apply to any claims of Executive under: (a) the Company’s
      certificate of incorporation or by-laws for an Indemnification Claim; provided
      ,
      however , that such right shall not apply to any Indemnification Claim which
      is
      the basis or a part of a claim of the Company against the Executive under the
      Securities Purchase Agreement (as hereinafter defined); (b) the Separation
      Shares, and (c) that certain Securities Purchase Agreement by and among the
      Executive, the Company and Ralph Porretti, Jim McAlinden and Peter Ng dated
      as
      of August 20, 2008 (hereinafter, the “Securities Purchase Agreement”) including
      any claims for indemnification thereunder to the extent in good faith she
      believes she is entitled thereto. 

    

    6.
      Mutual
      Non-Disparagement.  

    

    (a)
      The
      Executive agrees that she will not make any disparaging or defamatory
      statements, either orally or in writing (and, for the purposes of this
      Agreement, the term “writing” includes, but is not limited to electronic
      communications), to any third party concerning Company (including, but not
      limited to the Company Releasees identified in Section 5 above), concerning
      its
      or their officers, directors, employees or agents, or concerning its or their
      services, products, offerings, quantitative or other research, or methods of
      communicating such services, products or offerings, or its or their method
      of
      doing business, or employment practices. The Executive agrees that she will
      direct her immediate family members and representatives not to make any
      disparaging or defamatory statements, either orally or in writing, to any third
      party concerning Company or any other Company Releasee, concerning its or their
      officers, directors, employees or agents, or concerning its or their services,
      products, quantitative or other research, or methods of doing business. Nothing
      herein shall preclude the Executive
      from cooperating in a truthful manner with any governmental agency or
      self-regulatory agency (SRO), in an investigation or review by such agency,
      or
      testifying in a court of law or other proceeding if compelled or requested
      to
      testify as a witness in a proceeding in which Company, or any other Company
      Releasee, or Executive is a subject of the investigation, review, or proceeding.
      

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

    (b)
      Company agrees that it will direct Ralph Porretti, Jim McAlinden and Peter
      Ng
      not to make any disparaging or defamatory statements, either orally or in
      writing, to any third party concerning the Executive including, but not limited
      to, any statements related to the Executive’s performance during the Executive’s
      tenure at Company. Nothing herein shall preclude Company, its corporate
      affiliates, or their respective officers, directors, employees or agents from
      cooperating in a truthful manner with any governmental agency or self-regulatory
      agency (SRO), in an investigation or review by such agency, or testifying in
      a
      court of law or other proceeding if compelled or requested to testify as a
      witness in a proceeding in which Company, or any Company Releasee, or Executive
      is a subject of the investigation, review, or proceeding. 

    

    7.
      Knowing
      and Voluntary Agreement.
      The
      Executive understands and agrees that she: 

    

    (a)
      has
      had a reasonable time within which to consider this Agreement before executing
      it; 

    

    (b)
      has
      carefully read and fully understands all of the provisions of this Agreement;
      

    

    (c)
      is,
      through this Agreement, releasing Company and the other Company Releasees from
      any and all claims she may have against
      Company and the other Company Releasees (other than claims arising under the
      Separation Sharesand the Securities Purchase
      Agreement), as stated herein but not after this Agreement is executed by the
      Executive, including claims under the Age
      Discrimination in Employment Act of 1967; 

    

    (d)
      knowingly and voluntarily agrees to all of the terms set forth in this Agreement
      in exchange for consideration that is more valuable
      than what Executive is already entitled to; 

    

    (e)
      knowingly and voluntarily intends to be legally bound by the same; 

    

    (f)
      was
      advised, and hereby is advised in writing, to consider the terms of this
      Agreement and consult with an attorney of her respective
      choice prior to executing this Agreement; 

    

    (g)
      has
      had twenty-one (21) days to consider this Agreement before signing it (the
      “Consideration Period”), and has seven (7) days
      after signing this Agreement to revoke her signature (the “Revocation Period”).
      Revocation can be made by delivering written
      notice of revocation to: Ralph Porretti, 3571 Arthur Kill Rd., Staten Island,
      NY
      10304. For this revocation to be effective, written notice must be received
      by
      Ralph Porretti no later than the close of business on the seventh (7th) calendar
      day after the Executive signs this Agreement. If the Executive revokes this
      Agreement, it shall not be effective or enforceable and the Executive will
      not
      receive the benefits provided herein. 

    

    8.
      Executive
      Representations and Warranties.
      The
      Executive represents, warrants and covenants to the Company that: 

    

    (a)
      The
      Executive has the requisite power, authority and legal capacity to execute
      and
      deliver this Agreement, to perform all of her
      obligations hereunder and to undertake all actions required of the Executive
      hereunder; and all necessary approvals of third
      parties with respect to such matters have been given or obtained. 

    

    (b)
      This
      Agreement has been duly executed and delivered by the Executive and constitutes
      a valid and legally binding obligation of
      the
      Executive, enforceable against the Executive, in accordance with its terms,
      subject to applicable bankruptcy, insolvency,
      fraudulent transfer, reorganization, moratorium and similar laws of general
      applicability relating to or affecting creditors'
      rights generally and to general principles of equity. The entering into of
      this
      Agreement and the transactions contemplated
      hereby will not result in a violation of any of the terms or provisions of
      any
      law applicable to the Executive, or any
      agreement to which the Executive is a party or by which she is bound.

    

    (c)
      The
      Executive is acquiring the Separation Shares as principal for her own account
      for investment purposes only and not with a
      view to
      or for distributing or reselling the Separation Shares or any part thereof
      or
      interest therein. 

    

    (d)
      The
      Executive either alone or together with her representatives, has such knowledge,
      sophistication and experience in business
      and financial matters so as to be capable of evaluating and assessing the merits
      and risks of the prospective investment
      in the Separation Shares, and has so evaluated the merits and risks of such
      investment and has determined that the
      Separation Shares is suitable for investment for her . 

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

    (e)
      The
      Executive acknowledges that her acquisition of the Separation Shares is a highly
      speculative investment, involving a high
      degree of risk and the Executive is able to bear the economic risk of an
      investment in the Separation Shares; and, at the present
      time, is able to afford a complete loss of such investment. 

    

    (f)
      The
      execution, delivery, and performance of this Agreement by Executive and the
      consummation by Executive of the transactions
      contemplated hereby will not conflict with or result in a default under the
      terms of any material contract, agreement,
      obligation or commitment applicable to Executive. The execution, delivery and
      performance by the Executive of this
      Agreement and the completion of the transaction contemplated hereby do not
      and
      will not result in a violation of any law,
      regulation, order or ruling applicable to the Executive, and do not and will
      not
      constitute a breach of or default under any
      agreement to which the Executive is a party or by which she is bound.

    

    (g)
      The
      Executive understands that no securities commission, stock exchange,
      governmental agency, regulatory body or similar authority
      has made any finding or determination or expressed any opinion with respect
      to
      the merits of an investment in the Separation
      Shares. 

    

    (h)
      The
      Executive confirms that neither the Company nor any of its directors, employees,
      officers, consultants, agents or affiliates,
      has made any representations (written or oral) to the Executive regarding the
      future value of the Separation Shares. In
      making
      its investment decision with respect to the Separation Shares, the Executive
      has
      relied solely upon publicly available information relating to the Company and
      not upon any verbal or written representation made by or on behalf of the
      Company. 

    

    (i)
      The
      Executive is not and has not become aware of any advertisement in printed public
      media or on radio, television or other form
      of
      communication (including electronic display such as the Internet) with respect
      to the offering of the Separation Shares to her. 

    

    (j)
      The
      Executive understands that the sale and delivery of the Separation Shares is
      conditional upon such sale being exempt from
      the
      registration and prospectus requirements under applicable securities legislation
      or upon the issuance of such orders, consents
      or approvals as may be required to permit such sale and delivery without
      complying with such requirements. If required under applicable securities
      legislation or regulatory policy, or by any securities commission, stock
      exchange or other regulatory authority, the Executive will execute, deliver,
      file and otherwise assist the Company in filing such reports, undertakings
      and
      other documents with respect to the issue of the Separation Shares.

    

    (k)
      Except as disclosed in writing to the Company, the Executive does not act
      jointly or in concert with any other person or company
      for the purposes of acquiring the Separation Shares.

    

    (l)
      The
      investment in the Separation Shares may have tax consequences under applicable
      taxation laws, that it is the sole responsibility
      of the Executive to determine and assess such tax consequences as may apply
      to
      her particular circumstances, and
      the
      Executive has not received and is not relying on the Company for any tax advice
      whatsoever. 

    

    (m)
      The
      Executive is responsible for obtaining such legal advice as she considers
      appropriate in connection with the execution and
      delivery of this Agreement and her acquisition of the Separation Shares hereby.
      The Executive acknowledges that she has
      been
      advised that no accountant or attorney engaged by the Company is acting as
      her
      representative, accountant or attorney in connection with this Agreement and/or
      the transactions contemplated hereby. 

    

    (n)
      All
      information which the Executive has provided or is providing the Company, or
      to
      its agents or representatives concerning the Executive’s suitability to acquire
      the Separation Shares is accurate and correct as of the date of the signature
      on
      the last page of this Agreement. Such information includes, but is not limited
      to the Executive’s personal financial affairs, business position and the
      knowledge and experience of the Executive and the Executive’s advisors. The
      Company shall maintain such information regarding the Executive in strict
      confidence except as may be required to be disclosed to governmental agencies
      pursuant to requirements of applicable corporate securities and tax laws, rules
      and regulations regarding the issuance and delivery of the Separation Shares
      to
      the Executive. 

    

    (o)
      The
      Executive has been provided with copies of all material information requested
      by
      either the Executive, the Executive’s purchaser
      representative or other representing the Executive, including any information
      requested to verify any information furnished,
      and there has been direct communication between the Executive and her
      representatives on the one hand and the Executive
      and the Executive’s representatives and advisors on the other in connection with
      information regarding the acquisition of the Separation Shares under this
      Agreement. There has been made available the opportunity to ask questions of
      and
      receive answers from the Company and/or the directors, officers, employees
      or
      representatives of the Company concerning the issuance and deliver of the
      Separation Shares under this Agreement and to obtain any additional information
      (to the extent the Company possesses such information or can acquire it without
      unreasonable effort or expense) desired or necessary to verify the accuracy
      of
      the information provided. 

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

    (p)
      The
      Executive represents and warrants that the Executive is an “accredited investor”
as such term is defined in Rule 501(a) of
      Regulation D, as promulgated under the ’33 Act and, particularly, is either: (i)
      a natural person whose individual net worth, or joint net worth with her spouse,
      as of the date of this Agreement, exceeds $1,000,000; or (ii) a natural person
      who had an individual income in excess of $200,000 in each of the two most
      recent years or joint income with her spouse in excess of $300,000 in each
      of
      those years and has a reasonable expectation of reaching the same income level
      in the current year.

    

    (q)
      The
      Executive acknowledges that the Separation Shares shall bear a legend
      substantially as follows: 

    

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT
      OF
      1933 (THE “1933 ACT”) OR ANY STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN
      ACQUIRED FOR INVESTMENT
      AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED, ASSIGNED OR OTHERWISE DISPOSED
      OF
      IN THE
      ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT WITH RESPECT
      TO SUCH
      SHARES, OR WITH AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER
      STATING THAT
      SUCH
      SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS BEING MADE IN ACCORDANCE WITH
      REGULATION
      S UNDER THE SECURITIES ACT OR IS EXEMPT FROM THE REGISTRATION REQUIREMENTS
      OF
      THE 1933
      ACT
      AND ANY APPLICABLE STATE SECURITIES LAWS; AND HEDGING TRANSACTIONS INVOLVING
      THESE SECURITIES
      MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. 

    

    (r)
      The
      Executive confirms that she has been advised to consult with her own legal
      and
      financial advisors with respect to the suitability
      of the Separation Shares (and the non-transferability restrictions thereon)
      as
      an investment for the Executive and confirms
      that no representation has been made to her by or on behalf of the Company
      with
      respect thereto. 

    

    9.
      Full
      and Independent Knowledge.  The
      Parties represent that they have discussed thoroughly all aspects of this
      Agreement with their
      respective attorneys, fully understand all of the provisions of the Agreement,
      and are voluntarily entering into this Agreement. 

    

    10.
      No
      Representations. 
      The
      Parties acknowledge that, except as expressly set forth herein, no
      representations of any kind or character
      have been made to induce the execution of this Agreement. 

    

     11.
      Mutual
      Non-Admission of Liability. 
      Each of
      the Parties hereby expressly acknowledges that the execution of this Agreement
      and
      the
      mutual consideration provided hereunder are not and shall not be construed
      in
      any way as an admission of wrongdoing or liability on the
      part
      of any Party arising out of or attributable to the Executive’s relationship with
      and employment at Company or the termination of those relationships.

    

    12.
      Waiver.
      The
      failure of any Party to insist upon strict adherence to any term of this
      Agreement on any occasion shall not be considered a waiver thereof or deprive
      that party of the right thereafter to insist upon strict adherence to that
      term
      or any other term of this Agreement. 

    

     13. Miscellaneous.
      

    

    (a)
      The
      language of all parts in this Agreement shall be construed as a whole, according
      to its fair meaning, and not strictly
      for or against any Party, each Party having had a hand in its drafting;

    

    (b)
      Should any provision in this Agreement be declared or determined to be illegal
      or invalid, the validity of the remaining parts, terms, or provisions shall
      not
      be affected thereby, and the illegal or invalid part, term, or provision shall
      be deemed not to be part of this Agreement, and all remaining provisions shall
      remain valid and enforceable. 

    

    (c)
      Except as otherwise expressly provided in the Securities Purchase Agreement
      ,
      this Agreement sets forth the entire agreement between the Parties pertaining
      to
      the subject matter of this Agreement and fully supersedes any prior agreement
      or
      understanding pertaining to the subject matter hereof; 

    

    (d)
      The
      headings used herein are for reference only and shall not affect the
      construction of this Agreement. 

    

    15.
      Counterparts.
      This
      Agreement may be executed in one or more counterparts, by facsimile or original
      signature, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

    

    16.
      Notification. Notice
      to
      be given under this Agreement shall be deemed given, when received, and if
      sent
      by reputable courier (DHL,
      FedEx or UPS), as follows: 

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    If
      to the
      Company, to: 

    

    Tia
      IV
      Inc. 

    364
      Mosel
      Ave.

    Staten
      Island, NY 10304

    

    If
      to the
      Executive, to: 

    

    Mrs.
      Mary
      Passalaqua 

    7325
      Oswego Road , Suite D 

    Liverpool,
      New York, 13090 

    Fax
      No.:
      (315) 451-3964 

    

    IN
      WITNESS WHEREOF, the parties have executed and entered into this Agreement
      as of
      the day and year first-above written. 

        

    
      	
              TIA
                IV, INC. 

            
	 
	
              By:
                _/s/
                Ralph Porretti

            
	 
	
              Name:
                Ralph Porretti 

            
	
              Title:
                CEO

            
	 
	
              By:
                _/s/
                Jim McAlinden

            
	 
	
              Name:
                Jim McAlinden

            
	
              Title:
                President

            
	 
	
              By:
                _/s/
                Peter Ng

            
	 
	
              Name:
                Peter Ng

            
	
              Title:
                Secretary

            

    

    

    THE
      EXECUTIVE: 

    

    /s/
      Mary
      Passalaqua

    

    Mrs.
      Mary
      Passalaqua 

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

    

    [FORM
      OF LETTER OF RESIGNATION]

    

    Mrs.
      Mary
      Passalaqua

    7325
      Oswego Road, Suite D

    Liverpool,
      New York, 13090

    

    August
      20, 2008

    

    BY
      FEDEX

    

    Tia
      IV,
      Inc. 

    Attn:
      Ralph Porretti

    364
      Mosel
      Ave.

    Staten
      Island, NY 10304

    

    Ladies
      and Gentlemen:

    

    Effective
      as of August 25, 2008, I hereby resign my position as a director of Tia IV,
      Inc.
      and, additionally, resign all of my officer positions with Tia IV, Inc., namely,
      my positions as President, Secretary and Treasurer. 

    

    
      	
              Sincerely,
                

            
	 
	
              /s/
                Mary Passalaqua

            
	 
	
              Mary
                Passalaqua 

            

    

     

    
      
        
        

      

      
        20Unassociated Document

    

    LOAN
      AND SECURITY AGREEMENT

    

    by
      and among

    

    FEDERATED
      KAUFMANN FUND 

    

    as
      Agent for the benefit of the Lenders,

    

    FEDERATED
      KAUFMANN FUND

    

    and

    

    SAMSUNG
      C&T CORPORATION,

    

    as
      Lenders

    

    HYDROGEN,
      L.L.C.,

    

    as
      Borrower

    

    HYDROGEN
      CORPORATION

    

    as
      Guarantor

    

    Dated:
      August 22, 2008

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    LOAN
      AND SECURITY AGREEMENT

    

    LOAN
      AND SECURITY AGREEMENT, dated
      as
      of August 22, 2008, by and among HYDROGEN,
      L.L.C., an
      Ohio
      limited liability company, with its principal place of business located at
      2
      Juniper Street, Versailles, Pennsylvania 15132 (the “Borrower”),
      HYDROGEN
      CORPORATION, a
      Nevada
      corporation, with its principal place of business located at 10 East
      40th
      Street,
      Suite 3405, New York, New York 10016 (“Guarantor”
or
      “HYDRO
      Corp”),
      FEDERATED
      KAUFMANN FUND, a
      portfolio of Federated Equity Funds, a Massachusetts business trust, with
      offices located at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237, in
      its
      capacity as agent for the benefit of the Lenders (together with its successors
      and assigns, the “Agent”),
      FEDERATED
      KAUFMANN FUND, a
      portfolio of Federated Equity Funds, a Massachusetts business trust, with
      offices located at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237, in
      its
      capacity as a Lender, and SAMSUNG
      C & T CORPORATION,
      a
      corporation organized under the laws of the Republic of Korea, with offices
      at
      Samsung C&T Corporation Building, 1321-20, Seocho-2 Dong, Seocho-Gu, Seoul,
      Korea, in its capacity as a Lender (together with their respective successors
      and assigns, the “Lenders”).

    

    R
      E C I T A L S:

    

    WHEREAS,
      Borrower desires to enter into a term loan with Lenders; and

    

    WHEREAS,
      Guarantor desires to provide a certain guaranty as stipulated herein;
      and

    

    WHEREAS,
      each
      Lender is willing to provide such term loan on the terms and conditions
      hereinafter set forth; 

    

    NOW,
      THEREFORE,
      in
      consideration of the foregoing, the mutual covenants and agreements herein
      contained and other good and valuable consideration, Agent, Lenders and Borrower
      mutually covenant, warrant and agree as follows:

    

    SECTION
      1 DEFINITIONS
      AND RULES OF INTERPRETATION AND CONSTRUCTION

     

    Specific
      Terms Defined.
      The
      following terms (including both the singular and plurals thereof) shall have
      the
      following meanings unless the context indicates otherwise:

    

    1.1 “Account
      Debtor”
      or
“account
      debtor”
      shall
      have the meaning ascribed to such term in the UCC.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.2 “Accounts”
      or
“accounts” shall mean all “accounts” as defined in the UCC, and, in addition,
      any and all obligations of any kind at any time due and/or owing to Borrower,
      whether now existing or hereafter arising, and all rights of Borrower to receive
      payment or any other consideration including, without limitation, invoices,
      contract rights, accounts receivable, general intangibles, choses-in-action,
      notes, drafts, acceptances, instruments and all other debts, obligations and
      Obligations in whatever form owing to Borrower from any Person, Governmental
      Authority or any other entity, all security therefor, and all of Borrower’s
      rights to receive payments for goods sold (whether delivered, undelivered,
      in
      transit or returned), which may be represented thereby, or with respect thereto,
      including, but not limited to, all rights as an unpaid vendor (including
      stoppage in transit, replevin or reclamation), and all additional amounts due
      from any Account Debtor, together with all Proceeds and products of any and
      all
      of the foregoing.

     

    1.3 “Affiliate”
      shall
      mean, with respect to any Person, (a) any other Person that, directly or
      indirectly, controls, is controlled by, or is under common control with such
      Person or (b) any other Person who is a director or officer (i) of such Person,
      (ii) of any Subsidiary of such Person or (iii) of any Person described in clause
      (a) above. For the purposes of this definition, control of a Person shall mean
      the power (direct or indirect) to direct or cause the direction of the
      management or the policies of such Person, whether through the ownership of
      not
      less than 20% of the voting stock or equity of such person or by contract or
      otherwise.

     

    1.4 “Agent"
      means
      Federated Kaufmann, in its capacity as contractual representative of the Lenders
      pursuant to Section 13 herein, and not in its individual capacity as a Lender,
      and any successor Agent appointed pursuant to Section 13 herein. 

     

    1.5 “Agreement”
      shall
      mean this Loan and Security Agreement (including all Exhibits annexed hereto
      and
      the Borrower’s Disclosure Schedule) as originally executed or, if amended,
      modified, supplemented, renewed or extended from time to time, as so amended,
      modified, supplemented, renewed or extended.

     

    1.6 “Aggregate
      Term Loan Commitment”
means
      the aggregate of the Loan commitments of all the Lenders, which amount equals
      $2,000,000.

     

    1.7 “Balance
      Sheet” means
      the
      Borrower’s balance sheet dated as of June 30, 2008.

     

    1.8 “Borrower”
      shall
      have the meaning set forth in the introductory paragraph hereof.

     

    1.9 “Borrower’s
      Accounts”
      shall
      have the meaning set forth in Section 2.1 hereof.

     

    1.10 “Borrower’s
      Disclosure Schedule”
      means
      the disclosure schedule prepared by Borrower that is being delivered to each
      Lender concurrently herewith. 

     

    1.11 “Business
      Day”
      shall
      mean any day other than a Saturday, Sunday or any other day on which banks
      located in the State of New York are authorized or required to close under
      applicable banking laws.

     

    1.12 “Capital
      Assets”
      shall
      mean, in accordance with GAAP, fixed assets, both tangible (such as land,
      buildings, fixtures, machinery and equipment) and intangible (such as patents,
      copyrights, trademarks, franchises and goodwill).

     

    1.13 “Change
      of Control”
      shall
      have the meaning as set forth in Section 9.1 hereof. 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    1.14 “Chattel
      Paper”
      shall
      have the meaning ascribed to such term in the UCC.

     

    1.15 “Closing
      Date” shall
      mean the date of this Agreement.

     

    1.16 “Closing
      Date Warrants”
means
      the five (5) year warrants to purchase 400,000 shares of Common Stock of HYDRO
      Corp, issued to each of the Lenders on the Closing Date having a per share
      exercise price equal
      to
      the volume weighted average price per share for the period starting on the
      25th
      trading day prior to the respective vesting date and ending on the 10th trading
      day prior to such vesting date, in the form annexed hereto as Exhibit
      A.

     

    1.17 “Collateral”
      shall
      have the meaning as set forth in Section 5.1 hereof.

     

    1.18 “Commercial
      Tort Claims”
shall
      have the meaning ascribed to such term in the UCC.

     

    1.19 “Common
      Stock”
      shall
      mean the Common Stock, par value $0.001 per share, of HYDRO Corp.

     

    1.20 “Default
      Interest Rate”
shall
      have the meaning set forth in Section 3.1 hereof.

     

    1.21 “Default
      Warrants”
means
      the five (5) year warrants to purchase 1,000,000 shares of Common Stock of
      HYDRO
      Corp, issued to each of the Lenders having a per share exercise price equal
      to
      $0.01 per share, issuable solely after the occurrence and existence of an Event
      of Default that remains uncured for a period of fifteen (15) days, in
      the
      form annexed hereto as Exhibit
      B.

     

    1.22 “Deposit
      Accounts”
      shall
      have the meaning ascribed to such term in the UCC. Notwithstanding the
      foregoing, said Deposit Accounts shall include the Borrower’s
      Account.

     

    1.23 “Document”
      or
“document”
      shall
      have the meaning ascribed to such term in the UCC.

     

    1.24 “Environment”
      means
      all air, surface water, groundwater or land, including, without limitation,
      land
      surface or subsurface, including, without limitation, all fish, wildlife, biota
      and all other natural resources.

     

    1.25 “Environmental
      Law”
      or
“Environmental
      Laws”
      shall
      mean all federal, state and local laws, statutes, ordinances and regulations
      now
      or hereafter in effect, and in each case as amended or supplemented from time
      to
      time, and any judicial or administrative interpretation thereof, including
      any
      judicial or administrative order, consent decree or judgment relating to the
      regulation and protection of human health, safety, the environment and natural
      resources (including ambient air, surface water, groundwater, wetlands, land
      surface or subsurface strata, wildlife, aquatic species and vegetation).

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    1.26 “Environmental
      Obligations and Costs”
      shall
      mean, as to any Person, all Obligations, obligations, responsibilities, remedial
      actions, losses, damages, punitive damages, consequential damages, treble
      damages, costs and expenses (including all fees, disbursements and expenses
      of
      counsel, experts and consultants and costs of investigation and feasibility
      studies), fines, penalties, sanctions and interest incurred as a result of
      any
      claim or demand by any other Person, whether based in contract, tort, implied
      or
      express warranty, strict liability, criminal or civil statute, including any
      Environmental Law, permit, order or agreement with any Governmental Authority
      or
      other Person, and which arise from any environmental, health or safety
      conditions, or a Release or conditions that are reasonably likely to result
      in a
      Release, and result from the past, present or future operations of such Person
      or any of its Affiliates.

     

    1.27 “Environmental
      Lien”
      shall
      mean any Lien in favor of any Governmental Authority for Environmental
      Obligations and Costs.

     

    1.28 “ERISA”
      shall
      mean the Employee Retirement Income Security Act of 1974, as the same now exists
      or may from time to time hereafter be amended, modified, recodified or
      supplemented, together with all rules, regulations and interpretations
      thereunder or related thereto.

     

    1.29 “Equipment”
      shall
      mean “equipment”, as such term is defined in the UCC, now owned or hereafter
      acquired by Borrower, wherever located, and shall include, without limitation,
      all equipment, machinery, furniture, Fixtures, computer equipment, telephone
      equipment, molds, tools, dies, partitions, tooling, transportation equipment,
      all other tangible assets used in connection with the manufacture, sale or
      lease
      of goods or rendition of services, and Borrower’s interests in any leased
      equipment, and all repairs, modifications, alterations, additions, controls
      and
      operating accessories thereof or thereto, and all substitutions and replacements
      therefor.

     

    1.30 “Equity
      Interests”
      shall
      mean, with respect to any Person, any and all shares, rights to purchase,
      options, warrants, general, limited or limited liability partnership interests,
      membership interests, units, participations or other equivalents of or interest
      in (regardless of how designated) equity of such Person, whether voting or
      nonvoting, including common stock, preferred stock, convertible securities
      or
      any other “equity security” (as such term is defined in Rule 3a11-1 of the
      General Rules and Regulations promulgated by the SEC (or any successor thereto)
      under the 1934 Act).

     

    1.31 “Event
      of Default”
      shall
      mean the occurrence or existence of any event or condition described in Section
      10 of this Agreement.

     

    1.32 “Expenses”
      shall
      have the meaning set forth in Section 13.6 hereof.

     

    1.33 “Financial
      Statements”
      shall
      have the meaning as set forth in Section 7.9 hereof.

     

    1.34 “Financing
      Statements”
      shall
      mean the Uniform Commercial Code UCC-1 Financing Statements to be filed with
      applicable Governmental Authorities of each State or Commonwealth or political
      subdivisions thereof pursuant to which Agent (for the benefit of the Lenders)
      shall perfect its security interest in the Collateral.

     

    1.35 “Fiscal
      Year”
      shall
      mean that twelve (12) month period commencing on January 1 and ending on
      December 31.

     

    
      1.36 “Fixtures”
        shall
        have the meaning ascribed to such term in the UCC.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    1.37 “GAAP”
      means
      generally accepted accounting principles in effect in the United States of
      America at the time of any determination, and which are applied on a consistent
      basis. All accounting terms used in this Agreement which are not expressly
      defined in this Agreement shall have the meanings given to those terms by GAAP,
      unless the context of this Agreement otherwise requires.

     

    1.38 “General
      Intangibles”
      shall
      have the meaning ascribed to such term in the UCC.

     

    1.39 “Goods”
      shall
      have the meaning ascribed to such term in the UCC.

     

    1.40 “Governmental
      Authority”
      or
“Governmental
      Authorities”
      shall
      mean any federal, state, county or municipal governmental agency, board,
      commission, officer, official or entity exercising executive, legislative,
      judicial, regulatory or administrative functions of or pertaining to
      government.

     

    1.41 “Guaranty”
      shall
      mean that certain General Continuing Guaranty of even date herewith made by
      the
      Guarantor in favor of the Agent (for the benefit of the Lenders) as the same
      may
      be amended, restated, supplemented or otherwise modified from time to
      time.

     

    1.42 “Indebtedness”
      shall
      mean, with respect to any Person, all of the obligations of such Person which,
      in accordance with GAAP, should be classified upon such Person’s balance sheet
      as Obligations, or to which reference should be made by footnotes thereto,
      including without limitation, with respect to Borrower, in any event and whether
      or not so classified:

     

    (a) all
      debt
      and similar monetary obligations of Borrower, whether direct or
      indirect;

    

    (b) all
      obligations of Borrower arising or incurred under or in respect of any
      guaranties (whether direct or indirect) by Borrower of the indebtedness,
      Obligations or obligations of any other Person; and

    

    (c) all
      obligations of Borrower arising or incurred under or in respect of any Lien
      upon
      or in any property owned by such Person, even though such Person has not assumed
      or become liable for the payment of such obligations.

    

    1.43 “Intellectual
      Property”
      shall
      mean property constituting under any applicable law a registered patent, patent
      application, copyright, trademark, service mark, trade name, mask work, trade
      secret or license or other right to use any of the foregoing

     

    1.44 “Interest
      Rate”
shall
      have the meaning set forth in Section 3.1 hereof.

     

    1.45 “Instruments”
      shall
      have the meaning ascribed to such term in the UCC

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    1.46 “Inventory”
      shall
      mean any “inventory,” as such term is defined in the UCC, now owned or hereafter
      acquired by Borrower or Guarantor, wherever located, and, in any event, shall
      include, without limitation, all raw materials, work-in-process, finished and
      semi-finished Inventory including, without limitation, all materials, parts,
      components and supplies relating to the manufacture or assembly thereof,
      packaging and shipping supplies relating thereto, and all other inventory,
      merchandise, goods and other personal property now or hereafter owned by
      Borrower or Guarantor, which are held for sale, exchange or lease or are
      furnished or are to be furnished under a contract of service or an exchange
      arrangement or which constitute raw materials, work-in-process or materials
      used
      or consumed or to be used or consumed in Borrower’s or Guarantor’s business, or
      the processing, packaging, delivery or shipping of the same, and all finished
      goods and the products of the foregoing, whatever form and wherever located;
      and
      all names or marks affixed to or to be affixed thereto for purposes of selling
      same by the seller, manufacturer, lessor or licensor thereof and all right,
      title and interest of Borrower or Guarantor therein and thereto.

     

    1.47 “Investment
      Property”
      shall
      have the meaning ascribed to such term in the UCC.

     

    1.48 “Lender
      Obligations”
      shall
      have the meaning set forth in Section 13.6 hereof.

     

    1.49 “Lenders”
      shall
      have the meaning set forth in the introductory paragraph hereof.

     

    1.50 “Letter-of-Credit
      Rights”
      means
“letter-of-credit rights” as such term is defined in the UCC, including rights
      to payment or performance under a letter of credit, whether or not the
      beneficiary thereof has demanded or is entitled to demand payment or
      performance.

     

    1.51 “Lien”
      or
“lien”
      shall
      mean any mortgage, deed of trust, pledge, security interest, hypothecation,
      assignment, lien (statutory or other), charge or other encumbrance of any kind
      or nature whatsoever (including, without limitation, pursuant to any conditional
      sale or other title retention agreement, any financing lease having
      substantially the same economic effect as any of the foregoing, and the filing
      of any financing statement under the UCC or comparable law of any jurisdiction
      to evidence any of the foregoing) on personal or real property or
      fixtures.

     

    1.52 “Loan” shall
      mean the original principal amount as set forth in each Term Loan
      Note.

     

    1.53 “Loan
      Documents”
      shall
      mean this Agreement, the Guaranty and the Disclosure Schedules, and any and
      all
      other agreements, notes, documents, mortgages, financing statements, guaranties,
      intercreditor agreements, subordination agreements, certificates and instruments
      executed and/or delivered by Borrower or Guarantor or any other Person to Agent
      or the Lenders pursuant to and in connection with the Loan and this Agreement,
      including, without limitation, the Term Loan Notes, the Closing Date Warrants,
      the Default Warrants, the Membership Interest Pledge Agreement, and all other
      documents entered into by the parties in connection with the transactions
      contemplated hereby.

     

    1.54 “Losses”
      shall
      have the meaning set forth in Section 13.6 hereof.

     

    1.55 “Material
      Adverse Effect”
      means a
      material adverse effect on (a) the business, assets, Obligations, financial
      condition, or results of operations of Borrower, (b) the ability of a
      Borrower or Guarantor to pay when due or perform its obligations under any
      Loan
      Document to which it is a party in accordance with its respective terms,
      (c) the value of the Collateral or the priority of the Lender’s Lien
      therein, (d) the validity or enforceability of any of the Loan Documents,
      (e) the rights and remedies of Lender under any of such Loan Documents. All
      determinations of materiality shall be made by the Lender in its reasonable
      judgment unless expressly provided otherwise. 

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    1.56 “Material
      Contract”
      means
      any contract or other arrangement (other than Loan Documents), whether written
      or oral, to which Borrower or Guarantor is a party as to which the breach,
      nonperformance, cancellation or failure to renew by any party thereto could
      have
      a Material Adverse Effect.

     

    1.57 “Maturity
      Date”
      shall
      mean December 15, 2008; provided that if on or before December 15, 2008,
      Borrower has executed a definitive agreement with a third-party to consummate
      a
      transaction with either of the Borrower for an amount that will result in full
      repayment of the Loan, and such transaction requires shareholder approval as
      a
      closing condition, then said maturity date shall be extended until the earlier
      of (i) February 1, 2009 and (ii) ten (10) days from the date on which the
      transaction was put to a vote of shareholders of HYDRO Corp at a duly called
      meeting of such shareholders.

     

    1.58 “Membership
      Interest Pledge Agreement”
shall
      mean the Membership Interest Pledge Agreement, of even date herewith, between
      HYDRO Corp. and Agent for the benefit of the Lenders pursuant to which HYDRO
      Corp has pledged 100% of the membership interests of the Borrower to Agent
      for
      the benefit of the Lenders to secure the Obligations.

     

    1.59 “Minimum
      Price”
shall
      have the meaning as set forth in Section 2.1(b) hererof. 

     

    1.60 “1934
      Act” shall
      mean the Securities Exchange Act of 1934, as amended.

     

    1.61 “Obligations”
      shall
      mean all obligations, liabilities and indebtedness of every kind, nature and
      description owing by Borrower to Agent and the Lenders pursuant to the Loan
      Documents, including, without limitation, principal, interest, repurchase
      obligations, charges, fees, reimbursements, costs and expenses, however
      evidenced, whether as principal, surety, endorser, guarantor or otherwise,
      whether now existing or hereafter arising, whether arising before, during or
      after the Term (solely to the extent not otherwise satisfied by the Borrower)
      whether direct or indirect, absolute or contingent, joint or several, due or
      not
      due, primary or secondary, liquidated or unliquidated, secured or
      unsecured.

     

    1.62 “Payment
      Intangibles”
shall
      have the meaning ascribed to such term in the UCC.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    1.63 “Permitted
      Encumbrances”
      shall
      mean the following: (a)
      Liens
      granted to Agent for the benefit of the Lenders; (b) Liens granted to any other
      secured lender that are second in priority to the first-priority Liens of the
      Agent as provided in a subordination agreement reasonably satisfactory to the
      Lender, (c) purchase money security interests in favor of equipment vendors
      upon any Capital Assets hereafter acquired (including, without limitation,
      capitalized or finance leases); provided, that,
      (i)
      no such
      purchase money security interest or other Lien (or capitalized or finance lease,
      as the case may be) with respect to specific future Capital Assets shall extend
      to or cover any other property, other than the specific Capital Assets so
      acquired, and the proceeds thereof, (ii)
      such
      mortgage, Lien or security interest secures only the cost or obligation to
      pay
      the purchase price of such specific Capital Assets only (or the obligations
      under the capitalized or finance lease), and (iii)
      the
      principal amount secured thereby shall not exceed one hundred (100%) percent
      of
      the lesser of the cost or the fair market value (at the time of the acquisition
      of the Capital Assets) of the Capital Assets so acquired, and (iv) the total
      indebtedness secured by all such purchase money security interests granted
      on or
      after the Closing Date shall not exceed $25,000 in the aggregate at any time;
      (d) Liens of carriers, warehousemen, artisans, bailees, mechanics and
      materialmen incurred in the ordinary course of business securing sums not
      overdue; (e) Liens incurred in the ordinary course of business in connection
      with worker’s compensation, unemployment insurance or other forms of
      governmental insurance or benefits, relating to employees, securing sums (i)
      not
      overdue or (ii) being diligently contested in good faith provided that adequate
      reserves with respect thereto are maintained on the books of Borrower in
      conformity with GAAP; (f) Liens for taxes (i) not yet due or (ii) being
      diligently contested in good faith by appropriate proceedings, provided that
      adequate reserves with respect thereto are maintained on the books of Borrower
      in conformity with GAAP, and which have no effect on the priority of Liens
      in
      favor of Agent for the benefit of the Lenders or the value of the assets in
      which Agent has a Lien; and (g) such other Liens as are set forth on
Exhibit
      1.63
      annexed
      hereto and made a part hereof. 

     

    1.64 “Person”
      or
“person”
      shall
      mean, as applicable, any individual, sole proprietorship, partnership,
      corporation, limited liability company, limited liability partnership, business
      trust, unincorporated association, joint stock corporation, trust, joint venture
      or other entity or any government or any agency or instrumentality or political
      subdivision thereof.

     

    1.65 “Proceeding”
      means
      any insolvency, bankruptcy, receivership, custodianship, liquidation,
      reorganization, assignment for the benefit of creditors, or other proceeding
      for
      the liquidation, dissolution or other winding up of Borrower or the Collateral,
      whether voluntary or involuntary. 

     

    1.66 “Proceeds”
      shall
      have the meaning ascribed to such term in the UCC and shall also include, but
      not be limited to, (a) any and all proceeds of any and all insurance policies
      (including, without limitation, life insurance, casualty insurance, business
      interruption insurance and credit insurance), indemnity, warranty or guaranty
      payable to Borrower from time to time with respect to any of the Collateral
      or
      otherwise, (b) any and all payments (in any form whatsoever) made or due and
      payable to Borrower from time to time in connection with any requisition,
      confiscation, condemnation, seizure or forfeiture of all or any part of the
      Collateral by any governmental body, authority, bureau or agency or any other
      Person (whether or not acting under color of Governmental Authority) and (c)
      any
      and all other amounts from time to time paid or payable under or in connection
      with any of the Collateral.

     

    1.67 “Promissory
      Note”
shall
      have the meaning ascribed to such term in the UCC.

     

    1.68 “Release”
      means
      any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
      injecting, escaping, leaching, dumping, or disposing of a hazardous substance
      into the environment.

     

    1.69 “Required
      Lenders”
means,
      Lenders in the aggregate having at least 50% of the Aggregate Loan
      Commitment.
      

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    1.70 “Satisfied”
      means
      with respect to the Senior Debt that all of the Senior Debt shall have been
      paid
      in full in cash and all financing arrangements and accommodations among
      Borrower, Agent and the Senior Lender shall have been terminated and the Senior
      Lender and Agent, as applicable, have no obligations to make any loans,
      financial accommodations or advance any funds which would constitute Senior
      Debt
      to Borrower.

     

    1.71 “SEC” shall
      mean the United States Securities and Exchange Commission.

     

    1.72 “SEC
      Reports”
      shall
      mean HYDRO Corp’s (1) Annual Report on Form 10-K for the year ended December 31,
      2007, and (2) all other periodic and other reports filed by HYDRO Corp with
      the
      SEC pursuant to the 1934 Act subsequent to December 31, 2007, and prior to
      the
      date hereof, in each case as filed with the SEC and including the information
      and documents (other than exhibits) incorporated therein by
      reference.

     

    1.73 “Securities”
shall
      have the meaning ascribed to such term in the UCC.

     

    1.74 “Senior
      Debt”
      shall
      have the meaning set forth in Section 13.12 hereof.

     

    1.75 “Senior
      Lien”
      shall
      have the meaning set forth in Section 13.12 hereof.

     

    1.76 “Senior
      Lender”
      shall
      have the meaning set forth in Section 13.12 hereof.

     

    1.77 “Software”
      shall
      have the meaning ascribed
      to
      such term in the UCC. 

     

    1.78 “Subordinated
      Collection Action”
      means
      any judicial proceeding or other action taken or initiated by the Subordinated
      Lender against the Borrower, Guarantor, Agent or any Collateral to collect
      the
      Subordinated Lender Debt, to foreclose the Subordinated Liens or otherwise
      to
      enforce the rights or remedies of the Subordinated Lender under the this
      Agreement or any of the other Loan Documents or applicable law with respect
      to
      the Subordinated Lender Debt.

     

    1.79 “Subordinated
      Debt”
      shall
      mean, at any particular time, all Indebtedness of Borrower which is not
      expressly by its terms pari passu or senior, in right of payment to the prior
      payment in full
      of
      all of the Obligations. 

     

    1.80 “Subordinated
      Lien”
      shall
      have the meaning set forth in Section 13.12 hereof.

     

    1.81 “Subordinated
      Lender”
      shall
      have the meaning set forth in Section 13.12 hereof.

     

    1.82 “Subordinated
      Lender Debt”
      shall
      have the meaning set forth in Section 13.12 hereof.

     

    1.83 “Subordination
      Event”
      shall
      have the meaning set forth in Section 13.12 hereof.

     

    1.84 “Subordination
      Event Date”
      shall
      have the meaning set forth in Section 13.12 hereof.

    1.85 “Subordination
      Notice”
      shall
      have the meaning set forth in Section 13.12 hereof.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    1.86 “Subsidiary”
      shall
      mean, as to any Person, a corporation, limited liability company or other entity
      with respect to which more than fifty (50%) percent of the outstanding Equity
      Interests of each class having voting power is at the time owned by such Person
      or by one or more Subsidiaries of such Person or by such Person.

     

    1.87 “Tangible
      Chattel Paper”
shall
      have the meaning ascribed to such term in the UCC.

     

    1.88 “Term”
      shall
      have the meaning set forth in Section 4.1.

     

    1.89 “Term
      Loan Commitment”
      means,
      the obligation of each Lender to make the Loan in the principal amount of One
      Million Dollars
      ($1,000,000).

     

    1.90 “Term
      Loan Note”
      shall
      have the meaning
      set
      forth in Section 2.1(a).

     

    1.91 “UCC”
      shall
      mean the Uniform Commercial Code as presently enacted in the
      State
      of New York or any successor legislation thereto), and as the same may be
      amended from time to time, and the state counterparts thereof as may be enacted
      in such states or jurisdictions where any of the Collateral is located or
      held.

     

    1.92 “Rules
      of Interpretation and Construction.
      In this
      Agreement unless the context otherwise requires:

     

    (a) All
      terms
      used herein which are defined in the UCC shall have the meanings given therein
      unless otherwise defined in this Agreement;

     

    (b) Sections
      mentioned by number only are the respective Sections of this Agreement as so
      numbered;

     

    (c) Words
      importing a particular gender shall mean and include the other gender and words
      importing the singular number mean and include the plural number and vice
      versa;

     

    (d) Words
      importing persons shall mean and include firms, associations, partnerships
      (including limited partnerships), societies, trusts, corporations, limited
      liability companies or other legal entities, including public or governmental
      bodies, as well as natural persons;

     

    (e) Each
      reference in this Agreement to a particular person shall be deemed to include
      a
      reference to such person's successors and permitted assigns;

     

    (f) Any
      headings preceding the texts of any Section of this Agreement, and any table
      of
      contents or marginal notes appended to copies hereof are intended, solely for
      convenience of reference and shall not constitute a part of this Agreement,
      nor
      shall they affect its meaning, construction or effect;

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (g) If
      any
      clause, provision or section of this Agreement shall be ruled invalid or
      unenforceable by any court of competent jurisdiction, such holding shall not
      invalidate or render unenforceable any of the remaining provisions
      thereof;

     

    (h) The
      terms
“herein”, “hereunder”, “hereby”, “hereto”, and any similar terms as used in this
      Agreement refer to this Agreement; the term “heretofore” means before the date
      of execution of this Agreement; and the term “hereafter” shall mean after the
      date of execution of this Agreement;

     

    (i) If
      any
      clause, provision or section of this Agreement shall be determined to be
      apparently contrary to or conflicting with any other clause, provision or
      section of this Agreement, then the clause, provision or section containing
      the
      more specific provisions shall control and govern with respect to such apparent
      conflict;

     

    (j) Unless
      otherwise specified, (i)
      all
      accounting terms used herein or in any Loan Document shall be interpreted in
      accordance with GAAP, (ii)
      all
      accounting determinations and computations hereunder or thereunder shall be
      made
      in accordance with GAAP and (iii)
      all
      financial statements required to be delivered hereunder or thereunder shall
      be
      prepared in accordance with GAAP; 

     

    (k) An
      Event
      of Default that occurs shall exist or continue or be continuing unless such
      Event of Default is waived by Agent and the Lenders in accordance with the
      terms
      of this Agreement; and

     

    (l) The
      word
“and” when used from time to time herein shall mean “or” or “and/or” if such
      meaning is expansive of the rights or interests of Agent and Lenders in the
      given context.

     

    SECTION
      2 LOAN

     

    2.1 Loan.
      Upon the
      terms and provisions and subject to the conditions contained in this Agreement,
      on the date hereof, each Lender is willing to extend in one (1) advance term
      loans (collectively, the “Loan”)
      to the
      Borrower in an aggregate principal amount equal to each Term Loan Commitment,
      which aggregate amount equals the Aggregate Term Loan Commitment. On the Closing
      Date, each Lender shall provide to the Borrower 50% of its respective Term
      Loan
      Commitment. The remaining 50% of such Term Loan Commitment shall be deposited
      into an account in the name of the Borrower and Agent, for the benefit of the
      Lenders (the “Borrower’s
      Account”).
      Upon
      the satisfaction of the conditions in this Section 2.1(a) and Section 2.1(b)
      and
      upon written authorization or instruction of the Agent to release the amount
      in
      the Borrower’s Account, the amount in the Borrower’s Account shall be released
      to the Borrower. The Agent agrees that upon satisfaction of the conditions
      in
      this Section 2.1(a) and Section 2.1(b), it shall take all necessary action,
      including, without limitation, delivering the aforementioned signed
      authorization or instruction, to release the amount in the Borrower’s Account to
      the Borrower.

     

    (a)
      Each
      of the Lenders has been notified by the Borrower that the Borrower’s
      demonstration facility at ASHTA Chemicals has been  successfully
      started up to 10 amps and 5 psig, has completed acid addition, and has
      achieved stable fuel cell segment voltages sufficient to initiate increased
      power level operation; and 

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (b)
      (1)
      The Agent has received a letter from Triax Capital Advisors or another financial
      advisor to the Borrower indicating that one or more Persons has indicated a
      willingness to close an equity or loan transaction on or prior to December
      15,
      2008, which will allow the Loan to be repaid in full on or prior to the Maturity
      Date; or (2) the Agent has received a letter from Samsung C&T Corporation
      indicating Samsung C&T Corporation’s willingness to close an equity
      transaction with the Borrower or Guarantor on or prior to December 15, 2008
      and
      stating the cash purchase price it is willing to pay in connection with such
      transaction in an amount equal to or greater than the minimum cash purchase
      price mutually agreed upon by Samsung C&T Corporation and Federated Kaufmann
      Fund as an acceptable minimum price (the “Minimum Price”). The Parties
      hereto shall keep the Minimum Price as set forth in any such letter from Samsung
      C&T Corporation as confidential and shall not disclose it to any person not
      a party hereto without the prior written consent of the other parties to this
      Agreement.  Any such letter from Samsung C&T Corporation shall not (i)
      be a binding commitment on Samsung C&T Corporation to consummate any equity
      transaction with the Borrower or Guarantor, (ii) be a binding commitment on
      Samsung C&T Corporation to pay a cash purchase price equal to or greater
      than the Minimum Price in connection with any equity transaction it may
      consummate with the Borrower, and (iii) cause Samsung C&T Corporation to
      incur any liability to the Borrower, the Guarantor, Federated Kaufmann or any
      other Persons unless liability arises as a direct result of gross negligence
      or
      willful misconduct of Samsung C&T Corporation as determined in a final
      non-appealable judgment by a court of competent jurisdiction

     

    (c)
      If
      the Borrower fails to satisfy the criteria for disbursement as
      provided in Sections 2.1(a) and (b) above from
      the
      Borrower’s Account on or prior to September 30, 2008, then the Agent and
      Borrower shall promptly take all necessary action, including delivering signed
      authorizations or instructions, to return the Loan proceeds in the Borrower’s
      Account to the Lenders without payment of the Prepayment Fee. 

     

    (d)
      The
      obligation of Borrower to repay the Loan shall be evidenced by separate notes
      (collectively, the “Term
      Loan Notes”)
      dated
      the date hereof, with appropriate insertions, dated the Closing Date, payable
      to
      the order of each Lender in the principal amount of each Lender’s Term Loan
      Commitment. In case of any discrepancy between this Agreement and the Term
      Loan
      Notes, this Agreement shall govern. 

     

    2.2 Use
      of Proceeds. Borrower
      shall use the proceeds of the Loan for working capital needs and general
      corporate purposes.

     

    2.3 Repayment.
      The Loan
      and all accrued and unpaid interest owed to the Lenders hereunder shall be
      due
      and payable on the Maturity Date. 

     

    2.4 Subrogation.
       (a) Borrower
      expressly waives any and all rights of subrogation, reimbursement, indemnity,
      exoneration, contribution or any other claim which Borrower may now or hereafter
      have against the Guarantor or against any other Person directly or contingently
      liable for the Obligations until all Obligations have been indefeasibly paid
      in
      full and this Agreement has been irrevocably terminated.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (c) Borrower
      represents and warrants to Lenders that (i) Borrower and Guarantor have one
      or
      more common shareholders, members, directors, managers and/or officers, as
      the
      case may be, (ii) the businesses and corporate activities of Borrower and
      Guarantor are closely related to, and substantially benefit, the business and
      corporate activities of the consolidated group of which Borrower and Guarantor
      are members, and (iii) Borrower and Guarantor will receive a substantial
      economic benefit from entering into Loan Documents and will receive a
      substantial economic benefit from the Loan hereunder, in each case, whether
      or
      not such amount is used directly by Borrower.

    

    SECTION
      3 INTEREST,
      FEES AND CHARGES

     

    3.1 Interest.

     

    (a) Interest
      on the unpaid principal balance of the Loan shall be computed on the basis
      of
      the actual number of days elapsed and a year of 360 days, shall accrue at a
      rate
      equal to twelve percent (12%) per annum (the “Interest
      Rate”)
      and
      shall be payable in arrears on October 15, 2008 and on the Maturity Date, or
      together with any prepayment of the Loan.

    

    (b) Following
      and during the continuation of an Event of Default and as elected by the Lenders
      as evidenced by written notice to the Borrower, interest on the unpaid principal
      balance of the Loan (from the date of such notice until such Event of Default
      has been cured or waived by the Lenders) shall accrue at a rate equal to
      eighteen percent (18%) per annum (the “Default
      Interest Rate”).

    

    3.2 Fees
      and Expenses.
      Borrower
      shall pay, on Agent’s and each Lender's demand, all reasonable out-of-pocket
      costs, reasonable out-of-pocket expenses, filing fees and taxes payable in
      connection with the administration, collection, liquidation, defense and
      enforcement of the Loan Documents, Agent’s rights in the Collateral, and all
      other existing and future agreements or documents contemplated herein or related
      hereto, including any amendments, waivers, supplements or consents which may
      now
      or hereafter be made or entered into in respect hereof, or in any way involving
      claims or defenses asserted by Agent on behalf of the Lenders or claims or
      defenses against Agent or any Lender asserted by Borrower or any third party
      directly or indirectly arising out of or related to the relationship among
      Borrower, Agent and Lenders, including, but not limited to the following,
      whether incurred before, during or after the Term (solely to the extent any
      Obligations remain unsatisfied by Borrower) or after the commencement of any
      case with respect to Borrower under the United States Bankruptcy Code or any
      similar or successor statute: (a)
      all
      out-of-pocket costs and expenses of filing or recording (including UCC Financing
      Statement filing fees); and (b) all fees relating to the wire transfer of loan
      proceeds and other funds and fees for returned checks. In addition to the
      foregoing, if Samsung C&T Corporation submits an offer to HYDRO Corp to
      consummate an equity transaction with HYDRO Corp at a price no less than the
      Minimum Price and such offer by Samsung C&T Corporation is not accepted by
      HYDRO Corp or, if accepted, Samsung C&T Corporation does not consummate any
      such equity transaction with one or more of the Borrower through no fault of
      Samsung C&T Corporation, Samsung C&T Corporation shall be reimbursed by
      the Borrower for actual and reasonable expenses incurred by Samsung C&T
      Corporation in connection with conducting its due diligence review in connection
      with its consideration of such equity transaction involving the Borrower in
      an
      amount not to exceed $100,000. If any fees, costs or charges payable to Lenders
      hereunder are not paid when due (and after reasonable prior notice to the
      Borrower), such amounts shall accrue interest at the Default Interest Rate
      from
      the date when such amounts were due and ending on the date when such amounts
      are
      paid to Lenders. 

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    3.3 Savings
      Clause.
      It is
      intended that the Interest Rate and the Default Interest Rate shall never exceed
      the maximum rate, if any, which may be legally charged in the State of New
      York
      for loans made to corporations (the “Maximum
      Rate”).
      If
      the provisions for interest contained in the Term Loan Notes would result in
      a
      rate higher than the Maximum Rate, the interest shall nevertheless be limited
      to
      the Maximum Rate and any amounts which may be paid toward interest in excess
      of
      the Maximum Rate shall be applied to the reduction of principal, or, at the
      option of Lenders, returned to the Borrower.

     

    SECTION
      4 TERM.

     

    4.1 Term.
      This
      Agreement shall continue until all Obligations shall have been indefeasibly
      paid
      in full (the “Term”).
      

     

    4.2 Early
      Termination. 

    

    (a) Agent
      (at
      the direction of the Required Lenders) shall have the right to terminate this
      Agreement at any time upon or after the occurrence of an Event of
      Default.

    

    (b) Except
      as
      set forth in Section 4.2(c) hereof, the Loan shall be prepayable by Borrower
      without premium or penalty. 

    

    (c) Borrower
      may prepay the remaining outstanding Loan without premium or penalty,
provided,
      however,
      that,
      (i)
      such prepayment is no less than the amount of the remaining outstanding
      principal sum of the Term Loan Note, and (ii) as part of such prepayment,
      Borrower pay Lenders all other amounts due to Lenders pursuant to the Loan
      Documents, and (iii) in the event Borrower make such prepayment on or before
      the
      Maturity Date, Borrower shall also pay Lenders an amount equal to two and one
      half percent (2.5%) times the amount of the Loan prepaid (the “Prepayment
      Fee”).
      The
      Prepayment Fee is intended to compensate such Lender for committing and
      deploying funds for Borrower’s loan pursuant to the Agreement and for such
      Lender’s loss of investment of such funds in connection with such early
      termination, and is not intended as a penalty. 

    

    SECTION
      5 COLLATERAL.

     

    5.1 Security
      Interests in Borrower’s and Guarantor’s Assets.
      As
      collateral security for the payment and performance of the Obligations, Borrower
      and the Guarantor hereby grant and convey to Agent for the benefit of the
      Lenders a first priority continuing security interest in and Lien upon all
      now
      owned and hereafter acquired property and assets of Borrower and the Guarantor
      and the Proceeds and products thereof (which property, assets and Proceeds,
      together with all other collateral security for the Obligations now or hereafter
      granted to or otherwise acquired by Lenders, are referred to herein collectively
      as the “Collateral”),
      including, without limitation, all property of Borrower and/or Guarantor now
      or
      hereafter held or possessed by Lenders, and including the
      following:

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (a) Accounts;

     

    (b) Chattel
      Paper;

     

    (c) Commercial
      Tort Claims;

     

    (d) Deposit
      Accounts;

     

    (e) Documents;

     

    (f) Electronic
      Chattel Paper;

     

    (g) Equipment;

     

    (h) Fixtures;

     

    (i) General
      Intangibles;

     

    (j) Goods;

     

    (k) Instruments;

     

    (l) Inventory;

     

    (m) Investment
      Property;

     

    (n) Letter-of-Credit
      Rights;

     

    (o) Payment
      Intangibles;

     

    (p) Promissory
      Notes;

     

    (q) Software;

     

    (r) Tangible
      Chattel Paper; 

     

    (s) Securities
      (whether certificated or uncertificated), including, without limitation, the
      membership interests in Borrower;

     

    (t) Warehouse
      receipts; 

     

    (u) Cash
      monies;

     

    (v) Tax
      and
      duty refunds;

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (w) Patents,
      patent applications, trademarks, trademark applications, tradenames and
      tradestyles, copyrights, copyright applications, trade rights (whether or not
      registered), discoveries, improvements, processes, know-how, formulas, trade
      secrets, service marks, other rights in intellectual property (whether
      patentable or not), goodwill, customer and mailing lists, insurance policies,
      licenses (whether as licensor or licensee), franchises and permits;

     

    (x) All
      present and future books and records relating to any of the above including,
      without limitation, all present and future books of account of every kind or
      nature, purchase and sale agreements, invoices, ledger cards, bills of lading
      and other shipping evidence, statements, correspondence, memoranda, credit
      files
      and other data relating to the Collateral or any Account Debtor, together with
      the tapes, disks, diskettes and other data and software storage media and
      devices, file cabinets or containers in or on which the foregoing are stored
      (including any rights of Borrower or Guarantor with respect to any of the
      foregoing maintained with or by any other Person); and

     

    (y) Any
      and
      all products and Proceeds of the foregoing in any form including, without
      limitation, all insurance claims, warranty claims and proceeds and claims
      against third parties for loss or destruction of or damage to any or the
      foregoing. Notwithstanding the foregoing, in no event shall the Collateral
      include (i) the Equipment listed on Schedule 5.1 attached hereto, (ii) (ii)
      cash
      on hand as of the Closing Date in an amount of approximately $225,000, or (iii)
      any lease, license, contract, property rights or agreement to which a Borrower
      is a party (or to any of its rights or interests thereunder) if the grant of
      such security interest would constitute or result in either (A) the abandonment,
      invalidation or unenforceability of any right, title or interest of Borrower
      in
      such property, or (B) in a breach or termination pursuant to the terms of,
      or a
      default under, any lease, license, contract, property rights, agreement, law,
      statute or regulation, in each case, evidencing, governing or giving rise to
      such property (other than to the extent that any such term would be rendered
      ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
      UCC).

     

    5.2 Financing
      Statements.
      Borrower, on behalf of the Lenders, shall file Financing Statements with respect
      to the Collateral in form acceptable to Agent and its counsel, and shall provide
      satisfactory evidence of said filing to the Lenders and their counsel promptly
      after the said filing. Borrower shall, at all times, do, make, execute, deliver
      and record, register or file all Financing Statements and other instruments,
      acts, pledges, leasehold or other mortgages, amendments, modifications,
      assignments and transfers (or cause the same to be done), and will deliver
      to
      Agent such instruments and/or documentation evidencing items of Collateral,
      as
      may be reasonably requested by Agent to better secure or perfect Agent’s
      security interest in the Collateral or any Lien with respect
      thereto. Borrower
      acknowledges that it is not authorized to file any Financing Statement or
      amendment or termination statement with respect to any Financing Statement
      without the prior written consent of Agent and agrees that it will not do so
      without the prior written consent of Agent.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    5.3 License
      Grant. Borrower
      hereby grants to Agent, for the benefit of the Lenders and for the sole purpose
      of facilitating repayment of the Obligations, an irrevocable, non-exclusive,
      worldwide license without payment of royalty or other compensation to Borrower,
      upon the occurrence and during the continuance of an Event of Default, to use
      or
      otherwise exploit in any manner as to which authorization of the holder of
      such
      Intellectual Property would be required, and to license or sublicense such
      rights in to and under, any Intellectual Property now or hereafter owned by
      or
      licensed to Borrower, and wherever the same may be located, including in such
      license access to all media in which any of such Intellectual Property may
      be
      recorded or stored and to all software and hardware used for the compilation
      or
      printout thereof, and represent, promise and agree that any such license or
      sublicense is not and will not be in conflict with the contractual or commercial
      rights of any third Person and subject, in the case of trademarks and service
      marks, to sufficient rights to quality control and inspection in favor of
      Borrower to avoid the risk of invalidation of said trademarks and service marks.
      The foregoing license will terminate on the indefeasible payment in full of
      all
      Obligations; provided,
      however,
      that
      any license, sublicense, or other rights granted by Lender pursuant to such
      license during its term shall remain in effect in accordance with its
      terms.

     

    5.4 Representations,
      Warranties and Covenants Concerning the Collateral.
      Each of
      Borrower and Guarantor represents, warrants and covenants as
      follows:

     

    (a) All
      of
      its Collateral (i) is owned by it free and clear of all Liens (including any
      claim of infringement) except those in Agent’s favor and Permitted Encumbrances
      and (ii) is not subject to any agreement prohibiting the granting of a Lien
      or
      requiring notice of or consent to the granting of a Lien.

     

    (b) It
      shall
      not encumber, mortgage, pledge, assign or grant any Lien upon any Collateral
      or
      any other assets to anyone other than the Agent and except for Permitted
      Liens.

     

    (c) The
      Liens
      granted pursuant to this Agreement, upon the filing of Financing Statements
      in
      respect of Borrower and Guarantor (as may be applicable) in favor of the Agent
      for the benefit of the Lenders in the applicable filing office of the states
      of
      organization of Borrower and Guarantor (as may be applicable), constitute valid
      perfected first priority security interests in all of the Collateral to be
      perfected by filing in favor of the Agent for the benefit of the Lenders, as
      security for the prompt and complete payment and performance of the Obligations,
      enforceable in accordance with the terms hereof.

     

    (d) To
      our
      best knowledge, no security agreement, mortgage, deed of trust, financing
      statement, equivalent security or Lien instrument or continuation statement
      covering all or any part of the Collateral is or will be on file or of record
      in
      any public office, except those relating to Permitted Encumbrances.

     

    (e) It
      shall
      not dispose of any of the Collateral whether by sale, lease or otherwise except
      for (i) the sale of Inventory in the ordinary course of business and (ii) the
      disposition or transfer in the ordinary course of business of Equipment only
      to
      the extent that the proceeds of any such disposition are used to acquire
      replacement Equipment which is subject to the Lender’s security interest or are
      used to repay the Obligations.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (f) It
      shall
      defend the right, title and interest of the Agent (for the benefit of the
      Lenders) in and to the Collateral against the claims and demands of all Persons
      whomsoever, and take such actions, including (i) all actions necessary to grant
      the Lender “control” of any Investment Property, Deposit Accounts,
      Letter-of-Credit Rights or Electronic Chattel Paper owned by it, with any
      agreements establishing control to be in form and substance satisfactory to
      the
      Agent, (ii) the prompt (but in no event later than three (3) Business Days
      following the Agent’s request therefor) delivery to the Agent of all original
      Instruments, Chattel Paper, negotiable Documents and certificated Securities
      owned by it (in each case, accompanied by stock powers, allonges or other
      instruments of transfer executed in blank), (iii) notification to third parties
      of the Agent’s interest in Collateral at the Agent’s request, and (iv) the
      institution of litigation against third parties as shall be prudent in order
      to
      protect and preserve its and/or the Agent’s interests in the
      Collateral.

     

    (g) It
      shall
      promptly, and in any event within three (3) Business Days after the same is
      acquired by it, notify the Agent of any Commercial Tort Claim acquired by it
      and, unless otherwise consented to by the Agent, it shall enter into a
      supplement to this Agreement granting to the Agent for the benefit of the
      Lenders a Lien in such Commercial Tort Claim for the benefit of
      Agent.

     

    (h) It
      shall
      perform in a reasonable time all other steps reasonably requested by the Agent
      to create and maintain in the Agent’s favor a valid perfected first Lien in all
      Collateral subject only to Permitted Encumbrances.

     

    (i) It
      shall
      notify the Agent promptly and in any event within three Business Days after
      obtaining knowledge thereof (i) of any material delay in its performance of
      any
      of its obligations to any Account Debtor; (ii) of any assertion by any Account
      Debtor of any material claims, offsets or counterclaims; (iii) of any
      allowances, credits and/or monies granted by it to any Account Debtor; (iv)
      of
      all material adverse information relating to the financial condition of an
      Account Debtor; (v) of any material return of Goods; and (vi) of any loss,
      damage or destruction of any of the Collateral.

     

    (j) All
      Accounts (i) represent complete bona fide transactions which require no further
      act under any circumstances on its part to make such Accounts payable by the
      Account Debtors and (ii) do not represent bill and hold sales, consignment
      sales, guaranteed sales, sale or return or other similar understandings or
      obligations of any Affiliate or Subsidiary of the applicable Borrower. It has
      not made, nor will it make, any agreement with any Account Debtor for any
      extension of time for the payment of any Account, any compromise or settlement
      for less than the full amount thereof, any release of any Account Debtor from
      liability therefor, or any deduction therefrom except a discount or allowance
      for prompt or early payment allowed by it in the ordinary course of its business
      consistent with historical practice and as previously disclosed to the Agent
      in
      writing.

     

    (k) It
      shall
      keep and maintain its Equipment in good operating condition, except for ordinary
      wear and tear, and shall make all necessary repairs and replacements thereof
      so
      that the value and operating efficiency shall at all times be maintained and
      preserved. It shall not permit any such items to become a fixture to real estate
      or accessions to other personal property.

     

    (l) It
      shall
      maintain and keep all of its books and records concerning the Collateral at
      its
      executive offices listed in Section
      5.4(l)
      of the
      Borrower’s Disclosure Schedule.

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (m) Section
      5.4(m)
      of the
      Borrower’s Disclosure Schedule lists all banks and other financial institutions
      at which it maintains deposits and/or other accounts, and such Schedule
      correctly identifies the name, address and telephone number of each such
      depository, the name in which the account is held, a description of the purpose
      of the account, and the complete account number. It shall not establish any
      depository or other bank account with any financial institution (other than
      the
      accounts set forth on Section
      5.4(m)
      of the
      Borrower’s Disclosure Schedule) without providing Agent with written
      notification thereof and providing similar information related
      thereto.

     

    (n) On
      the
      date hereof, its exact legal name (as indicated in the public record of its
      jurisdiction of organization), jurisdiction of organization, organizational
      identification number, if any, from the jurisdiction of organization, and the
      location of its chief executive office and all other offices or locations out
      of
      which it conducts business or operations, are specified on Section
      5.4(n)
      of the
      Borrower’s Disclosure Schedule. It has furnished to each Lender a certified
      charter, certificate of incorporation or other organization document and
      long-form good standing certificate as of a date which is within thirty (30)
      days of the date hereof. It is organized solely under the law of the
      jurisdiction so specified and has not filed any certificates of domestication,
      transfer or continuance in any other jurisdiction. Except as otherwise indicated
      on Section
      5.4(n)
      of the
      Borrower’s Disclosure Schedule, the jurisdiction of its organization of
      formation is required to maintain a public record showing it to have been
      organized or formed. Except as specified on Section
      5.4(n)
      of the
      Borrower’s Disclosure Schedule, it has not changed its name, jurisdiction of
      organization, chief executive office or sole place of business or its corporate
      structure in any way (e.g., by merger, consolidation, change in corporate form
      or otherwise) within the last five years and has not within the last five years
      become bound (whether as a result of merger or otherwise) as a grantor under
      a
      security agreement entered into by another Person, which has not heretofore
      been
      terminated.

     

    (o) It
      will
      not, except upon thirty (30) days’ prior written notice to the Agent and
      delivery to the Agent of all additional financing statements and other documents
      reasonably requested by the Agent to maintain the validity, perfection and
      priority of the security interests provided for herein: (i) change its
      jurisdiction of organization or the location of its chief executive office
      from
      that referred to in Section
      5.4(n)
      of the
      Borrower’s Disclosure Schedule; or (ii) change its name, identity or
      organizational structure.

     

    (p) Except
      as
      otherwise provided herein, none of the Collateral is subject to any prohibition
      against encumbering, pledging, hypothecating or assigning the same or requires
      notice or consent to Borrower doing of the same.

     

    SECTION
      6 CONDITIONS
      TO LOAN

     

    The
      obligation of Lenders to make the Loan shall be subject to the satisfaction
      or
      waiver by Lenders, prior thereto or concurrently therewith, of each of the
      following conditions precedent:

    

    6.1 Loan
      Documents.
      Each of
      the Loan Documents shall have been duly and properly authorized, executed and
      delivered by Borrower, the Guarantor and the other parties thereto and shall
      be
      in full force and effect as of the date hereof.

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    6.2 Representations
      and Warranties.
      Each of
      the representations and warranties made by or on behalf of each of the Borrower
      and Guarantor to Lenders in this Agreement and in other Loan Documents shall
      be
      true and correct in all material respects as of the date hereof, provided that
      any such representation or warranty that is qualified by materiality shall
      be
      true and correct in all respects as of the date hereof.

     

    6.3 Certified
      Copies of Corporate Documents.
      Lenders
      shall have received from each of the Borrower and Guarantor, (a) certified
      by a
      duly authorized officer to be true and complete on and as of a date which is
      not
      more than ten (10) Business Days prior to the date hereof, a copy of each of
      (i)
      the certificate of incorporation or such other formation documents of Borrower
      in effect on such date of certification and (ii) the by-laws (or equivalent
      document) of Borrower in effect on such date, and (b) a long-form good standing
      certificate as of a date which is within thirty (30) days of the date
      hereof.

     

    6.4 Proof
      of Corporate Action.
      Lenders
      shall have received from each of the Borrower and Guarantor a copy, certified
      by
      a duly authorized officer to be true and complete on and as of the date which
      is
      not more than ten (10) Business Days prior to the date hereof, of the records
      of
      all corporate and/or limited liability company action taken by Borrower or
      Guarantor, as applicable, to authorize (a)
      its
      execution and delivery of each of the Loan Documents to which it is or is to
      become a party as contemplated or required by this Agreement, (b)
      its
      performance of all of its agreements and obligations under each of such
      documents, and (c)
      the
      incurring, or guaranty, as applicable, of the Obligations contemplated by this
      Agreement.

     

    6.5 Insurance.
      Agent on
      behalf of Lenders shall have received evidence of insurance, additional insured
      and loss payee endorsements required hereunder and under the other Loan
      Documents, in form and substance satisfactory to Lenders, and certificates
      of
      insurance policies and/or endorsements naming Agent as additional insured and
      lender’s loss payee. 

     

    6.6 Warrants.
      Each of
      the Lenders shall have received the Closing Date Warrant.

     

    6.7 UCC
      Filings.
      The
      Borrower shall have filed the Financing Statements with respect to the
      Collateral in favor of the Agent (for the benefit of the Lenders) as stipulated
      in Section 5

     

    6.8 Approvals.
      Samsung
      C&T Corporation shall have obtained the requisite approval from the Bank of
      Korea to consummate its Term Loan Commitment hereunder. 

     

    SECTION
      7 REPRESENTATIONS
      AND WARRANTIES.

     

    Each
      of
      Borrower and Guarantor hereby represents and warrants to Lenders, knowing and
      intending that Lenders shall rely thereon in making the Loan contemplated hereby
      (each of which representations and warranties shall be continuing unless
      expressly made in relation only to a specific date), that:

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    7.1 Corporate
      Existence: Good Standing.

    

    (a) It
      (i)
      is a
      corporation or limited liability company duly organized, validly existing and
      in
      good standing under the laws of the jurisdiction of its organization,
      (ii)
      is in
      good standing in all other jurisdictions in which it is required to be qualified
      to do business as a foreign corporation and where the failure to so qualify
      could reasonably be expected to have a Material Adverse Effect, and
      (iii)
      has all
      requisite corporate or limited liability company power and authority and full
      legal right to own or to hold under lease its properties and to carry on the
      business as presently engaged.

     

    (b) It
      has
      corporate or limited liability company power and authority and has full legal
      rights to enter into each of the Loan Documents to which it is a party, to
      perform, observe and comply with all of its agreements and obligations under
      each of such documents.

     

    7.2 No
      Violation, etc. The
      execution and delivery by it of the Loan Documents to which it is a party,
      the
      performance by it of all of its agreements and obligations under each of such
      documents, and the incurring by it of all of the Obligations contemplated by
      this Agreement, have been duly authorized by all necessary corporate actions
      on
      the part of it and, if required, its shareholders or members, as applicable,
      and
      do not and will not (a) contravene any provision of its charter, bylaws or
      other
      governing documents or this Agreement (each as from time to time in effect),
      (b)
      conflict with, or result in a breach of the terms, conditions, or provisions
      of,
      or constitute a default under, or result in the creation of any Lien upon any
      of
      the property of it under, any agreement, mortgage or other instrument to which
      it is or may become a party, (c) violate or contravene any provision of any
      law,
      regulation, order, ruling or interpretation thereunder or any decree, order
      or
      judgment or any court or governmental or regulatory authority, bureau, agency
      or
      official (all as from time to time in effect and applicable to such entity)
      except where such conflict or violation would not reasonably be expected to
      have
      a Material Adverse Effect, or (d) require any approval, consent, order,
      authorization, or license by, or giving notice to, or taking any other action
      with respect to, any Governmental Authority.

     

    7.3 Binding
      Effect of Documents, etc. It
      has
      duly executed and delivered each of the Loan Documents to which it is a party,
      and each of the Loan Documents is valid, binding and in full force and effect.
      The agreements and obligations of it as contained in each of the Loan Documents
      constitute, or upon execution and delivery thereof will constitute, legal,
      valid
      and binding obligations of it, enforceable against it in accordance with their
      respective terms, subject, as to the enforcement of remedies only, to
      limitations imposed by federal and state laws regarding bankruptcy, insolvency,
      reorganization, moratorium and other laws affecting creditors' rights and
      remedies generally, and by general principles of law and equity.

     

    7.4 No
      Events of Default.

     

    (a) No
      Event
      of Default has occurred and is continuing and no event has occurred and is
      continuing and no condition exists that would, with notice or the lapse of
      time,
      or both, constitute an Event of Default. 

     

    (b) Except
      as
      set forth on Schedule 7.4, it is not in default under any material contract,
      agreement or instrument to which Borrower is a party or by which it or any
      property of it is bound which is reasonably expected to have a Material Adverse
      Effect.

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (c) Its
      execution, delivery and performance of and compliance with this Agreement and
      the other Loan Documents will not, with or without the passage of time or giving
      of notice, result in any material violation of law, or be in conflict with
      or
      constitute a default under any term or provision, or result in the creation
      of
      any Lien upon any of its properties or assets or the suspension, revocation,
      impairment, forfeiture or nonrenewal, of any permit, license, authorization
      or
      approval applicable to it, or any of its businesses or operations or any of
      its
      assets or properties that is reasonably expected to have a Material Adverse
      Effect. 

     

    7.5 No
      Governmental Consent Necessary.
      No
      consent or approval of, giving of notice to, registration with or taking of
      any
      other action in respect of, any Governmental Authority is required with respect
      to the execution, delivery and performance by it of this Agreement and the
      other
      Loan Documents to which it is a party.

     

    7.6 No
      Proceedings.
      There
      are no actions, suits, or proceedings pending or, to the best of its knowledge,
      threatened against or affecting it in any court or before any Governmental
      Authority which, if adversely determined, would have an adverse effect on the
      ability of it to perform its obligations under this Agreement or the other
      Loan
      Documents to which they are parties.

     

    7.7 No
      Violations of Laws.
      It has
      conducted, and is conducting, its business, so as to comply in all material
      respects with all applicable federal, state, county and municipal statutes
      and
      regulations. Neither it nor any officer, director or shareholder of it is
      charged with, or so far as is known by Borrower, after having made due inquiry,
      is under investigation with respect to, any violation of any such statutes,
      regulations or orders, which could have a Material Adverse Effect.

     

    7.8 Use
      of Proceeds of the Loan. Proceeds
      from the Loan shall be used only for those purposes set forth in this
      Agreement.
      No part
      of the proceeds of the Loan shall be used, directly or indirectly, for the
      purpose of purchasing or carrying any margin stock or for the purpose of
      purchasing or carrying or trading in any stock under such circumstances as
      to
      involve Borrower in a violation of any statute or regulation. In particular,
      without limitation of the foregoing, no part of the proceeds from the Loan
      is
      intended to be used to acquire any publicly-held stock of any kind.

     

    7.9 Financial
      Statements; Indebtedness.

     

    (a) The
      audited consolidated balance sheet of the Borrower and Guarantor as of December
      31, 2007 and the related consolidated statements of operations, stockholders’
equity and cash flows (together with the related notes) for the year ended
      December 31, 2007, as audited by McGladrey & Pullen, LLP, and the unaudited
      consolidated balance sheet and the related consolidated statement of income
      of
      the Borrower and Guarantor as of and for the period beginning January 1, 2008
      and ended June 30, 2008 (collectively, the “Financial
      Statements”),
      (x)
      fairly present as of the respective dates thereof, the financial position of
      the
      Borrower and Guarantor and the results of their operations, cash flows and
      stockholders’ equity for each of the periods then ended in all material aspects;
      and (y) except for the fact that the unaudited financial statements omit notes
      to such statements and year-end adjustments thereto, have been prepared in
      accordance with GAAP in conformity with the rules and regulations of the SEC.
      

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (b) Except
      as
      shown on the most recent Financial Statements (i) except for Indebtedness of
      it
      that has accrued in the ordinary course of business, it has no other
      Indebtedness as of the date hereof which would adversely affect the financial
      condition of it or the Collateral, (ii) lease commitments of it, and (iii)
      except for severance payments and change of control payments that may be owed
      to
      certain employees of it in the event of termination or a change in control
      in
      it, it has no Obligations, contingent or otherwise, except those which,
      individually or in the aggregate, are not material to the financial condition
      or
      operating results of Borrower. 

     

    7.10 Changes
      in Financial Condition.
      Since
      December 31, 2007, except as disclosed to Lenders or otherwise provided in
      this
      Agreement, there has been no Material Adverse Effect on it. Since December
      31,
      2007, it has not (i) declared or paid any dividends, (ii) sold any assets,
      individually or in the aggregate, outside of the ordinary course of business,
      (iii) had capital expenditures outside of the ordinary course of business,
      (iv)
      engaged in any transaction with any Affiliate or (v) engaged in any other
      transaction outside of the ordinary course of business.

     

    7.11 Equipment.
      It shall
      keep its Equipment in good order and repair, and in running and marketable
      condition, ordinary wear and tear excepted.

     

    7.12 Taxes
      and Assessments. 

     

    (a) It
      has
      paid and discharged when due all taxes, assessments and other governmental
      charges which may lawfully be levied or assessed upon its income and profits,
      or
      upon all or any portion of any property belonging to it, whether real, personal
      or mixed, to the extent that such taxes, assessment and other charges have
      become due, except for taxes that may be contested in good faith by it. It
      has
      filed all tax returns, federal, state and local, and all related information,
      required to be filed by it except for extensions for filing that have been
      granted to the it.

    

    (b) It
      shall
      make all payments to be made by it hereunder without any Tax Deduction (as
      defined below), unless a Tax Deduction is required by law. If a Borrower is
      aware that it must make a Tax Deduction (or
      that
      there is a change in the rate or the basis of a Tax Deduction), it shall
      promptly notify Lenders. If a Tax Deduction is required by law to be made by
      it,
      the amount of the payment due from Borrower shall be increased to an amount
      which (after making the Tax Deduction) leaves an amount equal to the payment
      which would have been due if no Tax Deduction had been required. If a Borrower
      is required to make a Tax Deduction, Borrower shall make the minimum Tax
      Deduction allowed by law and shall make any payment required in connection
      with
      that Tax Deduction within the time allowed by law. Within thirty (30) days
      of
      making either a Tax Deduction or a payment required in connection with a Tax
      Deduction, Borrower shall deliver to Lenders evidence satisfactory to Lenders
      that the Tax Deduction has been made or (as applicable) the appropriate payment
      has been paid to the relevant taxing authority.

    

    (c) “Tax
      Deduction”
      means a
      deduction or withholding for or on account of Tax from a payment under a Loan
      Document.“Tax”
      means
      any tax, levy, impost, duty or other charge or withholding of a similar nature,
      including any income, franchise, stamp, documentary, excise or property tax,
      charge or levy (in each case, including any related penalty or
      interest).

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    7.13 ERISA.
      It is in
      material compliance in all material respects with the applicable provisions
      of
      ERISA and all regulations issued thereunder by the United States Treasury
      Department, the Department of Labor and the Pension Benefit Guaranty
      Corporation.

     

    7.14 Environmental
      Matters.

     

    (a) To
      its
      best knowledge, it has duly complied with, and its facilities, business assets,
      property, leaseholds and equipment are in compliance in all respects with,
      the
      provisions of all Environmental Laws, the failure of which would likely result
      in a Material Adverse Effect.

    

    (b) To
      its
      best knowledge, it has been issued all required federal, state and local
      licenses, certificates or permits relating to the operation of its business;
      and
      it and its facilities, business, assets, property and equipment are in
      compliance in all material respects with all Environmental Laws.

    

    7.15 United
      States Anti-Terrorism Laws; Holding Company Status.

     

    (a) In
      this
      Section 7.15:

    

    “Anti-Terrorism
      Law”
means
      each of: (i) Executive Order No. 13224 of September 23, 2001 Blocking Property
      and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or
      Support Terrorism (the “Executive
      Order”);
      (ii)
      the Uniting and Strengthening America by Providing Appropriate Tools Required
      to
      Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (commonly known
      as the USA Patriot Act); (iii) the Money Laundering Control Act of 1986, Public
      Law 99-570; and (iv) any similar law enacted in the United States of America
      subsequent to December 31, 2004.

    

    “holding
      company”
has
      the
      meaning given to it in the United States Public Utility Holding Company Act
      of
      1935, and any successor legislation and rules and regulations promulgated
      thereunder.

    

    “investment
      company”
has
      the
      meaning given to it in the United States Investment Company Act of
      1940.

    

    “public
      utility”
has
      the
      meaning given to it in the United States Federal Power Act of 1920.

    

    “Restricted
      Party”
means
      any person listed: (i) in the Annex to the Executive Order; (ii) on the
      Specially Designated Nationals and Blocked Persons list maintained by the Office
      of Foreign Assets Control of the United States Department of the Treasury;
      or
      (iii) in any successor list to either of the foregoing.

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (b) It
      is not
      (i) a holding company or subject to regulation under the United States Public
      Utility Holding Company Act of 1935; (ii) a public utility or subject to
      regulation under the United States Federal Power Act of 1920; or (iii) required
      to be registered as an investment company or subject to regulation under the
      United States Investment Company Act of 1940.

    

    (c) To
      the
      best of its knowledge, it (i) is not, and is not controlled by, a Restricted
      Party; (ii) has not received funds or other property from a Restricted Party;
      and (iii) is not in breach of and is not the subject of any action or
      investigation under any Anti-Terrorism Law.

    

    7.16 Changes.
      Since
      the date of the Balance Sheet, except as disclosed in Section
      7.16
      of
      Borrower’s Disclosure Schedule, with respect to it, there has not
      been:

     

    (a) any
      change in its business, assets, Obligations, condition (financial or otherwise),
      properties, operations or prospects, which, individually or in the aggregate,
      has had, or could reasonably be expected to have, a Material Adverse
      Effect;

     

    (b) any
      resignation or termination of any of its officers, key employees or groups
      of
      employees;

     

    (c) any
      material change, except in the ordinary course of business, in its contingent
      obligations by way of guaranty, endorsement, indemnity, warranty or
      otherwise;

     

    (d) any
      damage, destruction or loss, whether or not covered by insurance, which has
      had,
      or could reasonably be expected to have, individually or in the aggregate,
      a
      Material Adverse Effect;

     

    (e) any
      waiver by it of a valuable right or of a material debt owed to it;

     

    (f) any
      direct or indirect material loans made by it to any of its stockholders,
      employees, officers or directors, other than advances made in the ordinary
      course of business;

     

    (g) any
      material change in any compensation arrangement or agreement with any employee,
      officer, director or stockholder;

     

    (h) any
      declaration or payment of any dividend or other distribution of its
      assets;

     

    (i) any
      labor
      organization activity related to it;

     

    (j) any
      debt,
      obligation or liability incurred, assumed or guaranteed by it, except those
      for
      immaterial amounts and for current Obligations incurred in the ordinary course
      of business;

     

    (k) any
      sale,
      assignment, transfer, abandonment or other disposition of any Collateral other
      than Inventory in the ordinary course of business;

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    (l) any
      change in any material agreement to which it is a party or by which either
      it is
      bound which, either individually or in the aggregate, has had, or could
      reasonably be expected to have, individually or in the aggregate, a Material
      Adverse Effect;

     

    (m) any
      other
      event or condition of any character that, either individually or in the
      aggregate, has had, or could reasonably be expected to have, individually or
      in
      the aggregate, a Material Adverse Effect; or

     

    (n) any
      arrangement or commitment by it to do any of the acts described in subsection
      (a) through (m) of this Section 7.16.

     

    7.17 Intellectual
      Property. (a)
      Except for Permitted Encumbrances, (1) it holds all Intellectual Property that
      it owns free and clear of all Liens and restrictions on use or transfer, whether
      or not recorded, and has sole title to and ownership of or has the full,
      exclusive (subject to the rights of its licensees) right to use in its field
      of
      business such Intellectual Property; and Borrower holds all Intellectual
      Property that it uses but does not own under valid licenses or sub-licenses
      from
      others; (2) the use of the Intellectual Property by it does not, to the best
      knowledge of it, violate or infringe on the rights of any other Person; (3)
      it
      has not received any notice of any conflict between the asserted rights of
      others and Borrower with respect to any Intellectual Property; (4) it has used
      its commercially reasonable best efforts to protect its rights in and to all
      Intellectual Property; (5) it is in compliance with all material terms and
      conditions of its agreements relating to the Intellectual Property; (6) to
      the
      best knowledge of it, it is not, and since December 31, 2007 has not been,
      a
      defendant in any action, suit, investigation or proceeding relating to
      infringement or misappropriation by it of any Intellectual Property nor has
      it
      been notified of any alleged claim of infringement or misappropriation by
      Borrower of any Intellectual Property; (7) to the best knowledge of it, none
      of
      the products or services that it is researching, developing, proposes to
      research and develop, make, have made, use, or sell, infringes or
      misappropriates any Intellectual Property right of any third party; (8) none
      of
      the trademarks and service marks used by it, to the best knowledge of it,
      infringes the trademark or service mark rights of any third party; and (9)
      to
      its best knowledge, none of the material processes and formulae, research and
      development results and other know-how relating to its business, the value
      of
      which to it is contingent upon maintenance of the confidentiality thereof,
      has
      been disclosed to any Person other than Persons bound by written confidentiality
      agreements.

     

    (b) Section
      7.17
      of
      Borrower’s Disclosure Schedule sets forth, to the best knowledge of it, a true
      and complete list of (i) all registrations and applications for Intellectual
      Property owned by it filed or issued by any Intellectual Property registry
      and
      (ii) all Intellectual Property licenses which are either material to the
      business of it or relate to any material portion of its Inventory, including
      licenses for standard software having a replacement value of more than $10,000.
      None of such Intellectual Property licenses are reasonably likely to be
      construed as an assignment of the licensed Intellectual Property to
      it.

    

    7.18 Representations
      and Warranties: True, Accurate and Complete. None
      of
      the representations, certificates, reports, warranties or statements now or
      hereafter made or delivered to Agent or Lenders pursuant hereto or in connection
      with this Agreement or any other Loan Document or the transactions contemplated
      hereby contains or will contain any untrue statement of a material fact, or
      omits or will omit to state a material fact necessary in order to make the
      statements contained herein and therein, in light of the circumstances in which
      they are made, not misleading.

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    7.19 Internal
      Accounting Controls.
      To the
      extent required, it maintains disclosure controls and procedures (as such term
      is defined in Rule 13a-15 under the 1934 Act) that are effective, in ensuring
      that information required to be disclosed by it in the reports that they file
      or
      submit under the 1934 Act is recorded, processed, summarized and reported,
      within the time periods specified in the rules and forms of the SEC, including,
      without limitation, controls and procedures designed to ensure that information
      required to be disclosed by it in the reports that they file or submit under
      the
      1934 Act is accumulated and communicated to its management, including its
      principal executive officer or officers and its principal financial officer
      or
      officers, as appropriate, to allow timely decisions regarding required
      disclosure. 

     

    7.20 Sarbanes-Oxley
      Act.
      To its
      knowledge, it is in compliance with any and all applicable requirements of
      the
      Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any
      and
      all applicable rules and regulations promulgated by the SEC thereunder that
      are
      effective as of the date hereof.

     

    SECTION
      8 AFFIRMATIVE
      COVENANTS.

     

    Until
      the
      indefeasible payment and satisfaction in full of all Obligations from and after
      the Closing Date, each of Borrower and Guarantor hereby covenants and agrees
      as
      follows:

    

    8.1 Notify
      Lenders.
      It shall
      promptly, and in any event within three (3) Business Days, inform Lenders and
      Agent in writing (a) if any one or more of the representations and warranties
      made by it in this Agreement or in any document related hereto shall no longer
      be true, accurate and complete in any material respect, (b) of all material
      adverse information relating to the financial condition of it; and (c) of any
      material loss, damage or destruction of any of the Collateral.

     

    8.2 Change
      in Directors or Officers.
      It shall
      promptly notify Lenders in writing of any changes
      in
      either of its Directors or Officers.

     

    8.3 Observe
      Covenants, etc.
      It shall
      observe, perform and comply with the covenants, terms and conditions of this
      Agreement and the other Loan Documents.

     

    8.4 Information
      and Documents to be Furnished to Lenders.
      Borrower
      shall deliver or cause to be delivered to Lenders:

     

    (a) Weekly
      Statement of Cash Position. Not
      later
      than the close of business (New York Time) on each Tuesday during the Term
      of
      the Loan, a statement of cash position and projected cash activity of the
      Borrower by week as of the previous Friday through the period ending November
      30, 2008.

     

    (b) Notice
      of Judgments, Environmental, Health or Safety Complaints.

     

    (i) Within
      three (3) Business Days thereafter, written notice to Lenders of the entry
      of
      any judgment or the institution of any lawsuit or of other legal or equitable
      proceedings or the assertion of any crossclaim or counterclaim seeking monetary
      damages from Borrower in an amount exceeding $50,000; and 

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    (ii) Within
      three (3) Business Days thereafter, notice or copies if written of all claims,
      complaints, orders, citations or notices, whether formal or informal, written
      or
      oral, from a governmental body or private person or entity, relating to air
      emissions, water discharge, noise emission, solid or liquid waste disposal,
      hazardous waste or materials, or any other environmental, health or safety
      matter, which adversely effect Borrower. Such notices shall include, among
      other
      information, the name of the party who filed the claim, the potential amount
      of
      the claim, and the nature of the claim.

    

    (c) Other
      Information.
      Upon
      demand,

     

    (i) Certificates
      of insurance for all policies of insurance to be maintained by Borrower pursuant
      hereto; and

    

    (ii) All
      material information received by Borrower affecting the financial status or
      condition of any Account Debtor or the payment of any Account, including but
      not
      limited to, invoices, original orders, shipping and delivery receipts (to the
      extent not subject to any confidentiality provisions).

    

    (d) Additional
      Information.
      From
      time to time, such other information as Lenders may reasonably request,
      including financial projections and cash flow analysis to the extent available.
      

     

    8.5 Comply
      with Laws.
      It shall
      comply with the requirements of all applicable laws, rules, regulations and
      orders of any Governmental Authority, compliance with which is necessary to
      maintain its corporate existence or the conduct of its business or
      non-compliance with which would result in a Material Adverse
      Effect.

     

    8.6 Insurance
      Required.

     

    (d) It
      shall
      cause to be maintained, in full force and effect on all property of it
      including, without limitation, all Inventory and Equipment, insurance in such
      amounts against such risks as is commercially reasonable given the nature of
      the
      its business. 
      Said
      policy or policies shall:

     

    (i) Be
      in a
      form and with insurers which are reasonably satisfactory to
      Lenders;

    

    (ii) Be
      for
      such risks, and for such insured values as Lenders may reasonably require in
      order to replace the property in the event of actual or constructive total
      loss;

    

    (iii) Designate
      Agent for the benefit of the Lenders as additional insured and lender’s loss
      payee as Agent’s interest may from time to time appear;

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    (iv) Provide
      that they may not be canceled or altered without thirty (30) days prior written
      notice to Agent; and

    

    (v) Within
      ten (10) Business Days after demand, a copy of said policy shall be delivered
      to
      Agent.

    

    (e) In
      no
      event shall Agent be required either to (i) ascertain the existence of or
      examine any insurance policy or (iii)
      advise
      it in the event such insurance coverage shall not comply with the requirements
      of this Agreement.

     

    8.7 Condition
      of Collateral; No Liens.
      It shall
      maintain all Collateral in good condition and repair at all times, and preserve
      it against any loss, damage, or destruction of any nature whatsoever relating
      to
      said Collateral or its use, and keep said Collateral free and clear of any
      Liens, except for the Permitted Encumbrances, and shall not permit Collateral
      to
      become a fixture to real estate or accessions to other personal
      property.

     

    8.8 Payment
      of Proceeds.
      Borrower
      shall forthwith upon receipt of any proceeds of Collateral, pay such proceeds
      (insurance or otherwise) up to the amount of the then-outstanding Obligations
      over to Lender for application against the Obligations in such order and manner
      as Agent may elect.

     

    8.9 Name
      Changes; Location Changes.

     

    (a) It
      shall
      not change or alter its business names without the express written consent
      of
      the Lenders.

    

    (b) It
      shall
      deliver not less than thirty (30) Business Days prior written notice to Lenders
      if Borrower intends to conduct any of its business or operations at or out
      of
      offices or locations other than those set forth in this Agreement, or if it
      changes the location of its chief executive office or the address at which
      it
      maintains its books and records.

    

    8.10 Further
      Assurances.
      Borrower
      shall at any time or from time to time upon request of Lenders take such steps
      and execute and deliver such Financing Statements and other documents all in
      the
      form of substance satisfactory to Lenders relating to the creation, validity
      or
      perfection of the security interests provided for herein, under the UCC or
      which
      are reasonably necessary to effectuate the purposes and provisions of this
      Agreement. Borrower shall defend the right, title and interest of Agent in
      and
      to the Collateral against the claims and demands of all Persons whomsoever,
      and
      take such actions, including (i) all actions necessary to grant Lender “control”
of any Investment Property, Deposit Accounts, Letter-of-Credit Rights or
      Electronic Chattel Paper owned by it, with any agreements establishing control
      to be in form and substance satisfactory to Agent, (ii) the prompt (but in
      no
      event later than three (3) days following Agent’s request therefor) delivery to
      Agent of all original Instruments, Chattel Paper, negotiable Documents and
      certificated Securities owned by it (in each case, accompanied by stock powers,
      allonges or other instruments of transfer executed in blank), (iii) notification
      of Agent’s interest in Collateral at Agent’s request, and (iv) the institution
      of litigation against third parties as shall be prudent in order to protect
      and
      preserve Borrower’s and/or Agent’s respective and several interests in the
      Collateral.

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    8.11 SEC
      Reporting Status.
      To the
      extent required, it shall timely file (which for purposes herein shall include
      any extensions) all reports required to be filed with the SEC pursuant to
      Section 13 or 15(d) of the 1934 Act.

     

    8.12 Indemnification.
      Borrower
      shall indemnify, protect, defend and save harmless Lenders, as well as Lenders’
respective directors, officers, trustees, employees, agents, attorneys, members
      and shareholders (hereinafter referred to collectively as the “Indemnified
      Parties”
and
      individually as an “Indemnified
      Party”)
      from
      and against any and all losses, damages, expenses or obligations of any kind
      or
      nature and from any suits, claims or demands, by third parties (including,
      without limitation, claims of brokers and finders), including reasonable counsel
      fees incurred in investigating or defending such claim, suffered by any of
      them
      and caused by, relating to, arising out of, resulting from, or in any way
      connected with the Loan, the transactions contemplated herein and the Loan
      Documents, except for any such losses, damages, expenses or obligations referred
      to above caused by a Lender’s gross negligence or willful misconduct. In case
      any action shall be brought against an Indemnified Party based upon any of
      the
      above and in respect to which indemnity may be sought against Borrower, the
      Indemnified Party against whom such action was brought shall promptly notify
      Borrower in writing, and Borrower shall assume the defense thereof, including
      the employment of counsel selected by Borrower and reasonably satisfactory
      to
      the Indemnified Party, the payment of all costs and expenses and the right
      to
      negotiate and consent to settlement. Upon reasonable determination made by
      the
      Indemnified Party, the Indemnified Party shall have the right to employ separate
      counsel in any such action and to participate in the defense thereof; provided,
      however, that the Indemnified Party shall pay the costs and expenses incurred
      in
      connection with the employment of separate counsel. Borrower shall not be liable
      for any settlement of any such action effected without its consent, but if
      settled with Borrower’s consent, or if there be a final judgment for the
      claimant in any such action, Borrower agrees to indemnify and save harmless
      said
      Indemnified Party against whom such action was brought from and against any
      loss
      or liability by reason of such settlement or judgment, except as otherwise
      provided above. The provisions of this Section shall survive the termination
      of
      this Agreement and the final repayment of the Obligations

     

    SECTION
      9 NEGATIVE
      COVENANTS.

     

    Until
      payment and satisfaction in full of all Obligations and the termination of
      this
      Agreement from and after the Closing Date, each of Borrower and Guarantor hereby
      covenants and agrees as follows:

    

    9.1 Change
      of Control;
      No Creation of Subsidiaries.
      It will
      not consolidate with, merge with, or acquire the stock or a material portion
      of
      the assets of any person, firm, joint venture, partnership, corporation, or
      other entity, whether by merger, consolidation, purchase of stock or otherwise
      if any such action results in a Change of Control (as defined below).
      It will
      not create or permit to exist any Subsidiary unless such new Subsidiary is
      a
      wholly-owned Subsidiary and is designated by Lenders as either a co-borrower
      or
      guarantor hereunder and such Subsidiary shall have entered into all such
      documentation required by Lenders, including, without limitation, to grant
      to
      Agent for the benefit of the Lenders a first priority perfected security
      interest in substantially all of such Subsidiary’s assets to secure the
      Obligations. 

     

    A
      “Change
      of Control”
shall
      be deemed to have occurred if:

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    (i) any
      “Person,” which shall mean a “person” as such term is used in Sections 13(d) and
      14(d) of the 1934 Act, or group of Persons is or becomes the “beneficial owner”
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
      securities of Borrower representing 50% or more of the combined voting power
      of
      Borrower’s then outstanding voting securities;

     

    (ii) individuals,
      who at the Closing Date constitute the Board of Directors (which shall include
      any equivalent governing body) of Borrower or Guarantor, and any new director
      whose election by the Board of Directors of Borrower or Guarantor, or whose
      nomination for election by Borrower’s members or Guarantor’s shareholders, was
      approved by a vote of at least one-half (1/2) of the directors then in office
      (other than in connection with a contested election), cease for any reason
      to
      constitute at least a majority of the Board of Directors of Borrower or
      Guarantor, as applicable;

    

    (iii) the
      stockholders or members of either Borrower or Guarantor approve (I) a plan
      of
      complete liquidation of Borrower or Guarantor or (II) the sale or other
      disposition by Borrower of all or substantially all of Borrower’s assets;
      or

    

    (iv) a
      merger
      or consolidation of either Borrower or Guarantor with any other entity is
      consummated, other than:

    

    (A) a
      merger
      or consolidation which results in the voting securities of Borrower or Guarantor
      outstanding immediately prior thereto continuing to represent (either by
      remaining outstanding or by being converted into voting securities of the
      surviving entity) more than 50% of the combined voting power of the surviving
      entity's outstanding voting securities immediately after such merger or
      consolidation; or

    

    (B) a
      merger
      or consolidation which would result in the directors or managers of Borrower
      or
      Guarantor (who were directors or managers immediately prior thereto) continuing
      to constitute more than 50% of all directors or managers of the surviving entity
      immediately after such merger or consolidation.

    

    In
      this
      paragraph (iv), “surviving entity” shall mean only an entity in which all of a
      Borrower’s members or Guarantor’s stockholders immediately before such merger or
      consolidation (determined without taking into account any stockholders or
      members properly exercising appraisal or similar rights) become stockholders
      or
      members by the terms of such merger or consolidation, and the phrase “directors
      or managers of Borrower or Guarantor (who were directors or managers immediately
      prior thereto)” shall include only individuals who were directors or managers of
      Borrower or Guarantor at the Closing Date.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    9.2 Disposition
      of Assets or Collateral.
      Except
      for sales of Collateral the proceeds of which will be paid to Agent on behalf
      of
      the Lenders to permanently reduce the Loan and applied in accordance with the
      provisions contained herein, it will not sell, lease, transfer, convey, or
      otherwise dispose of any or all of its assets or Collateral, other than the
      disposition or transfer in the ordinary course of business, of obsolete and
      worn-out Equipment only to the extent that the proceeds of any such disposition
      are used to acquire replacement Equipment which is subject to Agent’s first
      priority security interest or are used to repay the Loan. 

     

    9.3 Other
      Liens.
      It will
      not incur, create or permit to exist any Lien on any of its property or assets,
      whether now owned or hereafter acquired, except (a) those
      Liens in favor of Agent created by this Agreement and the other Loan Documents;
      and (b) for the Permitted Encumbrances.

     

    9.4 Other
      Obligations.
      It will
      not incur, create, assume, or permit to exist, any Indebtedness or liability
      on
      account of either borrowed money or the deferred purchase price of property,
      except (a)
      Obligations to Lender, (b) liabilities of it for deferred compensation due
      certain of its employees, or (c) Indebtedness incurred in connection with any
      of
      the Permitted Encumbrances.

     

    9.5 Loans.
      It will
      not make any loans to any Person, other than advances to employees of Borrower
      in the ordinary course of business.

     

    9.6 Guaranties.
      It will
      not assume, guaranty, endorse, contingently agree to purchase or otherwise
      become liable upon the obligation of any Person, except by the endorsement
      of
      negotiable instruments for deposit or collection or similar transactions in
      the
      ordinary course of business.

     

    9.7 Transfers
      of Notes or Accounts.
      It will
      not sell, assign, transfer, discount or otherwise dispose of any Accounts or
      any
      promissory note payable to it, with or without recourse.

     

    9.8 Modification
      of Documents.
      It will
      not change, alter or modify, or permit any change, alteration or modification
      of
      its certificate of incorporation, by-laws or other governing documents in any
      manner that might adversely affect Lenders’ rights hereunder as secured lender s
      or its Collateral without each Lender’s prior written consent.

     

    9.9 Change
      Business or Name.
      It will
      not change or alter the nature of its business, or change its name as it appears
      in the official filings of its state of organization.

     

    SECTION
      10 EVENTS
      OF DEFAULT.

     

    The
      occurrence of any of the following shall constitute an event of default
      (hereinafter referred to as an “Event
      of Default”):

    

    10.1 Failure
      to Pay.
      The
      failure by Borrower to pay, within ten (10) days after the due date, any payment
      of principal, interest or other charges due and owing to Lenders pursuant to
      any
      obligations of Borrower to Lenders including, without limitation, those
      Obligations arising pursuant to this Agreement or any Loan Document, or under
      any other agreement for the payment of monies then due and payable to
      Lenders.

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    10.2 Failure
      to Perform.
      Each of
      Borrower’s and/or Guarantor’s failure to perform or observe any covenant, term
      or condition of this Agreement for a period of fifteen (15) days or more from
      the date the Agent sends written notice to Borrower describing such failure
      to
      perform.

     

    10.3 Cross
      Default.
      Each of
      Borrower’s and/or Guarantor’s default under any covenant, representation, term
      or warranty contained in any other Loan Document after the expiration of any
      applicable cure provision (if any).

     

    10.4 False
      Representation or Warranty.
      Borrower
      or Guarantor shall have made any statement, representation or warranty in this
      Agreement or in any other Loan Document to which Borrower or Guarantor is a
      party or in a certificate executed by Borrower or Guarantor incident to this
      Agreement, which is at any time found to have been false in any material respect
      at the time such representation or warranty was made.

     

    10.5 Liquidation,
      Voluntary Bankruptcy, Dissolution, Assignment to Creditors.
      Any
      resolution shall be passed or any action (including a meeting of creditors)
      shall be taken by either Borrower or Guarantor for the termination, winding
      up,
      liquidation or dissolution of Borrower or Guarantor, or either Borrower or
      Guarantor shall make an assignment for the benefit of creditors, or either
      Borrower or Guarantor shall file a petition in voluntary liquidation or
      bankruptcy, or either Borrower or Guarantor shall file a petition or answer
      or
      consent seeking, or consenting to, the reorganization of Borrower or Guarantor
      or the readjustment of any of the indebtedness of Borrower or Guarantor under
      any applicable insolvency or bankruptcy laws now or hereafter existing
      (including the United States Bankruptcy Code), or either Borrower or Guarantor
      shall consent to the appointment of any receiver, administrator, liquidator,
      custodian or trustee of all or any part of the property or assets of Borrower
      or
      Guarantor or any corporate action shall be taken by Borrower or Guarantor for
      the purposes of effecting any of the foregoing.

     

    10.6 Involuntary
      Petition Against Borrower or Guarantor.
      Any
      petition or application for any relief is filed against either Borrower or
      Guarantor under applicable insolvency or bankruptcy laws now or hereafter
      existing (including the United States Bankruptcy Code) or under any insolvency,
      reorganization, receivership, readjustment of debt, dissolution or liquidation
      law or statute of any jurisdiction now or hereafter in effect (whether at law
      or
      in equity), and is not discharged or stayed within sixty (60) days of the filing
      thereof. 

     

    10.7 Judgments;
      Levies.
      Any
      judgments or attachments aggregating in excess of $100,000 at any given time
      is
      obtained against either Borrower or Guarantor which remains unstayed for a
      period of thirty (30) days or is enforced. 

     

    10.8 Change
      of Control.
      Either
      Borrower or Guarantor undergoes a Change of Control. 

     

    10.9 Dissolution;
      Maintenance of Existence.
      Either
      Borrower or Guarantor is dissolved, or either Borrower fails to maintain its
      corporate existence in good standing, or the usual business of Borrower ceases
      or is suspended in any respect and Borrower is not reinstated or in good
      standing within ten (10) days after such event occurs.

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    SECTION
      11 REMEDIES.

     

    11.1 Acceleration;
      Other Remedies.
      Solely
      upon the occurrence and during the continuation of an Event of Default:

     

    (a) Lenders
      shall have all rights and remedies provided in this Agreement, any of the other
      Loan Documents, the UCC or other applicable law, all of which rights and
      remedies may be exercised without notice to Borrower, all such notices being
      hereby waived, except such notice as is expressly provided for hereunder or
      is
      not waivable under applicable law. All rights and remedies of Lenders are
      cumulative and not exclusive and are enforceable, in Agent’s discretion,
      alternatively, successively, or concurrently on any one or more occasions and
      in
      any order Agent may determine. Without limiting the foregoing, a Lender may
      accelerate the payment of all Obligations and demand immediate payment thereof
      to such Lender. The Agent, upon the instruction of the Required Lenders, may
      (i)
      with or without judicial process or the aid or assistance of others, enter
      upon
      any premises on or in which any of the Collateral may be located and take
      possession of the Collateral or complete processing, manufacturing and repair
      of
      all or any portion of the Collateral, (ii) require Borrower, at Borrower’s
      expense, to assemble and make available to Agent any part or all of the
      Collateral at any place and time designated by Agent, (iii) collect, foreclose,
      receive, appropriate, setoff and realize upon any and all Collateral, (iv)
      extend the time of payment of, compromise or settle for cash, credit, return
      of
      merchandise, and upon any terms or conditions, any and all Accounts or other
      Collateral which includes a monetary obligation and discharge or release the
      Account Debtor or other obligor, without affecting any of the Obligations,
      (v)
      sell, lease, transfer, assign, deliver or otherwise dispose of any and all
      Collateral (including, without limitation, entering into contracts with respect
      thereto, by public or private sales at any exchange, broker's board, any office
      of Agent or elsewhere) at such prices or terms as Agent may deem reasonable,
      for
      cash, upon credit or for future delivery, with Agent having the right to
      purchase the whole or any part of the Collateral at any such public sale, all
      of
      the foregoing being free from any right or equity of redemption of Borrower,
      which right or equity of redemption is hereby expressly waived and released
      by
      Borrower. If any of the Collateral or other security for the Obligations is
      sold
      or leased by Agent upon credit terms or for future delivery, the Obligations
      shall not be reduced as a result thereof until payment therefor is finally
      collected by Agent. If notice of disposition of Collateral is required by law,
      ten (10) days prior notice by Agent to Borrower designating the time and place
      of any public sale or the time after which any private sale or other intended
      disposition of Collateral is to be made, shall be deemed to be reasonable notice
      thereof and Borrower waives any other notice. In the event Agent institutes
      an
      action to recover any Collateral or seeks recovery of any Collateral by way
      of
      prejudgment remedy, Borrower waives the posting of any bond which might
      otherwise be required.

     

    (b) Agent
      may
      apply the proceeds of Collateral actually received by Agent from any sale,
      lease, foreclosure or other disposition of the Collateral to payment of any
      of
      the Obligations, in whole or in part (including attorneys' fees and legal
      expenses incurred by Agent with respect thereto or otherwise chargeable to
      Borrower) and in such order as Agent may elect, whether or not then due, in
      accordance with the provision of Section 11.6. Borrower shall remain liable
      to
      Agent for the payment on demand of any deficiency together with interest at
      the
      Default Interest Rate and all costs and expenses of collection or enforcement,
      including reasonable attorneys' fees and legal expenses.

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    (c) Agent
      may, with the prior written consent of the Required Lenders, cure any default
      by
      Borrower under any agreement with a third party or pay or bond on appeal any
      judgment entered against Borrower, discharge taxes and Liens at any time levied
      on or existing with respect to the Collateral, and pay any amount, incur any
      expense or perform any act which, in Agent's sole judgment, is necessary or
      appropriate to preserve, protect, insure, maintain, or realize upon the
      Collateral. Such amounts paid by Agent shall be repayable by Borrower on demand
      and added to the Obligations, with interest payable thereon at the Default
      Interest Rate. Agent shall be under no obligation to effect such cure, payment,
      bonding or discharge, and shall not, by doing so, be deemed to have assumed
      any
      obligation or liability of Borrower.

     

    (d) Agent
      and
      Agent’s agents shall have the right to utilize any of Borrower’s customer lists,
      registered names, trade names or trademarks to publicly advertise the sell,
      lease, transfer, assign, deliver or otherwise dispose of any and all Collateral
      and Borrower will be deemed to have waived and voided any confidentiality
      agreements by and among Borrower and Agent.

     

    11.2 Costs
      and Expenses.
      Borrower
      shall be liable for all costs, charges and expenses, including attorney's fees
      and disbursements, incurred by Lenders by reason of the occurrence of any Event
      of Default or the exercise of Agent’s and each Lender's remedies with respect
      thereto, each of which shall be repayable by Borrower on demand with interest
      at
      the Default Interest Rate, and added to the Obligations.

     

    11.3 No
      Marshalling.
      Except
      as provided herein, Agent shall be under no obligation whatsoever to proceed
      first against any of the Collateral or other property which is security for
      the
      Obligations before proceeding against any other of the Collateral. It is
      expressly understood and agreed that all of the Collateral or other property
      which is security for the Obligations stands as equal security for all
      Obligations, and that Agent shall have the right to proceed against any or
      all
      of the Collateral or other property which is security for the Obligations in
      any
      order, or simultaneously, as in its sole and absolute discretion it shall
      determine. It is further understood and agreed that Agent shall have the right,
      subject to the notice provisions in this Agreement, as it in its sole and
      absolute discretion shall determine, to sell any or all of the Collateral or
      other property which is security for the Obligations in any order or
      simultaneously, as Agent shall determine in its sole and absolute
      discretion.

     

    11.4 No
      Implied Waivers; Rights Cumulative.
      No delay
      on the part of a Lender or Agent in exercising any right, remedy, power or
      privilege hereunder or under any other Loan Document or provided by statute
      or
      at law or in equity or otherwise shall impair, prejudice or constitute a waiver
      of any such right, remedy, power or privilege or be construed as a waiver of
      any
      Event of Default or as an acquiescence therein. No right, remedy, power or
      privilege conferred on or reserved to Lender hereunder or under any other Loan
      Document or otherwise is intended to be exclusive of any other right, remedy,
      power or privilege. Each and every right, remedy, power or privilege conferred
      on or reserved to Agent or a Lender under this Agreement or under any of the
      other Loan Documents or otherwise shall be cumulative and in addition to each
      and every other right, remedy, power or privilege so conferred on or reserved
      to
      Agent or a Lender and may be exercised by Agent or a Lender at such time or
      times and in such order and manner as Lender shall (in its sole and complete
      discretion) deem expedient.

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    11.5 Specific
      Performance. The
      Borrower acknowledges and agrees that the rights being protected by the terms
      of
      this Agreement are of a special value, and that the breach of any provision
      of
      this Agreement or any of the Loan Documents shall cause irreparable injury
      and
      damage to the Lenders. In such event that the Borrower commits a breach of
      any
      provision of this Agreement or any of the Loan Documents, the Lenders (or the
      Agent, if applicable) shall be entitled to seek specific performance of all
      of
      the acts and the undertakings required hereunder and to obtain injunctive and
      other equitable relief to prevent the violation or threatened violation of
      any
      of the provisions of this Agreement. 

     

    11.6 Application
      of Payments and Proceeds.
      All
      payments remitted to Agent (or Lenders) and all proceeds of Collateral received
      by Agent shall be applied as follows:

     

    (A) first,
      to pay
      any expenses and fees of the Agent (including cost or expense reimbursements)
      or
      indemnities then due to Agent under the Loan Documents, until paid in
      full,

     

    (B) second,
      to pay
      any expenses
      and fees of the Lenders (including cost or expense reimbursements) or
      indemnities then
      due
      to Lenders under the Loan Documents, until paid in full,

     

    (C) third,
      ratably
      to the Lenders to pay interest due in respect of the Loan until paid in
      full,

     

    (D) fourth,
      ratably
      to the Lenders to pay the outstanding principal balance of the Loan until the
      Loan is paid in full, and 

     

    (E) fifth,
      to
      Borrower.

     

    SECTION
      12 OTHER
      RIGHTS OF LENDERS.

     

    12.1 Agent
      Appointed Attorney-in-Fact.

     

    (a) Borrower
      hereby irrevocably constitutes and appoints Agent (and any successor Agent
      appointed pursuant to Section 13.12 hereof), with full power of substitution,
      as
      its true and lawful attorney-in-fact, with full irrevocable power and authority
      in its place and stead and in its name or otherwise, from time to time in
      Agent’s discretion, at Borrower’s sole cost and expense, to take any and all
      appropriate action and to execute and deliver any and all documents and
      instruments which Agent may deem reasonably necessary or advisable to accomplish
      the purposes of this Agreement. 

    

    (b) Borrower
      hereby ratifies, to the extent permitted by law, all that Agent shall lawfully
      and in good faith do or cause to be done by virtue of and in compliance with
      this Agreement. The powers of attorney granted pursuant to this Agreement are
      each a power coupled with an interest and shall be irrevocable until the
      Obligations are paid indefeasibly in full.

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    12.2 Bid
      Restriction.
      Borrower shall not consummate a transaction of a type described in Section
      9.1
      or Section 9.2 with any Person for an amount that will not result in full
      repayment on or prior to the Maturity Date of all Obligations owed to the
      Lenders hereunder. 

     

    SECTION
      13 
      THE AGENT.

     

    13.1 Appointment;
      Nature of Relationship.
      Federated Kaufmann (and any successor Agent appointed pursuant to Section 13.12
      hereof) is hereby appointed by each of the Lenders as its contractual
      representative (herein referred to as the “Agent”)
      hereunder and under each other Loan Document, and each of the Lenders
      irrevocably authorizes the Agent to take such actions on its behalf and to
      exercise such powers as are delegated to the Agent by the terms hereof, together
      with such actions and powers as are reasonably incidental thereto. The Agent
      shall not have any duties or obligations except those expressly set forth
      herein. Without limiting the generality of the foregoing, (a) the Agent shall
      not be subject to any fiduciary or other implied duties, regardless of whether
      an Event of Default has occurred and is continuing, (b) the Agent shall not
      have
      any duty to take any discretionary action or exercise any discretionary powers,
      except discretionary rights and powers expressly contemplated hereby that the
      Agent is required to exercise in writing as directed by the Required Lenders,
      and (c) except as expressly set forth herein, the Agent shall not have any
      duty
      to disclose, and shall not be liable for the failure to disclose, any
      information relating to the Borrower or any of its Subsidiaries that is
      communicated to or obtained by the Agent or any of its Affiliates in any
      capacity. The Agent shall not be liable for any action taken or not taken by
      it
      with the consent or at the request of the Required Lenders or in the absence
      of
      its own gross negligence or willful misconduct. The Agent shall be deemed not
      to
      have knowledge of any Event of Default unless and until written notice thereof
      is given to the Agent by the Borrower or a Lender, and the Agent shall not
      be
      responsible for or have any duty to ascertain or inquire into (i) any statement,
      warranty or representation made in or in connection with this Agreement, (ii)
      the contents of any certificate, report or other document delivered hereunder
      or
      in connection herewith, (iii) the performance or observance of any of the
      covenants, agreements or other terms or conditions set forth herein, (iv) the
      validity, enforceability, effectiveness or genuineness of this Agreement or
      any
      other agreement, instrument or document, or (v) the satisfaction of any
      condition set forth herein, other than to confirm receipt of items expressly
      required to be delivered to the Agent.

     

    13.2 Powers.
      The
      Agent
      shall have and may exercise such powers for the benefit of the Lenders under
      the
      Loan Documents as are specifically delegated to the Agent by the terms of each
      thereof, together with such powers as are reasonably incidental thereto. The
      Agent shall have no implied duties to the Lenders, or any obligation to the
      Lenders to take any action thereunder except any action specifically provided
      by
      the Loan Documents to be taken by the Agent.

     

    13.3 General
      Immunity.
      Neither
      the Agent nor any of its directors, officers, agents or employees shall be
      liable to the Borrower, the Lenders or any Lender for any action taken or
      omitted to be taken by it or them hereunder or under any other Loan Document
      or
      in connection herewith or therewith except to the extent such action or inaction
      is determined in a final non-appealable judgment by a court of competent
      jurisdiction to have arisen from the gross negligence or willful misconduct
      of
      such Person.

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    13.4 No
      Responsibility for Loans, Recitals, etc.
      Neither
      the Agent nor any of its directors, officers, agents or employees shall be
      responsible for or have any duty to ascertain, inquire into, or verify (a)
      any
      statement, warranty or representation made in connection with any Loan Document
      or any borrowing hereunder; (b) the performance or observance of any of the
      covenants or agreements of any obligor under any Loan Document, including,
      without limitation, any agreement by an obligor to furnish information directly
      to each Lender; (c) the satisfaction of any condition specified in Section
      6,
      except receipt of items required to be delivered solely to the Agent; (d) the
      existence or possible existence of an Event of Default; (e) the validity,
      enforceability, effectiveness, sufficiency or genuineness of any Loan Document
      or any other instrument or writing furnished in connection therewith; (f) the
      value, sufficiency, creation, perfection or priority of any Lien in any
      Collateral; or (g) the financial condition of the Borrower or any guarantor
      of
      any of the Obligations or of any of the Borrower’s or any such guarantor’s
      respective Subsidiaries.

     

    13.5 Action
      on Instructions of Lenders.
      The
      Agent shall in all cases be fully protected in acting, or in refraining from
      acting, hereunder and under any other Loan Document in accordance with written
      instructions signed by the Required Lenders, and such instructions and any
      action taken or failure to act pursuant thereto shall be binding on all of
      the
      Lenders. The Lenders hereby acknowledge that the Agent shall be under no duty
      to
      take any discretionary action permitted to be taken by it pursuant to the
      provisions of this Agreement or any other Loan Document unless it shall be
      requested in writing to do so by the Required Lenders. The Agent shall be fully
      justified in failing or refusing to take any action hereunder and under any
      other Loan Document unless it shall first be indemnified to its satisfaction
      by
      the Lenders pro rata against any and all liability, cost and expense that it
      may
      incur by reason of taking or continuing to take any such action.

     

    13.6 Agent’s
      Reimbursement and Indemnification.
      The
      Lenders agree to reimburse and indemnify the Agent ratably in proportion to
      their respective Term Loan Commitments (or, if the Term Loan Commitments have
      been terminated, in proportion to their Term Loan Commitments immediately prior
      to such termination), to the extent such is not first reimbursed or indemnified
      by the Borrower or the Guarantor, as the case may be, (i) for all actual and
      reasonable expenses incurred by the Agent on behalf of the Lenders, in
      connection with the administration and enforcement of the Loan Documents (the
      forgoing clause (i), collectively, the “Expenses”)
      and
      (ii) for any Obligations, losses, damages, penalties, actions, judgments, suits,
      costs, expenses or disbursements of any kind and nature whatsoever which may
      be
      imposed on, incurred by or asserted against the Agent in any way relating to
      or
      arising out of the Loan Documents or any other document delivered in connection
      therewith or the transactions contemplated thereby, or the enforcement of any
      of
      the terms of the Loan Documents or of any such other documents (the forgoing
      clause (ii), collectively, the “Losses”
      and
      together with the Expenses, the “Lender
      Obligations”);
      provided that no Lender shall be liable for any Expenses or Losses to the extent
      any of the foregoing is found in a final non-appealable judgment by a court
      of
      competent jurisdiction to have resulted from the gross negligence or willful
      misconduct of the Agent. Any amounts owed to the Agent by the Lenders for
      reimbursement or indemnification as provided in this Section 13.6 shall be
      first
      paid by the proceeds of the Collateral as provided in Section 11.6 hereof.
      The
      Obligations of the Lenders under this Section 13.6 shall survive payment of
      the
      Obligations and termination of this Agreement. 

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    13.7 Notice
      of Expenses and Losses. 
      At such time the Agent has incurred Expenses or Losses  in
      excess
      of $5,000, the Agent shall provide to each Lender (a) within seven (7) days
      an
      itemized statement of such Expenses and Losses stating the amount of each
      such Loss or Expense, the person to whom each such Expense is
      owed
      or the circumstance under which the Loss was incurred, 
      and
      (b) within seven (7) days after the beginning of each month thereafter
      during the Term, a similar itemized statement of total
      incurred Expenses and Losses incurred
      during
      the previous month.

     

    13.8 Notice
      of Default.
      The
      Agent shall not be deemed to have knowledge or notice of the occurrence of
      an
      Event of Default hereunder unless the Agent has received written notice from
      a
      Lender or the Borrower referring to this Agreement describing such Event of
      Default. In the event that the Agent receives such a notice, the Agent shall
      give prompt notice thereof to the Lenders in writing. The Agent agrees and
      acknowledges that time is of the essence in giving prompt notice.

     

    13.9 Rights
      as a Lender.
      In the
      event the Agent is a Lender, the Agent shall have the same rights and powers
      hereunder and under any other Loan Document with respect to its Loans as any
      Lender and may exercise the same as though it were not the Agent, and the term
      “Lender” or “Lenders” shall, at any time when the Agent is a Lender, unless the
      context otherwise indicates, include the Agent in its individual capacity.
      The
      Agent and its Affiliates may accept deposits from, lend money to, and generally
      engage in any kind of trust, debt, equity or other transaction, in addition
      to
      those contemplated by this Agreement or any other Loan Document, with the
      Borrower or any of its subsidiaries in which the Borrower or such subsidiary
      is
      not restricted hereby from engaging with any other Person. 

     

    13.10 Execution
      of Collateral Documents.
      The
      Lenders hereby empower and authorize the Agent to execute and deliver to the
      Borrower on their behalf security agreements, pledge agreements and all related
      financing statements and any financing statements, agreements, documents or
      instruments as shall be necessary or appropriate to effect the purposes of
      the
      same.

     

    13.11 Collateral
      Releases.
      The
      Lenders hereby empower and authorize the Agent to execute and deliver to the
      Borrower on their behalf any agreements, documents or instruments as shall
      be
      necessary or appropriate to effect any releases of Collateral which shall be
      permitted by the terms hereof or of any other Loan Document or which shall
      otherwise have been approved by the Required Lenders in writing.

    

    13.12 Right
      to Subordinate.
      

     

    (a) Notwithstanding
      anything to the contrary contained herein or in any other Loan Document, each
      Lender may, upon not less than five (5) Business Days prior written notice
      to
      the other Lender, the Borrower and the Guarantor (such notice, the “Subordination
      Notice”),
      subordinate all of the Obligations due or owing to such Lender (the
“Subordinated
      Lender”
and
      such Obligations, the “Subordinated
      Lender Debt”)
      to the
      Obligations due or owing to the other Lender (the “Senior
      Lender,”
such
      Obligations the “Senior
      Debt,”
each
      such event, a “Subordination
      Event”
and
      the
      date of each such event, the “Subordination
      Event Date”).

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    (b) If
      a
      Subordination Event has occurred, then, on the Subordination Event Date, without
      any further action by any party hereto:

     

    (i) Subordinated
      Lender subordinates all Subordinated Lender Debt and all claims and demands
      arising therefrom to all of the Senior Debt, and the payment of any and all
      Subordinated Lender Debt shall be and hereby is expressly made subordinate
      and
      junior in right and time of the prior payment in full of all Senior
      Debt;

     

    (ii) Subordinated
      Lender agrees that to the extent herein provided all of the Senior Debt shall
      be
      Satisfied before Subordinated Lender shall be paid anything (of any kind or
      character) on account of any Subordinated Lender Debt; provided, however, prior
      to the date the Senior Debt is Satisfied, so long as no Event of Default exists
      or would result therefrom, Borrower (or Guarantor) may make and the Subordinated
      Lender may receive in respect of the Subordinated Lender Debt, its pro rate
      share of regularly scheduled payments of interest pursuant of the terms of
      Section 3.1 hereof. 

     

    (iii) until
      all
      of the Senior Debt is Satisfied, neither the Borrower nor Guarantor shall make,
      and Subordinated Lender shall not demand, receive, retain, or accept, either
      directly or indirectly, payment (of any kind or character) of all or any part
      of
      the Subordinated Lender Debt without the prior written consent of the
      Agent;

     

    (iv) the
      Subordinated Lender hereby subordinates any and all Liens in favor of the
      Subordinated Lender to secure the Subordinated Lender Debt (each a “Subordinated
      Lien”)
      to all
      Liens in favor of the Senior Lender to secure the Senior Debt (each a
“Senior
      Lien”)
      and
      agrees that all Senior Liens shall have priority over all Subordinated Liens,
      regardless of the time or order of attachment, the time, order or manner of
      perfection, or the time or order filing of any mortgage, debenture, deed or
      trust assignment, security agreement, financing statement or other
      document;

     

    (v) in
      the
      event of a Proceeding, all Senior Debt first shall be Satisfied before any
      payment of or with respect to the Subordinated Lender Debt shall be made and
      this Agreement shall remain in full force and effect notwithstanding any
      Proceeding commenced by or against any party hereto;

     

    (vi) if
      Subordinated Lender receives any distribution or payment prohibited under this
      Section
      13.12,
      or
      receives any payment (of any kind or character) of any Subordinated Lender
      Debt
      in violation of this Agreement, Subordinated Lender shall (A) notify the Agent
      immediately in writing thereof and (B) receive the same in trust for the Agent
      and Subordinated Lender shall immediately pay and deliver the same to Agent
      in
      precisely the form received, except for any requisite endorsement or assignment;
      

     

    (vii) Subordinated
      Lender agrees not to interfere with any disposition of Collateral by or at
      the
      direction of the Agent; 

     

    (viii) until
      the
      Senior Indebtedness is Satisfied and notwithstanding anything to the contrary
      contained herein or in any other Loan Document, Subordinated Lender shall not
      take any Subordinated Collection Action; 

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    (ix) if
      the
      Subordinated Lender is the Agent prior to the Subordination Event, (A) the
      Subordinated Lender shall automatically cease to be the Agent hereunder and
      (B)
      the Senior Lender shall, in the Senior Lender’s sole and absolute discretion,
      either (1) elect to become the Agent by delivering prior written notice to
      the
      Subordinated Lender, Borrower and Guarantor or (ii) appoint any other Person
      reasonably acceptable to the Borrower or Guarantor as the Agent hereunder
      (Senior Lender may make each of the foregoing actions at any time on or after
      receiving the Subordination Notice); and

     

    (x) On
      and
      after the Subordination Event Date, the Subordinated Lender shall cease to
      be
      responsible for any and all Lender Obligations (other than any Lender
      Obligations that are proved by the Agent to have arisen or resulted from any
      action or inaction of the Agent prior to the applicable Subordination Event
      Date).

    

    SECTION
      14 SETOFF;
      RATABLE PAYMENTS.

     

    14.1 Setoff.
      In
      addition to, and without limitation of, any rights of the Lenders under
      applicable law, if the Borrower becomes insolvent, however evidenced, or any
      Event of Default occurs, any and all deposits (including all account balances,
      whether provisional or final and whether or not collected or available) and
      any
      other Indebtedness at any time held or owing by any Lender or any Affiliate
      of
      any Lender to or for the credit or account of the Borrower may be offset and
      applied toward the payment of the Obligations owing to such Lender, whether
      or
      not the Obligations, or any part thereof, shall then be due.

     

    14.2 Ratable
      Payments.
      Except
      as otherwise agreed in writing by the Lenders, if any Lender, whether by setoff
      or otherwise, has payment made to it upon its Loan in a greater proportion
      than
      that received by any other Lender, such Lender agrees, promptly upon demand,
      to
      purchase a portion of the Loan held by the other Lenders so that after such
      purchase each Lender will hold its ratable proportion of Loan. If any Lender,
      whether in connection with setoff or amounts which might be subject to setoff
      or
      otherwise, receives collateral or other protection for its Obligations or such
      amounts which may be subject to setoff, such Lender agrees, promptly upon
      demand, to take such action necessary such that all Lenders share in the
      benefits of such collateral ratably in proportion to their Loan. In case any
      such payment is disturbed by legal process, or otherwise, appropriate further
      adjustments shall be made.

     

    SECTION
      15 PROVISIONS
      OF GENERAL APPLICATION.

     

    15.1 Transactional
      Expenses. The
      Borrower shall pay, and hold the Agent harmless against liability for the
      payment of reasonable attorneys fees and the out-of-pocket expenses of Agent
      arising in connection with the negotiation and execution of this Agreement
      and
      any other Loan Document and the consummation of the transactions contemplated
      by
      this Agreement and any other Loan Document, to be paid promptly on the Closing
      Date. If the closing does not occur due to a decision by the Borrower not to
      proceed with the transactions contemplated hereunder, the reasonable attorneys
      fees plus the out of pocket expenses of Agent arising in connection with the
      negotiation and execution of this Agreement and any other Loan Document, shall
      be paid promptly by Borrower after the termination of this
      Agreement.

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    15.2 Waivers.
      Borrower
      waive demand, presentment, notice of dishonor protest and notice of protest
      of
      any instrument of Borrower or others which may be included in the
      Collateral.

     

    15.3 Survival.
      All
      covenants, agreements, representations and warranties made by Borrower herein
      or
      in any other Loan Document or in any certificate, report or instrument
      contemplated hereby shall survive any independent investigation made by each
      Lender and the execution and delivery of this Agreement, and such certificates,
      reports or instruments and shall continue so long as any Obligations are
      outstanding and unsatisfied, applicable statutes of limitations to the contrary
      notwithstanding.

     

    15.4 Notices.
      All
      notices, requests and demands to or upon the respective parties hereto shall
      be
      in writing and either (a) delivered by hand or (b) delivered by national
      overnight courier service, and shall be deemed to have been duly given or made
      upon receipt by the receiving party. All notices, requests and demands are
      to be
      given or made to the respective parties at the following addresses (or to such
      other addresses as either party may designate by notice in accordance with
      the
      provisions of this paragraph):

     

    
      	
              If
                to Borrower:

            	 	
              Hydrogen
                L.L.C.

            
	 	 	
              2
                Juniper Street

            
	 	 	
              Versailles,
                Pennsylvania 15132

            
	 	 	
              Attention:
                Chief Executive Officer

            
	 	 	 
	
              With
                a copy to:

            	 	
              HydroGen
                Corporation

            
	 	 	
              10
                East 40th Street, Suite 3405

            
	 	 	
              New
                York, New York 10016

            
	 	 	
              Attention:
                General Counsel

            
	 	 	 
	
              With
                a copy to:

            	 	
              Duane
                Morris LLP

            
	 	 	
              190
                South LaSalle Street

            
	 	 	
              Suite
                3700

            
	 	 	
              Chicago,
                Illinois 60603

            
	 	 	
              Attention:
                Richard T. Ruzich, Esq.

            
	 	 	 
	
              If
                to Lenders

            	 	 
	
              or
                Agent:

            	 	
              Federated
                Kaufmann Fund

            
	 	 	
              140
                East 45th Street, 43rd Floor

            
	 	 	
              New
                York, NY 10017

            
	 	 	
              Attention:
                Jonathan E. Gold

            

    

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    

    
      	
              With
                a copy to:

            	 	
              Reed
                Smith LLP

            
	 	 	
              599
                Lexington Avenue, 28th Floor

            
	 	 	
              New
                York, New York 10022

            
	 	 	
              Attention:
                Gerard S. DiFiore, Esq.

            
	 	 	 
	
              If
                to Samsung

            	 	 
	
              C&T Corporation:

            	 	
              Samsung
                C&T Corporation

            
	 	 	
              30th
                Floor Samsung C&T Corporation Building

            
	 	 	
              1321-20,
                Seocho-2 Dong, Seocho-Gu

            
	 	 	
              Seoul,
                Korea

            
	 	 	
              Attention:
                Hachull Chung

            
	 	 	 
	
              With
                a copy to:

            	 	
              Samsung
                C&T Corporation

            
	 	 	
              32nd
                Floor Samsung C&T Corporation Building

            
	 	 	
              1321-20,
                Seocho-2 Dong, Seocho-Gu

            
	 	 	
              Seoul,
                Korea

            
	 	 	
              Attention:
                JongYun Kim, Esq.

            

    

    

    Notwithstanding
      the foregoing, that parties expressly acknowledge and agree that foregoing
      provisions of notice by Lenders to Borrower’s counsel is an accommodation only,
      and that Lender shall have fulfilled its notice obligation hereunder if notice
      shall have been received by Borrower at the address set forth above,
      irrespective of whether such notice is received by Borrower’s counsel.

    

    15.5 Amendments;
      Waiver of Defaults.
      The
      terms of this Agreement shall not be amended, waived, altered, modified,
      supplemented or terminated in any manner whatsoever except by a written
      instrument signed by the Required Lenders, Agent, and Borrower. Any default
      or
      Event of Default by Borrower may only be waived by a written instrument
      specifically describing such default or Event of Default and signed by the
      Lender.

     

    15.6 Binding
      on Successors. 

     

    (a) This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors and assigns, provided, however, that Borrower
      may not assign any of its rights or obligations under this Agreement or the
      other Loan Documents to any Person without the prior written consent of each
      Lender. 

    

    (b) A
      Lender
      may assign any or all of the Obligations together with any or all of the
      security therefor to any Person and any such assignee shall succeed to all
      of
      such Lender’s rights with respect thereto upon the consent of the Borrower. Such
      Lender shall notify the other Lender and Borrower of any such assignment. Upon
      such assignment, such assigning Lender shall have no further obligations under
      the Loan Documents. 

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    15.7 Invalidity.
      Any
      provision of this Agreement which may be determined by competent authority
      to be
      prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
      be ineffective to the extent of such prohibition or unenforceability without
      invalidating the remaining provisions hereof, and any such prohibition or
      unenforceability in any jurisdiction shall not invalidate or render
      unenforceable such provision in any other jurisdiction.

     

    15.8 Section
      or Paragraph Headings.
      Section
      and paragraph headings are for convenience only and shall not be construed
      as
      part of this Agreement.

     

    15.9 APPLICABLE
      LAW:
      THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF NEW YORK, THE LAWS OF WHICH THE BORROWER HEREBY
      EXPRESSLY ELECTS TO APPLY TO THIS AGREEMENT, WITHOUT GIVING EFFECT TO PROVISIONS
      FOR CHOICE OF LAW HEREUNDER. THE BORROWER AGREES THAT ANY ACTION OR PROCEEDING
      BROUGHT TO ENFORCE OR ARISING OUT OF THIS AGREEMENT SHALL BE COMMENCED IN
      ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT. 

     

    15.10 WAIVER
      OF JURY TRIAL:
      BORROWER HEREBY WAIVES ANY AND ALL RIGHTS THAT IT MAY NOW OR HEREAFTER HAVE
      UNDER THE LAWS OF THE UNITED STATES OF AMERICA OR ANY STATE TO A TRIAL BY JURY
      OF ANY AND ALL ISSUES ARISING EITHER DIRECTLY OR INDIRECTLY IN ANY ACTION OR
      PROCEEDING BETWEEN BORROWER, AGENT, EACH LENDER OR ITS SUCCESSORS AND ASSIGNS,
      OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE OTHER LOAN DOCUMENTS,
      THE OBLIGATIONS AND/OR THE COLLATERAL. IT IS INTENDED THAT SAID WAIVER SHALL
      APPLY TO ANY AND ALL DEFENSES, RIGHTS, AND/OR COUNTERCLAIMS IN ANY ACTION OR
      PROCEEDINGS BETWEEN BORROWER AND AGENT OR ANY LENDER. BORROWER WAIVES ALL RIGHTS
      TO INTERPOSE ANY CLAIMS, DEDUCTIONS, SETOFFS OR COUNTERCLAIMS OF ANY KIND,
      NATURE OR DESCRIPTION IN ANY ACTION OR PROCEEDING INSTITUTED BY EACH LENDER
      WITH
      RESPECT TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, THE OBLIGATIONS, THE
      COLLATERAL OR ANY MATTER ARISING THEREFROM OR RELATING THERETO, EXCEPT
      COMPULSORY COUNTERCLAIMS.

     

    15.11 CONSENT
      TO JURISDICTION:
      BORROWER HEREBY (a)
      IRREVOCABLY SUBMITS AND CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE STATE
      AND
      FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK, WITH RESPECT TO ANY ACTION
      OR
      PROCEEDING ARISING OUT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, THE
      OBLIGATIONS AND/OR THE COLLATERAL OR ANY MATTER ARISING THEREFROM OR RELATING
      THERETO, AND (b)
      WAIVES ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS
      WITH RESPECT THERETO. IN ANY SUCH ACTION OR PROCEEDING, BORROWER WAIVES PERSONAL
      SERVICE OF THE SUMMONS AND COMPLAINT OR OTHER PROCESS AND PAPERS THEREIN AND
      AGREES THAT THE SERVICE THEREOF MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT
      REQUESTED, DIRECTED TO BORROWER AT ITS OFFICES SET FORTH HEREIN OR OTHER ADDRESS
      THEREOF OF WHICH LENDER HAS RECEIVED NOTICE AS PROVIDED IN THIS
      AGREEMENT.

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    15.12 Entire
      Agreement.
      This
      Agreement, the other Loan Documents, any supplements or amendments hereto or
      thereto, and any instruments or documents delivered or to be delivered in
      connection herewith or therewith represents the entire agreement and
      understanding concerning the subject matter hereof and thereof between the
      parties hereto, and supersede all other prior agreements, understandings,
      negotiations and discussions, representations, warranties, commitments,
      proposals, offers and contracts concerning the subject matter hereof, whether
      oral or written. In the event of any inconsistency between the terms of this
      Agreement and any schedule or exhibit hereto, the terms of this Agreement shall
      govern.

     

    15.13 Counterparts.
      This
      Agreement may be executed in counterparts and by facsimile or other electronic
      signatures, each of which when so executed, shall be deemed an original, but
      all
      of which shall constitute but one and the same instrument.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      this
      Loan and Security Agreement has been duly executed as of the day and year first
      above written.

    

    
      	
              BORROWER:

            
	 
	
              HYDROGEN,
                L.L.C.

            
	 	 
	
              By:

            	/s/
              John J. Freeh
	
              Name:
                

            	
              John
                J. Freeh

            
	
              Title:

            	Chief
              Executive Officer  
	 	 
	
              GUARANTOR:

            
	 
	
              HYDROGEN
                CORPORATION

            
	 	 
	
              By:
                

            	/s/
              John J. Freeh  
	
              Name:
                

            	John
              J. Freeh
	
              Title:
                

            	Chief
              Executive
              Officer   
	 	 
	
              AGENT:

            
	 
	
              FEDERATED
                KAUFMANN FUND

            
	
              a
                portfolio of Federated Equity Funds

            
	 	 
	
              By:
                

            	/s/
              Lawrence Auriana
	
              Name:
                

            	Lawrence
              Auriana
	
              Title:
                

            	Vice
              President
	 	 
	
              LENDERS:

            
	 
	
              FEDERATED
                KAUFMANN FUND

            
	
              a
                portfolio of Federated Equity Funds

            
	 	 
	
              By:
                

            	/s/
              Lawrence Auriana
	
              Name:
                

            	Lawrence
              Auriana
	
              Title:
                

            	Vice
              President

    

    

    [Signature
      Page to Loan and Security Agreement]

    
      
        
        

      

      
        S-1

        
          

        

      

      
        
        

      

    

    

    
      	
              SAMSUNG
                C&T CORPORATION

            
	 	 
	
              By:

            	/s/
              Cheol-Woo Lee
	
              Name:

            	Cheol-Woo
              Lee
	
              Title:
                

            	Senior
              Executive Vice President 

    

    

    [Signature
      Page to Loan and Security Agreement]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    
      [FORM
        OF WARRANT]

      

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

      

      HYDROGEN
        CORPORATION

       

      WARRANT
        

       

      
        	
                Warrant
                  No. XXXX

              	
                Original
                  Issue Date: August 22, 2008

              

      

       

      HYDROGEN
        CORPORATION, a Nevada corporation (the “Company”),
        hereby certifies that, for value received, [NAME OF LENDER] or its permitted
        registered assigns (the “Holder”),
        is
        entitled to purchase from the Company up to a total of 400,000 shares of
        common
        stock, $0.001 par value (the “Common
        Stock”),
        of
        the Company (each such share, a “Warrant
        Share”
and
        all
        such shares, the “Warrant
        Shares”)
        at an
        exercise price per share equal to the Exercise Price (as defined herein),
        at
        such time and in such amount as more fully described herein, and subject
        to the
        following terms and conditions: 

      

      This
        Warrant is issued pursuant to that certain Loan and Security Agreement, dated
        August 22, 2008, by and among the Company, HydroGen L.L.C., Federated Kaufmann
        Fund, a portfolio of Federated Equity Fund, as Agent for Federated Kaufmann
        Fund
        and Samsung C&T Corporation (the “Loan
        and Security Agreement”).
        The
        Warrants and Warrant Shares shall be referred to herein collectively as the
        “Securities.”

       

      1.
         Definitions.
        In
        addition to the terms defined elsewhere in this Warrant, capitalized terms
        that
        are not otherwise defined herein have the meanings given to such terms in
        the
        Security and Loan Agreement. 

        

      2.  List
        of Warrant Holders.
        The
        Company shall register this Warrant, upon records to be maintained by the
        Company for that purpose (the “Warrant
        Register”),
        in
        the name of the record Holder (which shall include the initial Holder or,
        as the
        case may be, any registered assignee to which this Warrant is permissibly
        assigned hereunder from time to time). The Company may deem and treat the
        registered Holder of this Warrant as the absolute owner hereof for the purpose
        of any exercise hereof or any distribution to the Holder, and for all other
        purposes, absent actual notice to the contrary. 

       

      3.
         List
        of Transfers.
        

      

      (a) This
        Warrant is subject to the restrictions noted in the legend set forth on the
        first page of this Warrant.

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      (b) The
        Company shall register any such transfer of all or any portion of this Warrant
        in the Warrant Register, upon (i) surrender of this Warrant, with the Form
        of
        Assignment attached hereto duly completed and signed, to the Company at its
        address specified in Section 13 hereof and (ii) if a registration statement
        is
        not effective, (x) delivery, at the request of the Company, of an opinion
        of
        counsel reasonably satisfactory to the Company, to the effect that the transfer
        of such portion of this Warrant may be made pursuant to an available exemption
        from the registration requirements of the Securities Act and all applicable
        state securities or blue sky laws and (y) delivery by the transferee of a
        written statement to the Company certifying that the transferee is an
“accredited investor” as defined in Rule 501(a) under the Securities Act and
        making the representations and certifications set forth below in Section
        3(c),
        to the Company at its address specified herein. Upon any such registration
        or
        transfer, a new Warrant to purchase Common Stock, in substantially the form
        of
        this Warrant (any such new Warrant, a “New
        Warrant”),
        evidencing the portion of this Warrant so transferred shall be issued to
        the
        transferee and a New Warrant evidencing the remaining portion of this Warrant
        not so transferred, if any, shall be issued to the transferring Holder. The
        acceptance of the New Warrant by the transferee thereof shall be deemed the
        acceptance by such transferee of all of the rights and obligations in respect
        of
        the New Warrant that the Holder has in respect of this Warrant. Notwithstanding
        the foregoing, to the extent a Holder desires to transfer this Warrant to
        a
        non-affiliate after the effectiveness of any registration statement filed
        by the
        Company to register for offer and sale the Warrant Shares, then such transferee
        shall not be entitled to the registration rights associated with the underlying
        Warrant Shares but shall be entitled to all other rights as a Holder hereunder,
        including the right to exercise this Warrant on a “cashless” exercise basis
        pursuant to Section 10(b) hereof.

      

      (c) Any
        transferee of the Warrant shall represent and warrant to the Company the
        following:

      

      (i)
        Investment
        Intent.
        Such
        transferee understands that the Securities are “restricted securities” and have
        not been registered under the Securities Act or any applicable state securities
        law and is acquiring the Securities and, upon exercise of the Warrant will
        acquire the Warrant Shares issuable upon exercise thereof, as principal for
        its
        own account for investment purposes only and not with a view to or for
        distributing or reselling such Securities or any part thereof, without
        prejudice, however, to such transferee's right, subject to the provisions
        of
        this Agreement, at all times to sell or otherwise dispose of all or any part
        of
        such Securities pursuant to an effective registration statement under the
        Securities Act or under an exemption from such registration and in compliance
        with applicable federal and state securities laws. Subject to the immediately
        preceding sentence, nothing contained herein shall be deemed a representation
        or
        warranty by such transferee to hold the Securities for any period of time.
        Such
        transferee is acquiring the Securities hereunder in the ordinary course of
        its
        business. Such transferee does not have any agreement, plan or understanding,
        directly or indirectly, with any Person to distribute any of the
        Securities. 

      

      (ii)
        Purchaser
        Status.
        At the
        time such transferee was offered the Securities, it was, and at the date
        hereof
        it is, and on each date on which it exercises the Warrants it will be, an
        “accredited investor” as defined in Rule 501(a) under the Securities Act. Such
        transferee is not a registered broker-dealer under Section 15 of the Exchange
        Act.

       

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

      

      4.
         Exercise,
        Price and Duration of Warrants.
        

       

      (a)
         This
        Warrant shall be exercisable by the registered Holder in the amounts and
        at the
        times as stated below: 

      

      (i)
        At
        any time and from time to time on or after the Closing Date and through and
        including the Expiration Date, the registered Holder of this Warrant may
        exercise this Warrant by purchasing up to 200,000 Warrant Shares at the Exercise
        Price.

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      (ii)
        At
        any time and from time to time on or after the date on which the amount in
        the
        Borrower’s Account is released to the Borrowers pursuant to Section 2.1 of the
        Loan and Security Agreement (such date a “Vesting Date” and together with the
        Closing Date, the “Vesting Dates”) and through and including the Expiration
        Date, the registered Holder of this Warrant may exercise this Warrant by
        purchasing up to 200,000 Warrant Shares at the Exercise Price. 

      

      (b)
         As
        used
        in this Agreement, the following terms shall have their respective
        meaning:

      

      (i)
        “Exercise Price” shall mean the per share price equal to the volume weighted
        average sale price (regular way) for each trade for
        the
        period starting on the 25th trading day prior to the respective Vesting Date
        and
        ending on the 10th trading day prior to such Vesting
        Date.

      

      (ii)
        “Expiration Date” shall mean August 22, 2013.

      

      (c)
         Subject
        to Section 11 hereof, at 5:00 p.m., New York City time, on the Expiration
        Date,
        the portion of this Warrant not exercised prior thereto shall be and become
        void
        and of no value and this Warrant shall be terminated and no longer outstanding.
        

      

      (d) The
        Holder may exercise this Warrant by delivering to the Company (i) an exercise
        notice, in the form attached hereto (the “Exercise
        Notice”),
        completed and duly signed, together with the aggregate Exercise Price for
        the
        number of Warrant Shares to be issued pursuant to such exercise, and (ii)
        if
        such Holder is not utilizing the cashless exercise provisions set forth in
        this
        Warrant, payment of the Exercise Price for the number of Warrant Shares as
        to
        which this Warrant is being exercised, and the date such items are delivered
        to
        the Company (as determined in accordance with the notice provisions hereof)
        is
        an “Exercise
        Date.”
The
        delivery by (or on behalf of) the Holder of the Exercise Notice and the
        applicable Exercise Price shall be accompanied by a statement by the Holder
        certifying to the Company the representations and warranties contained in
        Section 3(c) hereof. The Holder shall not be required to deliver the original
        Warrant in order to effect an exercise hereunder. Execution and delivery
        of the
        Exercise 

      

      Notice
        shall have the same effect as cancellation of the original Warrant and issuance
        of a New Warrant evidencing the right to purchase the remaining number of
        Warrant Shares.

       

       5.
         Delivery
        of Warrant Shares.
        

       

      (a)
         Upon
        exercise of this Warrant, the Company shall promptly (but in no event later
        than
        three Trading Days after the Exercise Date) issue or cause to be issued and
        cause to be delivered to or upon the written order of the Holder and in such
        name or names as the Holder may designate (provided that, if a registration
        statement is not effective and the Holder directs the Company to deliver
        a
        certificate for the Warrant Shares in a name other than that of the Holder
        or an
        Affiliate of the Holder, it shall deliver to the Company on the Exercise
        Date an
        opinion of counsel reasonably satisfactory to the Company to the effect that
        the
        issuance of such Warrant Shares in such other name may be made pursuant to
        an
        available exemption from the registration requirements of the Securities
        Act and
        all applicable state securities or blue sky laws), a certificate for the
        Warrant
        Shares issuable upon such exercise, free of restrictive legends unless a
        registration statement covering the resale of the Warrant Shares and naming
        the
        Holder as a selling stockholder thereunder is not then effective or the Warrant
        Shares are not freely transferable pursuant to Rule 144 under the Securities
        Act. The Holder, or any Person permissibly so designated by the Holder to
        receive Warrant Shares, shall be deemed to have become the holder of record
        of
        such Warrant Shares as of the Exercise Date. 

       

      (b)
         If
        by the
        close of the third Trading Day after delivery of an Exercise Notice, the
        Company
        fails to deliver to the Holder a certificate representing the required number
        of
        Warrant Shares in the manner required pursuant to Section 5(a), and if after
        such third Trading Day and prior to the receipt of such Warrant Shares, the
        Holder purchases (in an open market transaction or otherwise) shares of Common
        Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
        which the Holder anticipated receiving upon such exercise (a “Buy-In”),
        then
        the Company shall, within three Trading Days after the Holder’s request and in
        the Holder’s sole discretion, either (1) pay in cash to the Holder an amount
        equal to the Holder’s total purchase price (including brokerage commissions, if
        any) for the shares of Common Stock so purchased (the “Buy-In
        Price”),
        at
        which point the Company’s obligation to deliver such certificate (and to issue
        such Warrant Shares) shall terminate or (2) promptly honor its obligation
        to
        deliver to the Holder a certificate or certificates representing such Warrant
        Shares and pay cash to the Holder in an amount equal to the excess (if any)
        of
        the Buy-In Price over the product of (A) such number of Warrant Shares, times
        (B) the closing bid price of a share of Common Stock on the date of the event
        giving rise to the Company’s obligation to deliver such certificate.

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      (c)
         To
        the
        extent permitted by law, the Company’s obligations to issue and deliver Warrant
        Shares in accordance with the terms hereof are absolute and unconditional,
        irrespective of any action or inaction by the Holder to enforce the same,
        any
        waiver or consent with respect to any provision hereof, the recovery of any
        judgment against any Person or any action to enforce the same, or any setoff,
        counterclaim, recoupment, limitation or termination, or any breach or alleged
        breach by the Holder or any other Person of any obligation to the Company
        or any
        violation or alleged violation of law by the Holder or any other Person,
        and
        irrespective of any other circumstance which might otherwise limit such
        obligation of the Company to the Holder in connection with the issuance of
        Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any other
        remedies available to it hereunder, at law or in equity including, without
        limitation, a decree of specific performance and/or injunctive relief with
        respect to the Company’s failure to timely deliver certificates representing
        shares of Common Stock upon exercise of the Warrant as required pursuant
        to the
        terms hereof. 

      

      6.
         Charges,
        Taxes and Expenses.
        Issuance and delivery of certificates for shares of Common Stock upon exercise
        of this Warrant shall be made without charge to the Holder for any issue
        or
        transfer tax, withholding tax, transfer agent fee or other incidental tax
        or
        expense in respect of the issuance of such certificates, all of which taxes
        and
        expenses shall be paid by the Company; provided,
        however,
        that
        the Company shall not be required to pay any tax which may be payable in
        respect
        of any transfer involved in the registration of any certificates for Warrant
        Shares or Warrants in a name other than that of the Holder. The Holder shall
        be
        responsible for all other tax liability that may arise as a result of holding
        or
        transferring this Warrant or receiving Warrant Shares upon exercise hereof.
        

       

      7.
         Replacement
        of Warrant.
        If this
        Warrant is mutilated, lost, stolen or destroyed, the Company shall issue
        or
        cause to be issued in exchange and substitution for and upon cancellation
        hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
        only
        upon receipt of evidence reasonably satisfactory to the Company of such loss,
        theft or destruction and customary and reasonable indemnity (which shall
        not
        include a surety bond), if requested. Applicants for a New Warrant under
        such
        circumstances shall also comply with such other reasonable regulations and
        procedures and pay such other reasonable third-party costs as the Company
        may
        prescribe. If a New Warrant is requested as a result of a mutilation of this
        Warrant, then the Holder shall deliver such mutilated Warrant to the Company
        as
        a condition precedent to the Company’s obligation to issue the New Warrant.

      

      8.
         Reservation
        of Warrant Shares.
        The
        Company covenants that it will initially reserve and keep available out of
        the
        aggregate of its authorized but unissued and otherwise unreserved Common
        Stock,
        solely for the purpose of enabling it to issue Warrant Shares upon exercise
        of
        this Warrant as herein provided, [one hundred twenty percent (120%)] of the
        number of Warrant Shares which are initially issuable and deliverable upon
        the
        exercise of this entire Warrant, free from preemptive rights or any other
        contingent purchase rights of persons other than the Holder. The Company
        further
        covenants that it will at all times reserve and keep available out of the
        aggregate of its authorized but unissued and otherwise unreserved Common
        Stock,
        solely for the purpose of enabling it to issue Warrant Shares upon exercise
        of
        this Warrant as herein provided, the number of Warrant Shares which are then
        issuable and deliverable upon the exercise of this entire Warrant, free from
        preemptive rights or any other contingent purchase rights of persons other
        than
        the Holder (taking into account the adjustments and restrictions of Section
        9).
        The
        Company covenants that all Warrant Shares so issuable and deliverable shall,
        upon issuance and the payment of the applicable Exercise Price in accordance
        with the terms hereof, be duly and validly authorized, issued and fully paid
        and
        nonassessable. 

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      9.
         Certain
        Adjustments.
        The
        Exercise Price and number of Warrant Shares issuable upon exercise of this
        Warrant are subject to adjustment from time to time as set forth in this
        Section
        9.
        

       

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

       

      (b)
         Pro
        Rata Distributions.
        If the
        Company, at any time while this Warrant is outstanding, distributes to all
        holders of Common Stock (i) evidences of its indebtedness, (ii) any security
        (other than a distribution of Common Stock covered by the preceding paragraph),
        (iii) rights or warrants to subscribe for or purchase any security, or (iv)
        any
        other asset (in each case, “Distributed
        Property”),
        then,
        upon any exercise of this Warrant that occurs after the record date fixed
        for
        determination of stockholders entitled to receive such distribution, the
        Holder
        shall be entitled to receive, in addition to the Warrant Shares otherwise
        issuable upon such exercise (if applicable), the Distributed Property that
        such
        Holder would have been entitled to receive in respect of such number of Warrant
        Shares had the Holder been the record holder of such Warrant Shares immediately
        prior to such record date.

      

      (c) Fundamental
        Transactions.
        If, at
        any time while this Warrant is outstanding (i) the Company effects any merger
        or
        consolidation of the Company with or into another Person, in which the Company
        is not the survivor, (ii) the Company effects any sale of all or substantially
        all of its assets in one or a series of related transactions, (iii) any tender
        offer or exchange offer (whether by the Company or another Person) is completed
        pursuant to which holders of Common Stock are permitted to tender or exchange
        their shares for other securities, cash or property, or (iv) the Company
        effects
        any reclassification of the Common Stock or any compulsory share exchange
        pursuant to which the Common Stock is effectively converted into or exchanged
        for other securities, cash or property (each, a “Fundamental
        Transaction”),
        then
        the Holder shall have the right thereafter to receive, upon exercise of this
        Warrant, the same amount and kind of securities, cash or property as it would
        have been entitled to receive upon the occurrence of such Fundamental
        Transaction if it had been, immediately prior to such Fundamental Transaction,
        the holder of the number of Warrant Shares then issuable upon exercise in
        full
        of this Warrant (the “Alternate
        Consideration”).

       

      (d)
         Number
        of Warrant Shares.
        Simultaneously with any adjustment to the Exercise Price pursuant to paragraph
        (a) of this Section 9, the number of Warrant Shares that may be purchased
        upon
        exercise of this Warrant shall be increased or decreased proportionately,
        so
        that after such adjustment the aggregate Exercise Price payable hereunder
        for
        the adjusted number of Warrant Shares shall be the same as the aggregate
        Exercise Price in effect immediately prior to such adjustment. 

       

       (e)
         Calculations.
        All
        calculations under this Section
        9
        shall be
        made to the nearest cent or the nearest 1/100th
        of a
        share, as applicable. The number of shares of Common Stock outstanding at
        any
        given time shall not include shares owned or held by or for the account of
        the
        Company, and the disposition of any such shares shall be considered an issue
        or
        sale of Common Stock. 

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

      (f)
         Notice
        of Adjustments.
        Upon
        the occurrence of each adjustment pursuant to this Section
        9,
        the
        Company at its expense will, at the written request of the Holder, promptly
        compute such adjustment, in good faith, in accordance with the terms of this
        Warrant and prepare a certificate setting forth such adjustment, including
        a
        statement of the adjusted Exercise Price and adjusted number or type of Warrant
        Shares or other securities issuable upon exercise of this Warrant (as
        applicable), describing the transactions giving rise to such adjustments
        and
        showing in detail the facts upon which such adjustment is based. Upon written
        request, the Company will promptly deliver a copy of each such certificate
        to
        the Holder and to the Company’s Transfer Agent. 

       

      (g)
         Notice
        of Corporate Events.
        If,
        while this Warrant is outstanding, the Company (i) declares a dividend or
        any
        other distribution of cash, securities or other property in respect of its
        Common Stock, including without limitation any granting of rights or warrants
        to
        subscribe for or purchase any capital stock of the Company or any Subsidiary,
        (ii) authorizes or approves, enters into any agreement contemplating, or
        solicits stockholder approval for any Fundamental Transaction or (iii)
        authorizes the voluntary dissolution, liquidation or winding up of the affairs
        of the Company, then, except if such notice and the contents thereof shall
        be
        deemed to constitute material non-public information, the Company shall deliver
        to the Holder a notice describing the material terms and conditions of such
        transaction at least ten (10) Trading Days prior to the applicable record
        or
        effective date on which a Person would need to hold Common Stock in order
        to
        participate in or vote with respect to such transaction, and the Company
        will
        take all reasonable steps to give the Holder the practical opportunity to
        exercise this Warrant prior to such time; provided,
        however,
        that
        the failure to deliver such notice or any defect therein shall not affect
        the
        validity of the corporate action required to be described in such notice.
        

       

      10.
         Payment
        of Exercise Price.
        The
        Holder may pay the Exercise Price in one of the following manners: 

       

      (a)
         Cash
        Exercise.
        The
        Holder may deliver immediately available funds; or 

       

      (b)
         Cashless
        Exercise.
        If an
        Exercise Notice is delivered at a time when a registration statement permitting
        the Holder to resell the Warrant Shares is required to be effective and is
        not
        then effective or the prospectus forming a part thereof is not then available
        to
        the Holder for the resale of the Warrant Shares, then the Holder may notify
        the
        Company in an Exercise Notice of its election to utilize cashless exercise,
        in
        which event the Company shall issue to the Holder the number of Warrant Shares
        determined as follows: 

       

      X
        = Y
        [(A-B)/A] 

       

      where:
        

       

      X
        = the
        number of Warrant Shares to be issued to the Holder. 

       

      Y
        = the
        number of Warrant Shares with respect to which this Warrant is being exercised.
        

       

      A
        = the
        average of the closing prices of a share of Common Stock for the five Trading
        Days immediately prior to (but not including) the Exercise Date. 

       

      B
        = the
        Exercise Price. 

       

      For
        purposes of Rule 144 promulgated under the Securities Act, it is intended,
        understood and acknowledged that the Warrant Shares issued in a cashless
        exercise transaction shall be deemed to have been acquired by the Holder,
        and
        the holding period for the Warrant Shares shall be deemed to have commenced,
        on
        the date this Warrant was originally issued. 

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

      11.
         No
        Fractional Shares.
        No
        fractional Warrant Shares will be issued in connection with any exercise
        of this
        Warrant. In lieu of any fractional shares which would otherwise be issuable,
        the
        Company shall pay cash equal to the product of such fraction multiplied by
        the
        closing price of one Warrant Share as reported by the applicable Trading
        Market
        on the Exercise Date. 

       

      12.
          Registration
        Rights and SEC Reporting Obligations of Company.
        

      

      (a)
        Piggy
        Back Registration Rights. If
        the
        Investor exercises any portion of the Warrant, and thereafter the Company
        proposes to file a registration statement under the Securities Act with respect
        to an offering for its own account of any class of its equity securities
        (other
        than a registration statement on Form S-8 (or any

      successor
        form) or any other registration statement relating solely to employee benefit
        plans or filed in connection with an exchange offer, then the Company shall
        in
        each case give written notice of such proposed filing to the Holder as soon
        as
        practicable (but no later than 20 business days) before the anticipated filing
        date, and such notice shall offer each Holder the opportunity to register
        such
        number of shares of Warrant Shares as such Holder may request. Each Holder
        desiring to have Warrant Shares included in such registration statement shall
        so
        advise the Company in writing within 10 business days after the date on which
        the Company’s notice is so given, setting forth the number of shares of Warrant
        Shares for which registration is requested. If the Company's offering is
        to be
        an underwritten offering, the Company shall use its reasonable best efforts
        to
        cause the managing underwriter or underwriters to permit the Holders of the
        Warrant Shares requested to be included in the registration for such offering
        to
        include such Warrant Shares in such offering on the same terms and conditions
        as
        any similar securities of the Company included therein. 

      

      (b)
        SEC
        Reporting Obligation.
        The
        Company agrees to make publicly available adequate public information necessary
        for the Holder to transfer the Warrant Shares pursuant to Rule 144 promulgated
        under the Securities Act (“Rule
        144”)
        by
        providing the following: 

      

      
        	 	
                (i)

              	
                For
                  so long at the Company is subject to the reporting requirements
                  of Section
                  13 or 15(d) of the Securities Exchange Act of 1934, as amended,
                  (the
                  “Exchange
                  Act”),
                  the Company shall timely file (inclusive of any extensions) all
                  required
                  reports under Section 13 or 15(d) of the Exchange Act, as applicable,
                  (other than Form 8-K reports). 

              

      

      
        	 	
                (ii)

              	
                If
                  the Company is not subject to the reporting requirements of Section
                  13 or
                  15(d) of the Exchange Act, the Company shall make publicly available
                  that
                  information specified in Rule 144 necessary for the Holder to transfer
                  the
                  Warrant Shares pursuant to Rule 144.

              

      

       

      13.
         Notices.
        Any and
        all notices or other communications or deliveries hereunder (including, without
        limitation, any Exercise Notice) shall be in writing and shall be deemed
        given
        and effective on the earliest of (i) the date of transmission, if such notice
        or
        communication is delivered via facsimile at the facsimile number specified
        in
        this Section prior to 5:00 p.m. (New York City time) on a Trading Day, (ii)
        the
        next Trading Day after the date of transmission, if such notice or communication
        is delivered via facsimile at the facsimile number specified in this Section
        on
        a day that is not a Trading Day or later than 5:00 p.m. (New York City time)
        on
        any Trading Day, (iii) the Trading Day following the date of mailing, if
        sent by
        nationally recognized overnight courier service, or (iv) upon actual receipt
        by
        the party to whom such notice is required to be given. The addresses for
        such
        notices or communications shall be: (i) if to the Company, to HydroGen
        Corporation, 10 East 40th
        Street,
        Room 3405, New York, New York 10016, Attn: Chief Executive Officer or to
        facsimile number (212) 672-0393 (or such other address as the Company shall
        indicate in writing in accordance with this Section) or (ii) if to the Holder,
        to the address or facsimile number appearing on the Warrant Register (or
        such
        other address as the Company shall indicate in writing in accordance with
        this
        Section). 

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

      14.
         Warrant
        Agent.
        The
        Company shall serve as warrant agent under this Warrant. Upon thirty (30)
        days’
notice to the Holder, the Company may appoint a new warrant agent. Any
        corporation into which the Company or any new warrant agent may be merged
        or any
        corporation resulting from any consolidation to which the Company or any
        new
        warrant agent shall be a party or any corporation to which the Company or
        any
        new warrant agent transfers substantially all of its corporate trust or
        shareholders services business shall be a successor warrant agent under this
        Warrant without any further act. Any such successor warrant agent shall promptly
        cause notice of its succession as warrant agent to be mailed (by first class
        mail, postage prepaid) to the Holder at the Holder’s last address as shown on
        the Warrant Register. 

       

      15.
         Miscellaneous.
        

       

      (a)
         This
        Warrant shall be binding on and inure to the benefit of the parties hereto
        and
        their respective successors and assigns. Subject to the preceding sentence,
        nothing in this Warrant shall be construed to give to any Person other than
        the
        Company and the Holder any legal or equitable right, remedy or cause of action
        under this Warrant. This Warrant may be amended only in writing signed by
        the
        Company and the Holder, or their successors and assigns. 

       

      (b)
         All
        questions concerning the construction, validity, enforcement and interpretation
        of this Warrant shall be governed by and construed and enforced in accordance
        with the internal laws of the State of New York, without regard to the
        principles of conflicts of law thereof. Each party agrees that all legal
        proceedings concerning the interpretations, enforcement and defense of this
        Warrant and the transactions herein contemplated (“Proceedings”)
        (whether brought against a party hereto or its respective Affiliates, employees
        or agents) shall be commenced exclusively in the New York Courts. Each party
        hereto hereby irrevocably submits to the exclusive jurisdiction of the New
        York
        Courts for the adjudication of any dispute hereunder or in connection herewith
        or with any transaction contemplated hereby or discussed herein, and hereby
        irrevocably waives, and agrees not to assert in any Proceeding, any claim
        that
        it is not personally subject to the jurisdiction of any New York Court, or
        that
        such Proceeding has been commenced in an improper or inconvenient forum.
        Each
        party hereto hereby irrevocably waives personal service of process and consents
        to process being served in any such Proceeding by mailing a copy thereof
        via
        registered or certified mail or overnight delivery (with evidence of delivery)
        to such party at the address in effect for notices to it under this Warrant
        and
        agrees that such service shall constitute good and sufficient service of
        process
        and notice thereof. Nothing contained herein shall be deemed to limit in
        any way
        any right to serve process in any manner permitted by law. Each party hereto
        hereby irrevocably waives, to the fullest extent permitted by applicable
        law,
        any and all right to trial by jury in any legal proceeding arising out of
        or
        relating to this Warrant or the transactions contemplated hereby. If either
        party shall commence a Proceeding to enforce any provisions of this Warrant,
        then the prevailing party in such Proceeding shall be reimbursed by the other
        party for its attorney’s fees and other costs and expenses incurred in
        connection with the investigation, preparation and prosecution of such
        Proceeding.

      

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

       

      (d)
         In
        case
        any one or more of the provisions of this Warrant shall be invalid or
        unenforceable in any respect, the validity and enforceability of the remaining
        terms and provisions of this Warrant shall not in any way be affected or
        impaired thereby and the parties will attempt in good faith to agree upon
        a
        valid and enforceable provision which shall be a commercially reasonable
        substitute therefor, and upon so agreeing, shall incorporate such substitute
        provision in this Warrant. 

       

      (e)
         Other
        than as otherwise set forth herein, prior to exercise of this Warrant, the
        Holder hereof shall not, by reason of by being a Holder, be entitled to any
        rights of a stockholder with respect to the Warrant Shares 

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK, 

      SIGNATURE
        PAGE FOLLOWS] 

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
        by its
        authorized officer as of the date first indicated above. 

       

      
        	
                HYDROGEN
                  CORPORATION

              
	
                 
                   

              
	
                By:

              	      

	
                Name:

              	
                John
                  J. Freeh

              
	
                Title:

              	
                Chief
                  Executive Officer

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXERCISE
        NOTICE

      

      HYDROGEN
        CORPORATION

      

      WARRANT
        DATED _________________, 2008

      

      Ladies
        and Gentlemen:

      

      (1) The
        undersigned hereby elects to purchase ______ shares of Common Stock pursuant
        to
        the above-referenced Warrant. Capitalized terms used herein and not otherwise
        defined herein have the respective meanings set forth in the Warrant.

        

      (2) The
        Holder intends that payment of the Exercise Price shall be made as (check
        one):

      

      o
Cash
        Exercise under
        Section 10

      

      o
Cashless
        Exercise under Section
        10

      

      (3) If
        the
        Holder has elected a Cash Exercise, the holder shall pay the sum of $_______
        to
        the Company in accordance with the terms of the Warrant.

      

      (4) Pursuant
        to this Exercise Notice, the Company shall deliver to the Holder ______ Warrant
        Shares in accordance with the terms of the Warrant.

       

      (5) By
        its
        delivery of this Exercise Notice, the undersigned represents and warrants
        to the
        Company that in giving effect to the exercise evidenced hereby the Holder
        will
        not beneficially own in excess of the number of shares of Common Stock (as
        determined in accordance with Section 13(d) of the Securities Exchange Act
        of
        1934) permitted to be owned under Section 11 of this Warrant to which this
        notice relates. 

      

      Dated:_______________,
        _____ 

       

      Name
        of
        Holder: 

       

      
        	
                By:

              	     

      

      
        	
                Name: 

              	   

      

      
        	
                Title:

              	  

      

      (Signature
        must conform in all respects to name of Holder as specified on the face of
        the
        Warrant)

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      HYDROGEN
        CORPORATION

      WARRANT
        ORIGINALLY ISSUED August 22, 2008

      WARRANT
        NO. 

      

      FORM
        OF
        ASSIGNMENT 

       

      [To
        be
        completed and signed only upon transfer of Warrant]

       

      FOR
        VALUE
        RECEIVED, the undersigned hereby sells, assigns and transfers unto                             
        the
        right represented by the within Warrant to purchase                 
        shares
        of Common Stock to which the within Warrant relates and appoints ___________
        attorney to transfer said right on the books of the Company with full power
        of
        substitution in the premises. 

       

      
        	
                Dated:
                  _________, ___

              	
                 

              	
              
	 
	 
	    

	
                 

              	
                 

              	
                (Signature
                  must conform in all respects to name of holder as specified on
                  the face of
                  the Warrant)

              
	 	 	 
	
                 
                  

              	
                 
                  

              	  

	
                 

              	
                 

              	
                Address
                  of Transferee

              
	   	   	 
	
                     
                  

              	
                  
                  

              	 
	  	 	 
	
                   
                  

              	
                 

              	   

      

       

      
        	
                In
                  the presence of:

              
	 
	  

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
      B

     

    
      [FORM
        OF DEFAULT WARRANT]

      

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

      

      HYDROGEN
        CORPORATION

       

      WARRANT
        

       

      
        	
                Warrant
                  No. XXXX

              	
                  

              	
                Original
                  Issue Date: __________________

              

      

       

      HYDROGEN
        CORPORATION, a Nevada corporation (the “Company”),
        hereby certifies that, for value received, [Lender] or its permitted registered
        assigns (the “Holder”),
        is
        entitled to purchase from the Company up to a total of 1,000,000 shares of
        common stock, $0.001 par value (the “Common
        Stock”),
        of
        the Company (each such share, a “Warrant
        Share”
and
        all
        such shares, the “Warrant
        Shares”)
        at an
        exercise price per share equal to $0.01 (the “Exercise
        Price”),
        at
        any time and from time to time from and after the Trigger Date (as defined
        below) and through and including [FIVE YEARS FROM THE ORIGINAL ISSUE DATE]
        (the
“Expiration
        Date”),
        and
        subject to the following terms and conditions: 

      

      This
        Warrant is issued pursuant to that certain Loan and Security Agreement, dated
        August 22, 2008, by and among the Company, HydroGen L.L.C., Federated Kaufmann
        Fund, a portfolio of Federated Equity Funds, as Agent for Federated Kaufmann
        Fund and Samsung C&T Corporation (the “Loan
        and Security Agreement”).
        The
        Warrants and Warrant Shares shall be referred to herein collectively as the
        “Securities.”

       

      1.
         Definitions.
        In
        addition to the terms defined elsewhere in this Warrant, capitalized terms
        that
        are not otherwise defined herein have the meanings given to such terms in
        the
        Security and Loan Agreement. 

        

      2.  List
        of Warrant Holders.
        The
        Company shall register this Warrant, upon records to be maintained by the
        Company for that purpose (the “Warrant
        Register”),
        in
        the name of the record Holder (which shall include the initial Holder or,
        as the
        case may be, any registered assignee to which this Warrant is permissibly
        assigned hereunder from time to time). The Company may deem and treat the
        registered Holder of this Warrant as the absolute owner hereof for the purpose
        of any exercise hereof or any distribution to the Holder, and for all other
        purposes, absent actual notice to the contrary. 

       

      3.
         List
        of Transfers.
        

      

      (a) This
        Warrant is subject to the restrictions noted in the legend set forth on the
        first page of this Warrant.

      

      (b) The
        Company shall register any such transfer of all or any portion of this Warrant
        in the Warrant Register, upon (i) surrender of this Warrant, with the Form
        of
        Assignment attached hereto duly completed and signed, to the Company at its
        address specified in Section 13 hereof and (ii) if a registration statement
        is
        not effective, (x) delivery, at the request of the Company, of an opinion
        of
        counsel reasonably satisfactory to the Company, to the effect that the transfer
        of such portion of this Warrant may be made pursuant to an available exemption
        from the registration requirements of the Securities Act and all applicable
        state securities or blue sky laws and (y) delivery by the transferee of a
        written statement to the Company certifying that the transferee is an
“accredited investor” as defined in Rule 501(a) under the Securities Act and
        making the representations and certifications set forth below in Section
        3(c),
        to the Company at its address specified herein. Upon any such registration
        or
        transfer, a new Warrant to purchase Common Stock, in substantially the form
        of
        this Warrant (any such new Warrant, a “New
        Warrant”),
        evidencing the portion of this Warrant so transferred shall be issued to
        the
        transferee and a New Warrant evidencing the remaining portion of this Warrant
        not so transferred, if any, shall be issued to the transferring Holder. The
        acceptance of the New Warrant by the transferee thereof shall be deemed the
        acceptance by such transferee of all of the rights and obligations in respect
        of
        the New Warrant that the Holder has in respect of this Warrant. Notwithstanding
        the foregoing, to the extent a Holder desires to transfer this Warrant to
        a
        non-affiliate after the effectiveness of any registration statement filed
        by the
        Company to register for offer and sale the Warrant Shares, then such transferee
        shall not be entitled to the registration rights associated with the underlying
        Warrant Shares but shall be entitled to all other rights as a Holder hereunder,
        including the right to exercise this Warrant on a “cashless” exercise basis
        pursuant to Section 10(b) hereof.

      

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

       

      (c) Any
        transferee of the Warrant shall represent and warrant to the Company the
        following:

      

      (i)
        Investment
        Intent.
        Such
        transferee understands that the Securities are “restricted securities” and have
        not been registered under the Securities Act or any applicable state securities
        law and is acquiring the Securities and, upon exercise of the Warrant will
        acquire the Warrant Shares issuable upon exercise thereof, as principal for
        its
        own account for investment purposes only and not with a view to or for
        distributing or reselling such Securities or any part thereof, without
        prejudice, however, to such transferee's right, subject to the provisions
        of
        this Agreement, at all times to sell or otherwise dispose of all or any part
        of
        such Securities pursuant to an effective registration statement under the
        Securities Act or under an exemption from such registration and in compliance
        with applicable federal and state securities laws. Subject to the immediately
        preceding sentence, nothing contained herein shall be deemed a representation
        or
        warranty by such transferee to hold the Securities for any period of time.
        Such
        transferee is acquiring the Securities hereunder in the ordinary course of
        its
        business. Such transferee does not have any agreement, plan or understanding,
        directly or indirectly, with any Person to distribute any of the
        Securities. 

      

      (ii)
        Purchaser
        Status.
        At the
        time such transferee was offered the Securities, it was, and at the date
        hereof
        it is, and on each date on which it exercises the Warrants it will be, an
        “accredited investor” as defined in Rule 501(a) under the Securities Act. Such
        transferee is not a registered broker-dealer under Section 15 of the Exchange
        Act.

       

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

      

      4.
         Exercise
        and Duration of Warrants.
        

       

      (a)
         All
        or
        any part of this Warrant shall be exercisable by the registered Holder at
        any
        time and from time to time on or after the Trigger Date (as defined below)
        and
        through and including the Expiration Date. 

      

      (b)
         As
        used
        in this Agreement, the following term shall have the respective
        meaning:

      

      (i)
        “Trigger Date” shall mean the day following the occurrence and existence of
        an Event of Default (as defined in the Loan and Security Agreement) that
        is
        either not cured by the Borrower or Guarantor (as defined in the Loan and
        Security Agreement)  nor waived by the Lenders (as defined in the Loan and
        Security Agreement) within the applicable cure period. 

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

      (c)
         At
        5:00
        p.m., New York City time, on the Expiration Date, the portion of this Warrant
        not exercised prior thereto shall be and become void and of no value and
        this
        Warrant shall be terminated and no longer outstanding. 

      

      (d) The
        Holder may exercise this Warrant by delivering to the Company (i) an exercise
        notice, in the form attached hereto (the “Exercise
        Notice”),
        completed and duly signed, together with the aggregate Exercise Price for
        the
        number of Warrant Shares to be issued pursuant to such exercise, and (ii)
        if
        such Holder is not utilizing the cashless exercise provisions set forth in
        this
        Warrant, payment of the Exercise Price for the number of Warrant Shares as
        to
        which this Warrant is being exercised, and the date such items are delivered
        to
        the Company (as determined in accordance with the notice provisions hereof)
        is
        an “Exercise
        Date.”
The
        delivery by (or on behalf of) the Holder of the Exercise Notice and the
        applicable Exercise Price shall be accompanied by a statement by the Holder
        certifying to the Company the representations and warranties contained in
        Section 3(c) hereof. The Holder shall not be required to deliver the original
        Warrant in order to effect an exercise hereunder. Execution and delivery
        of the
        Exercise 

      

      Notice
        shall have the same effect as cancellation of the original Warrant and issuance
        of a New Warrant evidencing the right to purchase the remaining number of
        Warrant Shares.

       

       5.
         Delivery
        of Warrant Shares.
        

       

      (a)
         Upon
        exercise of this Warrant, the Company shall promptly (but in no event later
        than
        three Trading Days after the Exercise Date) issue or cause to be issued and
        cause to be delivered to or upon the written order of the Holder and in such
        name or names as the Holder may designate (provided that, if a registration
        statement is not effective and the Holder directs the Company to deliver
        a
        certificate for the Warrant Shares in a name other than that of the Holder
        or an
        Affiliate of the Holder, it shall deliver to the Company on the Exercise
        Date an
        opinion of counsel reasonably satisfactory to the Company to the effect that
        the
        issuance of such Warrant Shares in such other name may be made pursuant to
        an
        available exemption from the registration requirements of the Securities
        Act and
        all applicable state securities or blue sky laws), a certificate for the
        Warrant
        Shares issuable upon such exercise, free of restrictive legends unless a
        registration statement covering the resale of the Warrant Shares and naming
        the
        Holder as a selling stockholder thereunder is not then effective or the Warrant
        Shares are not freely transferable pursuant to Rule 144 under the Securities
        Act. The Holder, or any Person permissibly so designated by the Holder to
        receive Warrant Shares, shall be deemed to have become the holder of record
        of
        such Warrant Shares as of the Exercise Date. 

       

      (b)
         If
        by the
        close of the third Trading Day after delivery of an Exercise Notice, the
        Company
        fails to deliver to the Holder a certificate representing the required number
        of
        Warrant Shares in the manner required pursuant to Section 5(a), and if after
        such third Trading Day and prior to the receipt of such Warrant Shares, the
        Holder purchases (in an open market transaction or otherwise) shares of Common
        Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
        which the Holder anticipated receiving upon such exercise (a “Buy-In”),
        then
        the Company shall, within three Trading Days after the Holder’s request and in
        the Holder’s sole discretion, either (1) pay in cash to the Holder an amount
        equal to the Holder’s total purchase price (including brokerage commissions, if
        any) for the shares of Common Stock so purchased (the “Buy-In
        Price”),
        at
        which point the Company’s obligation to deliver such certificate (and to issue
        such Warrant Shares) shall terminate or (2) promptly honor its obligation
        to
        deliver to the Holder a certificate or certificates representing such Warrant
        Shares and pay cash to the Holder in an amount equal to the excess (if any)
        of
        the Buy-In Price over the product of (A) such number of Warrant Shares, times
        (B) the closing bid price of a share of Common Stock on the date of the event
        giving rise to the Company’s obligation to deliver such certificate.

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      

      (c)
         To
        the
        extent permitted by law, the Company’s obligations to issue and deliver Warrant
        Shares in accordance with the terms hereof are absolute and unconditional,
        irrespective of any action or inaction by the Holder to enforce the same,
        any
        waiver or consent with respect to any provision hereof, the recovery of any
        judgment against any Person or any action to enforce the same, or any setoff,
        counterclaim, recoupment, limitation or termination, or any breach or alleged
        breach by the Holder or any other Person of any obligation to the Company
        or any
        violation or alleged violation of law by the Holder or any other Person,
        and
        irrespective of any other circumstance which might otherwise limit such
        obligation of the Company to the Holder in connection with the issuance of
        Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any other
        remedies available to it hereunder, at law or in equity including, without
        limitation, a decree of specific performance and/or injunctive relief with
        respect to the Company’s failure to timely deliver certificates representing
        shares of Common Stock upon exercise of the Warrant as required pursuant
        to the
        terms hereof. 

      

      6.
         Charges,
        Taxes and Expenses.
        Issuance and delivery of certificates for shares of Common Stock upon exercise
        of this Warrant shall be made without charge to the Holder for any issue
        or
        transfer tax, withholding tax, transfer agent fee or other incidental tax
        or
        expense in respect of the issuance of such certificates, all of which taxes
        and
        expenses shall be paid by the Company; provided,
        however,
        that
        the Company shall not be required to pay any tax which may be payable in
        respect
        of any transfer involved in the registration of any certificates for Warrant
        Shares or Warrants in a name other than that of the Holder. The Holder shall
        be
        responsible for all other tax liability that may arise as a result of holding
        or
        transferring this Warrant or receiving Warrant Shares upon exercise hereof.
        

       

      7.
         Replacement
        of Warrant.
        If this
        Warrant is mutilated, lost, stolen or destroyed, the Company shall issue
        or
        cause to be issued in exchange and substitution for and upon cancellation
        hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
        only
        upon receipt of evidence reasonably satisfactory to the Company of such loss,
        theft or destruction and customary and reasonable indemnity (which shall
        not
        include a surety bond), if requested. Applicants for a New Warrant under
        such
        circumstances shall also comply with such other reasonable regulations and
        procedures and pay such other reasonable third-party costs as the Company
        may
        prescribe. If a New Warrant is requested as a result of a mutilation of this
        Warrant, then the Holder shall deliver such mutilated Warrant to the Company
        as
        a condition precedent to the Company’s obligation to issue the New Warrant.

      

      8.
         Reservation
        of Warrant Shares.
        The
        Company covenants that it will initially reserve and keep available out of
        the
        aggregate of its authorized but unissued and otherwise unreserved Common
        Stock,
        solely for the purpose of enabling it to issue Warrant Shares upon exercise
        of
        this Warrant as herein provided, [one hundred twenty percent (120%)] of the
        number of Warrant Shares which are initially issuable and deliverable upon
        the
        exercise of this entire Warrant, free from preemptive rights or any other
        contingent purchase rights of persons other than the Holder. The Company
        further
        covenants that it will at all times reserve and keep available out of the
        aggregate of its authorized but unissued and otherwise unreserved Common
        Stock,
        solely for the purpose of enabling it to issue Warrant Shares upon exercise
        of
        this Warrant as herein provided, the number of Warrant Shares which are then
        issuable and deliverable upon the exercise of this entire Warrant, free from
        preemptive rights or any other contingent purchase rights of persons other
        than
        the Holder (taking into account the adjustments and restrictions of Section
        9).
        The
        Company covenants that all Warrant Shares so issuable and deliverable shall,
        upon issuance and the payment of the applicable Exercise Price in accordance
        with the terms hereof, be duly and validly authorized, issued and fully paid
        and
        nonassessable. 

       

      9.
         Certain
        Adjustments.
        The
        Exercise Price and number of Warrant Shares issuable upon exercise of this
        Warrant are subject to adjustment from time to time as set forth in this
        Section
        9.
        

       

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

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

       

      (b)
         Pro
        Rata Distributions.
        If the
        Company, at any time while this Warrant is outstanding, distributes to all
        holders of Common Stock (i) evidences of its indebtedness, (ii) any security
        (other than a distribution of Common Stock covered by the preceding paragraph),
        (iii) rights or warrants to subscribe for or purchase any security, or (iv)
        any
        other asset (in each case, “Distributed
        Property”),
        then,
        upon any exercise of this Warrant that occurs after the record date fixed
        for
        determination of stockholders entitled to receive such distribution, the
        Holder
        shall be entitled to receive, in addition to the Warrant Shares otherwise
        issuable upon such exercise (if applicable), the Distributed Property that
        such
        Holder would have been entitled to receive in respect of such number of Warrant
        Shares had the Holder been the record holder of such Warrant Shares immediately
        prior to such record date.

      

      (c) Fundamental
        Transactions.
        If, at
        any time while this Warrant is outstanding (i) the Company effects any merger
        or
        consolidation of the Company with or into another Person, in which the Company
        is not the survivor, (ii) the Company effects any sale of all or substantially
        all of its assets in one or a series of related transactions, (iii) any tender
        offer or exchange offer (whether by the Company or another Person) is completed
        pursuant to which holders of Common Stock are permitted to tender or exchange
        their shares for other securities, cash or property, or (iv) the Company
        effects
        any reclassification of the Common Stock or any compulsory share exchange
        pursuant to which the Common Stock is effectively converted into or exchanged
        for other securities, cash or property (each, a “Fundamental
        Transaction”),
        then
        the Holder shall have the right thereafter to receive, upon exercise of this
        Warrant, the same amount and kind of securities, cash or property as it would
        have been entitled to receive upon the occurrence of such Fundamental
        Transaction if it had been, immediately prior to such Fundamental Transaction,
        the holder of the number of Warrant Shares then issuable upon exercise in
        full
        of this Warrant (the “Alternate
        Consideration”).

       

      (d)
         Number
        of Warrant Shares.
        Simultaneously with any adjustment to the Exercise Price pursuant to paragraph
        (a) of this Section 9, the number of Warrant Shares that may be purchased
        upon
        exercise of this Warrant shall be increased or decreased proportionately,
        so
        that after such adjustment the aggregate Exercise Price payable hereunder
        for
        the adjusted number of Warrant Shares shall be the same as the aggregate
        Exercise Price in effect immediately prior to such adjustment. 

       

       (e)
         Calculations.
        All
        calculations under this Section
        9
        shall be
        made to the nearest cent or the nearest 1/100th
        of a
        share, as applicable. The number of shares of Common Stock outstanding at
        any
        given time shall not include shares owned or held by or for the account of
        the
        Company, and the disposition of any such shares shall be considered an issue
        or
        sale of Common Stock. 

      

      (f)
         Notice
        of Adjustments.
        Upon
        the occurrence of each adjustment pursuant to this Section
        9,
        the
        Company at its expense will, at the written request of the Holder, promptly
        compute such adjustment, in good faith, in accordance with the terms of this
        Warrant and prepare a certificate setting forth such adjustment, including
        a
        statement of the adjusted Exercise Price and adjusted number or type of Warrant
        Shares or other securities issuable upon exercise of this Warrant (as
        applicable), describing the transactions giving rise to such adjustments
        and
        showing in detail the facts upon which such adjustment is based. Upon written
        request, the Company will promptly deliver a copy of each such certificate
        to
        the Holder and to the Company’s Transfer Agent. 

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

       

      (g)
         Notice
        of Corporate Events.
        If,
        while this Warrant is outstanding, the Company (i) declares a dividend or
        any
        other distribution of cash, securities or other property in respect of its
        Common Stock, including without limitation any granting of rights or warrants
        to
        subscribe for or purchase any capital stock of the Company or any Subsidiary,
        (ii) authorizes or approves, enters into any agreement contemplating, or
        solicits stockholder approval for any Fundamental Transaction or (iii)
        authorizes the voluntary dissolution, liquidation or winding up of the affairs
        of the Company, then, except if such notice and the contents thereof shall
        be
        deemed to constitute material non-public information, the Company shall deliver
        to the Holder a notice describing the material terms and conditions of such
        transaction at least ten (10) Trading Days prior to the applicable record
        or
        effective date on which a Person would need to hold Common Stock in order
        to
        participate in or vote with respect to such transaction, and the Company
        will
        take all reasonable steps to give the Holder the practical opportunity to
        exercise this Warrant prior to such time; provided,
        however,
        that
        the failure to deliver such notice or any defect therein shall not affect
        the
        validity of the corporate action required to be described in such notice.
        

       

      10.
         Payment
        of Exercise Price.
        The
        Holder may pay the Exercise Price in one of the following manners: 

       

      (a)
         Cash
        Exercise.
        The
        Holder may deliver immediately available funds; or 

       

      (b)
         Cashless
        Exercise.
        If an
        Exercise Notice is delivered at a time when a registration statement permitting
        the Holder to resell the Warrant Shares is required to be effective and is
        not
        then effective or the prospectus forming a part thereof is not then available
        to
        the Holder for the resale of the Warrant Shares, then the Holder may notify
        the
        Company in an Exercise Notice of its election to utilize cashless exercise,
        in
        which event the Company shall issue to the Holder the number of Warrant Shares
        determined as follows: 

       

      X
        = Y
        [(A-B)/A] 

       

      where:
        

       

      X
        = the
        number of Warrant Shares to be issued to the Holder. 

       

      Y
        = the
        number of Warrant Shares with respect to which this Warrant is being exercised.
        

       

      A
        = the
        average of the closing prices of a share of Common Stock for the five Trading
        Days immediately prior to (but not including) the Exercise Date. 

       

      B
        = the
        Exercise Price. 

       

      For
        purposes of Rule 144 promulgated under the Securities Act, it is intended,
        understood and acknowledged that the Warrant Shares issued in a cashless
        exercise transaction shall be deemed to have been acquired by the Holder,
        and
        the holding period for the Warrant Shares shall be deemed to have commenced,
        on
        the date this Warrant was originally issued. 

       

      11.
         No
        Fractional Shares.
        No
        fractional Warrant Shares will be issued in connection with any exercise
        of this
        Warrant. In lieu of any fractional shares which would otherwise be issuable,
        the
        Company shall pay cash equal to the product of such fraction multiplied by
        the
        closing price of one Warrant Share as reported by the applicable Trading
        Market
        on the Exercise Date. 

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

       

      12.
          Registration
        Rights and SEC Reporting Obligations of Company.
        

      

      (a)
        Piggy
        Back Registration Rights. If
        the
        Investor exercises any portion of the Warrant, and thereafter the Company
        proposes to file a registration statement under the Securities Act with respect
        to an offering for its own account of any class of its equity securities
        (other
        than a registration statement on Form S-8 (or any

      successor
        form) or any other registration statement relating solely to employee benefit
        plans or filed in connection with an exchange offer, then the Company shall
        in
        each case give written notice of such proposed filing to the Holder as soon
        as
        practicable (but no later than 20 business days) before the anticipated filing
        date, and such notice shall offer each Holder the opportunity to register
        such
        number of shares of Warrant Shares as such Holder may request. Each Holder
        desiring to have Warrant Shares included in such registration statement shall
        so
        advise the Company in writing within 10 business days after the date on which
        the Company’s notice is so given, setting forth the number of shares of Warrant
        Shares for which registration is requested. If the Company's offering is
        to be
        an underwritten offering, the Company shall use its reasonable best efforts
        to
        cause the managing underwriter or underwriters to permit the Holders of the
        Warrant Shares requested to be included in the registration for such offering
        to
        include such Warrant Shares in such offering on the same terms and conditions
        as
        any similar securities of the Company included therein. 

      

      (b)
        SEC
        Reporting Obligation.
        The
        Company agrees to make publicly available adequate public information necessary
        for the Holder to transfer the Warrant Shares pursuant to Rule 144 promulgated
        under the Securities Act (“Rule
        144”)
        by
        providing the following: 

      

      
        	 	
                (i)

              	
                For
                  so long at the Company is subject to the reporting requirements
                  of Section
                  13 or 15(d) of the Securities Exchange Act of 1934, as amended,
                  (the
                  “Exchange
                  Act”),
                  the Company shall timely file (inclusive of any extensions) all
                  required
                  reports under Section 13 or 15(d) of the Exchange Act, as applicable,
                  (other than Form 8-K reports). 

              

      

      
        	 	
                (ii)

              	
                If
                  the Company is not subject to the reporting requirements of Section
                  13 or
                  15(d) of the Exchange Act, the Company shall make publicly available
                  that
                  information specified in Rule 144 necessary for the Holder to transfer
                  the
                  Warrant Shares pursuant to Rule 144.

              

      

       

      13.
         Notices.
        Any and
        all notices or other communications or deliveries hereunder (including, without
        limitation, any Exercise Notice) shall be in writing and shall be deemed
        given
        and effective on the earliest of (i) the date of transmission, if such notice
        or
        communication is delivered via facsimile at the facsimile number specified
        in
        this Section prior to 5:00 p.m. (New York City time) on a Trading Day, (ii)
        the
        next Trading Day after the date of transmission, if such notice or communication
        is delivered via facsimile at the facsimile number specified in this Section
        on
        a day that is not a Trading Day or later than 5:00 p.m. (New York City time)
        on
        any Trading Day, (iii) the Trading Day following the date of mailing, if
        sent by
        nationally recognized overnight courier service, or (iv) upon actual receipt
        by
        the party to whom such notice is required to be given. The addresses for
        such
        notices or communications shall be: (i) if to the Company, to HydroGen
        Corporation, 10 East 40th
        Street,
        Room 3405, New York, New York 10016, Attn: Chief Executive Officer or to
        facsimile number (212) 672-0393 (or such other address as the Company shall
        indicate in writing in accordance with this Section) or (ii) if to the Holder,
        to the address or facsimile number appearing on the Warrant Register (or
        such
        other address as the Company shall indicate in writing in accordance with
        this
        Section). 

       

      14.
         Warrant
        Agent.
        The
        Company shall serve as warrant agent under this Warrant. Upon thirty (30)
        days’
notice to the Holder, the Company may appoint a new warrant agent. Any
        corporation into which the Company or any new warrant agent may be merged
        or any
        corporation resulting from any consolidation to which the Company or any
        new
        warrant agent shall be a party or any corporation to which the Company or
        any
        new warrant agent transfers substantially all of its corporate trust or
        shareholders services business shall be a successor warrant agent under this
        Warrant without any further act. Any such successor warrant agent shall promptly
        cause notice of its succession as warrant agent to be mailed (by first class
        mail, postage prepaid) to the Holder at the Holder’s last address as shown on
        the Warrant Register. 

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

       

      15.
         Miscellaneous.
        

       

      (a)
         This
        Warrant shall be binding on and inure to the benefit of the parties hereto
        and
        their respective successors and assigns. Subject to the preceding sentence,
        nothing in this Warrant shall be construed to give to any Person other than
        the
        Company and the Holder any legal or equitable right, remedy or cause of action
        under this Warrant. This Warrant may be amended only in writing signed by
        the
        Company and the Holder, or their successors and assigns. 

       

      (b)
         All
        questions concerning the construction, validity, enforcement and interpretation
        of this Warrant shall be governed by and construed and enforced in accordance
        with the internal laws of the State of New York, without regard to the
        principles of conflicts of law thereof. Each party agrees that all legal
        proceedings concerning the interpretations, enforcement and defense of this
        Warrant and the transactions herein contemplated (“Proceedings”)
        (whether brought against a party hereto or its respective Affiliates, employees
        or agents) shall be commenced exclusively in the New York Courts. Each party
        hereto hereby irrevocably submits to the exclusive jurisdiction of the New
        York
        Courts for the adjudication of any dispute hereunder or in connection herewith
        or with any transaction contemplated hereby or discussed herein, and hereby
        irrevocably waives, and agrees not to assert in any Proceeding, any claim
        that
        it is not personally subject to the jurisdiction of any New York Court, or
        that
        such Proceeding has been commenced in an improper or inconvenient forum.
        Each
        party hereto hereby irrevocably waives personal service of process and consents
        to process being served in any such Proceeding by mailing a copy thereof
        via
        registered or certified mail or overnight delivery (with evidence of delivery)
        to such party at the address in effect for notices to it under this Warrant
        and
        agrees that such service shall constitute good and sufficient service of
        process
        and notice thereof. Nothing contained herein shall be deemed to limit in
        any way
        any right to serve process in any manner permitted by law. Each party hereto
        hereby irrevocably waives, to the fullest extent permitted by applicable
        law,
        any and all right to trial by jury in any legal proceeding arising out of
        or
        relating to this Warrant or the transactions contemplated hereby. If either
        party shall commence a Proceeding to enforce any provisions of this Warrant,
        then the prevailing party in such Proceeding shall be reimbursed by the other
        party for its attorney’s fees and other costs and expenses incurred in
        connection with the investigation, preparation and prosecution of such
        Proceeding.

      

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

       

      (d)
         In
        case
        any one or more of the provisions of this Warrant shall be invalid or
        unenforceable in any respect, the validity and enforceability of the remaining
        terms and provisions of this Warrant shall not in any way be affected or
        impaired thereby and the parties will attempt in good faith to agree upon
        a
        valid and enforceable provision which shall be a commercially reasonable
        substitute therefor, and upon so agreeing, shall incorporate such substitute
        provision in this Warrant. 

       

      (e)
         Other
        than as otherwise set forth herein, prior to exercise of this Warrant, the
        Holder hereof shall not, by reason of by being a Holder, be entitled to any
        rights of a stockholder with respect to the Warrant Shares 

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK, 

      SIGNATURE
        PAGE FOLLOWS] 

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
        by its
        authorized officer as of the date first indicated above. 

       

      
        	
                 

              	
                HYDROGEN
                  CORPORATION

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                By:

              	
                 

              
	
                 

              	
                Name:

              	
                 

              
	
                 

              	
                Title:

              	
                 

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      EXERCISE
        NOTICE 

      

      HYDROGEN
        CORPORATION

      

      WARRANT
        DATED _________________, 2008

       

      Ladies
        and Gentlemen:

      

      (1) The
        undersigned hereby elects to purchase ______ shares of Common Stock pursuant
        to
        the above-referenced Warrant. Capitalized terms used herein and not otherwise
        defined herein have the respective meanings set forth in the Warrant.

        

      (2) The
        Holder intends that payment of the Exercise Price shall be made as (check
        one):

      

        o
Cash
        Exercise under Section 10

      

        o
Cashless
        Exercise under Section 10

      

      (3) If
        the
        Holder has elected a Cash Exercise, the holder shall pay the sum of $_______
        to
        the Company in accordance with the terms of the Warrant.

      

      (4) Pursuant
        to this Exercise Notice, the Company shall deliver to the Holder ______ Warrant
        Shares in accordance with the terms of the Warrant.

       

      (5) By
        its
        delivery of this Exercise Notice, the undersigned represents and warrants
        to the
        Company that in giving effect to the exercise evidenced hereby the Holder
        will
        not beneficially own in excess of the number of shares of Common Stock (as
        determined in accordance with Section 13(d) of the Securities Exchange Act
        of
        1934) permitted to be owned under Section 11 of this Warrant to which this
        notice relates. 

      

      Dated:_______________,
        _____ 

       

      Name
        of
        Holder: 

       

      
        	
                By:

              	 
	
                Name:
                  

              	 
	
                Title:
                  

              	 

      

      (Signature
        must conform in all respects to name of Holder as specified on the face of
        the
        Warrant)

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      HYDROGEN
        CORPORATION

      WARRANT
        ORIGINALLY ISSUED August __, 2008

      WARRANT
        NO. 

      

      FORM
        OF
        ASSIGNMENT 

       

      [To
        be
        completed and signed only upon transfer of Warrant]

       

      FOR
        VALUE
        RECEIVED, the undersigned hereby sells, assigns and transfers unto                             
        the
        right represented by the within Warrant to purchase                 
        shares
        of Common Stock to which the within Warrant relates and appoints ___________
        attorney to transfer said right on the books of the Company with full power
        of
        substitution in the premises. 

       

      
        	
                Dated:
                  _________, ___

              	
                 

              	
                 

              
	 	 	 

	
                 

              	
                 

              	
                (Signature
                  must conform in all respects to name of holder as specified on
                  the face of
                  the Warrant)

              
	 	 	 
	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Address
                  of Transferee

              
	 	 	 
	
                 

              	
                 

              	
                 

              
	 	 	 
	
                 

              	
                 

              	
                 

              

      

       

      
        	
                In
                  the presence of:

              
	
                 
                  

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
      1.63

    

    Permitted
      Encumbrances

    

    The
      following is a list of Capital Assets encumbered by purchase money security
      interests (including, without limitation, capitalized or finance leases) in
      favor of equipment vendors and the remaining payments on such finance
      leases:

    

      
        	
                Equipment

              	 	
                Remaining Payments

              	 
	 	 	 	 
	
                5000
                  lb Nissan Forklift

              	 	 	
                2,026.81

              	 
	 	 	 	 	 
	
                Pacific
                  Scrub Master floor scrubber

              	 	 	
                1,618.83

              	 
	 	 	 	 	 
	
                (4)
                  Retrofit Control Systems

              	 	 	
                4,014.34

              	 
	
                (1)
                  Gruenberg Model 4/MM80VD50.M Conveyor Oven

              	 	 	
                29,922.87

              	 
	
                (2)
                  Blue M 11MT-243618-21-AM-SPL's with floor stands

                
                  (2)
                    Blue M 11MT-243618-21-SPL Atmosphere Standard Retorts including
                    steel
                    surcharge

                

              	 	 	
                22,778.63

              	 
	
                (2)
                  Blue M 11MT-243618-21-AM-SPL's with floor stands

                
                  (2)
                    Blue M 11MT-243618-21-SPL Atmosphere Standard Retorts including
                    steel
                    surcharge

                

              	 	 	
                18,094.88

              	 
	
                (1)
                  Blue M 11MT-243618-21-AM-SPL's with floor stands

                
                  (1)
                    Blue M 11MT-243618-21-SPL Atmosphere Standard Retorts including
                    steel
                    surcharge

                

              	 	 	
                49,581.00

              	 
	
                770
                  Ton Hydraulic Slab Side Press, Heater Control System, Safety Door,
                  Cooling
                  & Filtration Unit, Quiet Package & Bellows Boot

              	 	 	
                78,948.00

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]