<SUBMISSION>
<ACCESSION-NUMBER>0001193805-10-001380
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>12
<PERIOD>20100511
<ITEMS>2.01
<ITEMS>3.02
<ITEMS>4.01
<ITEMS>5.02
<ITEMS>7.01
<ITEMS>9.01
<FILING-DATE>20100517
<DATE-OF-FILING-DATE-CHANGE>20100517
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>HEPALIFE TECHNOLOGIES INC
<CIK>0001054274
<ASSIGNED-SIC>3841
<IRS-NUMBER>582349413
<STATE-OF-INCORPORATION>FL
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-29819
<FILM-NUMBER>10837244
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>60 STATE STREET
<STREET2>SUITE 700
<CITY>BOSTON
<STATE>MA
<ZIP>02109
<PHONE>800-518-4879
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>60 STATE STREET
<STREET2>SUITE 700
<CITY>BOSTON
<STATE>MA
<ZIP>02109
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>ZETA CORP
<DATE-CHANGED>20030219
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>ZETA CORP /CA
<DATE-CHANGED>20000303
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>e606965_8k-hepalife.htm
<TEXT>
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D.C.&#160;&#160;20549</font></div>
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REPORT</font></div>
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to Section 13 or 15(d) of the</font></div>
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Exchange Act of 1934</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date of
Report (Date of earliest event reported):&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">May 11, 2010</font></font></div>
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State Street, Suite 700, Boston, MA 02109</font></div>
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appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):</font></div>
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communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)</font></div>
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material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)</font></div>
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communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))</font></div>
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communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
2.01.&#160;&#160;Completion of Acquisition or Disposition of
Assets.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On May
11, 2010, HepaLife Technologies, Inc., a Florida corporation (&#8220;HepaLife&#8221;),
entered into an Agreement and Plan of Merger (the &#8220;Merger Agreement&#8221;) by and
among HepaLife, HT Acquisition Corp., a newly formed, wholly-owned Delaware
subsidiary of HepaLife (&#8220;Merger Sub&#8221;), and AquaMed Technologies, Inc., a
privately held Delaware corporation (&#8220;AquaMed&#8221;). The merger transaction
contemplated under the Merger Agreement (the &#8220;Merger&#8221;) was consummated on May
11, 2010, at which time Merger Sub merged with and into AquaMed, with AquaMed
continuing as the surviving corporation and becoming a wholly-owned subsidiary
of HepaLife. The filing and acceptance of the Certificate of Merger with the
Secretary of State of the State of Delaware is referred to herein as the
&#8220;Effective Time&#8221; of the Merger.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to the terms and conditions of the Merger Agreement:</font></div>
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<tr valign="top">
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            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      the Effective Time, each issued and outstanding share of AquaMed common
      stock, par value $0.001 per share (the &#8220;AquaMed Common Stock&#8221;), was
      cancelled and converted into the right to receive 25 shares of common
      stock, par value $0.001 per share (the &#8220;HepaLife Common Stock&#8221;), of
      HepaLife (the &#8220;Common Merger Consideration&#8221;); each issued and outstanding
      share of AquaMed Series A Preferred Stock, par value $0.001 per share (the
      &#8220;AquaMed Series A Preferred Stock&#8221;), was cancelled and converted into the
      right to receive 100 shares of HepaLife Common Stock (the &#8220;Series A Merger
      Consideration&#8221;); and each issued and outstanding share of AquaMed Series B
      Preferred Stock, par value $0.001 per share (the &#8220;AquaMed Series B
      Preferred Stock&#8221;), was cancelled and converted into the right to receive
      399.99994 shares of HepaLife Common Stock (the &#8220;Series B Merger
      Consideration,&#8221; and together with the Common Merger Consideration and the
      Series A Merger Consideration, the &#8220;Merger Consideration&#8221;). In the
      aggregate, the Merger Consideration consisted of 84,800,000 shares of
      HepaLife Common Stock.</font></div>
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<tr valign="top">
            <td style="WIDTH: 18pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed
      stockholders may not resell the Merger Consideration until the first
      anniversary of the Effective Time, except for 11,191,115 shares of Series
      A Merger Consideration that may be transferred by GRQ Consultants, Inc.
      401K following the Effective Time subject only to federal and state
      securities laws, and not without registration under the Securities Act of
      1933, as amended (the &#8220;Securities Act&#8221;), or pursuant to an exemption from
      the registration requirements of the Securities
  Act.</font></div>
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    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
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<tr valign="top">
            <td style="WIDTH: 18pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 18pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      of HepaLife, AquaMed and Merger Sub made customary representations,
      warranties, covenants and indemnities in the Merger
    Agreement.</font></div>
            </td>
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    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The foregoing description of the Merger
Agreement does not purport to be complete and is qualified in its entirety by
reference to the complete text of the Merger Agreement, which is filed as
Exhibit 2.1 hereto and incorporated herein by reference.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Private
Placements</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>On May 11, 2010, simultaneously with
the closing of the Merger, HepaLife sold 9,400,000 units of its securities (the
&#8220;Units&#8221;) in a private placement in exchange for aggregate gross proceeds of
$1,175,000 (the &#8220;May 11 Private Placement&#8221;). Each Unit consisted of (i) one (1)
share of HepaLife Common Stock, (ii) one half of one five year Series E Stock
Purchase Warrant (the &#8220;Series E Warrants&#8221;) with an exercise price of $0.16 per
share, and (iii) one half of one five year Series F Stock Purchase Warrant (the
&#8220;Series F Warrants&#8221;) with an exercise price of $0.20 per share, and was sold to
investors at a price per Unit of $0.125.</font></div>
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17, 2010, HepaLife sold an additional 2,000,000 Units in a private placement and
received aggregate gross proceeds of $250,000 (the &#8220;May 17 Private Placement&#8221;,
and together with the May 11 Private Placements, the &#8220;Private
Placements&#8221;).</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Private Placements were made solely to &#8220;accredited investors,&#8221; as that term is
defined in Regulation D under the Securities Act. The securities sold in the
Private Placements were not registered under the Securities Act, or the
securities laws of any state, and were offered and sold in reliance on the
exemption from registration afforded by Section 4(2) and Regulation D (Rule 506)
under the Securities Act and corresponding provisions of state securities laws,
which exempt transactions by an issuer not involving any public offering.<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to a Placement Agent Agreement (the &#8220;Placement Agreement&#8221;), dated May 6, 2010,
between HepaLife and Palladium Capital Advisors, LLC, a Delaware limited
liability company (the &#8220;Palladium&#8221;), Palladium served as HepaLife&#8217;s placement
agent in the Private Placements and received an aggregate cash fee of
$114,000.00, which equaled 8% of the aggregate cash consideration received by
HepaLife in the Private Placements from investors introduced to HepaLife by
Palladium. In addition, in connection with the Private Placements, Palladium was
issued (i) Series E Warrants to purchase 456,000 shares of HepaLife Common Stock
and (ii) Series F Warrants to purchase 456,000 shares of HepaLife Common Stock,
which together equaled 8% of the aggregate number of shares of HepaLife Common
Stock issued to investors introduced to HepaLife by the Placement Agent, as part
of Units, in the Private Placements). The Placement Agent also received
2,000,000 shares of HepaLife Common Stock.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Palladium
is an &#8220;accredited investor,&#8221; as that term is defined in Regulation D under the
Securities Act. The securities issued to Palladium under the Placement Agreement
were not registered under the Securities Act, or the securities laws of any
state, and were issued in reliance on the exemption from registration afforded
by Section 4(2) and Regulation D (Rule 506) under the Securities Act and
corresponding provisions of state securities laws, which exempt transactions by
an issuer not involving any public offering.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
proceeds received from the Private Placements are expected to be used for
working capital, investor relations and other general corporate
purposes.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Voting
Agreement</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>At the Effective Time, the size of the
board of directors of HepaLife was set at three directors.&#160;&#160;On May 7,
2010, holders of a majority of the voting shares of HepaLife acted by written
consent in lieu of a special meeting of stockholders to adopt an amendment
to&#160;HepaLife&#8217;s Articles of Incorporation&#160;(the &#8220;Amended Articles of
Incorporation&#8221;), to among other things, provide for the classification of
the&#160;HepaLife&#8217;s board of directors and to provide for staggered terms of
service for each class of directors. This amendment will be effective on the
date that the Amended Articles of Incorporation are filed with the Secretary of
State of the State of Florida, all as more fully described in HepaLife&#8217;s
Preliminary Information Statement on Schedule 14C (the &#8220;Preliminary Information
Statement&#8221;) as filed with the Securities and Exchange Commission on May 7,
2010.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Concurrently
with the execution of the Merger Agreement, HepaLife entered into a Stockholder
Voting Agreement and Irrevocable Proxy (the &#8220;Voting Agreement&#8221;) with Harborview
Master Fund LP (the &#8220;Agent&#8221;) and certain stockholders signatory thereto,
pursuant to which the stockholders signatory thereto agreed to vote their shares
of HepaLife Common Stock to elect Joseph Sierchio as a Class I director, Richard
Rosenblum as a Class II director and David Stefansky as a Class III director. In
order to implement the terms of the Voting Agreement, each stockholder signatory
thereto granted the Agent an irrevocable proxy to vote their shares in favor of
the election of directors in accordance with the terms of the Voting
Agreement.</font></div>
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      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        </div>
      </div>
      <div id="HDR">
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      </div>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Voting Agreement and the rights granted the Agent&#160;thereunder terminate with
respect to any&#160;stockholder&#160;signatory thereto upon the earlier of: (a)
June 30, 2010, (b) on the date that the Amended Articles of Incorporation are
filed with the Secretary of State of the State of Florida, or (c) the date on
which such&#160;stockholder no longer beneficially owns any shares of HepaLife
Common Stock.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
foregoing description of the Voting Agreement does not purport to be complete
and is qualified in its entirety by reference to the complete text of the Voting
Agreement, which is filed as Exhibit 9.1 hereto and incorporated herein by
reference.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Investor Relations Service
Agreement</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On May
11, 2010, upon consummation of the Merger, HepaLife entered into an Investor
Relations Service Agreement (the &#8220;Service Agreement&#8221;) with Cogito Corp. (the
&#8220;Consultant&#8221;), pursuant to which the Consultant shall provide HepaLife with
certain investor relations services. In consideration for the performance of
such services, HepaLife has agreed to pay the Consultant a monthly consulting
fee of $5,000, plus reimbursement for certain expenses (the &#8220;Consulting
Expenses&#8221;). In order to ensure prompt payment of the Consulting Expenses, on the
Effective Date and as required under the Services Agreement, HepaLife deposited
$271,503 (the &#8220;Initial Escrowed Funds&#8221;) into an escrow account for the direct
payment of fees to the Consultant by the escrow agent upon the Consultant&#8217;s
presentment of invoices to the escrow agent. Upon the consummation of the May 17
Private Placement, an additional $230,000 was deposited into the escrow account
(the &#8220;Additional Escrowed Funds&#8221;, and together with the Initial Escrowed Funds,
collectively, the &#8220;Escrowed Funds&#8221;). The term of the Service Agreement is 12
months, but may terminate earlier in the event that the Escrowed Funds are
depleted prior to the expiration of the twelve month term or otherwise at the
option of HepaLife for &#8220;Cause&#8221; (as defined in the Service Agreement). In the
event that the Services Agreement is terminated for Cause or Escrowed Funds
remain in the escrow account following the termination of the Services Agreement
after 12 months, the Escrowed Funds shall be released to HepaLife.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
foregoing description of the Service Agreement does not purport to be complete
and is qualified in its entirety by reference to the complete text of the
Service Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein
by reference.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Description
of AquaMed&#8217;s Business</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Overview</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As a
result of the Merger, a significant portion of our business consists of the
business of AquaMed.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Aquamed
develops, manufactures and markets high water content, electron beam
cross-linked, aqueous polymer hydrogels used for wound care, medical
diagnostics, transdermal drug delivery and cosmetics.&#160;&#160;These gels are
produced using unique proprietary manufacturing technologies which enable
AquaMed to develop, manufacture and market electron beam cross-linked aqueous
polymer sheet hydrogels, hereafter referred to as &#8220;gels.&#8221;&#160;&#160;AquaMed is
believed to be one of two known manufacturers in the world of these gels.
AquaMed specializes in custom gels capitalizing on proprietary manufacturing
technologies.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed&#8217;s
gels exhibit significant potential in the following high growth fields: topical
therapeutics in moist wound/burn healing applications; in trans (systemic) and
intradermal (non-systemic) delivery of prescription and non-prescription
medications; cosmetic skin care; and components in medical diagnostics. The
hydrophilic system has two parts:&#160;&#160;a hydrophilic pre-polymer phase and
a water phase.&#160;&#160;During the water phase AquaMed introduces various
water soluble active ingredients into its products. Current ingredients
incorporated into AquaMed&#8217;s proprietary process include: health additives,
moisturizers, super absorbents, soaps, detergents, antibacterials, carbons,
electrostatic dissipative agents, fragrances, and waxes.</font></div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed
believes that it has developed successful strategic relationships in each of
these categories with partners who are meaningful participants in these markets,
including the market leaders in several medical device categories and leading
cosmetic companies.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hydrogels
are gel-like or colloidal substances made of water and solids.&#160;&#160;They
can be created chemically (through a combination of ultra violet cross-linking
and chemical interface), or by mixing polymer and water then exposing it to an
electron beam creating a &#8220;sheet&#8221; of water. Currently, and for the foreseeable
future, all of the hydrogel products that&#160;&#160;AquaMed produces are
electron beam cross-linked, water and polymer gels, a category in which AquaMed
believes that its hydrogels have a competitive advantage, in part due to the
following product characteristics: painless adhesion to the human body,
stability of form and composition, purity, reproducibility (manufacturing high
quality product on a consistent basis), compatibility with active ingredients,
and high water content.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Many of
the products of AquaMed&#8217;s competition feature physical characteristics which
AquaMed believes are less desirable than those of AquaMed&#8217;s gels. These include
aggressive skin bonding, chemical and form instability, lack of uniformity, low
water content, odor and active receptivity issues.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed&#8217;s
products are manufactured using proprietary and non-proprietary mixing, coating,
drying and cross-linking technologies.&#160;&#160;Together, these proprietary
technologies enable AquaMed to produce gels that can satisfy rigid tolerance
specifications with respect to a wide range of physical characteristics &#8211;
thickness, water content, adherence, absorption, vapor transmission, release
rates &#8211; while maintaining product integrity. These manufacturing technologies
allow AquaMed to participate in the development of FDA regulated medical
devices.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
addition to its ability to specifically regulate the aforementioned physical
characteristics of the gels, AquaMed has the manufacturing technology to offer
broad choices in selection of liners thereby allowing its customers to create
even tighter tolerances in vapor transmission and active ingredient release
rates, while personalizing color and texture, characteristics that AquaMed
believes are critical in the cosmetic category.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Products
and Services</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed
manufactures and markets electron-beam cross-linked sheet gels for use as
wound/burn dressings with and without active ingredients, components in certain
medical devices, transdermal and intradermal delivery of medication, and topical
application of non-prescription drugs, other skin care treatments, cosmetics and
other commercial products.&#160;&#160;AquaMed markets its own brand of moist
wound/burn dressings under the AQUAMED brand name, and AquaMed is currently
developing additional line extensions of this product. In addition, the gels are
prepared as components for products distributed by its customers under their
brand names. In addition to manufacturing roll stock, AquaMed offers its
customers converting services, which AquaMed believes creates a competitive
advantage in pricing while expediting its production process.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Industry</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hydrogels
are now being marketed in the United States or abroad for many different
applications:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Hydrogel as A Method of Drug
Delivery.</font>&#160;&#160;Patches are a relatively new method of delivering
medication that has important advantages over other more traditional methods of
drug delivery.&#160;&#160;As a system of drug delivery, hydrogel patches are
less intrusive, painless, can medicate for preplanned time periods, provide the
potential for a release of medication more consistent with the body&#8217;s own
glandular activity, thereby avoiding dosage spikes and, or, digestive
alteration, and minimize side effects apparent in more traditional delivery
methodologies of injection or ingestion.</font></div>
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      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Moist Wound and Burn
Dressings.</font> Dressings made from hydrogels have long been used for the
treatment of wounds and burns. Clinical trials have demonstrated the benefits of
moist wound healing versus traditional dressings. Some of these benefits include
immediate anti-inflammatory effects, keeping the wound bed moist allowing for
the freer cell flow and less scarring, increased absorption of exudate and
accelerated healing. According to a Smith &amp; Nephew presentation
entitled&#160;&#160;&#8221;Advanced Wound Management in Europe&#8221;&#160;from an Investor
and Analyst Meeting held in Zurich,&#160;Switzerland on November 20, 2009,
the&#160;current market for advanced wound management is estimated to be in
excess of $5 billion worldwide and growing at 7% per annum to $7.1 billion by
2014.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Other Medical
Applications.</font>&#160;&#160;Hydrogel patches are being used for transdermal
applications for the following uses: as hormone replacement therapy and
contraception, treatment of acne, shingles, diabetes and motion sickness,
treatment of angina with nitroglycerin, treatment of smoking addiction using
nicotine and palliatives (i.e., pain relievers, such as lidocaine).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Non-Prescription Therapeutic
Applications.</font>&#160;&#160;Hydrogel patches are used in the medical
community, and also directly marketed to consumers for the following uses:
topical application of over the counter (&#8220;OTC&#8221;) drugs such as non-prescription
acne treatments, pain relievers, and diet preparations, cough suppressants,
treatment of warts, calluses and corns, and pain relief.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Cosmetic
Applications.</font>&#160;&#160;Hydrogel patches and applications are being used
to deliver cosmetics, such as skin care products to consumers and skin care
providers for uses that include moisturizers, face masks, cooling masks and
applicators.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed&#8217;s
Customers and Markets</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Moist Wound
Healing.</font>&#160;&#160;AquaMed markets products under its proprietary brand
AQUAMED as well as supplying products to developers and distributors of
prescription and OTC wound healing products for redistribution to healthcare
professionals and retailers.&#160;&#160;The benefits of AquaMed&#8217;s hydrogel wound
healing products include reduced scarring and pain, greater speed of healing and
increased absorption of exudate.&#160;&#160;AquaMed believes that the markets
for its wound healing products will continue to expand due to the growing
recognition by professionals and consumers of the benefits of moist wound
healing.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Medical Device Manufacturers.</font>
AquaMed has targeted the high quality, medical device manufacturers (such as
monitoring electrodes and devices and defibrillator pads) as a core segment of
its future revenue streams.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Transdermal Delivery of Prescription
Drugs and OTC Treatments.</font>&#160;&#160;&#160;AquaMed actively seeks new
applications for two types of transdermal delivery through patches which adhere
to the skin and are impregnated with active ingredients and through
iontophoresis, which drives the active ingredients through the skin by use of
controlled electrical currents.&#160;&#160;Iontophoresis allows for greater
control over the delivery of active ingredients.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed
is actively involved in various development projects for use of hydrogels in
transdermal delivery of specific ingredients. AquaMed also sells its products to
manufacturers and distributors of non-prescription medications.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Cosmetics and Other Consumer
Products.</font>&#160;&#160;AquaMed currently manufactures hydrogels, hydrogel
patches and products for some of the leading U.S. cosmetics companies, among
others.&#160;&#160;These products include OTC skin care preparations and other
products for cosmetic use.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Direct
Retailing.</font>&#160;&#160;&#160;AquaMed is exploring various opportunities
for the manufacture and distribution of OTC therapeutic, skin care and cosmetic
products using hydrogel products through such retailers as chain drug, food and
mass merchandise stores under co-branding arrangements.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For the
year ended December 31, 2009, AquaMed filled orders from approximately 20
different customers. Approximately 84% of AquaMed&#8217;s annual revenue during this
period was attributable to 4 of these customers, with each of these customers
responsible for more than 12% of AquaMed&#8217;s annual revenue, and AquaMed&#8217;s largest
customer accounting for approximately 30% of AquaMed&#8217;s annual
revenue.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Technology
&amp; Manufacturing</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hydrogels
are manufactured by introducing a hydrophilic polymer (solid) into water,
creating a feed mix.&#160;&#160;This feed mix is then coated on to a liner and
exposed to radiation. The polymers used by AquaMed, when exposed to radiation,
cross link faster than they degrade (more covalent bonds between molecules are
created than destroyed), creating a matrix that gives the gels a solid
form.&#160;&#160;Active ingredients such as OTC medication, and skin care, wound
healing or other materials can be added before or after
cross-linking.&#160;&#160;Materials that do not survive the irradiation process
or dehydration process are added after the cross-linking process is completed.
Once the products have been mixed and cross-linked they form sheets that can be
delivered to customers or first cut and shaped according to customer
specifications. AquaMed believes that many of the processes described above are
proprietary to AquaMed and provide AquaMed with competitive
advantages.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proprietary
Technologies</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
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            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Proprietary
      Mixing.</font>&#160;&#160;AquaMed believes that it is able to manufacture
      hydrogel feed mixes with far greater homogeneity than those of its
      competition. This is critical especially as it relates to the dosing of
      active ingredients.&#160;&#160;In addition, AquaMed&#8217;s proprietary mixing
      technology allows for the incorporation of sensitive materials that may
      degrade if subjected to other types of
mixing.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Proprietary
      Coating.</font>&#160;&#160;AquaMed&#8217;s proprietary coating technology
      enables it to handle the gels properly even though they are extremely
      thick and resistant to flow.&#160;&#160;AquaMed has achieved coating
      tolerances that have allowed it to coat materials as thin as 0.005 inches
      with a margin for error of typically less than 5%.&#160;&#160;Thickness
      controls are critical with respect to the performance of many of the end
      products utilizing AquaMed&#8217;s hydrogels including medical electrodes,
      transdermal delivery patches and cosmetic patches.&#160;&#160;AquaMed has
      also developed coating methodology that minimizes imperfections such as
      wrinkling in the end product by significantly reducing line tension.
      AquaMed believes that this proprietary know-how allows AquaMed to
      manufacture high quality, consistent products which meet the standards of
      AquaMed&#8217;s customers.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Proprietary Cross-linking
      Technology.</font>&#160;&#160;AquaMed cross-links its hydrogels using an
      electron beam accelerator. Electron beam cross-linking is achieved through
      the introduction of the high energy field, created by the accelerated
      electrons, which causes the release of hydrogen atoms, thereby causing
      carbon molecule covalent bonding. The creation of longer chains of the
      polymer in the gel increases its molecular integrity, giving the gel
      characteristics that make it useful in a variety of
    products.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      </div>
      <div id="HDR">
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      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed&#8217;s
electron-beam cross-linking process is one of three types of cross-linking used
in the industry.&#160;&#160;The other types used are ultra violent cross-linking
and chemical cross-linking. The benefits of electron beam cross-linking include:
(i) precise control of the amount of polymer cross-linking, (ii) other types
allow for the continuation of cross-linking over a period of time, (iii) no need
for chemical cross-linking agents which may complicate or interfere with other
additives or active ingredients, and (iv) the ability to manufacture high
quality hydrogels on a consistent basis.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
physical characteristics can be further modified by varying the percent of
polymer cross-linking and the way in which the high energy field is delivered.
There are three variables in the use of an electron beam accelerator for
cross-linking of hydrogels: (i) time of exposure of the target material to the
electron stream, (ii) voltage (electrical potential), and (iii) amperage
(strength of the electrical current). AquaMed believes that its methods of
managing these three variables make it possible to produce high quality gels
matching customer specifications as to a wide range of characteristics. These
methods are proprietary to AquaMed.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The uses
for particle beam accelerators include but are not limited to: sterilization of
medical products and devices, modification of polymers, polymerization and
de-polymerization, crosslinking of thermoplastics, crystal modification,
grafting, de-infestation of spices, fruits and vegetables, cold pasteurization
of foods, meats and seafood, sterilization of wastes, treatment of sewage,
controlled degradation of PTFE (Teflon), cold curing of resins and adhesives,
de-infestation of wood chips and pulp products, coloring gemstones, pollution
control, and treating wire, cable and tubing.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed
owns and operates a Radiation Dynamics, Inc. (&#8220;RDI&#8221;) Dynamitron IEA 1500-40
Industrial Electron Accelerator (the &#8220;RDI Accelerator&#8221;). The RDI Accelerator has
been customized to handle the cross-linking of the type of materials AquaMed
uses, but can also be used for several of the other potential uses such as
coloring gemstones and treating wire, cable and tubing. Replacement cost of the
RDI Accelerator and processing equipment is estimated to be in excess of $7
million. The delivery and installation process is time-consuming with
replacement estimated to take 2.5 to 3 years. AquaMed estimates that its
equipment has a useful life of approximately 20 years and provides annual
production capacity in excess of 6,000 hours. AquaMed believes that its current
utilization is significantly less than capacity.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Competition</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed
believes that its proprietary competitive manufacturing advantages, along with
the high barrier to entry (the substantial cost of acquiring an electron beam as
compared to other cross-linking devices and the cost and extended time required
for installing this beam) and current minimal level of competition for high
performance gels, affords AquaMed the opportunity to be a leader in the
applications that require tight tolerances and/or incorporate active
ingredients. AquaMed believes that awareness of its product, low cost, speed to
market, and unique manufacturing techniques, are advantages that will be
conveyed to its customer base through a combination of consumer product entries,
expansion within current original equipment manufacturer bases and institutional
reach programs such as trade magazines, trade shows, and through senior
management contacts.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Government
Regulation</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There is
no required government regulation with respect to AquaMed&#8217;s hydrogel related
products at this time. While some applications of the hydrogels fall under the
jurisdiction of the Food and Drug Administration (the &#8220;FDA&#8221;), the hydrogels are
generally classified as Class I exempt devices and the majority of the hydrogel
products that AquaMed manufactures are thereby exempt from the FDA filing of any
regulatory submissions and/or pre-market notification requirements. To the
extent that any FDA regulatory submissions are required, AquaMed will need to
file these submissions and maintain all appropriate documentation. With respect
to registering the manufacturing facility with the FDA under the Code of Federal
Regulations, 21CFR820.1, Scope: Part A, it is stated that the regulation does
not apply to manufacturers of component parts of finished devices.&#160;&#160;At
the current time, hydrogels are sold as component parts to various medical
device/cosmetic manufacturers.&#160;&#160;If at any time in the future AquaMed
manufactures products that would require such filings or registration, AquaMed
will take the appropriate steps to comply.</font></div>
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      <div id="FTR">
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      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      </div>
      <div id="HDR">
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      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sources
and Availability of Raw Materials; Principal Suppliers</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed&#8217;s
principal suppliers for the two polymers that it primarily uses in the
manufacture of its hydrogels, polyethylene oxide and polyvinylpyrrolidone, are
Dow Chemical and BASF, respectively. Although AquaMed has not experienced
significant production delays attributable to supply changes, AquaMed believes
that, for the polymers used to make its current hydrogels, alternative sources
of supply would be difficult to develop over a short period of time. Because
AquaMed has no direct control over its third-party suppliers, interruptions or
delays in the products and services provided by these third parties may be
difficult to remedy in a timely fashion. In addition, if such suppliers are
unable or unwilling to deliver the necessary raw materials or products, AquaMed
may be unable to redesign or adapt its technology to work without such raw
materials or products or find alternative suppliers or manufacturers. In such
events, AquaMed could experience interruptions, delays, increased costs, or
quality control problems.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Patents,
Proprietary Rights and Trademarks</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed&#8217;s
policy is to file patent applications to protect technology, inventions and
improvements that are important to the development of its business. AquaMed also
relies on trade secret protection for its confidential and proprietary
information.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed
holds no issued patents related to the hydrogel products, but has several
patents pending and holds a registered trademark on AQUAMED which is used on its
hydrogels.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Employees</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As of May
13, 2010 AquaMed had 8 employees, 1 in administration and 7 in manufacturing and
quality control.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed
believes that it has good relations with its employees and other human
resources, and has never incurred a significant work stoppage due to any strike
or protest by its employees.<a name="fis_properties"><!--EFPlaceholder-->
</a></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed
Properties</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
February 27, 2009, AquaMed executed an assignment and assumption of Hydrogel
Design Systems, Inc. lease at market rate for its commercial manufacturing
facility located at 2150 Cabot Boulevard West, Langhorne, Pennsylvania which is
due to expire January 31, 2016.&#160;&#160;The lease calls for monthly lease
payments as follows $14,883 a month through January 31, 2010, $15,627 a month
through January 31, 2014 and $17,187 through January 31, 2016.&#160;&#160;In
addition the lease calls for monthly reimbursements which are adjusted
annually.&#160;&#160;The monthly reimbursements for 2009 amounted to $4,400 a
month.&#160;&#160;Rent expense including all related reimbursements which were
classified as operating leases, totaled $211,734 for 2009.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
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    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following is a schedule by year of future minimum rental payments, excluding
reimbursements, required under the operating lease agreements:</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div align="center">
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<tr>
            <td valign="top" width="29%" style="BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">For
      the Year Ending</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">December
      31</font></div>
            </td>
            <td valign="top" width="30%" style="BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Amount</font></div>
            </td>
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            <td valign="top" width="29%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2010</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2011</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2012</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2013</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2014</font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">187,522</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">187,522</font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-DECORATION: underline"><font style="DISPLAY: inline">223,438</font></font></div>
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            <td valign="top" width="29%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Total</font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
            </td>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed&#160;believes&#160;that
its&#160;property and equipment are in good condition, subject to normal wear
and tear.&#160;AquaMed believes that&#160;its facility has sufficient capacity
to meet its current and projected distribution needs.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Forward-Looking
Statements</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
Current Report on Form 8-K and other written reports and oral statements made
from time to time by us may contain so-called &#8220;forward-looking statements,&#8221; all
of which are subject to risks and uncertainties. Forward-looking statements can
be identified by the use of words such as &#8220;expects,&#8221; &#8220;plans,&#8221; &#8220;will,&#8221;
&#8220;forecasts,&#8221; &#8220;projects,&#8221; &#8220;intends,&#8221; &#8220;estimates,&#8221; and other words of similar
meaning. One can identify them by the fact that they do not relate strictly to
historical or current facts. These statements are likely to address our growth
strategy, financial results and product and development programs. One must
carefully consider any such statement and should understand that many factors
could cause actual results to differ from our forward-looking statements. Such
risks and uncertainties include but are not limited to those outlined in the
section entitled &#8220;Risk Factors&#8221; and other risks detailed from time to time in
our filings with the Securities and Exchange Commission or otherwise. These
factors may include inaccurate assumptions and a broad variety of other risks
and uncertainties, including some that are known and some that are not. No
forward-looking statement can be guaranteed and actual future results may vary
materially.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Information
regarding market and industry statistics contained in this Report is included
based on information available to us that we believe is accurate. It is
generally based on industry and other publications that are not produced for
purposes of securities offerings or economic analysis. We have not reviewed or
included data from all sources, and cannot assure investors of the accuracy or
completeness of the data included in this Report. Forecasts and other
forward-looking information obtained from these sources are subject to the same
qualifications and the additional uncertainties accompanying any estimates of
future market size, revenue and market acceptance of products and services. We
do not assume any obligation to update any forward-looking statement. As a
result, investors should not place undue reliance on these forward-looking
statements<font style="DISPLAY: inline; FONT-STYLE: italic">.</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Risk
Factors</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">You
should carefully consider the factors described below, among others, and other
information contained in this report before deciding whether to invest in our
shares or obligations.&#160;&#160;Any investment in our shares or obligations
involve a high degree of risk.&#160;&#160;The risks and uncertainties described
below are not the only ones we face.&#160;&#160;Additional risks and
uncertainties not presently known to us, or which we currently deem immaterial
or which are similar to those faced by other companies in our industry or
business in general, may also impair our business operations.&#160;&#160;As a
result of any of the following risks, our business, financial condition or
results of operations could be materially and adversely affected.&#160;&#160;In
such case, the trading price of our common stock could decline, and you may lose
all or part of your investment.&#160;&#160;This report also contains
forward-looking statements that involve risks and
uncertainties.&#160;&#160;Please refer to &#8220;Forward-Looking Statements&#8221;
above.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Risk
Relating to Our Company</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">We
have experienced significant losses and expect losses to continue for the
foreseeable future.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We have
yet to establish any history of profitable operations. We have incurred annual
operating losses of $1,513,928 and $2,961,820, respectively, during the fiscal
years ended December 31, 2009 and 2008. As a result, at December 31, 2009, we
had an accumulated deficit of $20,237,116. As a result of the acquisition of
AquaMed, we anticipate that we will incur additional operating losses for the
foreseeable future since AquaMed has a history of net losses and may expect net
losses for the foreseeable future.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed
has achieved only limited revenues to date and there is no assurance that
AquaMed will be able to generate substantial revenues or be profitable in the
future.&#160;&#160;AquaMed has incurred net losses since its inception,
including a net loss of $817,196 from the period of its inception (January 13,
2009) to December 31, 2009.&#160;&#160;We expect that AquaMed will continue to
incur significant losses on a quarterly basis at least through 2010 and this
will increase our operating losses. We can offer no assurance that, after the
acquisition of AquaMed, we will achieve revenue growth or
profitability.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">The
acquisition of AquaMed could divert management&#8217;s attention, cause ownership
dilution to our stockholders and be difficult to integrate.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
acquisition of AquaMed presents a number of risks that could harm us and our
business, operating results and financial condition:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">we
      could experience a substantial strain on our resources, including time and
      money, and we may not be successful in integrating AquaMed&#8217;s business into
      our existing business;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">our
      management&#8217;s attention may be diverted from our ongoing business
      concerns;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">while
      integrating AquaMed, we may lose key executives or other employees of
      AquaMed;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">we
      could experience customer dissatisfaction or performance problems with
      AquaMed or the products offered by
AquaMed;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">we
      may become subject to unknown or underestimated liabilities of AquaMed or
      incur unexpected expenses or losses from the acquisition of AquaMed;
      and</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">we
      may incur possible impairment charges related to goodwill or other
      intangible assets or other unanticipated events or circumstances, any of
      which could harm our business.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consequently,
we might not be successful in integrating AquaMed&#8217;s acquired businesses,
products or technologies, and might not achieve anticipated revenue and cost
benefits.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Risks
Related to AquaMed&#8217;s Business</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">AquaMed
is&#160;&#160;dependent on proprietary know-how. AquaMed holds limited
patents.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Competitors
of AquaMed may develop or market technologies that are more effective or more
commercially attractive than AquaMed&#8217;s. AquaMed&#8217;s manufacturing know-how as to
mixing, coating and cross-linking can be duplicated even if it is difficult to
do so. There is no assurance that, should we apply for intellectual property
protection for AquaMed&#8217;s intellectual property, we would be able to obtain such
protection.&#160;&#160;Despite our efforts to protect proprietary rights, there
is no assurance that such protections may not preclude competitors of AquaMed
from developing and/or marketing similar products.&#160;&#160;While we are not
aware of any third party intellectual property that would materially affect
AquaMed&#8217;s business, our failure or inability to obtain patents and protect
AquaMed&#8217;s proprietary information could result in our business being adversely
affected.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">We
are dependent on the services of key personnel of AquaMed, the loss of which
would have a material adverse effect on us.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
operations and future success of HepaLife depend upon the efforts of our key
employees.&#160;&#160;Because of the specialized nature of AquaMed&#8217;s business
that we acquired, we are dependent on our ability to attract and retain
qualified personnel. We face competition for personnel from other companies with
greater resources than we have.&#160;&#160;There can be no assurance that we
will be successful in hiring or retaining qualified personnel and our failure to
do so could have a material adverse effect on our business and financial
condition.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">We
may not be able to correctly estimate our future operating expenses, which could
lead to cash shortfalls.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
operating expenses may fluctuate significantly in the future as a result of a
variety of factors, many of which are outside of our control. These factors
include:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      time and resources required to develop, conduct clinical trials and obtain
      regulatory approvals for AquaMed&#8217;s drug
  candidates;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      costs to attract and retain personnel with the skills required for
      effective operations; and</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      costs of preparing, filing, prosecuting, defending and enforcing patent
      claims and other patent related costs, including litigation costs and the
      results of such litigation.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">AquaMed&#8217;s
business is dependant on significant customers.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
the period between January 13, 2009 (AquaMed&#8217;s inception) through December 31,
2009, more than 84% of AquaMed&#8217;s revenues were from only 4 customers, one of
which represented approximately 30% of AquaMed&#8217;s revenue. The loss of any
significant customer of AquaMed would have a significantly negative effect on
AquaMed&#8217;s operations and, as a result, on our overall operations.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">AquaMed
is dependent on outside suppliers for raw materials.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
products produced by AquaMed are manufactured using proprietary polymers that we
will obtain from outside suppliers.&#160;&#160;It is possible that the outside
suppliers may be unable to meet our demands or may be unable to supply us with
the materials necessary for us to manufacture the products produced by
AquaMed.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Risks
Related to AquaMed&#8217;s Industry</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">AquaMed
is subject to governmental regulations.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inherent
in the development of new medical products is the potential for delay in that
product testing, including clinical evaluation, is required before most products
can be used with humans. The manufacture, marketing, labeling, record-keeping,
claims and advertising of medical devices, as well as prescription drugs,
non-prescription drugs that claim to have certain therapeutic properties, and
cosmetics are subject to regulation by the FDA and the Federal Trade Commission.
AquaMed is also subject to state regulation on electron beam radiation services
and facilities. The expansion of our business into the manufacture and
distribution of AquaMed&#8217;s products for consumer use will subject us to
additional governmental regulation. While hydrogel patches are classified as
Class I exempt devices by the FDA, there can be no assurances that the FDA will
not seek to regulate this product in the future. Such action by the FDA could
have a material adverse effect on AquaMed&#8217;s prospects and our overall prospects,
as such approval can take a number of years, and would require AquaMed to
undertake costly and time-consuming tests and other procedures.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">If
AquaMed fails to comply with continuing federal, state and foreign regulations,
it could lose its approvals to market drugs and our business would be seriously
harmed.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Following
initial regulatory approval of any drugs that AquaMed may develop, it will be
subject to continuing regulatory review, including review of adverse drug
experiences and clinical results that are reported after AquaMed&#8217;s drug products
become commercially available. This would include results from any
post-marketing tests or continued actions required as a condition of approval.
The manufacturing facilities AquaMed may use to make any of its drug candidates
will be subject to periodic review and inspection by the FDA. If a previously
unknown problem or problems with a product or a manufacturing and laboratory
facility used by AquaMed is discovered, the FDA or foreign regulatory agency may
impose restrictions on that product or on the manufacturing facility, including
requiring AquaMed to withdraw the product from the market. Any changes to an
approved product, including the way it is manufactured or promoted, often
requires FDA approval before the product, as modified, can be marketed. In
addition, AquaMed and its contract manufacturers will be subject to ongoing FDA
requirements for submission of safety and other post-market information. If
AquaMed or any of its contract manufacturers fail to comply with applicable
regulatory requirements, a regulatory agency may:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">issue
      warning letters;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">impose
      civil or criminal penalties;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">suspend
      or withdraw AquaMed&#8217;s regulatory
approval;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">suspend
      or terminate any of AquaMed&#8217;s ongoing clinical
  trials;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">refuse
      to approve pending applications or supplements to approved applications
      filed by AquaMed;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">impose
      restrictions on AquaMed&#8217;s
operations;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">close
      the facilities of AquaMed&#8217;s contract manufacturers;
  or</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline;" face="Symbol, serif">&#183;</font></font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">seize
      or detain products or require a product
recall.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additionally,
regulatory review covers a company&#8217;s activities in the promotion of its drugs,
with significant potential penalties and restrictions for promotion of drugs for
an unapproved use. Sales and marketing programs are under scrutiny for
compliance with various mandated requirements, such as illegal promotions to
health care professionals. AquaMed is also required to submit information on its
open and completed clinical trials to public registries and databases. Failure
to comply with these requirements could expose us to negative publicity, fines
and penalties that could harm our business.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
AquaMed violates regulatory requirements at any stage, whether before or after
marketing approval is obtained, we may be fined, be forced to remove a product
from the market or experience other adverse consequences, including delay, which
would materially harm our financial results. Additionally, we may not be able to
obtain the labeling claims necessary or desirable for product
promotion.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Once
approved, there is no guarantee that the market will accept AquaMed&#8217;s products
and AquaMed&#8217;s products are subject to obsolescence; competition in the medical
products field is intense and AquaMed represents a very small
presence.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The field
of medical and health products is characterized by rapid and significant
changes. Even if AquaMed obtains regulatory approvals, uncertainty exists as to
whether the market will accept its products or if the market for its products is
as large as we anticipate. A number of factors may limit the market acceptance
of AquaMed&#8217;s products, including the timing of regulatory approvals and market
entry relative to competitive products, the availability of alternative
products, the price of AquaMed&#8217;s products relative to alternative products, the
availability of third party reimbursement and the extent of marketing efforts by
third party distributors or agents that we retain. We cannot assure you that
AquaMed&#8217;s products will receive market acceptance in a commercially viable
period of time, if at all. We cannot be certain that any investment made in
developing products will be recovered by AquaMed, even if AquaMed is successful
in commercialization.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We can
give no assurance that any existing or future product produced by AquaMed will
be competitive and will not become obsolete in light of future technological
developments. Most of AquaMed&#8217;s competitors have far greater financial,
research, marketing and distribution resources and more established channels of
distribution than AquaMed does. In addition, many of AquaMed&#8217;s current and
potential competitors offer greater variety of products and services and can
therefore offer discounts and other incentive programs unavailable to AquaMed at
this time.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed&#8217;s
failure to meet the prices offered by competitors, or to be unable to meet
production demands for AquaMed&#8217;s products could have material adverse effect on
our business, financial condition or results of operations. The relative speed
with which we can introduce AquaMed&#8217;s products and expand its distribution are
also a competitive factor. Additionally, many of AquaMed&#8217;s customers have
financial ability to establish in-house manufacturing capabilities similar to
ours.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">AquaMed&#8217;s
products risk exposure to product liability claims.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
successful in developing testing and commercializing AquaMed&#8217;s products, we will
be exposed to potential product liability risks, which are inherent in the
testing, manufacturing and marketing of topical therapeutic and skin care
products.&#160;&#160;It is likely we will be contractually obligated, under any
license agreements&#160;&#160;that AquaMed enters into to indemnify the
individuals and/or entities to whom AquaMed has licensed the technology against
claims relating to the manufacture and sale of products sold by
licensees.&#160;&#160;This indemnification liability, as well as direct
liability to consumers for any defects in the products sold, could expose us to
substantial risks and losses.&#160;&#160;AquaMed has obtained $3,000,000 of
product liability insurance; however, there can be no assurance that we will be
able to maintain such insurance on acceptable terms or that such insurance will
provide adequate coverage against potential liabilities.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Risks
Related to the Common Stock</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Our
stock price historically has been volatile and may continue to be
volatile.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
market price of our common stock has been and is expected to continue to be
highly volatile. Factors, many of which are beyond our control, include, in
addition to other risk factors described in this section, the announcements of
technological innovations by us or other companies, regulatory matters, new or
existing products or procedures, concerns about our financial position,
operating results, litigation, government regulation, developments or disputes
relating to agreements, patents or proprietary rights, and general economic,
industry and market conditions may have a significant impact on the market price
of our stock. In addition, the future sales of shares of our common stock by our
stockholders, the holders of our other outstanding warrants and options, and us
could have an adverse dilutive effect on our outstanding shares and the market
price of such shares.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
trading price of our common stock has, from time to time, fluctuated widely and
in the future may be subject to similar fluctuations. The trading price may be
affected by a number of factors including the risk factors set forth herein, as
well as our operating results, financial condition, general economic conditions,
market demand for our common stock, and various other events or factors both in
and out of our control. In recent years, broad stock market indices, in general,
and smaller capitalization companies, in particular, have experienced
substantial price fluctuations. In a volatile market, we may experience wide
fluctuations in the market price of our common stock. These fluctuations may
have a negative effect on the market price of our common stock. To the extent
our stock price fluctuates and/or remains low, it could cause you to lose some
or all of your investment and impair our ability to raise capital through the
offering of additional equity securities.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Our
common stock is a &#8220;penny stock&#8221; and because &#8220;penny stock&#8221; rules will apply, you
may find it difficult to sell shares of our common stock.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
common stock is a &#8220;penny stock&#8221; as that term is defined under Rule 3a51-1 of the
Securities Exchange Act of 1934, as amended (the &#8220;Exchange Act&#8221;). Generally, a
&#8220;penny stock&#8221; is a common stock that is not listed on a securities exchange and
trades for less than $5.00 a share. Prices of penny stocks often are not
available to buyers and sellers and the market may be very limited. Penny stocks
in start-up companies are among the riskiest equity investments. Broker-dealers
who sell penny stocks must provide purchasers of these stocks with a
standardized risk-disclosure document prepared by the Securities and Exchange
Commission. The document provides information about penny stocks and the nature
and level of risks involved in investing in the penny stock market. A broker
must also give a purchaser, orally or in writing, bid and offer quotations and
information regarding broker and salesperson compensation, make a written
determination that the penny stock is a suitable investment for the purchaser,
and obtain the purchaser&#8217;s written agreement to the purchase. Many brokers
choose not to participate in penny stock transactions. Because of the penny
stock rules, there is less trading activity in penny stocks and you are likely
to have difficulty selling your shares.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Our
common stock is quoted on the Over-The-Counter Bulletin Board and, accordingly,
it may be difficult for you to sell your shares or you may not be able to sell
your shares for an optimum trading price.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
common stock is quoted on the Financial Industry Regulatory Authority&#8217;s
Over-The-Counter Bulletin Board (the &#8220;OTCBB&#8221;) under the symbol &#8220;HPLF.&#8221; The OTCBB
is a regulated quotation service that displays real-time quotes, last sale
prices and trade volumes in over-the-counter securities. Because trades and
quotations on the OTCBB involve a manual process, the market information for
such securities cannot be guaranteed. In addition, quote information, or even
firm quotes, may not be available. The manual execution process may delay order
processing and intervening price fluctuations may result in the failure of a
limit order to execute or the execution of a market order at a significantly
different price. Execution of trades, execution reporting and the delivery of
legal trade confirmations may be delayed significantly. Consequently, one may
not be able to sell shares of our common stock at the optimum trading
prices.</font></div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">When
fewer shares of a security are being traded on the OTCBB, volatility of prices
may increase and price movement may outpace the ability to deliver accurate
quote information. Lower trading volumes in a security may result in a lower
likelihood of an individual&#8217;s orders being executed, and current prices may
differ significantly from the price one was quoted by the OTCBB at the time of
the order entry.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Orders
for OTCBB securities may not be canceled or edited like orders for other
securities. All requests to change or cancel an order must be submitted to,
received and processed by the OTCBB. Due to the manual order processing involved
in handling OTC Bulletin Board trades, order processing and reporting may be
delayed, and an individual may not be able to cancel or edit his order.
Consequently, one may not be able to sell shares of common stock at the optimum
trading prices.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
dealer&#8217;s spread (the difference between the bid and ask prices) may be large and
may result in substantial losses to the seller of securities on the OTCBB if the
common stock or other security must be sold immediately. Further, purchasers of
securities on the OTCBB may not have a bid price for securities bought and sold
through the OTCBB. Due to the foregoing, demand for securities that are traded
through the OTCBB may be decreased or eliminated.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">We
do not intend to pay dividends for the foreseeable future.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
currently intend to retain future earnings, if any, to support the development
and expansion of our business and do not anticipate paying cash dividends in the
foreseeable future. Our payment of any future dividends will be at the
discretion of our board of directors after taking into account various factors,
including but not limited to our financial condition, operating results, cash
needs, growth plans and the terms of any credit agreements that we may be a
party to at the time. Accordingly, investors must rely on sales of our common
stock after price appreciation, which may never occur, as the only way to
realize a return on their investment.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Sales
practice requirements of the Financial Industry Regulatory Authority (&#8220;FINRA&#8221;)
may also limit a stockholder&#8217;s ability to buy and sell our stock.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
addition to the &#8220;penny stock&#8221; rules described above, FINRA has adopted rules
that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for
that customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer&#8217;s financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for our shares.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
3.02.&#160;&#160;Unregistered Sales of Equity Securities.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reference
is made to the disclosure regarding the Private Placements set forth under Item
2.01 of this Form 8-K, which disclosure is incorporated herein by
reference.</font></div>
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      </div>
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      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
4.01.&#160;&#160;Changes in Registrant&#8217;s Certifying Accountant.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Dismissal
of Independent Registered Public Accounting Firm.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On May
13, 2010, the board of directors of HepaLife dismissed Peterson Sullivan LLP
(&#8220;Peterson&#8221;) as HepaLife&#8217;s independent registered public accounting
firm.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
reports of Peterson on HepaLife&#8217;s financial statements as of and for the years
ended December&#160;31, 2009 and December 31, 2008 contained no adverse opinion
or disclaimer of opinion nor were they qualified or modified as to uncertainty,
audit scope, or accounting principle.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
the fiscal years ending December 31, 2009 and December 31, 2008 and the
subsequent period through May 13, 2010, there have been no (i) disagreements
with Peterson on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to Peterson&#8217;s satisfaction, would have caused Peterson to make
reference to the subject matter of the disagreement(s) in connection with its
reports; or (ii) &#8220;reportable events&#8221; as defined in Item 304(a)(1)(v) of
Regulation S-K.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HepaLife
has provided Peterson with a copy of the above disclosures and requested that
Peterson furnish HepaLife with a letter addressed to the Securities and Exchange
Commission stating whether or not it agrees with the above statement. A copy of
Peterson&#8217;s letter, dated May 13, 2010 is filed as Exhibit 16.1 to this Form
8-K.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Appointment
of New Independent Registered Public Accounting Firm.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On May
13, 2010, the board of directors of HepaLife engaged Marcum LLP (&#8220;Marcum&#8221;), as
HepaLife&#8217;s new independent registered public accounting firm.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
the fiscal years ending December 31, 2009 and December 31, 2008, and the
subsequent interim period prior to the engagement of Marcum, HepaLife has not
consulted Marcum regarding (i) the application of accounting principles to any
specified transaction, either completed or proposed, (ii) the type of audit
opinion that might be rendered on HepaLife&#8217;s financial statements, or (iii) any
matter that was either the subject of a disagreement (as defined in Item
304(a)(1)(iv)) or a reportable event (as defined in Item
304(a)(1)(v)).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
5.02.&#160;&#160;Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director
and Officer Resignations</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
May 11, 2010, upon consummation of the Merger and pursuant to the Merger
Agreement, Jatinder S. Bhogal and Javier Jimenez resigned from HepaLife&#8217;s board
of directors. Also effective May 11, 2010, upon consummation of the Merger, Amit
S. Dang resigned from his position as Interim Chief Executive Officer and
President and Interim Chief Financial Officer of HepaLife.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
Officers and Directors</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
following persons became our executive officers and directors on May 11, 2010,
upon consummation of the Merger, and hold the positions set forth opposite their
respective names.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
    </div>
    <div>&#160;</div>
    <div align="center">
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<tr>
            <td width="33%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Name</font></font></td>
            <td width="33%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Age</font>&#160;</font></td>
            <td width="33%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Position</font></font></td>
          </tr><tr bgcolor="#cceeff">
            <td width="33%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">David
      Stefansky</font></td>
            <td width="33%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">39</font></td>
            <td width="33%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Chairman and
      Director</font></td>
          </tr><tr bgcolor="white">
            <td width="33%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Richard
      Rosenblum&#160;&#160;&#160;</font></td>
            <td width="33%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">51&#160;&#160;</font></td>
            <td width="33%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">President</font></td>
          </tr><tr bgcolor="#cceeff">
            <td width="33%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Steven
      Berger&#160;</font></td>
            <td width="33%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">49&#160;&#160;</font></td>
            <td width="33%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Chief Financial
      Officer, Treasurer and Secretary</font></td>
          </tr></table>
    </div>
    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">17</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prior to
the Effective Time, HepaLife&#8217;s board of directors appointed Richard Rosenblum
and David Stefansky to HepaLife&#8217;s board of directors effective upon the
consummation of the Merger and following the resignations of Messrs Bhogal and
Jimenez. Subsequent to this appointment, the board of directors and Mr.
Rosenblum determined that Mr. Rosenblum would not accept this appointment to
HepaLife&#8217;s board of directors until HepaLife satisfies the notice requirements
to HepaLife&#8217;s stockholders pursuant to Rule 14f-1 under the Exchange Act. Until
such time, Mr. Rosenblum shall be invited to participate at all meetings of
HepaLife&#8217;s board of directors as an observer.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As noted
above, on May 7, 2010, holders of a majority of the voting shares of HepaLife
acted by written consent in lieu of a special meeting of stockholders to adopt
an amendment to HepaLife&#8217;s Articles of Incorporation, to among other things,
provide for the classification of the HepaLife&#8217;s board of directors and to
provide for staggered terms of service for each class of directors. Upon the
effectiveness of the Amended Articles of Incorporation, HepaLife&#8217;s board of
directors has designated Joseph Sierchio as a Class I director, to serve in such
capacity until the 2010 annual meeting of stockholders, Richard Rosenblum as a
Class II director, to serve in such capacity until the 2011 annual meeting of
stockholders, and David Stefansky as a Class III director, to serve in such
capacity until the 2012 annual meeting of stockholders. Directors elected to
succeed those listed above will hold office for three-year terms until the
election and qualification of their successors.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Biographies</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">David Stefansky (Chairman of the
Board of Directors)</font>. David Stefansky has been a principal of Harborview
Advisors, LLC, the investment manager for Harborview Master Fund, L.P. and
Harborview Value Master Fund, L.P., since 2004. Mr. Stefansky previously was a
managing director at vFinance, Inc.&#160;&#160;From September 2006 to March
2009, Mr. Stefansky was a director of Boxwoods, Inc. From September 2006 to May
2007, Mr. Stefansky was a director of Mill Basin Technologies, Ltd. From
November 2006 to January 2008, Mr. Stefansky was a director of Marine Park
Holdings, Inc. From August 2009 to September 2009, Mr. Stefansky was a director
of HG Partners, Inc.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Richard Rosenblum (President)</font>.
Richard Rosenblum has been a principal of Harborview Advisors, LLC, the
investment manager for Harborview Master Fund, L.P. and Harborview Value Master
Fund, L.P., since 2004. He previously was a managing director of investment
banking for vFinance, Inc., a middle market investment banking and brokerage
organization. Mr. Rosenblum graduated from the State University of New York at
Buffalo in 1981, summa cum laude, with a degree in finance and accounting. From
September 2006 to April 2010, Mr. Rosenblum was a director of Boxwoods, Inc.,
which changed its name to Duke Mining Company, Inc. in March 2009. From
September 2006 to May 2007, Mr. Rosenblum was a director of Mill Basin
Technologies, Ltd. From November 2006 to January 2008, Mr. Rosenblum was a
director of Marine Park Holdings, Inc. From August 2009 to September 2009, Mr.
Rosenblum was a director of HG Partners, Inc..</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Steven Berger (Chief Financial
Officer, Treasurer and Secretary).</font> Steven Berger has been the Chief
Financial Officer and Chief Operating Officer of Harborview Advisors, LLC, the
investment manager for Harborview Master Fund, L.P. and Harborview Value Master
Fund, L.P., since 2007. His past executive finance positions include serving as
Chief Financial Officer of Global/CHC Worldwide LLC, a chemical coatings
company. Other executive experience includes his tenure as President of Morgan
Harris &amp; Co. where he was involved in equity trading. From 2000 to 2003, Mr.
Berger was Chief Financial Officer of Virtual BackOffice Inc., a company engaged
in the provision of virtual secretarial services. From 1983 to 1999, Mr. Berger
was the Treasurer, Controller and Chief Compliance Officer with LaBranche &amp;
Co., the parent corporation of LaBranche &amp; Co. LLC, one of the oldest and
largest specialists in equity securities listed on the New York Stock Exchange
and the American Stock Exchange. Mr. Berger holds a Bachelor of Science degree
in business administration with a concentration in finance from Boston
University.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">18</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
7.01.&#160; Regulation FD Disclosure.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>On May 17, 2010, HepaLife issued a
press release announcing the execution of the Merger Agreement and consummation
of the Merger and Private Placements, a copy of which is furnished as Exhibit
99.1 hereto.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>In accordance with general instruction
B.2 to Form 8-K, the information contained in Exhibit 99.1 is being &#8220;furnished&#8221;
and not &#8220;filed&#8221; with the Securities and Exchange Commission for purposes of
Section 18 of the Exchange Act and such information shall not be deemed
incorporated by reference in any filing under the Securities Act or the Exchange
Act, whether made before or after the date hereof, regardless of any general
incorporation language in such filing.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><br>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The information furnished pursuant to
this Item 7.01 shall not be deemed to constitute an admission that such
information is required to be furnished pursuant to Regulation FD or that such
information or exhibit contains material information that is not otherwise
publicly available.&#160;&#160;In addition, HepaLife does not assume any
obligation to update such information in the future.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
9.01.&#160;&#160;Financial Statements and Exhibits.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Financial
Statements of Businesses Acquired</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To be
filed by amendment.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Pro
Forma Financial Information</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To be
filed by amendment.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Exhibits</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 108pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit
      No.</font>&#160;&#160;&#160;</font></div>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.1</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Description</font></font></div>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Agreement
      and Plan of Merger, dated as of May 11, 2010, by and among HepaLife
      Technologies, Inc., HT Acquisition Corp. and AquaMed Technologies,
      Inc.</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 108pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.2</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
      of Merger, dated May 11, 2010, between AquaMed Technologies, Inc. and HT
      Acquisition Corp.</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 108pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
      of Series E Stock Purchase Warrant</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 108pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.2</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
      of Series F Stock Purchase Warrant</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 108pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.1</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholder
      Voting Agreement and Irrevocable Proxy, dated as of May 11, 2010, by and
      among HepaLife Technologies, Inc., Harborview Master Fund LP and certain
      stockholders signatory thereto.</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 108pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investor
      Relations Service Agreement, dated as of May 11, 2010, by and between
      HepaLife Technologies, Inc. and Cogito,
Corp.</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 108pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Placement
      Agent Agreement, dated as of May 6, 2010, by and between Palladium Capital
      Advisors, LLC and HepaLife Technologies,
Inc.</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 108pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
      of Subscription Agreement</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 108pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16.1</font></div>
            </td>
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duly authorized.</font></div>
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            <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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            <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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            <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
          </tr><tr>
            <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
          </tr></table>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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INDEX</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
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<tr valign="top">
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      No.</font></font></div>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.1</font></div>
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            <td>
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Agreement
      and Plan of Merger, dated as of May 11, 2010, by and among HepaLife
      Technologies, Inc., HT Acquisition Corp. and AquaMed Technologies,
      Inc.</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.2</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
      of Merger, dated May 11, 2010, between AquaMed Technologies, Inc. and HT
      Acquisition Corp.</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
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            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.2</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
      of Series F Stock Purchase Warrant</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 108pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.1</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholder
      Voting Agreement and Irrevocable Proxy, dated as of May 11, 2010, by and
      among HepaLife Technologies, Inc., Harborview Master Fund LP and certain
      stockholders signatory thereto.</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
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            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investor
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      HepaLife Technologies, Inc. and Cogito,
Corp.</font></div>
            </td>
          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
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            </td>
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      Advisors, LLC and HepaLife Technologies,
Inc.</font></div>
            </td>
          </tr></table>
    </div>
    <div>
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<tr valign="top">
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2010</font></div>
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<DOCUMENT>
<TYPE>EX-2.1
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">and</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AQUAMED
TECHNOLOGIES, INC.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">This AGREEMENT AND PLAN OF
MERGER</font>, dated as of&#160;&#160;May 11, 2010 (this<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Agreement</font>&#8221;), is among HepaLife
Technologies, Inc., a Florida corporation<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>(&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent</font>&#8221;), HT Acquisition
Corp., a Delaware corporation and a wholly-owned Subsidiary of Parent<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>(&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Merger Sub</font>&#8221;), and AquaMed
Technologies, Inc., a Delaware corporation (the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company</font>&#8221;). Certain terms used
in this Agreement are used as defined in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;8.1</font>.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>, Parent has approved,
and the respective Boards of Directors of the Company and Merger Sub have
adopted, approved and declared advisable, this Agreement and the merger of
Merger Sub with and into the Company (the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Merger</font>&#8221;), on the terms and
subject to the conditions provided for in this Agreement;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS,</font> simultaneously with
the closing of the Merger, Parent intends to consummate a private placement of
approximately a minimum of $1,175,000 and a maximum of $2,500,000&#160;of
Parent&#8217;s securities, on such terms and conditions as may be mutually agreed to
by Parent and the Company (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Financing</font>&#8221;)<font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS,</font> prior to the
execution and delivery of this Agreement by the parties hereto, the holders of a
sufficient number of voting securities of the Company have adopted and approved
this Agreement and the Merger as required under the <font style="DISPLAY: inline; FONT-SIZE: 10pt">General Corporation Law of the State of
Delaware (the</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-STYLE: italic">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt">&#8220;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt">DGCL</font><font style="DISPLAY: inline; FONT-SIZE: 10pt">&#8221;) </font>and have executed and
delivered an action by written consent adopting this Agreement (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Stockholder
Consent</font>&#8221;);</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS,</font> Parent, Merger Sub
and the Company desire that the Merger qualify as a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">reorganization</font>&#8221; within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Code</font>&#8221;).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">NOW, THEREFORE</font>, for and in
consideration of the foregoing and the representations, warranties, covenants
and agreements set forth in this Agreement, the parties to this Agreement (each
a<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Party</font>,&#8221; and collectively,
the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parties</font>&#8221;) agree as
follows:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ARTICLE
1</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THE
MERGER</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;1.1</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-STYLE: italic">&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">The Merger</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-STYLE: italic">.</font> Upon the
terms and subject to the conditions set forth in this Agreement, and in
accordance with the DGCL, at the Effective Time (as defined below) Merger Sub
shall be merged with and into the Company, and the separate corporate existence
of Merger Sub shall thereupon cease, and the Company shall be the surviving
corporation in the Merger (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Surviving
Corporation</font>&#8221;).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;1.2</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-STYLE: italic">&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Closing</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-STYLE: italic">.</font> The
closing of the Merger (the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Closing</font>&#8221;) shall take place at
10:00&#160;a.m. (Eastern Time) at the offices of Haynes and Boone, LLP, 1221
Avenue of the Americas, 26th Floor, New York, New York 10020 simultaneously with
the execution of this Agreement. The date hereof is herein referred to as the
&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Closing
Date.&#8221;</font></font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;1.3 Effective Time of
Merger.</font> Subject to the provisions of this Agreement, on the Closing Date,
the parties shall file a Certificate of Merger (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Certificate of Merger</font>&#8221;)
executed in accordance with the relevant provisions of the DGCL and shall make
all other filings or recordings required under the DGCL. The Merger shall become
effective at such time as the Certificate of Merger is duly filed with the
Secretary of State of the State of Delaware (the time the Merger becomes
effective being hereinafter referred to as the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Effective Time</font>&#8221;).<a name="effectstwo"><!--EFPlaceholder-->
 </a></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;1.4 Effects of the
Merger.</font> The Merger shall have the effects set forth in this Agreement and
the DGCL. Without limiting the generality of the foregoing, and subject thereto,
at the Effective Time, all of the properties, rights, privileges, powers and
franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all of the debts, liabilities and duties of the Company and
Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Section&#160;1.5 Certificate of
Incorporation and Bylaws of the Surviving Corporation.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(a) The certificate of incorporation of
the Company, as in effect immediately prior to the Effective Time, shall be
amended and restated as of the Effective Time as a result of the Merger so as to
read in its entirety as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Exhibit
A</font> hereto, and such certificate of incorporation, as so amended, shall be
the certificate of incorporation of the Surviving Corporation until thereafter
amended as provided therein or by Applicable Law.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(b) The bylaws of the Company, as in
effect immediately prior to the Effective Time, shall be amended and restated as
of the Effective Time as a result of the Merger so as to read in their entirety
as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Exhibit
B</font> hereto, and such bylaws, as so amended, shall be the bylaws of the
Surviving Corporation until thereafter amended as provided therein or by
Applicable Law.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Section&#160;1.6
Directors.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)</font> <font style="DISPLAY: inline; FONT-WEIGHT: bold">Surviving Corporation.</font> Each of
the parties hereto shall take all necessary action to cause the persons listed
on <font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Schedule
1.6(a)</font> hereto to be the directors of the Surviving Corporation
immediately following the Effective Time, until their respective successors are
duly elected or appointed and qualified or their earlier death, resignation or
removal in accordance with Applicable Law.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b) Parent.</font> At the Effective
Time, the size of the board of directors of Parent shall be three members, and
each of the parties hereto shall take all necessary action to cause the persons
listed on <font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Schedule
1.6(b)</font> hereto to be the directors of Parent immediately following the
Effective Time, until their respective successors are duly elected or appointed
and qualified or their earlier death, resignation or removal in accordance with
Applicable Law.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
1.7 Officers.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a) Surviving Corporation.</font> The
officers of the Company immediately prior to the Effective Time shall be the
officers of the Surviving Corporation, until the earlier of their resignation or
removal or their respective successors are duly elected and qualified, as the
case may be.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b) Parent.</font>&#160;At the
Effective Time, the individuals listed on <font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Schedule&#160;1.7(b</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">)</font> hereto shall have the
executive officer positions with Parent set forth opposite their respective
names, and each such executive officer shall serve until such executive
officer&#8217;s successor shall be elected and qualified or such executive officer&#8217;s
earlier death, resignation, retirement, disqualification or removal. If, at or
before the Effective Time, any such Person is unable or unwilling to serve as an
executive officer of Parent in the capacity set forth on <font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Schedule&#160;1.7(b)</font>,
then a substitute executive officer shall be selected by Parent Board after the
Effective Time</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<a name="dirtwo"><!--EFPlaceholder-->
 </a></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ARTICLE&#160;2</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">EFFECT
OF MERGER ON CAPITAL STOCK</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2.1 Effect on Capital
Stock.</font> As of the Effective Time, by virtue of the Merger and without any
action on the part of the holder of any shares of capital stock of the Company,
or Merger Sub:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a) Capital Stock of Merger
Sub.</font> Each issued and outstanding share of capital stock of Merger Sub
shall be converted into and become one fully paid and nonassessable share of
common stock of the Surviving Corporation.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b) Cancellation of Treasury and
Parent Owned Stock</font>. Each share of the Company Merger Stock (i) issued and
held in the Company&#8217;s treasury or (ii) owned by Parent, Merger Sub or any other
wholly owned Subsidiary of Parent or the Company shall, at the Effective Time
and by virtue of the Merger, cease to be outstanding and shall be canceled and
retired without payment of any consideration therefor, and no consideration
shall be delivered in exchange therefor.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(c) Conversion of the Company Common
Stock</font>. Subject to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2.1(f),</font> each issued
and outstanding share (including any dissenting shares) of the Company Common
Stock at the Effective Time shall be converted into the right to receive
25&#160;&#160;&#160;(the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Common Exchange Ratio</font>&#8221;)
validly issued, fully paid and non-assessable shares of Parent Common Stock
(the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Common Merger Consideration</font>&#8221;),
rounded to the nearest whole share. No fractional shares of Parent Common Stock
will be issued. As of the Effective Time, all the Company Common Stock shall no
longer be outstanding and shall be automatically canceled and retired and shall
cease to exist, and each holder of a certificate representing any shares of the
Company Common Stock shall cease to have any rights with respect thereto, except
the right to receive the Common Merger Consideration, without interest. The
Common Exchange Ratio shall be appropriately adjusted to reflect fully the
effect of any stock split, reverse stock split, stock dividend (including any
dividend or distribution of securities convertible into Company Common Stock or
Parent Common Stock), reorganization, recapitalization, reclassification or
other like change with respect to the Company Common Stock or Parent Common
Stock having a record date on or after the date hereof and prior to the
Effective Time.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(d) Conversion of the Company Series
A Preferred Stock</font>. Subject to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2.1(f),</font> each issued
and outstanding share (including any dissenting shares) of the Company Series A
Preferred Stock at the Effective Time shall be converted into the right to
receive 100 (the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Series A Exchange Ratio</font>&#8221;)
validly issued, fully paid and non-assessable shares of Parent Common Stock
(the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Series A Merger
Consideration</font>&#8221;), rounded to the nearest whole share. No fractional shares
of Parent Common Stock will be issued. As of the Effective Time, all the Series
A Preferred Stock shall no longer be outstanding and shall be automatically
canceled and retired and shall cease to exist, and each holder of a certificate
representing any shares of the Series A Preferred Stock shall cease to have any
rights with respect thereto, except the right to receive the Series A Preferred
Merger Consideration, without interest. The Series A Exchange Ratio shall be
appropriately adjusted to reflect fully the effect of any stock split, reverse
stock split, stock dividend (including any dividend or distribution of
securities convertible into Company Series A Stock, Company Common Stock or
Parent Common Stock), reorganization, recapitalization, reclassification or
other like change with respect to the Company Series A Stock, Company Common
Stock or Parent Common Stock having a record date on or after the date hereof
and prior to the Effective Time.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(e) Conversion of the Company Series
B Preferred Stock</font>. Subject to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2.1(f),</font> each issued
and outstanding share (including any dissenting shares) of the Company Series B
Preferred Stock at the Effective Time shall be converted into the right to
receive 399.99994 (the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Series B Exchange Ratio</font>&#8221;)
validly issued, fully paid and non-assessable shares of Parent Common Stock
(the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Series B Merger Consideration</font>&#8221;
and together with the Common Merger Consideration and the Series B Merger
Consideration, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Merger
Consideration</font>&#8221;), rounded to the nearest whole share. No fractional shares
of Parent Common Stock will be issued. As of the Effective Time, all the Series
B Preferred Stock shall no longer be outstanding and shall be automatically
canceled and retired and shall cease to exist, and each holder of a certificate
representing any shares of the Series B Preferred Stock shall cease to have any
rights with respect thereto, except the right to receive the Series B Merger
Consideration, without interest. The Series B Exchange Ratio shall be
appropriately adjusted to reflect fully the effect of any stock split, reverse
stock split, stock dividend (including any dividend or distribution of
securities convertible into Company Series B Preferred Stock, Company Common
Stock or Parent Common Stock), reorganization, recapitalization,
reclassification or other like change with respect to the Company Series B
Preferred Stock, Company Common Stock or Parent Common Stock having a record
date on or after the date hereof and prior to the Effective Time.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(f) Shares of Dissenting
Stockholders.</font> Notwithstanding anything in this Agreement to the contrary,
shares of Company Merger Stock (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Dissenting Shares</font>&#8221;) that are
issued and outstanding immediately prior to the Effective Time and which are
held by a stockholder who did not vote in favor of the Merger (or consent
thereto in writing) and who is entitled to demand and properly demands appraisal
of such shares pursuant to, and who, in all respects,&#160;&#160;complies with
the provisions of Section 262 of the DGCL (all such stockholders, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Dissenting Stockholders</font>&#8221;),
shall not be converted into or be exchangeable for the right to receive the
Merger Consideration, but instead such holder shall be entitled to payment of
the fair value of such shares in accordance with the provisions of Section 262
of the DGCL (and at the Effective Time, such Dissenting Shares shall no longer
be outstanding and shall automatically be canceled and shall cease to exist, and
such holder shall cease to have any rights with respect thereto, except the
right to receive the fair value of such Dissenting Shares in accordance with the
provisions of Section 262 of the DGCL), unless and until such holder shall have
failed to perfect or shall have effectively waived, withdrawn or lost rights to
appraisal under the DGCL (or a court of competent jurisdiction shall determine
that such holder is not entitled to the relief provided by Section 262 of the
DGCL). If any Dissenting Stockholder shall have failed to perfect or shall have
effectively waived, withdrawn or lost such right (or a court of competent
jurisdiction shall determine that such holder is not entitled to the relief
provided by Section 262 of the DGCL), such holder&#8217;s shares of Company Merger
Stock shall thereupon be treated as if they had been converted into and become
exchangeable for the right to receive, as of the Effective Time, the Merger
Consideration for each such share of Company Merger Stock, as provided herein,
without any interest thereon. The Company shall give Parent (i) prompt notice of
any written demands for appraisal of any shares of Company Merger Stock,
attempted withdrawals of such demands and any other instruments served pursuant
to the DGCL and received by the Company relating to stockholders&#8217; rights of
appraisal, and (ii) the opportunity to participate in all negotiations and
proceedings with respect to demands for appraisal under the DGCL. The Company
shall not, except with the prior written consent of Parent, voluntarily make any
payment with respect to, or settle, or offer or agree to settle, any such demand
for payment or waive any failure by a stockholder to timely comply with the
requirements of Section 262 of the DGCL to perfect or demand appraisal. Any
portion of the Merger Consideration made available to the Paying Agent pursuant
to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2.2</font> to pay
for shares of Company Merger Stock for which appraisal rights have been
perfected shall be returned to Parent upon demand.&#160;&#160;The number of
Dissenting Shares shall not exceed five percent (5%) of the Company Merger
Stock.</font></div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(g)&#160;Anything to the contrary
notwithstanding the Merger Consideration, will not exceed 84,800,000 shares of
Parent Common Stock (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Aggregate Merger
Consideration</font>&#8221;).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><a name="exchtwo"><!--EFPlaceholder-->
</a><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
2.2 Exchange of Certificates.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a) Paying Agent.</font> Prior to the
Effective Time, Parent shall designate its transfer agent or another trust
company to act as agent for the holders of the shares of the Company Merger
Stock in connection with the Merger (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Paying Agent</font>&#8221;) to receive in
trust the Merger Consideration to which holders of the shares of the Company
Merger Stock shall become entitled hereunder. From time to time, Parent shall
make available, or cause the Surviving Corporation to make available, to the
Paying Agent&#160;certificates (or evidence of Parent Book-Entry shares of the
Parent Common Stock) representing the aggregate number of shares of Parent
Common Stock to be issued as Merger Consideration in exchange for outstanding
shares of the Company Merger Stock in amounts and at times necessary for the
prompt payment of the Merger Consideration upon surrender of Certificates
representing shares of the Company Merger Stock as provided herein.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b) Exchange Procedure.</font> As
soon as reasonably practicable after the Effective Time, the Paying Agent shall
mail to each holder of record of a certificate or certificates that immediately
prior to the Effective Time represented shares of the Company Merger Stock (the
&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Certificates</font>&#8221;),
(i)&#160;a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Paying Agent and shall be in a form as
Parent may reasonably specify) and (ii)&#160;instructions for use in effecting
the surrender of the Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate for cancellation to the Paying Agent or to such other
agent or agents as may be appointed by Parent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor the number of shares of Parent Common Stock into
which the shares of the Company Merger Stock theretofore represented by such
Certificate shall have been converted, pursuant to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2.1 </font>and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of shares of the Company Merger Stock that is not
registered in the transfer records of the Company, payment may be made to a
Person other than the Person in whose name the Certificate so surrendered is
registered, if such Certificate shall be properly endorsed or otherwise be in
proper form for transfer and the Person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a Person other than
the registered holder of such Certificate or establish to the satisfaction of
the Surviving Corporation that such tax has been paid or is not applicable.
Until surrendered as contemplated by this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2.2</font>, each Certificate
shall be deemed at any time after the Effective Time to represent only the right
to receive upon such surrender the Merger Consideration, without interest, which
the shares of the Company Merger Stock theretofore represented by such
Certificate shall have been entitled to receive pursuant to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2.1.</font></font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(c) No Further Ownership Rights;
Transfer Books.</font> The Merger Consideration paid upon the surrender of
Certificates in accordance with the terms of this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Article 2</font> shall be deemed to
have been paid in full satisfaction of all rights pertaining to the shares of
the Company Merger Stock theretofore represented by such Certificates. At the
Effective Time, the stock transfer books of the Company shall be closed, and
there shall be no further transfers of the shares of the Company Merger Stock
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to Parent or the Company, the
presented Certificates shall be canceled and exchanged for shares of Parent
Common Stock or other consideration payable in respect thereof pursuant to this
Agreement in accordance with the procedures set forth herein.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(d) Termination of Fund; No
Liability.</font> At any time following six months after the Effective Time,
Parent shall be entitled to require the Paying Agent to deliver to it any funds
(including any interest received with respect thereto) and certificates for
shares of Parent Common Stock which had been made available to the Paying Agent
and which have not been disbursed to holders of Certificates, and thereafter
such holders shall be entitled to look to Parent (subject to abandoned property,
escheat or other similar laws) only as general creditors thereof with respect to
the Merger Consideration payable upon due surrender of their Certificates,
without any interest thereon. Notwithstanding the foregoing, none of Parent, the
Company or any other Person shall be liable to any former holder of shares of
the Company Merger Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws. If any
Certificates shall not have been surrendered immediately prior to such date on
which any payment pursuant to this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Article&#160;2</font> would otherwise
escheat to or become the property of any Governmental Authority, the payment in
respect of such Certificate shall, to the extent permitted by Applicable Law,
become the property of Parent, free and clear of all claims or interests of any
Person previously entitled thereto.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(e) Lost, Stolen or Destroyed
Certificates.</font> In the event any Certificates evidencing shares of the
Company Merger Stock shall have been lost, stolen or destroyed, the Paying Agent
shall pay to such holder the Merger Consideration required pursuant to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2.1,</font> in exchange for
such lost, stolen or destroyed Certificates, upon the making of an affidavit of
that fact by the holder thereof with such assurances as the Paying Agent, in its
discretion and as a condition precedent to the payment of the Merger
Consideration, may reasonably require of the holder of such lost, stolen or
destroyed Certificates.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(f) Withholding Taxes.</font> Parent
shall be entitled to deduct and withhold, or cause the Paying Agent to deduct
and withhold, from the consideration otherwise payable to a holder of shares of
the Company Merger Stock pursuant to the Merger any stock transfer taxes and
such amounts as are required under the Code, or any applicable provisions of
state, local or foreign tax law. To the extent that amounts are so withheld,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the shares of the Company Merger Stock in
respect of which such deduction and withholding were made.<a name="stocktwo"><!--EFPlaceholder-->
 </a></font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ARTICLE&#160;3</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">REPRESENTATIONS
AND WARRANTIES OF</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PARENT
AND MERGER SUB</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As an
inducement for the Company to enter into this Agreement, Parent and Merger Sub
hereby jointly and severally make the following representations and warranties
to the Company;<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-STYLE: italic">provided,
however,</font> that such representations and warranties shall be subject to and
qualified by: (a)&#160;the disclosure letter delivered by Parent to the Company
as of the date hereof (each section of which qualifies the correspondingly
numbered representation and warranty or covenant to the extent specified
therein) (the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Disclosure Letter</font>&#8221;) (it
being understood that (i)&#160;the disclosure of any fact or item in any section
of the Parent Disclosure Letter shall, should the existence of such fact or item
be relevant to any other section, be deemed to be disclosed with respect to that
other section to the extent that such disclosure is made in a manner that makes
its relevance to the other section reasonably apparent and (ii)&#160;the
disclosure of any matter or item in the Parent Disclosure Letter shall not be
deemed to constitute an acknowledgement that such matter or item is required to
be disclosed therein or is material to a representation or warranty set forth in
this Agreement and shall not be used as a basis for interpreting the terms<font style="DISPLAY: inline; FONT-STYLE: italic"> &#8220;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">material</font><font style="DISPLAY: inline; FONT-STYLE: italic">,&#8221;</font> <font style="DISPLAY: inline; FONT-STYLE: italic">&#8220;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">materially,&#8221;</font> <font style="DISPLAY: inline; FONT-STYLE: italic">&#8220;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">materiality,&#8221;</font> <font style="DISPLAY: inline; FONT-STYLE: italic">&#8220;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Material Adverse
Effect</font><font style="DISPLAY: inline; FONT-STYLE: italic">&#8221;</font> or any
word or phrase of similar import and does not mean that such matter or item,
alone or together with any other matter or item, would constitute a Parent
Material Adverse Effect); and (b)&#160;information contained in Parent Reports
(excluding any exhibits thereto and excluding disclosures under<font style="DISPLAY: inline; FONT-STYLE: italic"> &#8220;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Risk Factors</font><font style="DISPLAY: inline; FONT-STYLE: italic">&#8221;</font> and other forward-looking
or predictive statements) filed with the SEC prior to the date hereof (but only
to the extent that such disclosure on its face appears to constitute information
that would reasonably be deemed a qualification or exception to the following
representations and warranties).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.1 Corporate Existence;
Good Standing; Corporate Authority.</font></font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a)&#160;Parent is a corporation duly
incorporated, validly existing and in good standing under the Applicable Laws of
the State of Florida. Merger Sub is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. Parent is
duly qualified to conduct business and is in good standing (to the extent such
concept exists in the relevant jurisdiction) in each jurisdiction in which the
ownership, operation or lease of its property or the nature of Parent&#8217;s business
requires such qualification, except for jurisdictions in which any failures to
be so qualified or to be in good standing, individually or in the aggregate,
have not had or caused and would not reasonably be expected to have or cause a
Parent Material Adverse Effect. Parent and Merger Sub each have all requisite
corporate power and authority to own or lease and operate their respective
properties and assets and to carry on their businesses as they are currently
being conducted. Each of the Articles of Incorporation and Bylaws of Parent
(the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Charter Documents</font>&#8221;) is
in full force and effect, and except as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 3.1</font> of the Parent
Disclosure Letter, has not been amended or modified and has not been terminated,
superseded or revoked. Parent is not in violation of the Parent Charter
Documents.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(b)&#160;The minute books of Parent,
which shall be exhibited to the Company between the date hereof and the Closing
Date, each contain true, correct and complete minutes and records of all
meetings, proceedings and other actions of the shareholders, Boards of Directors
and committees of such Boards of Directors of Parent, if any, except where such
would not have a Material Adverse Effect and, on the Closing Date, will, to the
best of Parent&#8217;s Knowledge contain true, correct and complete minutes and
records of any meetings, proceedings and other actions of the shareholders and
the Board of Directors and committees of such Board of Directors of
Parent.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section&#160;3.2
Authorization, Validity and Effect of Agreement.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)&#160; </font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Authority.</font>&#160;&#160;&#160;Each
of Parent and Merger Sub has the requisite corporate power and authority to
execute and deliver this Agreement and all other agreements, instruments,
certificates and documents contemplated hereunder (collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Related Documents</font>&#8221;) to which
it is, or will become, a party, to perform its obligations hereunder and
thereunder and to consummate the Merger, and all other transactions contemplated
hereunder and thereunder. The execution, delivery and performance of this
Agreement and the Related Documents and the consummation of the Merger and the
other transactions contemplated hereunder and thereunder have been duly
authorized by all requisite corporate action on behalf of Parent and Merger Sub,
and no other corporate proceedings by Parent or Merger Sub, except for the
filing of the Certificate of Merger pursuant to the DGCL. The Parent Board, by
unanimous written consent dated May 7, 2010, (i) determined that this Agreement
and the Merger are advisable, fair to and in the best interests of Parent and
Parent&#8217;s shareholders and (ii) approved this Agreement and the Related Documents
to which Parent and Merger Sub will be party, the Merger and the other
transactions contemplated hereby and thereby.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b)&#160; </font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Consent of
Stockholders</font>.&#160;&#160;&#160;Parent&#8217;s shareholders owning more than 51%
of Parent&#8217;s issued and outstanding voting securities as of May 7, 2010
consented, approved ratified and adopted&#160;&#160;(i) an amendment to Parent&#8217;s
Articles of Incorporation (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Articles of Amendment</font>&#8221;) to (a)
increase the number of shares of common stock, $0.001 par value per share (the
&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Common Stock</font>&#8221;) which
Parent is authorized to issue from 300,000,000 shares to 500,000,000 shares; (b)
change the par value of Parent&#8217;s authorized preferred stock from $0.10 to $0.001
per share; and (c) provide for the classification of Parent&#8217;s Board of Directors
and to further provide for staggered terms of service for each class of
directors; and (ii) Parent&#8217;s Amended and Restated By-laws;&#160;&#160;all as
more fully described in the Information Statement.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(c) Binding Obligations.</font> This
Agreement and each of the Related Documents to which each of Parent and Merger
Sub is a party have been or will be duly executed by each of Parent and Merger
Sub and, assuming the due authorization, execution and delivery hereof and
thereof by the Company to the extent a party hereof and thereof, constitute the
valid and legally binding obligations of Parent and Merger Sub, enforceable
against each of Parent and Merger Sub in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other
Applicable Laws relating to or affecting the rights and remedies of creditors
generally and to general principles of equity (regardless of whether considered
in a proceeding in equity or at law).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.3
Capitalization.</font></font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a) Authorized and Outstanding
Shares.</font> The authorized capital stock of Parent consists of
300,000,000&#160;shares of Parent Common Stock and 1,000,000&#160;shares of
Parent Preferred Stock, (the<font style="DISPLAY: inline; FONT-STYLE: italic">
&#8220;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Preferred
Stock</font><font style="DISPLAY: inline; FONT-STYLE: italic">&#8221;</font>). As of
the close of business on the date immediately preceding the date of this
Agreement, there were 101,494,158 issued and outstanding shares of Parent Common
Stock, no&#160;shares of Parent Common Stock held by Parent in its treasury, and
no issued and outstanding shares of Parent Preferred Stock. <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.3(a)</font> of the
Parent Disclosure Letter sets forth a true, correct and complete list of all
outstanding shares of Parent Common Stock subject to outstanding options,
warrants or similar rights (collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Equity Rights</font>&#8221;), held
in escrow, or reserved for future issuance. Except as set forth therein, there
are no outstanding or authorized stock appreciation, phantom stock, profit
participation or other similar rights with respect to Parent Common Stock. All
shares of Parent Common Stock are, and all shares of Parent Common Stock which
may be issued and outstanding immediately prior to the Effective Time as
permitted under this Agreement shall be when issued, duly authorized, validly
issued, fully paid and nonassessable shares of Parent Common Stock free and
clear of all liens and encumbrances and not subject to any preemptive
rights.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b)&#160;&#160;Other Equity
Interests.</font> Except as otherwise provided in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 3.3(a)</font>, Parent has no
outstanding Equity Interests, bonds, debentures, promissory notes or other
Indebtedness the holders of which have the right to vote with the stockholders
of Parent on any matter or convertible or exercisable for Equity Interests
having the right to vote. As of the date of this Agreement, Parent and the
Parent Subsidiaries have not issued, sold, granted or delivered, are not
obligated to issue, sell, grant or deliver (or to cause to be issued, sold,
granted or delivered), and are not a party to any Contract or other obligation
to issue, sell, grant or deliver, any Equity Interest (including, without
limitation, any securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind pursuant to which a Person
is entitled to acquire an Equity Interest) of any nature or any additional
shares of capital stock or any other Equity Interest in Parent or any Parent
Subsidiary.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(c) Parent Equity Rights. Section
3.3(c)</font> of the Parent Disclosure Letter sets forth a true, correct and
complete list of all outstanding Parent Equity Rights as of the date of this
Agreement, including grantee name, exercise price (if any), vesting schedule and
other vesting conditions to the extent not fully vested and expiration date.
Since December 31, 2009, Parent has not (i) granted, conferred or awarded any
Parent Equity Rights that will not be exercised, converted or terminated by
their terms by the Effective Time, (ii) granted or issued any restricted stock
or securities, except as specifically contemplated by this Agreement, or (iii)
amended or otherwise modified any Parent Equity Rights. There are no outstanding
or authorized (i) contractual or other obligations of Parent or any Parent
Subsidiary to repurchase, redeem or otherwise acquire any Equity Interest of
Parent or any Parent Subsidiary or any such securities or agreements referred to
in the first sentence or (ii) voting trusts or similar agreements to which
Parent or any Parent Subsidiary is a party with respect to the voting of the
capital stock of Parent or any Parent Subsidiary, except repurchases,
redemptions or acquisitions that would have an immaterial effect on Parent and
its Subsidiaries, taken as a whole.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section&#160;3.4
Subsidiaries.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a) Organization and
Qualification.</font> Each Parent Subsidiary is a corporation or other legal
entity duly organized or constituted and validly existing under the Applicable
Laws of its jurisdiction of incorporation, organization or formation. Each
Parent Subsidiary has all requisite corporate, limited liability company,
partnership or other business power and authority to own or lease and operate
its properties and assets and to carry on its business as currently conducted,
except as would have an immaterial effect on Parent and any Parent Subsidiary,
taken as a whole. Each Parent Subsidiary is duly qualified to conduct business
and is in good standing in each jurisdiction in which the ownership or lease and
operation of its property or the nature of its business requires such
qualification, except for jurisdictions in which any failures to be so qualified
or to be in good standing, individually or in the aggregate, have not had or
caused and would not reasonably be expected to have or cause a Parent Material
Adverse Effect. All of the outstanding shares of capital stock of, or other
Equity Interests in, each Parent Subsidiary are duly authorized, validly issued,
fully paid and nonassessable and are owned, directly or indirectly, by Parent,
free and clear of all Liens, except for Permitted Liens.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b) List of Subsidiaries.</font>
<font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.4(b)</font> of
the Parent Disclosure Letter sets forth all Parent Subsidiaries (other than
Merger Sub) and the ownership interest of each Parent Subsidiary held, directly
or indirectly, by Parent. The Parent Subsidiaries are not in violation of their
respective organizational documents. Except for the Parent Subsidiaries listed
in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 3.4(b)</font> of the
Parent Disclosure Letter, neither Parent nor any of its Subsidiaries directly or
indirectly owns any equity, partnership, membership or similar interest in, or
any interest convertible into, exercisable for the purchase of or exchangeable
for any such equity, partnership, membership or similar interest, or is under
any current or prospective obligation to form or participate in, provide funds
to, make any loan, capital contribution or other investment in, or assume any
liability or obligation of, any Person.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(c) Merger Sub.</font> Merger Sub has
been formed solely for the purpose of engaging in the transactions contemplated
hereby and, as of the Effective Time, will not have engaged in any activities
other than in connection with the transactions contemplated by this Agreement.
Parent is, and will be at the Effective Time, the owner of all the outstanding
shares of capital stock of Merger Sub. The outstanding shares of capital stock
of Merger Sub are validly issued, fully paid, nonassessable and free of
preemptive rights.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.5&#160;Compliance with
Laws; Permits.</font> Except for such matters that, individually or in the
aggregate, have not had or caused and would not reasonably be expected to have
or cause a Parent Material Adverse Effect, and except for (x)&#160;matters
relating to Taxes, which are treated exclusively in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.10</font>,
(y)&#160;matters relating to Parent Benefit Plans, which are treated exclusively
under <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.11</font>
and (z)&#160;matters arising under Environmental, Health and Safety Laws, which
are treated exclusively in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.13</font>:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a)&#160; Neither Parent nor any Parent
Subsidiary is in violation of any Applicable Law relating to the ownership or
operation of any of its assets, and no Claim is pending or, to the Knowledge of
Parent, threatened with respect to any such matters;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(b) Parent and each Parent Subsidiary
hold all permits, licenses, certifications, variations, exemptions, Orders,
franchises, registrations, filings, approvals, authorizations or other required
grant of operating authority required by any Governmental Authority necessary
for the conduct of their respective businesses (the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Permits</font>&#8221;). All Parent
Permits are in full force and effect and there exists no default thereunder or
breach thereof, and Parent has no notice or Knowledge that such Parent Permits
will not be renewed in the ordinary course after the Effective Time. No
Governmental Authority has given, or to the Knowledge of Parent, threatened to
give, notice of any action to terminate, cancel or reform any Parent Permits;
and</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(c) Parent and each Parent Subsidiary
possess all Parent Permits required for the present ownership or lease, as the
case may be, of their businesses and operation of their property, and there
exists no default or breach with respect to, and no Person, including any
Governmental Authority, has taken or, to the Knowledge of Parent, threatened to
take, any action to terminate, cancel or reform any such Parent
Permit.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section&#160;3.6&#160;No
Conflict; Consents.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a) No Conflict.</font> Except as set
forth on <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 3.6(a)</font>
of the Parent Disclosure Letter,&#160;&#160;the execution and delivery by each
of Parent and Merger Sub of this Agreement and the Related Documents, the
performance of the obligations of Parent and Merger Sub hereunder and thereunder
and the consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby and thereby in accordance with the terms hereof
and thereof will not (i)&#160;conflict with or result in a breach of any
provisions of their respective organizational documents, (ii) violate, conflict
with, result in a breach of any provision of, constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
impair Parent&#8217;s rights under, alter the rights or obligations of third parties
under, result in the termination of or in a right of termination or cancellation
of, give rise to a right of purchase under, or accelerate the performance
required by, any Parent Material Contract or other Contract, (iii) result in the
creation of any Lien (other than Permitted Liens) upon any of the properties or
assets of Parent or Parent Subsidiaries under any Parent Material Contract or by
which Parent or Parent Subsidiaries or any of their properties is bound or
affected, (iv)&#160;result in any Parent Material Contract being declared void,
voidable, or without further binding effect, or (vi) (assuming that the consents
and approvals referred to in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.6(b)</font> are duly
and timely made or obtained), contravene, conflict with or constitute a
violation of any provision of any Applicable Law binding upon or applicable to
Parent or any Parent Subsidiaries, other than any such violations, conflicts,
breaches, defaults, impairments, alterations, terminations, cancellations,
purchase rights, accelerations or Liens that, individually or in the aggregate,
have not had or caused and would not reasonably be expected to have or cause a
Parent Material Adverse Effect.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b) Required Consents.</font> Except
for the consent of its Board of Directors, neither the execution and delivery by
Parent or Merger Sub of this Agreement or any Related Document nor the
consummation by Parent or Merger Sub of the Merger and the other transactions
contemplated hereby or thereby in accordance with the terms hereof or thereof
will require any consent, approval or authorization of, notice to or filing or
registration with any Governmental Authority, other than the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware, and
appropriate documents required to be filed as a result of the Merger with the
relevant Governmental Authorities in the states and foreign jurisdictions in
which Parent is qualified to conduct business, except for any failures to obtain
any such consent, approval or authorization or to make any such filing,
notification or registration that, individually or in the aggregate, have not
had or would not reasonably be expected to have or cause a Parent Material
Adverse Effect.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.7&#160;SEC
Documents.</font> Parent has filed with the SEC all documents required to be so
filed by it since December 31, 2008 pursuant to Sections&#160;13(a), 14(a) and
15(d) of the Exchange Act (collectively, the<font style="DISPLAY: inline; FONT-STYLE: italic"> &#8220;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Reports</font><font style="DISPLAY: inline; FONT-STYLE: italic">&#8221;</font>). As of its respective date
or, if amended by a subsequent filing prior to the date hereof, on the date of
such filing, each Parent Report or as subsequently amended complied in all
material respects with the applicable requirements of the Exchange Act, SOX and
the rules and regulations thereunder and did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The consolidated
balance sheets included in or incorporated by reference into the Parent Reports
(including the related notes and schedules) fairly presents in all material
respects the consolidated financial position of Parent and Parent Subsidiaries
as of its date, and each of the consolidated statements of operations, cash
flows and changes in shareholders&#8217; equity included in or incorporated by
reference into the Parent Reports (including any related notes and schedules)
fairly presents in all material respects the results of operations, cash flows
or changes in shareholders&#8217; equity, as the case may be, of Parent and Parent
Subsidiaries for the periods set forth therein (such consolidated balance sheets
and consolidated statements of operations, cash flows and changes in
shareholders&#8217; equity, each including the notes and schedules thereto, the<font style="DISPLAY: inline; FONT-STYLE: italic"> &#8220;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Financial
Statements</font><font style="DISPLAY: inline; FONT-STYLE: italic">&#8221;</font>).
Parent Financial Statements (i)&#160;complied as to form in all material
respects with the published rules and regulations of the SEC and (ii)&#160;were
prepared in accordance with GAAP consistently applied during the periods
involved, except as may be noted in the Parent Financial Statements or as
permitted by Form&#160;10-K, 10-Q or Form&#160;8-K. Except as and to the extent
adequately accrued or reserved against in the audited balance sheet of Parent as
at December 31, 2009 (such balance sheet, together with all related notes and
schedules thereto, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent
Balance Sheet</font>&#8221;), Parent does not have any liability, indebtedness,
expense, claim, deficiency, guaranty or obligation of any type or nature,
whether accrued, absolute, contingent, matured, unmatured or otherwise, whether
known or unknown and whether or not required by GAAP to be reflected in a
consolidated balance sheet of Parent or disclosed in the notes thereto, except
for (i) liabilities and obligations, incurred in the ordinary course of business
consistent with past practice since the date of the Parent Balance Sheet, that
are not, individually or in the aggregate, material in amount, (ii) liabilities
for performance under Parent Material Contracts that do not exceed $25,000
individually or $50,000 in the aggregate, and (iii) liabilities described in
<font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 3.7</font> of the
Parent Disclosure Letter.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.8&#160;Litigation.</font>
Except as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
3.8</font> of the Parent&#8217;s Disclosure Letter there is no litigation,
arbitration, mediation, action, suit, Claim, proceeding or investigation,
whether legal or administrative, pending against Parent or any Parent Subsidiary
or, to Parent&#8217;s Knowledge, threatened against Parent or any Parent Subsidiary or
any of their respective assets, properties or operations, at Applicable Law or
in equity, before or by any Governmental Authority or any Order of any
Governmental Authority that, individually or in the aggregate, and taking into
consideration the aggregate amounts reserved for any such matters in Parent&#8217;s
consolidated balance sheet at December 31, 2009, has had or caused or would
reasonably be expected to have or cause a Parent Material Adverse
Effect.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.9 Absence of Certain
Changes.</font> Except as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 3.9</font> of the Parent
Disclosure Letter from December 31, 2009 to the date of this Agreement, except
as described in the Parent Reports, there has not been (a)&#160;any event or
occurrence that has had or caused or would reasonably be expected to have or
cause a Parent Material Adverse Effect, (b)&#160;any material change by Parent
or any Parent Subsidiary, when taken as a whole, in any of their accounting
methods, principles or practices or any of their Tax methods, practices or
elections, (c)&#160;any declaration, setting aside or payment of any dividend or
distribution in respect of any capital stock of Parent or any redemption,
purchase or other acquisition of any of its capital stock or (d)&#160;except in
the ordinary course of business consistent with past practices, any increase in
or establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option, stock purchase or other
employee benefit plan.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section&#160;3.10&#160;Taxes.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a) Except for such matters that,
individually or in the aggregate, have not had or caused and would not
reasonably be expected to have or cause a Parent Material Adverse
Effect:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(i) The Parent and the Parent
Subsidiaries have timely filed, or have caused to be timely filed on their
behalf, all Tax Returns required to be filed by or on behalf of Parent and any
Parent Subsidiary in the manner prescribed by Applicable Law. All such Tax
Returns are complete and correct. Parent and the Parent Subsidiary have timely
paid all Taxes due and owing, and, in accordance with GAAP, the most recent
Parent Financial Statements contained in the Parent Reports reflect a reserve
(excluding any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) for all Taxes payable by Parent and the
Parent Subsidiaries for all Taxable periods and portions thereof through the
date of such Parent Financial Statements;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(ii) No Tax Return of Parent or any
Parent Subsidiary is under audit or examination by any Governmental Authority,
and no written or, to the Knowledge of Parent, unwritten notice of such an audit
or examination has been received by Parent or any Parent Subsidiary. There is no
assessed deficiency, refund litigation, proposed adjustment or matter in
controversy with respect to any Taxes due and owing by Parent or any Parent
Subsidiary;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(iii) Since December 31, 2008, Parent
and the Parent Subsidiaries have not made or rescinded any election relating to
Taxes or settled or compromised any Claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to any Taxes, or,
except as may be required by Applicable Law, made any change to any of their
methods of reporting income or deductions for federal income Tax purposes from
those employed in the preparation of their most recently filed federal Tax
Returns;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(iv) There is no agreement or other
document extending, or having the effect of extending, the period of assessment
or collection of any material Taxes and no power of attorney with respect to any
such Taxes has been executed or filed with any Tax Authority by or on behalf of
Parent or any Parent Subsidiary;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(v) Except for statutory Liens for
Taxes not yet due, no Liens for Taxes exist with respect to any assets or
properties of Parent or any Parent Subsidiary;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(vi) Except for any agreements or
arrangements (A)&#160;with customers, vendors, lessors or similar Persons
entered into in the ordinary course of business or (B)&#160;among the Parent and
any Parent Subsidiary, none of Parent or any Parent Subsidiary is a party to or
bound by any Tax sharing agreement, Tax indemnity obligation or agreement or
arrangement with respect to Taxes (including any advance pricing agreement,
closing agreement or other agreement relating to Taxes with any Governmental
Authority);</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(vii) Parent and the Parent
Subsidiaries have complied with all Applicable Law relating to the payment and
withholding of Taxes and have, within the time and the manner prescribed by such
Applicable Law withheld from and paid over to the proper Governmental
Authorities all amounts required to be so withheld and paid over under
Applicable Law; and</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(viii) None of Parent and the Parent
Subsidiaries shall be required to include in a Taxable period ending after the
Closing Date any item of income that accrued in a prior Taxable period but was
not recognized in any prior Taxable period as a result of the installment method
of accounting, the long-term contract method of accounting, the cash method of
accounting or Section&#160;481 of the Code or comparable provisions of any other
Applicable Law.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(b) None of Parent or any Parent
Subsidiary knows of any fact, agreement, plan, or other circumstance, or has
taken or failed to take any action, that would reasonably be expected to prevent
the Merger from qualifying as a &#8220;reorganization&#8221; within the meaning of
Section&#160;368(a) of the Code.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section&#160;3.11&#160;Employee
Benefit Plans.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a) <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.11(a)</font> of the
Parent Disclosure Letter contains a list of all Parent&#8217;s Benefit Plans (each a
&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Benefit Plan</font>&#8221;
and collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent
Benefit Plans</font>&#8221;). To the extent applicable, Parent Benefit Plans comply in
all material respects with the requirements of ERISA and the Code or with the
Applicable Laws and regulations of any applicable jurisdiction. Parent Benefit
Plans have been maintained and operated in compliance in all material respects
with their terms. To Parent&#8217;s Knowledge, there are no breaches of fiduciary duty
in connection with Parent Benefit Plans for which Parent could be liable. There
are no pending or, to Parent&#8217;s Knowledge, threatened Claims against or otherwise
involving any Parent Benefit Plan that, individually or in the aggregate, have
had or caused or would reasonably be expected to have or cause a Parent Material
Adverse Effect, and no suit, action or other litigation (excluding claims for
benefits incurred in the ordinary course of Parent Benefit Plan activities) has
been brought against or with respect to any such Parent Benefit Plan for which
Parent could be liable that, individually or in the aggregate, have had or
caused or would reasonably be expected to have or cause a Parent Material
Adverse Effect. All material contributions required to be made as of the date
hereof to Parent Benefit Plans have been made or have been properly accrued and
are reflected in the Parent Financial Statements as of the date
thereof;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(b) None of Parent or any Parent
Subsidiary contributes to, or has an obligation to contribute to, and has not
within six years prior to the Effective Time contributed to, or had an
obligation to contribute to or has any material liability, contingent or
otherwise, with respect to, (i)&#160;a &#8220;multiemployer plan&#8221; within the meaning
of Section&#160;3(37) of ERISA, (ii)&#160;any plan that is covered by
Title&#160;IV of ERISA, (iii)&#160;any plan subject to Section&#160;412 of the
Code or (iv)&#160;any plan funded by a &#8220;voluntary employees&#8217; benefits
association&#8221; within the meaning of Section&#160;501(c)(9) of the
Code;</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(c) No Parent Benefit Plan maintained
by any of the Parent or any Parent Subsidiary provides medical, surgical,
hospitalization, death or similar benefits (regardless of whether insured) for
employees or former employees of Parent or any Parent Subsidiary for periods
extending beyond their retirement or other termination of service other than
coverage mandated by Applicable Law;</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(d) All accrued material obligations of
Parent and any Parent Subsidiary, whether arising by operation of Applicable
Law, Contract, or past custom, for compensation and benefits, including, but not
limited to, bonuses and accrued vacation, and benefits under Parent Benefit
Plans, have been paid or adequate accruals for such obligations are reflected on
the Parent Financial Statements as of the date thereof;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(e) Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will (either alone or in conjunction with any other event, such as termination
of employment), result in, cause the accelerated vesting, funding or delivery
of, or increase the amount or value of, any payment or benefit to any employee,
officer or director of Parent or any of Parent Subsidiaries;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(f) Each Parent Benefit Plan which is
or reasonably could be determined to be an arrangement subject to
Section&#160;409A of the Code has been operated in good faith compliance with
Section&#160;409A of the Code since January&#160;1, 2005 and has been, or may
be, timely amended with the consent of the participant, if necessary, to comply
in good faith with Section&#160;409A of the Code and any applicable guidance,
whether proposed or final, issued by the IRS with respect thereto;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(g) No Parent Benefit Plan is a
multiple employer plan within the meaning of Section&#160;413(c) of the
Code;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(h) Section&#160;3.11(h) of the Parent
Disclosure Letter contains a description that is accurate and correct in all
material respects, of all amounts estimated to be paid or payable (whether in
cash, in property, or in the form of benefits, accelerated cash, property, or
benefits, or otherwise) in connection with the transactions contemplated hereby
(solely as a result thereof) that were or will be an &#8220;excess parachute payment&#8221;
within the meaning of Section&#160;280G of the Code; and</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(i) No Parent Benefit Plan that is not
subject to ERISA has any material liabilities thereunder which are not otherwise
fully funded, if applicable, or properly accrued and reflected under the Parent
Financial Statements as of the date thereof.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section&#160;3.12&#160;Labor
Matters.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a) Collective Bargaining.</font> As
of the date of this Agreement, (i)&#160;neither Parent nor any Parent Subsidiary
is a party to, or bound by, any collective bargaining agreement or similar
Contract, agreement or understanding with a labor union or similar labor
organization and (ii)&#160;to Parent&#8217;s Knowledge, there are no organizational
efforts with respect to the formation of a collective bargaining unit presently
being made or threatened.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b) Unfair Labor Practices.</font>
Except for such matters that, individually or in the aggregate, have not had or
caused and would not reasonably be expected to have or cause a Parent Material
Adverse Effect, (i)&#160;neither Parent nor any Parent Subsidiary has received
any written complaint of any unfair labor practice or other unlawful employment
practice or any written notice of any material violation of any federal, state
or local statutes, Applicable Laws, ordinances, rules, regulations, Orders or
directives with respect to the employment of individuals by, or the employment
practices of, Parent or any Parent Subsidiary, or the work conditions, terms and
conditions of employment, wages or hours of their respective businesses,
(ii)&#160;there are no unfair labor practice charges or other employee related
complaints against Parent or any Parent Subsidiary pending or, to the Knowledge
of Parent,&#160;&#160;threatened before any Governmental Authority by or
concerning the employees working in their respective businesses, and
(iii)&#160;there is no labor dispute, strike, slowdown or work stoppage against
Parent or any Parent Subsidiary pending or, to the Knowledge of Parent or any
Parent Subsidiary, threatened against Parent or any Parent
Subsidiary.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.13&#160;Environmental
Matters.</font> Except for such matters that, individually or in the aggregate,
have not had or caused and would not reasonably be expected to have or cause a
Parent Material Adverse Effect:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a) Parent and each Parent Subsidiary
have been and are in compliance with all applicable Environmental, Health and
Safety Laws and possess and are in compliance with any permits or licenses
required under Environmental, Health and Safety Laws. To the Knowledge of
Parent, there are no past or present facts, conditions or circumstances that
interfere with or preclude, or could interfere with or preclude if known to a
Governmental Authority, the business of Parent or any Parent Subsidiary as now
conducted or which interfere with continued compliance with applicable
Environmental, Health and Safety Laws;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(b) No proceedings or investigations of
any Governmental Authority are pending or, to the Knowledge of Parent,
threatened against Parent or any Parent Subsidiary that allege the violation of
or seek to impose liability pursuant to any Environmental, Health and Safety
Laws, and, to the Knowledge of Parent, there are no past or present facts,
conditions or circumstances at, on or arising out of, or otherwise associated
with, any current (or, to the Knowledge of Parent or any Parent Subsidiary,
former) businesses, assets or properties of Parent or any Parent Subsidiary,
which constitute a material violation of Environmental, Health and Safety Laws
or are reasonably likely to give rise to (i)&#160;costs, expenses, liabilities
or obligations for any cleanup, remediation, disposal or corrective action under
any Environmental, Health and Safety Laws, (ii)&#160;Claims arising for personal
injury, property damage or damage to natural resources or (iii)&#160;fines,
penalties or injunctive relief; and</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(c) Neither Parent nor any Parent
Subsidiary has (i)&#160;received any written notice of noncompliance with,
violation of, or liability or potential liability under any Environmental,
Health and Safety Laws or (ii)&#160;entered into or become subject to any
consent decree, Order or agreement with any Governmental Authority or other
Persons pursuant to any Environmental, Health and Safety Laws or relating to the
cleanup of any Hazardous Materials.</font></div>
      </div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.14&#160;Intellectual
Property.</font> Except for such matters that, individually or in the aggregate,
have not had or caused and would not reasonably be expected to have or cause a
Parent Material Adverse Effect, (a)&#160;the products, services and operations
of Parent or any Parent Subsidiary do not infringe upon, violate or
misappropriate the Intellectual Property of any Third Party, (b)&#160;Parent and
each Parent Subsidiary own or possess valid licenses or other valid rights to
use the Intellectual Property that they use, exercise or exploit in, or that may
be necessary or desirable for, their businesses as currently being conducted,
free and clear of all Liens (other than Permitted Liens), and (c)&#160;to the
Knowledge of Parent, there is no infringement of any Intellectual Property owned
by or licensed by or to any Parent Company. To Parent&#8217;s Knowledge, there is no
unauthorized use, disclosure, infringement or misappropriation of any
Intellectual Property of any Parent Company by any Person, including, without
limitation, any employee or independent contractor (present or former) of Parent
or any Parent Subsidiary, that, individually or in the aggregate, has had or
caused or could reasonably be expected to have or cause a Parent Material
Adverse Effect.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.15&#160;Insurance</font><font style="DISPLAY: inline; FONT-STYLE: italic">.</font> Except for such matters
that, individually or in the aggregate, have not had or caused and would not
reasonably be expected to have or cause a Material Adverse Effect:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a) Parent and the Parent Subsidiaries
maintain and will maintain through the Closing Date insurance adequate in
character and amount with financially sound and reputable insurers. There is no
material default with respect to any provision contained in any insurance policy
or binder, and none of Parent nor any Parent Subsidiary has failed to give any
notice or present any claim under any such policy or binder in a timely fashion;
and</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(b) To the Knowledge of Parent, no
event relating specifically to any of Parent or any Parent Subsidiary has
occurred that is reasonably likely, after the date of this Agreement, to result
in an upward adjustment in premiums under any insurance policies they maintain.
Neither Parent nor any Parent Subsidiary has received notice from any insurer or
agent of such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such insurance policies.
Excluding insurance policies that have expired and been replaced in the ordinary
course of business, no excess liability or protection and indemnity insurance
policy has been cancelled by the insurer within one year prior to the date
hereof, and to Parent&#8217;s Knowledge, no threat in writing has been made to cancel
(excluding cancellation upon expiration or failure to renew) any current
insurance policy of Parent or any Parent Subsidiary.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.16&#160;Ownership and
Condition of Assets.</font> Except as would not reasonably be expected to have,
individually or in the aggregate, a Parent&#160;&#160;Material Adverse Effect
and except as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 3.16</font> of the Parent
Disclosure Letter, Parent or one of its Subsidiaries (i) has good and marketable
title to all the properties and assets (a) reflected in the Parent Financial
Statements as being owned by Parent or one of its Subsidiaries or (b) acquired
after the date thereof which are material to Parent&#8217;s business on a consolidated
basis (except properties sold or otherwise disposed of since the date thereof in
the ordinary course of business), free and clear of all Liens except Permitted
Liens, and (ii) is the lessee of all leasehold estates reflected in the Parent
Financial Statements or acquired after the date thereof which are material to
its business on a consolidated basis (except for leases that have expired by
their terms since the date thereof) and is in possession of the properties
purported to be leased thereunder, and each such lease is valid without default
thereunder by the lessee or, to Parent&#8217;s Knowledge, the lessor.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.17&#160;Undisclosed
Liabilities.</font> Neither Parent nor any Parent Subsidiary has any liabilities
or obligations of any nature, regardless of whether fixed, accrued, contingent
or otherwise, except&#160;&#160;(a)&#160;liabilities and obligations that are
fully reflected or reserved against in the Parent Financial Statements included
in the Parent Reports or described in the Parent Reports filed prior to the date
hereof, (b)&#160;liabilities and obligations arising under this Agreement and
the transaction contemplated by this Agreement, (c)&#160;liabilities or
obligations incurred in the ordinary course of business consistent with past
practices since December 31, 2009 and (d)&#160;liabilities and obligations that,
individually or in the aggregate, have not had or caused and would not
reasonably be expected to have or cause a Parent Material Adverse
Effect.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.18&#160;Material
Contracts.</font>&#160;&#160;All material contracts, commitments and similar
agreements to which Parent or any Parent Subsidiary is a party or by which they
or any of their property is bound as of the date of this Agreement (other than
this Agreement or any Related Document) (the<font style="DISPLAY: inline; FONT-STYLE: italic"> &#8220;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Material Contracts</font><font style="DISPLAY: inline; FONT-STYLE: italic">&#8221;</font>)&#160;are filed as an
exhibit to Parent Reports filed prior to the date of this Agreement. Except as
set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
3.18</font> of the Parent Disclosure Letter, as of the date of this Agreement
(a) each Parent Material Contract is in full force and effect and (b) except for
such matters that, individually or in the aggregate, have not had or caused and
would not reasonably be expected to have or cause a Parent Material Adverse
Effect, none of Parent and any Parent Subsidiary&#160;&#160;know of, or have
received written notice of, any breach or violation of, or default under (nor,
to the Knowledge of Parent or any Parent Subsidiary, does there exist any
condition which with the passage of time or the giving of notice or both would
result in such a violation or default under) any Parent Material Contract, or
have received written notice of the desire of the other party or parties to any
such Parent Material Contracts to exercise any rights such party has to cancel,
terminate or repudiate such Contract or exercise remedies
thereunder.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.19&#160;No Brokers;
Investment Advisor</font><font style="DISPLAY: inline; FONT-STYLE: italic">.</font> Except for a brokerage
commission equal to 2,000,000 shares of Parent Common Stock payable under
certain circumstances to Palladium Capital Advisors, LLC (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Palladium</font>&#8221;), and commissions
payable to Palladium in connection with the Financing, none of the Parent and
any Parent Subsidiary has entered into any Contract with any Person that may
result in the obligation of the Company, Parent, or any Parent Subsidiary to pay
any finder&#8217;s fees, brokerage or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.</font></div>
      </div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.20&#160;Improper
Payments.</font> Except for such matters that, individually or in the aggregate,
have not had or caused and would not reasonably be expected to have or cause a
Parent Material Adverse Effect: (a)&#160;no funds, assets or properties of
Parent or its Affiliates have been used or offered for illegal purposes;
(b)&#160;no accumulation or use of any funds, assets or properties of Parent or
its Affiliates has been made without being properly accounted for in the
financial books and records of Parent or its Affiliates; (c)&#160;all payments
by or on behalf of Parent or its Affiliates have been duly and properly recorded
and accounted for in their financial books and records and such books and
records accurately and fairly reflect all transactions and dispositions of the
assets of Parent and its Affiliates; (d)&#160;Parent has devised and maintained
systems that provide reasonable assurances that transactions are and have been
executed in accordance with management&#8217;s general or specific authorization;
(e)&#160;neither Parent nor any of its Affiliates, nor any director, officer,
agent, employee or other Person associated with or acting on behalf of Parent or
its Affiliates, has (i)&#160;used any corporate funds for any unlawful
contribution, gift, entertainment or payment of anything of value relating to
political activity, (ii)&#160;made any direct or indirect unlawful payment to
any employee, agent, officer, director, representative or stockholder of a
Governmental Authority or political party, or official or candidate thereof, or
any immediate family member of the foregoing or (iii)&#160;made any bribe,
unlawful rebate, payoff, influence payment, kickback or other unlawful payment
in connection with the conduct of Parent&#8217;s or its Affiliates&#8217; businesses;
(f)&#160;none of Parent, any of its Affiliates or any agent of any of them has
received any bribes, kickbacks or other improper payments from vendors,
suppliers or other Persons; and (g)&#160;Parent has no Knowledge that any
payment made to a Person would be or has thereafter been offered, given or
provided to any foreign official, political party or official thereof, or to any
candidate for public office.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;3.21&#160;No Ownership
of the Company Stock.</font> Parent does not own any shares of the Company
Merger Stock or any other securities convertible into or otherwise exercisable
to acquire shares of the Company Merger Stock.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 3.22 No Other Representations
or Warranties.</font> Except for the representations and warranties contained in
this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Article&#160;3</font>,
neither Parent nor any other Person makes any other express or implied
representation or warranty on behalf of Parent or any of its Affiliates in
connection with this Agreement or the transactions contemplated
hereby.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 3.23 Net Cash on
Hand.</font>&#160;&#160;On the date hereof, Parent&#8217;s cash on hand, after giving
effect to receipt of the proceeds of the Financing and excluding (i)
Indebtedness, (ii) accrued and unpaid amounts through the date hereof, payable
to any third party for services rendered or goods provided through the date
hereof, and (iii) transaction expenses incurred in connection with this
Agreement, the Financing, the Merger, and the transactions contemplated hereby
and thereby, and payable through the date hereof, is at least
$2,871,503.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ARTICLE&#160;4</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">REPRESENTATIONS
AND WARRANTIES OF THE COMPANY</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As an
inducement for Parent and Merger Sub to enter into this Agreement, the Company
hereby makes the following representations and warranties to Parent and Merger
Sub;<font style="DISPLAY: inline; FONT-STYLE: italic"> provided, however,</font>
that such representations and warranties shall be subject to and qualified by:
(a)&#160;the disclosure letter delivered by the Company to Parent as of the date
hereof (each section of which qualifies the correspondingly numbered
representation and warranty or covenant to the extent specified therein)
(the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Disclosure Letter</font>&#8221;)
(it being understood that (i)&#160;the disclosure of any fact or item in any
section of the Company Disclosure Letter shall, should the existence of such
fact or item be relevant to any other section, be deemed to be disclosed with
respect to that other section to the extent that such disclosure is made in a
manner that makes its relevance to the other section reasonably apparent and
(ii)&#160;the disclosure of any matter or item in the Company Disclosure Letter
shall not be deemed to constitute an acknowledgement that such matter or item is
required to be disclosed therein or is material to a representation or warranty
set forth in this Agreement and shall not be used as a basis for interpreting
the terms<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;material</font>,&#8221;<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">materially</font>,&#8221;<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">materiality</font>,&#8221;<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Material Adverse
Effect</font>&#8221; or any word or phrase of similar import and does not mean that
such matter or item, alone or together with any other matter or item, would
constitute a Company Material Adverse Effect).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.1&#160;Corporate
Existence; Good Standing; Corporate Authority</font><font style="DISPLAY: inline; FONT-STYLE: italic">.</font></font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;The
Company is a corporation duly incorporated, validly existing and in good
standing under the Applicable Laws of the State of Delaware. The Company is duly
qualified to conduct business and is in good standing (to the extent such
concept exists in the relevant jurisdiction) in each jurisdiction in which the
ownership, operation or lease of its property or the nature of the Company&#8217;s
business requires such qualification, except for jurisdictions in which any
failures to be so qualified or to be in good standing, individually or in the
aggregate, have not had or caused and would not reasonably be expected to have
or cause a Company Material Adverse Effect. The Company has all requisite
corporate power and authority to own or lease and operate its properties and
assets and to carry on its business as it is currently being conducted. Each of
the Certificate of Incorporation (including any and all Certificates of
Designations) as amended and Bylaws of the Company (<font style="DISPLAY: inline; FONT-WEIGHT: bold">the </font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Charter Documents</font>&#8221;),
is in full force and effect, has not been amended or modified and has not been
terminated, superseded or revoked. The Company is not in violation of the
Company Charter Documents. The Company has delivered true and complete copies of
the Company Charter Documents to Parent, certified as applicable by Secretary of
State or other authorized official of the jurisdiction of
incorporation.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;The
minute books of the Company, which shall be exhibited to Parent between the date
hereof and the Closing Date, each contain true, correct and complete minutes and
records of all meetings, proceedings and other actions of the shareholders,
Boards of Directors and committees of such Boards of Directors of the Company,
if any, except where such would not have a Material Adverse Effect and, on the
Closing Date, will, to the best of the Company&#8217;s knowledge contain true, correct
and complete minutes and records of any meetings, proceedings and other actions
of the shareholders and the Board of Directors and committees of such Board of
Directors of the Company.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
4.2 Authorization, Validity and Effect of Agreements.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a) Authority.</font> The Company has
the requisite corporate power and authority to execute and deliver this
Agreement and Related Documents to which it is, or will become, a party, to
perform its obligations hereunder and thereunder and to consummate the Merger,
and all other transactions contemplated hereunder and thereunder, except for the
Company Stockholder Consent, which consent shall be obtained as a condition to
Closing. The execution, delivery and performance of this Agreement and the
Related Documents and the consummation of the Merger and the other transactions
contemplated hereunder and thereunder have been duly authorized by all requisite
corporate action on behalf of the Company, and no other corporate proceedings by
the Company are necessary to authorize the execution and delivery of this
Agreement or the Related Documents or to consummate the Merger and the other
transactions contemplated hereunder or under the Related Documents, except for
the approval of the Merger by the Company&#8217;s stockholders and the filing of the
Certificate of Merger pursuant to the DGCL.&#160;The Company Board, by unanimous
written consent dated May 7, 2010 (i)&#160;determined that this Agreement and
the Merger are advisable, fair to and in the best interests of the Company and
the Company Stockholders, (ii)&#160;approved this Agreement and the Related
Documents to which the Company will be party, the Merger and the other
transactions contemplated hereby and thereby, and (iii)&#160;resolved to
recommend that the Company Stockholders approve and adopt this Agreement and the
Merger and the other transactions contemplated hereby.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b) Binding Obligations.</font> This
Agreement and each of the Related Documents to which the Company is a party have
been or will be duly executed by the Company and, assuming the due
authorization, execution and delivery hereof and thereof by Parent and Merger
Sub to the extent a party hereof and thereof, constitute the valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other Applicable Laws relating to or affecting the
rights and remedies of creditors generally and to general principles of equity
(regardless of whether considered in a proceeding in equity or at
law).</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
4.3 Capitalization. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a) <font style="DISPLAY: inline; FONT-WEIGHT: bold">Authorized and Outstanding
Shares.</font> The authorized capital stock of the Company consists of
10,000,000&#160;shares of the Company Common Stock, 540,000&#160;shares of
Company Series A Preferred Stock (the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Series A Preferred
Stock</font>&#8221;) and 150,000&#160;shares of Company Series B Preferred Stock
(the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Series B Preferred
Stock</font>&#8221;). As of the close of business on the date immediately preceding
the date of this Agreement, there were 400,000 issued and outstanding shares of
Company Common Stock, 540,000 issued and outstanding shares of Company Series A
Preferred Stock, 52,000 issued and outstanding shares of Company Series B
Preferred Stock and no&#160;shares of Company Common Stock, Company Series A
Preferred Stock and Company Series B Preferred Stock held by the Company in its
treasury. <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.3(a)</font> of the
Company Disclosure Letter<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>sets forth a true,
correct and complete list of all outstanding shares of the Company Merger Stock
subject to outstanding options, warrants, conversion or similar rights
(collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company
Equity Rights</font>&#8221;), or reserved for future issuance. Except as set forth
therein, there are no outstanding or authorized stock appreciation, phantom
stock, profit participation or other similar rights with respect to the Company
Merger Stock. All shares of the Company Merger Stock are, and all shares of the
Company Merger Stock which may be issued and outstanding immediately prior to
the Effective Time as permitted under this Agreement shall be when issued, duly
authorized, validly issued, fully paid and nonassessable shares of the Company
Common Stock and not subject to any preemptive rights.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b) Other Equity Interests.</font>
Except as otherwise provided in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 4.3(a</font>), the Company
has no outstanding Equity Interests, bonds, debentures, promissory notes or
other Indebtedness the holders of which have&#160;the right to vote with the
stockholders of the Company on any matter or convertible or exercisable for
Equity Interests having the right to vote. As of the date of this Agreement, the
Company has not issued, sold, granted or delivered, are not obligated to issue,
sell, grant or deliver (or to cause to be issued, sold, granted or delivered),
and is not a party to any Contract or other obligation to issue, sell, grant or
deliver, any Equity Interest (including, without limitation, any securities,
options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind pursuant to which a Person is entitled to acquire an
Equity Interest) of any nature or any additional shares of capital stock or any
other Equity Interest in the Company.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c) <font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Equity Rights.</font> <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.3(c) of the Company
Disclosure Letter</font> sets forth a true, correct and complete list of all
outstanding Company Equity Rights as of the date of this Agreement, including
grantee name, exercise price (if any), vesting schedule and other vesting
conditions to the extent not fully vested and expiration date. Since December
31, 2009, the Company has not (i) granted, conferred or awarded any Company
Equity Rights that will not be exercised, converted or terminated by their terms
by the Effective Time, (ii) granted or issued any restricted stock or
securities, except as specifically contemplated by this Agreement, or (iii)
amended or otherwise modified any Company Equity Rights. There are no
outstanding or authorized (i)&#160;contractual or other obligations of the
Company to repurchase, redeem or otherwise acquire any Equity Interest of the
Company or any such securities or agreements referred to in the first sentence
or (ii)&#160;voting trusts or similar agreements to which the Company is a party
with respect to the voting of the capital stock of the Company, except
repurchases, redemptions or acquisitions that would have an immaterial effect on
the Company. At the Effective Time, all the Company Equity Rights will be
converted or exercised in accordance with <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2.3</font> or otherwise
terminated and of no further force or effect.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.4&#160;Subsidiaries.</font>&#160;&#160;The
Company does not have any Subsidiaries.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.5&#160;Compliance with
Laws; Permits.</font> Except for such matters that, individually or in the
aggregate, have not had or caused and would not reasonably be expected to have
or cause a Company Material Adverse Effect, and except for (x)&#160;matters
relating to Taxes, which are treated exclusively in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.9,</font>
(y)&#160;matters relating to the Company Benefit Plans, which are treated
exclusively under <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.11</font> and
(z)&#160;matters arising under Environmental, Health and Safety Laws, which are
treated exclusively in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.13</font>:</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a) The Company is not in violation of
any Applicable Law relating to the ownership or operation of any of its assets,
and no Claim is pending or, to the Knowledge of the Company, threatened with
respect to any such matters;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(b) the Company holds all permits,
licenses, certifications, variations, exemptions, Orders, franchises,
registrations, filings, approvals, authorizations or other required grant of
operating authority required by any Governmental Authority necessary for the
conduct of their respective businesses (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Permits</font>&#8221;). All the
Company Permits are in full force and effect and there exists no default
thereunder or breach thereof, and the Company has no notice or Knowledge that
such Company Permits will not be renewed in the ordinary course after the
Effective Time. No Governmental Authority has given, or to the Knowledge of the
Company, threatened to give, notice of any action to terminate, cancel or reform
any Company Permits; and</font></div>
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Company Permits required for the present ownership or lease, as the case may be,
of its business and operation of its property, and there exists no default or
breach with respect to, and no Person, including any Governmental Authority, has
taken or, to the Knowledge of the Company, threatened to take, any action to
terminate, cancel or reform any such Company Permit.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
4.6 No Conflict; Consents.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a<font style="DISPLAY: inline; FONT-WEIGHT: bold">) No Conflict.</font> The execution
and delivery by the Company of this Agreement and the Related Documents, the
performance of the obligations of the Company hereunder and thereunder and the
consummation by the Company of the Merger and the other transactions
contemplated hereby and thereby in accordance with the terms hereof and thereof
will not (i)&#160;conflict with or result in a breach of any provisions of its
organizational documents, (ii) violate, conflict with, result in a breach of any
provision of, constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, impair the Company&#8217;s rights
under, alter the rights or obligations of third parties under, result in the
termination of or in a right of termination or cancellation of, give rise to a
right of purchase under, or accelerate the performance required by, any Company
Material Contract or other Contract, (iii) result in the creation of any Lien
(other than Permitted Liens) upon any of the properties or assets of the Company
under any Company Material Contract or by which the Company or any of its
properties is bound or affected, (iv)&#160;result in any Company Material
Contract being declared void, voidable, or without further binding effect, or
(v) (assuming that the consents and approvals referred to in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.6(b)</font> are duly
and timely made or obtained and that the Company Stockholders Consent is
obtained), contravene, conflict with or constitute a violation of any provision
of any Applicable Law binding upon or applicable to the Company, other than any
such violations, conflicts, breaches, defaults, impairments, alterations,
terminations, cancellations, purchase rights, accelerations or Liens that,
individually or in the aggregate, have not had or caused and would not
reasonably be expected to have or cause a Company Material Adverse
Effect.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b) Required Consents. </font>Neither
the execution and delivery by the Company of this Agreement or any Related
Document nor the consummation by the Company of the Merger and the other
transactions contemplated hereby or thereby in accordance with the terms hereof
or thereof will require any consent, approval or authorization of, notice to or
filing or registration with any Governmental Authority, other than the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware,
and appropriate documents required to be filed as a result of the Merger with
the relevant Governmental Authorities in the states and foreign jurisdictions in
which the Company is qualified to conduct business, except for any failures to
obtain any such consent, approval or authorization or to make any such filing,
notification or registration that, individually or in the aggregate, have not
had or caused and would not reasonably be expected to have or cause a Company
Material Adverse Effect.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.7 Litigation.</font>
Except as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
4.7</font> of the Company Disclosure Letter (there is no litigation,
arbitration, mediation, action, suit, Claim, proceeding or investigation,
whether legal or administrative, pending against the Company or, to the
Company&#8217;s Knowledge, threatened against the Company or any of its assets,
properties or operations, at Applicable Law or in equity, before or by any
Governmental Authority or any Order of any Governmental Authority that,
individually or in the aggregate, and taking into consideration the aggregate
amounts reserved for any such matters in the Company Balance Sheet, has had or
caused or would reasonably be expected to have or cause a Company Material
Adverse Effect.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.8 Absence of Certain
Changes</font><font style="DISPLAY: inline; FONT-STYLE: italic">.</font> Since
December 31, 2009, except as described in the Financial Statements, there has
not been (a)&#160;any event or occurrence that has had or caused or would
reasonably be expected to have or cause a Company Material Adverse Effect,
(b)&#160;any material change by the Company in any of its accounting methods,
principles or practices or any of its Tax methods, practices or elections,
(c)&#160;any declaration, setting aside or payment of any dividend or
distribution in respect of any capital stock of the Company or any redemption,
purchase or other acquisition of any of its capital stock or (d)&#160;except in
the ordinary course of business consistent with past practices, any increase in
or establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option, stock purchase or other
employee benefit plan.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section&#160;4.9&#160;Taxes.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a) Except for such matters that,
individually or in the aggregate, have not had or caused and would not
reasonably be expected to have or cause a Company Material Adverse
Effect:&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(i) The Company has timely filed, or
has caused to be timely filed on its behalf, all Tax Returns required to be
filed by or on their behalf o in the manner prescribed by Applicable Law. All
such Tax Returns are complete and correct. The Company has timely paid all Taxes
due and owing, and, in accordance with GAAP, the most recent Company Financial
Statements reflect a reserve (excluding any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) for all
Taxes payable by the Company for all Taxable periods and portions thereof
through the date of the Company Financial Statements;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(ii) No Tax Return of the Company is
under audit or examination by any Governmental Authority, and no written or, to
the Knowledge of the Company, unwritten notice of such an audit or examination
has been received by the Company. There is no assessed deficiency, refund
litigation, proposed adjustment or matter in controversy with respect to any
Taxes due and owing by the Company;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(iii) Since December 31, 2008, the
Company has not made or rescinded any election relating to Taxes or settled or
compromised any Claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to any Taxes, or, except as may be
required by Applicable Law, made any change to any of their methods of reporting
income or deductions for federal income Tax purposes from those employed in the
preparation of their most recently filed federal Tax Returns;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(iv) There is no agreement or other
document extending, or having the effect of extending, the period of assessment
or collection of any material Taxes and no power of attorney with respect to any
such Taxes has been executed or filed with any Governmental Authority by or on
behalf of the Company;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(v) Except for statutory Liens for
Taxes not yet due, no Liens for Taxes exist with respect to any assets or
properties of the Company;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(vi) Except for any agreements or
arrangements (A)&#160;with customers, vendors, lessors or similar Persons
entered into in the ordinary course of business or (B)&#160; the Company is not
a party to or bound by any Tax sharing agreement, Tax indemnity obligation or
agreement or arrangement with respect to Taxes (including any advance pricing
agreement, closing agreement or other agreement relating to Taxes with any Tax
Authority);</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(vii) The Company has complied with
all Applicable Law relating to the payment and withholding of Taxes and have,
within the time and the manner prescribed by any such Applicable Law, withheld
from and paid over to the proper Governmental Authorities all amounts required
to be so withheld and paid over under Applicable Law; and</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 38.7pt"></font>(viii) The Company shall not be
required to include in a Taxable period ending after the Closing Date any item
of income that accrued in a prior Taxable period but was not recognized in any
prior Taxable period as a result of the installment method of accounting, the
long-term contract method of accounting, the cash method of accounting or
Section&#160;481 of the Code or comparable provisions of any other Applicable
Law.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(b) The Company does not know of any
fact, agreement, plan, or other circumstance, or has taken or failed to take any
action, that would reasonably be expected to prevent the Merger from qualifying
as a reorganization within the meaning of Section&#160;368(a) of the
Code.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section&#160;4.10
Financial Statements; No Undisclosed Liabilities.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(a)&#160;True and complete copies of
the audited balance sheet of the Company as at December 31, 2009, and the
related audited statements of income, shareholders&#8217; equity and cash flows of the
Company, together with all related notes and schedules thereto, accompanied by
the reports thereon of the Company&#8217;s independent auditors (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Financial Statements</font>&#8221;)
are attached hereto as <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
4.10(a)</font> of the Company Disclosure Letter.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(b)&#160;Except as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 4.10(b)</font> of the Company
Disclosure Letter, each of the Company Financial Statements (i)&#160;are correct
and complete and have been prepared in accordance with the books and records of
the Company; (ii)&#160;have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods indicated and consistent with each other
(except as may be indicated in the notes thereto); and (iii)&#160;fairly
present, in all material respects, the financial position, results of operations
and cash flows of the Company,, as the case may be, as at the respective dates
thereof and for the respective periods indicated therein, except as otherwise
noted therein and subject, in the case of any interim financial statements of
the Company, to normal and recurring year-end adjustments that will not,
individually or in the aggregate, be material.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(c)&#160;Except as and to the extent
adequately accrued or reserved against in the audited balance sheet of the
Company as at December 31, 2009 (such balance sheet, together with all related
notes and schedules thereto, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Balance Sheet</font>&#8221;), the
Company does not have any liability, indebtedness, expense, claim, deficiency,
guaranty or obligation of any type or nature, whether accrued, absolute,
contingent, matured, unmatured or otherwise, whether known or unknown and
whether or not required by GAAP to be reflected in a balance sheet of the
Company or disclosed in the notes thereto, except for (i)&#160;liabilities and
obligations, incurred in the ordinary course of business consistent with past
practice since the date of the Company Balance Sheet, that are not, individually
or in the aggregate, material in amount, (ii)&#160;liabilities for performance
under Company Material Contracts that do not exceed $25,000 individually or
$50,000 in the aggregate, and (iii)&#160;liabilities described in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 4.10(c)</font> of the Company
Disclosure Letter.</font></div>
          <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(d)&#160;The books of account and
financial records of the Company are true and correct and have been prepared and
are maintained in accordance with GAAP.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section&#160;4.11&#160;Employee
Benefit Plans.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a) <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.11(a)</font> of the
Company Disclosure Letter contains a list of all the Company&#8217;s Benefit Plans
(each a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Benefit
Plan</font>&#8221; and collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Benefit Plans</font>&#8221;). To
the extent applicable, the Company Benefit Plans comply in all material respects
with the requirements of ERISA and the Code or with the Applicable Laws and
regulations of any applicable jurisdiction. The Company Benefit Plans have been
maintained and operated in compliance in all material respects with their terms.
To the Company&#8217;s Knowledge, there are no breaches of fiduciary duty in
connection with the Company Benefit Plans for which the Company could be liable.
There are no pending or, to the Company&#8217;s Knowledge, threatened Claims against
or otherwise involving any Company Benefit Plan that, individually or in the
aggregate, have had or caused or would reasonably be expected to have or cause a
Company Material Adverse Effect, and no suit, action or other litigation
(excluding claims for benefits incurred in the ordinary course of the Company
Benefit Plan activities) has been brought against or with respect to any such
Company Benefit Plan for which the Company could be liable that, individually or
in the aggregate, have had or caused or would reasonably be expected to have or
cause a Company Material Adverse Effect. All material contributions required to
be made as of the date hereof to the Company Benefit Plans have been made or
have been properly accrued and are reflected in the Company Financial Statements
as of the date thereof.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(b) The Company does not contribute to,
or has an obligation to contribute to, and has not within six years prior to the
Effective Time contributed to, or had an obligation to contribute to or has any
material liability, contingent or otherwise, with respect to, (i)&#160;a
&#8220;multiemployer plan&#8221; within the meaning of Section&#160;3(37) of ERISA,
(ii)&#160;any plan that is covered by Title&#160;IV of ERISA, (iii)&#160;any
plan subject to Section&#160;412 of the Code or (iv)&#160;any plan funded by a
&#8220;voluntary employees&#8217; benefits association&#8221; within the meaning of
Section&#160;501(c)(9) of the Code.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(c) No Company Benefit Plan maintained
by the Company provides medical, surgical, hospitalization, death or similar
benefits (regardless of whether insured) for employees or former employees of
the Company for periods extending beyond their retirement or other termination
of service other than coverage mandated by Applicable Law.</font></div>
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the Company, whether arising by operation of Applicable Law, Contract, or past
custom, for compensation and benefits, including, but not limited to, bonuses
and accrued vacation, and benefits under the Company Benefit Plans, have been
paid or adequate accruals for such obligations are reflected on the Company
Financial Statements as of the date thereof.</font></div>
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of this Agreement or the consummation of the transactions contemplated hereby
will (either alone or in conjunction with any other event, such as termination
of employment), result in, cause the accelerated vesting, funding or delivery
of, or increase the amount or value of, any payment or benefit to any employee,
officer or director of the Company.</font></div>
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Company Disclosure Letter contains a description that is accurate and correct in
all material respects, of all amounts estimated to be paid or payable (whether
in cash, in property, or in the form of benefits, accelerated cash, property, or
benefits, or otherwise) in connection with the transactions contemplated hereby
(solely as a result thereof) that were or will be an &#8220;excess parachute payment&#8221;
within the meaning of Section&#160;280G of the Code.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(g) Each Company Benefit Plan which is
or reasonably could be determined to be an arrangement subject to
Section&#160;409A of the Code has been operated in good faith compliance with
Section&#160;409A of the Code since January&#160;1, 2005 and has been, or may
be, timely amended with the consent of the participant, if necessary, to comply
in good faith with Section&#160;409A of the Code and any applicable guidance,
whether proposed or final, issued by the IRS with respect thereto.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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multiple employer plan within the meaning of Section&#160;413(c) of the
Code.</font></div>
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subject to ERISA has any material liabilities thereunder which are not otherwise
fully funded, if applicable, or properly accrued and reflected under the Company
Financial Statements as of the date thereof.</font></div>
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Matters.</font></div>
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(i)&#160; the Company is not a party to, or bound by, any collective bargaining
agreement or similar Contract, agreement or understanding with a labor union or
similar labor organization and (ii)&#160;to the Company&#8217;s Knowledge, there are
no organizational efforts with respect to the formation of a collective
bargaining unit presently being made or threatened.</font></div>
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individually or in the aggregate, have not had or caused and would not
reasonably be expected to have or cause a Company Material Adverse Effect,
(i)&#160;the Company has not received any written complaint of any unfair labor
practice or other unlawful employment practice or any written notice of any
material violation of any federal, state or local statutes, Applicable Laws,
ordinances, rules, regulations, Orders or directives with respect to the
employment of individuals by, or the employment practices of, the Company, or
the work conditions, terms and conditions of employment, wages or hours of their
respective businesses, (ii)&#160;there are no unfair labor practice charges or
other employee related complaints against the Company pending or, to the
Knowledge of the Company, threatened before any Governmental Authority by or
concerning the employees working in its businesses, and (iii)&#160;there is no
labor dispute, strike, slowdown or work stoppage against the Company pending or,
to the Knowledge of the Company, threatened against the Company.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.13&#160;Environmental
Matters.</font> Except for such matters that, individually or in the aggregate,
have not had or caused and would not reasonably be expected to have or cause a
Company Material Adverse Effect:</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a) the Company has been and
is&#160;&#160;in compliance with all applicable Environmental, Health and Safety
Laws and possess and is in compliance with any permits or licenses required
under Environmental, Health and Safety Laws. To the Knowledge of the Company,
there are no past or present facts, conditions or circumstances that interfere
with or preclude, or could interfere with or preclude if known to a Governmental
Authority, the conduct of any of their respective businesses as now conducted or
which interfere with continued compliance with applicable Environmental, Health
and Safety Laws;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(b) No proceedings or investigations of
any Governmental Authority are pending or, to the Knowledge of the Company,
threatened against the Company that allege the violation of or seek to impose
liability pursuant to any Environmental, Health and Safety Laws, and, to the
Knowledge of the Company, there are no past or present facts, conditions or
circumstances at, on or arising out of, or otherwise associated with, any
current (or, to the Knowledge of the Company, former) businesses, assets or
properties of the Company, which constitute a material violation of
Environmental, Health and Safety Laws or are reasonably likely to give rise to
(i)&#160;costs, expenses, liabilities or obligations for any cleanup,
remediation, disposal or corrective action under any Environmental, Health and
Safety Laws, (ii)&#160;Claims arising for personal injury, property damage or
damage to natural resources, or (iii)&#160;fines, penalties or injunctive
relief; and</font></div>
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(i)&#160;received any written notice of noncompliance with, violation of, or
liability or potential liability under any Environmental, Health and Safety Laws
or (ii)&#160;entered into or become subject to any consent decree, Order or
agreement with any Governmental Authority or other Persons pursuant to any
Environmental, Health and Safety Laws or relating to the cleanup of any
Hazardous Materials.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.14 Intellectual
Property.</font>&#160; Except for such matters that, individually or in the
aggregate, have not had or caused and would not reasonably be expected to have
or cause a Company Material Adverse Effect, (a) the products, services and
operations of the Company do not infringe upon, violate or misappropriate the
Intellectual Property of any Third Party, (b) the Company owns or possesses
valid licenses or other valid rights to use the Intellectual Property that they
use, exercise or exploit in, or that may be necessary or desirable for, its
businesses as currently being conducted, free and clear of all Liens (other than
Permitted Liens), and (c) to the Knowledge of the Company, there is no
infringement of any Intellectual Property owned by or licensed by or to the
Company. To the Company&#8217;s Knowledge, there is no unauthorized use, disclosure,
infringement or misappropriation of any Intellectual Property of the Company by
any Person, including, without limitation, any employee or independent
contractor (present or former) of the Company that, individually or in the
aggregate, has had or caused or could reasonably be expected to have or cause a
Company Material Adverse Effect.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.15 Insurance.</font>
Except for such matters that, individually or in the aggregate, have not had or
caused and would not reasonably be expected to have or cause a Company Material
Adverse Effect:</font></div>
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            </div>
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        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a) The Company maintains and will
maintain through the Closing Date insurance adequate in character and amount
with financially sound and reputable insurers. There is no material default with
respect to any provision contained in any insurance policy or binder, and the
Company has not failed to give any notice or present any claim under any such
policy or binder in a timely fashion.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(b) To the Knowledge of the Company, no
event relating specifically to any of the Company has occurred that is
reasonably likely, after the date of this Agreement, to result in an upward
adjustment in premiums under any insurance policies they maintain. The Company
has not received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be made in
order to continue such insurance policies. Excluding insurance policies that
have expired and been replaced in the ordinary course of business, no excess
liability or protection and indemnity insurance policy has been cancelled by the
insurer within one year prior to the date hereof, and to the Company&#8217;s
Knowledge, no threat in writing has been made to cancel (excluding cancellation
upon expiration or failure to renew) any current insurance policy of the
Company.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.16&#160;Ownership and
Condition of Assets.</font> Except as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect and except
as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
4.16</font> of the Company Disclosure Letter, the Company (i) has good and
marketable title to all the properties and assets reflected in the Company
Financial Statements as being owned by the Company or acquired after the date
thereof which are material to the Company&#8217;s business on a consolidated basis
(except properties sold or otherwise disposed of since the date thereof in the
ordinary course of business), free and clear of all Liens, except Permitted
Liens, and (ii) is the lessee of all leasehold estates reflected in the Company
Financial Statements or acquired after the date thereof which are material to
its business on a consolidated basis (except for leases that have expired by
their terms since the date thereof) and is in possession of the properties
purported to be leased thereunder, and each such lease is valid without default
thereunder by the lessee or, to Company&#8217;s Knowledge, the lessor.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.17&#160;
</font>Intentionally Omitted.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.18&#160;Material
Contracts.</font> <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
4.18</font> of the Company Disclosure Letter lists all material contracts,
commitments and similar agreements to which the Company is a party or by which
they or any of their property is bound as of the date of this Agreement (other
than this Agreement or any Related Document) (the<font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Company Material Contracts</font>&#8221;).
As of the date of this Agreement, each of the Company Material Contracts is, to
the Knowledge of the Company, in full force and effect. Except for such matters
that, individually or in the aggregate, have not had or caused and would not
reasonably be expected to have or cause a Company Material Adverse Effect, the
Company does not know of, or has not received written notice of, any breach or
violation of, or default under (nor, to the Knowledge of the Company, does there
exist any condition which with the passage of time or the giving of notice or
both would result in such a violation or default under), any Company Material
Contract, or has received written notice of the desire of the other party or
parties to any such Company Material Contract to exercise any rights such party
has to cancel, terminate or repudiate such Contract or exercise remedies
thereunder.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.19&#160;No Brokers;
Investment Advisor</font><font style="DISPLAY: inline; FONT-STYLE: italic">.</font>&#160;The Company has not
entered into any Contract with any Person that may result in the obligation of
the Company&#160;&#160;to pay any finder&#8217;s fees, brokerage or other like
payments in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.20&#160;Improper
Payments.</font> Except for such matters that, individually or in the aggregate,
have not had or caused and would not reasonably be expected to have or cause a
Company Material Adverse Effect: (a)&#160;no funds, assets or properties of the
Company or its Affiliates have been used or offered for illegal purposes;
(b)&#160;no accumulation or use of any funds, assets or properties of the
Company or its Affiliates has been made without being properly accounted for in
the financial books and records of the Company or its Affiliates; (c)&#160;all
payments by or on behalf of the Company or its Affiliates have been duly and
properly recorded and accounted for in their financial books and records and
such books and records accurately and fairly reflect all transactions and
dispositions of the assets of the Company and its Affiliates; (d)&#160;the
Company has devised and maintained systems that provide reasonable assurances
that transactions are and have been executed in accordance with management&#8217;s
general or specific authorization; (e)&#160;neither the Company nor any of its
Affiliates, nor any director, officer, agent, employee or other Person
associated with or acting on behalf of the Company or its Affiliates, has
(i)&#160;used any corporate funds for any unlawful contribution, gift,
entertainment or payment of anything of value relating to political activity,
(ii)&#160;made any direct or indirect unlawful payment to any employee, agent,
officer, director, representative or stockholder of a Governmental Authority or
political party, or official or candidate thereof, or any immediate family
member of the foregoing or (iii)&#160;made any bribe, unlawful rebate, payoff,
influence payment, kickback or other unlawful payment in connection with the
conduct of the Company&#8217;s or its Affiliates&#8217; businesses; (f)&#160;none of the
Company, any of its Affiliates or any agent of any of them has received any
bribes, kickbacks or other improper payments from vendors, suppliers or other
Persons; and (g)&#160;the Company has no Knowledge that any payment made to a
Person would be or has thereafter been offered, given or provided to any foreign
official, political party or official thereof, or to any candidate for public
office.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.21 State Takeover
Statutes.</font> To the knowledge of the Company, except for Section 203 of the
DGCL (which has been rendered inapplicable), no &#8220;moratorium,&#8221; &#8220;control share,&#8221;
&#8220;fair price&#8221; or other anti-takeover law or regulation is applicable to this
Agreement, the Merger, or the other transactions contemplated
hereby.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;4.22&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">No Other Representations or
Warranties.</font> Except for the representations and warranties contained in
this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Article&#160;4,</font>
neither the Company nor any other Person makes any other express or implied
representation or warranty on behalf of the Company or any of its Affiliates in
connection with this Agreement or the transactions contemplated
hereby.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font>Section&#160;4.23 Affiliate Interests
and Transactions.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font>(a)&#160;Except as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 4.23(a)</font> of the Company
Disclosure Letter, no Related Party of the Company: (i)&#160;owns or has owned,
directly or indirectly, any equity or other financial or voting interest in any
competitor, supplier, licensor, lessor, distributor, independent contractor or
customer of the Company; (ii)&#160;owns, directly or indirectly, or has any
interest in any property (real or personal, tangible or intangible) that the
Company uses in or pertaining to the business of the Company; or (iii)&#160;has
any business dealings or a financial interest in any transaction with the
Company or involving any assets or property of the Company, other than business
dealings or transactions conducted in the ordinary course of business at
prevailing market prices and on prevailing market terms.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font>(b)&#160;There are no outstanding notes
payable to, accounts receivable from or advances by the Company to, and the
Company is not otherwise a debtor or creditor of, or has any liability or other
obligation of any nature to, any Related Party of the Company&#160;&#160;Since
the date of the Company Balance Sheet, the Company has not incurred any
obligation or liability to, or entered into or agreed to enter into any
transaction with or for the benefit of, any Related Party of the Company, other
than the transactions contemplated by this Agreement and the Related
Agreements.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 4.24 Stockholders.
</font>All&#160;&#160;of the Company&#8217;s stockholders are &#8220;accredited investors&#8221;
as that term is defined in Regulation D as promulgated by the SEC pursuant to
the Securities Act.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ARTICLE&#160;5</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">COVENANTS</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.1&#160;
</font>Intentionally Omitted.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.2</font>&#160;
Intentionally Omitted.</font><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.3&#160;
</font>Intentionally Omitted.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.4&#160;
</font>Intentionally Omitted.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.5&#160;
</font>Intentionally Omitted.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.6&#160;
</font>Intentionally Omitted.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.7&#160;
</font>Intentionally Omitted.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.8</font>&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Taking of Necessary Action; Further
Action.</font> Subject to the terms and conditions of this Agreement, the
Parties agree to execute and deliver any additional instruments necessary to
consummate the transactions contemplated by this Agreement.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.9&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Public Announcements.</font> On the
date this Agreement is executed (or if executed after the close of business, no
later than the first to occur of the beginning of trading on the OTCBB on the
next day), the Company and Parent shall issue a joint press release with respect
to the execution hereof and the transactions contemplated hereby. Except in
respect of a public announcement as may be required by Applicable Law or any
rule of any regulatory body, the Company and Parent shall consult with each
other before issuing any press release, making any other public statement or
scheduling any press conference or conference call with investors or analysts
with respect to this Agreement or the transactions contemplated by this
Agreement.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.10&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Notification of Certain
Matters.</font> Intentionally Omitted.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.11&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Payment of Expenses.</font> Each
Party shall pay its own expenses incident to preparing for, entering into and
carrying out this Agreement and the consummation of the transactions
contemplated hereby.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section&#160;5.12&#160;&#160;Indemnification;
Directors&#8217; and Officers&#8217; Insurance.&#160;</font><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(a)&#160;From and after the Effective
Time Parent,, (i)&#160;to the maximum extent permitted under Applicable Law,
indemnify and hold harmless and provide advancement of expenses to, each person
who is now, or has been at any time prior to the date hereof or who becomes
prior to the Effective Time, an officer, director or employee of Parent or of
any Parent Subsidiary (each, a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent</font> <font style="DISPLAY: inline; FONT-WEIGHT: bold">Indemnified Party</font>&#8221;) against
all losses, claims, damages, costs, expenses, liabilities or judgments or
amounts that are paid in settlement of or in connection with any claim, action,
suit, proceeding or investigation based in whole or in part on or arising in
whole or in part out of the fact that such person is or was a director, officer
or employee of Parent, and pertaining to any matter existing or occurring, or
any acts or omissions occurring, at or prior to the Effective Time, whether
asserted or claimed prior to, or at or after, the Effective Time (including
matters, acts or omissions occurring in connection with the approval of this
Agreement and the consummation of the transactions contemplated hereby) to the
same extent such persons are indemnified or have the right to advancement of
expenses as of the date of this Agreement by Parent pursuant to Parent&#8217;s
Certificate of Incorporation, Bylaws and indemnification agreements, if any, in
existence on the date hereof with any directors, officers and employees of
Parent. In the event of any such claim, action, suit, proceeding or
investigation, (x)&#160;Parent shall pay the reasonable and documented fees and
expenses of counsel selected by the Parent Indemnified Parties, which counsel
shall be reasonably satisfactory to the Indemnifying Party, and (y)&#160;the
Parent may participate in the defense of any such matter;<font style="DISPLAY: inline; FONT-STYLE: italic"> provided</font>,<font style="DISPLAY: inline; FONT-STYLE: italic"> however</font>, that Parent shall
not be liable for any settlement effected without its prior written
consent;<font style="DISPLAY: inline; FONT-STYLE: italic"> provided
further</font>, that the Parent shall not be obligated pursuant to this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.12</font> to pay the
fees and expenses of more than one counsel for all Parent Indemnified Parties in
any single Action unless a conflict of interest precludes the effective
representation of more than one Parent Indemnified Party with respect to the
applicable claim, action, suit, proceeding or investigation.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)
Parent shall maintain in effect for six (6)&#160;years from the Closing Date,
the directors&#8217; and officers&#8217; liability insurance policies maintained by Parent
as of the date hereof (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">D&amp;O Policy</font>,&#8221; a true,
correct and complete copy of which has been heretofore provided to the Company)
with respect to acts or omissions occurring prior to the Closing Date;<font style="DISPLAY: inline; FONT-STYLE: italic"> provided</font>,<font style="DISPLAY: inline; FONT-STYLE: italic"> however</font>, that Parent, or any
successor entity, may substitute therefor policies of an insurance company
material terms of which, including coverage and amount, are no less favorable
than the Company&#8217;s existing policies as of the date hereof or (ii)&#160;obtain
such extended reporting period coverage under its existing insurance programs
(to be effective as of the Closing Date).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(c)&#160;If Parent or any of its
successors or assigns (i)&#160;consolidates with or merges into any other person
and shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii)&#160;transfers or conveys all or substantially
all of its properties and assets to any person, then, and in each such case, to
the extent necessary, proper provision shall be made so that the successors and
assigns of Parent, as the case may be, shall assume the obligations set forth in
this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.12.</font></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(d)&#160;The provisions in this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.12</font> are intended
to be for the benefit of, and shall be enforceable by each of the Indemnified
Parties, their heirs and representatives and are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section&#160;5.13
Employee Matters.&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a) With respect to each Continuing
Employee, Parent shall credit, or cause its Subsidiaries to credit, the period
of employment and service recognized by the applicable employer (including its
Affiliates and their predecessors if so recognized by the employer) for such
Continuing Employee immediately prior to the Effective Time for purposes of
Parent&#8217;s corresponding benefit plans, programs, policies or similar
employment-related arrangements to have been employment and service with Parent
or its Subsidiaries for purposes of determining the Continuing Employee&#8217;s
eligibility to join (subject to satisfaction of all non-service related
eligibility criteria), vesting and benefit accrual (but not benefit accrual for
any purpose other than vacation pay, and sick leave, and vesting in employer
contributions under a 401(k))&#160;under all employee benefit plans, programs,
policies or similar employment-related arrangements of Parent and its
Subsidiaries in which the Continuing Employee is eligible to participate. No
such period of employment and service credit shall be provided to the extent
that it will result in a duplication of credit or employment
benefits.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(b) To the extent required by
Applicable Law, if the health insurance carrier covering certain Continuing
Employees is no longer engaged, Parent will use reasonable efforts to provide
creditable coverage which will reduce any restrictions and limitations for
medical conditions existing as of the Effective Time of each Continuing Employee
and the Continuing Employee&#8217;s dependents. Additionally, Parent shall use
reasonable efforts to effect a change of carriers, if applicable, so that
Continuing Employees can plan for any loss of credit with respect to
deductibles, co-insurance and maximum out of pocket requirements. In accordance
with Applicable Law, any terminated employee shall be offered the opportunity to
continue coverage reasonably comparable to that coverage such employee had at
the time of termination of employment. If such coverage cannot been continued
with respect to a Continuing Employee, in accordance with Applicable Law, the
employee shall be offered the opportunity to continue such coverage as is
currently available.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(c) Nothing in this Agreement shall be
considered a contract between the Company, Parent or any of their respective
Subsidiaries and any Continuing Employee or consideration for, or inducement
with respect to, any such Continuing Employees&#8217; continued employment with Parent
and, without limitation, all such Continuing Employees are and will continue to
be considered employees at will pursuant to the applicable employment at will
laws or doctrine, subject to any express written agreement to the contrary with
such Continuing Employee. For the avoidance of doubt and without limiting the
generality of <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.6</font>, nothing in
this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.13</font>
is intended to make any Person a third-party beneficiary of the agreements
contained in this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.13</font>, and nothing
in this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.13</font> shall
constitute an amendment of any Parent Benefit Plan.</font><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;5.14&#160;</font>
Intentionally Omitted.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 5.15 Lock Up.&#160;&#160;(a)
</font>By adopting and approving the Merger and the terms and conditions set
forth in this Agreement, the Company&#8217;s stockholders who receive the Merger
Consideration acknowledge, understand and agree that the Merger
Consideration&#160;&#160;may not be resold by such stockholder until the first
anniversary of the Effective Time, except for (i) 11,191,115 shares of Merger
Consideration that may be transferred by GRQ Consultants, Inc. 401k, following
the Effective Time, subject only to federal and state securities
laws.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;Subject
to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 5.15(a)</font> the
Company&#8217;s Stockholders who receive the Merger Consideration acknowledge and
understand that the Merger Consideration has not been registered under the
Securities Act and therefore, cannot be sold without registration under the
Securities Act or pursuant to an exemption from the registration requirements of
the Securities Act, and the certificates representing the Merger Consideration
shall bear the following legend:</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER STATE SECURITIES LAWS, AND SUCH SHARES MAY NOT BE
SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER WILL BE EFFECTED IN ACCORDANCE
WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AT THAT
TIME AMENDED, AND SUCH STATE SECURITIES LAWS, OR IN ACCORDANCE WITH AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH STATE SECURITIES LAWS,
WHICH MAY THEN BE AVAILABLE THERETO, [BUT IN NO EVENT MAY THESE SECURITIES BE
SOLD OR TRANSFERRED PRIOR TO THE FIRST YEAR ANNIVERSARY OF THE EFFECTIVE TIME AS
PROVIDED IN THE AGREEMENT OF MERGER DATED MAY 11, 2010 BY AND AMONG HEPALIFE
TECHNOLOGIES, INC., AQUAMED TECHNOLOGIES, INC. AND HT ACQUISITION
CORP].&#8221;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 27.2pt"></font>Provided, however, that the bracketed
language above shall not be part of the legend with respect to the Excluded
Shares.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 5.16 Articles of
Amendment.</font> As soon as practicable after the Effective Time, Parent shall
file with the Secretary of State for the State of Florida the Articles of
Amendment to (i) increase the number of shares of common stock, $0.001 par value
per share which the&#160;Parent is authorized to issue from 300,000,000 shares
to 500,000,000 shares; (ii) change the par value of the Parent&#8217;s authorized
preferred stock from $0.10 to $0.001 per share; and (iii) provide for the
classification of the&#160;Parent&#8217;s Board of Directors and to further provide
for staggered terms of service for each class of directors, all as more fully
described in the Information Statement</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ARTICLE&#160;6</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Intentionally
Omitted</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ARTICLE&#160;7</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Intentionally
Omitted</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ARTICLE&#160;8</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">DEFINITIONS
AND USAGE</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 8.1</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-STYLE: italic"> Defined Terms in
Agreement</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> For
the purposes of this Agreement, capitalized terms used but not defined in this
Agreement shall have the meanings set forth below:</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Actions</font>&#8221; means any actions,
suits, arbitrations, inquiries, proceedings or investigations by or before any
Governmental Authority.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;A<font style="DISPLAY: inline; FONT-WEIGHT: bold">ffiliate</font>&#8221; means, with respect
to any Person, any other Person directly or indirectly controlling, controlled
by, or under common control with such Person.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Applicable Law</font>&#8221; means with
respect to any Person, any international, federal, state, local or foreign
statute, code, ordinance, rule, regulation, consent, approval, judgment, Order,
writ, decree, injunction or other authorization, treaty, convention, or
governmental requirement of any Governmental Authority that is binding upon, or
applicable to, such Person.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Benefit Plan</font>&#8221; means any
qualified or non-qualified employee benefit plan, program, policy, practice,
agreement, Contract or other arrangement, regardless of whether written,
regardless of whether U.S.-based, including any &#8220;employee welfare benefit plan&#8221;
within the meaning of Section&#160;3(1) of ERISA (including post-retirement
medical and life insurance), any &#8220;employee pension benefit plan&#8221; within the
meaning of Section&#160;3(2) of ERISA (regardless of whether such plan is
subject to ERISA), including any multiemployer plan (as defined in
Section&#160;3(37) of ERISA) or multiple employer plan (within the meaning of
Section&#160;413(c) of the Code), any employment or severance agreement or other
arrangement, and any employee benefit, bonus, incentive, deferred compensation,
profit sharing, vacation, stock, stock purchase, stock option, severance, change
of control, fringe benefit or other plan, program, policy, practice, agreement,
Contract, or other arrangement, regardless of whether subject to ERISA and
regardless of whether funded.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Business Day</font>&#8221; means any day
other than a Saturday, Sunday or any day on which banks in the State of New York
are authorized or required by federal law to be closed in New York, New
York.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Claim</font>&#8221; means claims, demands,
charges, complaints, actions, causes of action, suits, proceedings, hearings or
administrative proceedings.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold"><font style="FONT-WEIGHT: normal">&#8220;</font>Company Board</font>&#8221; means the board of
directors of the Company.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Common Stock</font>&#8221; shall
mean all outstanding shares of common stock, $.001 par value per share, of the
Company.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Material Adverse
Effect</font>&#8221; means a material adverse effect on the business, results of
operations, or condition (financial or otherwise) of the Company.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Merger Stock</font>&#8221; means
each of the Company Common Stock, Company Series A Preferred Stock and Company
Series B Preferred Stock.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Series A Preferred
Stock</font>&#8221; shall mean all outstanding shares of Series A Preferred Stock,
$.001 par value per share, of the Company.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Series B Preferred
Stock</font>&#8221; shall mean all outstanding shares of Series B Preferred Stock,
$.001 par value per share, of the Company.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Stockholders</font>&#8221; shall
mean the owners of all the outstanding shares of the Company Merger
Stock.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Stockholder Consent</font>&#8221;
means the written consent of the holders of a majority of the outstanding voting
stock of the Company, pursuant to which the proposal to adopt this Agreement and
the Merger is approved.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Continuing Employee</font>&#8221; means any
employee who was employed by the Company or any of its Subsidiaries as of the
day immediately prior to the Effective Time and who is employed by Parent or any
of its Subsidiaries on and after the Effective Time.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Contract</font>&#8221; means any agreement,
arrangement, commitment or instrument, written or oral, including, without
limitation, any loan or credit agreement or other agreement evidencing
Indebtedness, promissory note, bond, mortgage, indenture, guarantee, permit,
lease, sublease, license, agreement to render services, or other agreement,
arrangement, commitment or instrument evidencing rights or obligations of any
kind or nature, including all amendments, modifications, supplements and options
relating thereto.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Environmental, Health and Safety
Laws</font>&#8221; means any present or future Applicable Laws relating to
(a)&#160;emissions, discharges, releases or threatened releases of Hazardous
Materials into the environment, including into ambient air, soil, sediments,
land surface or subsurface, buildings or facilities, surface water, groundwater,
publicly-owned treatment works, or septic systems, (b)&#160;the generation,
treatment, storage, disposal, use, handling, manufacturing, recycling,
transportation or shipment of Hazardous Materials, (c)&#160;occupational health
and safety, or (d)&#160;the pollution of the environment, solid waste handling,
treatment or disposal, reclamation or remediation activities, or protection of
environmentally sensitive areas.</font></div>
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        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Equity Interests</font>&#8221; means
(a)&#160;with respect to a corporation, any and all shares, interests,
participation, phantom stock plans or arrangements or other equivalents (however
designated) of corporate stock, including all common stock, preferred stock and
other equity and voting interests, and warrants, options, calls, subscriptions
or other convertible securities or other rights to acquire any of the foregoing,
and (b)&#160;with respect to a partnership, limited liability company or similar
Person, any and all units, membership or other interests, including rights to
purchase, warrants, options, calls, subscriptions or other equivalents of, or
other interests convertible into, any beneficial or legal ownership interest in
such Person.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">ERISA</font>&#8221; means the Employee
Retirement Income Security Act of 1974, as amended, and any regulations
promulgated pursuant thereto.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Exchange Act</font>&#8221; means the
Securities Exchange Act of 1934, as amended.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">GAAP</font>&#8221; means generally accepted
accounting principles, as recognized by the U.S.&#160;Financial Accounting
Standards Board (or any generally recognized successor).</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Governmental Authority</font>&#8221; shall
mean (a) the United States of America, (b) any state, county, municipality, or
other governmental subdivision within the U.S., (c) any court or any
governmental department, commission, board, bureau, agency, or other
instrumentality of the U.S. or of any state, county, municipality, water rights,
taxing, or zoning authority, or other governmental subdivision within the U.S.
and (d) any foreign government or agency having jurisdiction over any party to
this Agreement.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Hazardous Material</font>&#8221; means any
chemical, pollutant, contaminant, material, waste or substance regulated by any
Governmental Authority under Environmental, Health and Safety Law, including,
but not limited to, any hazardous waste, hazardous substance, toxic substance,
radioactive material (including any naturally occurring radioactive material),
asbestos-containing materials in any form or condition, polychlorinated
biphenyls in any form or condition, or petroleum, petroleum hydrocarbons,
petroleum products or any fraction or byproducts thereof.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">43</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
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            </div>
          </div>
        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Indebtedness</font>&#8221; of any Person
means and includes any obligations consisting of (a)&#160;the outstanding
principal amount of and accrued and unpaid interest on, and other payment
obligations for, borrowed money, or payment obligations issued or incurred in
substitution or exchange for payment obligations for borrowed money,
(b)&#160;amounts owing as deferred purchase price for property or services,
including &#8220;earn out&#8221; payments, (c)&#160;payment obligations evidenced by any
promissory note, bond, debenture, mortgage or other debt instrument or debt
security, (d)&#160;commitments or obligations by which such Person assures a
creditor against loss, including contingent reimbursement obligations with
respect to letters of credit, (e)&#160;payment obligations secured by a Lien,
other than a Permitted Lien, on assets or properties of such Person,
(f)&#160;obligations to repay deposits or other amounts advanced by and owing to
third parties, (g)&#160;obligations under capitalized leases,
(h)&#160;obligations under any interest rate, currency or other hedging
agreement or derivatives transaction, (i)&#160;guarantees or other contingent
liabilities with respect to any amounts of a type described in clauses&#160;(a)
through (h)&#160;above, and (j)&#160;any change of control payments or
prepayment premiums, penalties, charges or equivalents thereof with respect to
any indebtedness, obligation or liability of a type described in
clauses&#160;(a) through (i)&#160;above that are required to be paid at the time
of, or the payment of which would become due and payable solely as a result of,
the execution of this Agreement or the consummation of the transactions
contemplated by this Agreement at such time, in each case determined in
accordance with GAAP; provided, however, that Indebtedness shall not include
accounts payable to trade creditors and accrued expenses arising in the ordinary
course of business consistent with past practices and shall not include the
endorsement of negotiable instruments for collection in the ordinary course of
business.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Information Statement</font>&#8221; means
the Information Statement on Schedule 14C as filed with the SEC on May 7, 2010
pertaining to, among other things, the consent to, and the approval,
ratification and adoption, by Parent&#8217;s stockholders, of: (a) an amendment to the
its Articles of Incorporation to (i) increase the number of shares of common
stock, $0.001 par value per share which the&#160;Parent is authorized to issue
from 300,000,000 shares to 500,000,000 shares; (ii) change the par value of the
Parent&#8217;s authorized preferred stock from $0.10 to $0.001 per share; and (iii)
provide for the classification of the&#160;Parent&#8217;s Board of Directors and to
further provide for staggered terms of service for each class of directors, all
as more fully described in the Information Statement; and (b) the Amended and
Restated Bylaws.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Intellectual Property</font>&#8221; means
all U.S. and foreign (a)&#160;patents and patent applications and all reissues,
renewals, divisions, extensions, provisionals, continuations and continuations
in part thereof, (b)&#160;inventions (regardless of whether patentable),
invention disclosures, trade secrets, proprietary information, industrial
designs and registrations and applications, mask works and applications and
registrations therefor, (c)&#160;copyrights and copyright applications and
corresponding rights, (d)&#160;trade dress, trade names, logos, URLs, common law
trademarks and service marks, registered trademarks and trademark applications,
registered service marks and service mark applications, (e)&#160;domain name
rights and registrations, (f)&#160;databases, customer lists, data collections
and rights therein, and (g)&#160;confidentiality rights or other intellectual
property rights of any nature, in each case throughout the world.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">IR Escrow Agreement</font>&#8221; means the
Investor Relations Escrow Agreement dated the date hereof by and among the
Parent, Cogito Corp. and Alfred V. Greco, PLLC.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">44</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">IR Services Agreement</font>&#8221; means
the Investor Relations Services Agreement dated the date hereof by and between
the Parent and Cogito Corp.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Knowledge</font>&#8221; when used in
relation to any Person shall mean the actual (but not constructive) knowledge of
such Person or such Person&#8217;s officers after reasonable inquiry.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Lien</font>&#8221; means any lien,
mortgage, security interest, indenture, deed of trust, pledge, deposit,
restriction, burden, lien, license, lease, sublease, right of first refusal,
right of first offer, charge, privilege, easement, right of way, reservation,
option, preferential purchase right, right of a vendor under any title retention
or conditional sale agreement, or other arrangement substantially equivalent
thereto, in each case regardless of whether relating to the extension of credit
or the borrowing of money.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Milestone Escrow Agreement</font>&#8221;
means the Milestone Escrow Agreement dated the date hereof by and among the
Parent, 12<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font>
Street Financial LLC and Alfred V. Greco, PLLC.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Order</font>&#8221; means any order, writ,
fine, injunction, decree, judgment, award or enforceable determination of any
Governmental Authority.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Board</font>&#8221; means the board
of directors of Parent.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Common Stock</font>&#8221; shall
mean Parent&#8217;s common stock, $.001 par value per share, of Parent.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Material Adverse
Effect</font>&#8221; means a material adverse effect on the business, results of
operations, or condition (financial or otherwise) of Parent and its
Subsidiaries, taken as a whole.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Subsidiary</font>&#8221; or &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Parent Subsidiaries</font>,&#8221; means,
individually or collectively, as the case may be, (a)&#160;any corporation of
which Parent owns, either directly or through its Subsidiaries, more than 50% of
the total combined voting power of all classes of voting securities of such
corporation, or (b)&#160;any partnership, association, joint venture, limited
liability company or other business organization, regardless of whether such
business organization constitutes a legal entity, in which Parent directly or
indirectly owns more than 50% of the total Equity Interests.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">45</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Permitted Liens</font>&#8221; means
(a)&#160;Liens for Taxes, assessments or other governmental charges or levies
that are not yet due and payable or that are being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
have been established and described in the applicable Disclosure Letter,
(b)&#160;Liens in connection with workmen&#8217;s compensation, unemployment insurance
or other social security, old age pension or public liability obligations not
yet due or which are being contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP have been established
and described in the applicable Disclosure Letter, (c)&#160;operators&#8217;,
vendors&#8217;, suppliers&#8217;, carriers&#8217;, warehousemen&#8217;s, repairmen&#8217;s, mechanics&#8217;,
workmen&#8217;s, materialmen&#8217;s, or construction Liens (during repair or upgrade
periods) or other like Liens arising by operation of Applicable Law in the
ordinary course of business or statutory landlord&#8217;s Liens, each of which is in
respect of obligations that have not been outstanding more than 90&#160;days (so
long as no action has been taken to file or enforce such Liens within said
90-day period) or which are being contested in good faith, or (d)&#160;any other
Lien, encumbrance or other imperfection of title that does not materially affect
the value or use of the property subject thereto or has been incurred in the
ordinary course of business.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Person</font>&#8221; means any natural
person, corporation, company, limited or general partnership, joint stock
company, joint venture, association, limited liability company, trust, bank,
trust company, land trust, business trust or other entity or
organization.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Related Party</font>&#8221;
means&#8221;</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt">
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
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                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
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                  <td style="WIDTH: 36pt">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font></div>
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                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">With
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          <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
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            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                  <td style="WIDTH: 72pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
                  </td>
                  <td style="WIDTH: 36pt">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font></div>
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                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">each
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Family;</font></div>
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          </div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                  <td style="WIDTH: 72pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
                  </td>
                  <td style="WIDTH: 36pt">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font></div>
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                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">any
      Person that is directly or indirectly controlled by any one or more
      members of such individual's
Family;</font></div>
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                </tr></table>
          </div>
          <div>
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<tr valign="top">
                  <td style="WIDTH: 72pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
                  </td>
                  <td style="WIDTH: 36pt">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font></div>
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                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">any
      Person in which members of such individual's Family hold (individually or
      in the aggregate) a Material Interest;
and</font></div>
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<tr valign="top">
                  <td style="WIDTH: 72pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
                  </td>
                  <td style="WIDTH: 36pt">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font></div>
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      Person with respect to which one or more members of such individual's
      Family serves as a director, officer, partner, executor or trustee (or in
      a similar capacity).</font></div>
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                </tr></table>
          </div>
          <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                  <td style="WIDTH: 36pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
                  </td>
                  <td style="WIDTH: 36pt">
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                  </td>
                  <td>
                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">With
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  individual:</font></div>
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                </tr></table>
          </div>
          <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                  <td style="WIDTH: 72pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
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                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">any
      Person that directly or indirectly controls, is directly or indirectly
      controlled by or is directly or indirectly under common control with such
      specified Person;</font></div>
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<tr valign="top">
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                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
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                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">any
      Person that holds a Material Interest in such specified
      Person;</font></div>
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<tr valign="top">
                  <td style="WIDTH: 72pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
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                  <td style="WIDTH: 36pt">
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                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">each
      Person that serves as a director, officer, partner, executor or trustee of
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  capacity);</font></div>
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          <div>
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<tr valign="top">
                  <td style="WIDTH: 72pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
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                  <td style="WIDTH: 36pt">
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                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">any
      Person in which such specified Person holds a Material Interest;
      and</font></div>
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          <div>&#160;</div>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
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              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">46</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
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              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div>
          <div>&#160;</div>
          <div>&#160;</div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                  <td style="WIDTH: 72pt">
                    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
                  </td>
                  <td style="WIDTH: 36pt">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)</font></div>
                  </td>
                  <td>
                    <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">any
      Person with respect to which such specified Person serves as a general
      partner or a trustee (or in a similar
capacity).</font></div>
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          <div>&#160;</div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>For purposes of this definition, (a)
"<font style="DISPLAY: inline; FONT-WEIGHT: bold">control</font>" (including
"controlling," "controlled by," and "under common control with") means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and shall be construed as such term is
used in the rules promulgated under the Securities Act; (b) the "<font style="DISPLAY: inline; FONT-WEIGHT: bold">Family</font>" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree and (iv) any other natural person who resides with such
individual; and (c) "<font style="DISPLAY: inline; FONT-WEIGHT: bold">Material
Interest</font>" means direct or indirect beneficial ownership (as defined in
Rule 13d-3 under the Exchange Act) of voting securities or other voting
interests representing at least five percent (5%) of the outstanding voting
power of a Person or equity securities or other equity interests representing at
least five percent (5%) of the outstanding equity securities or equity interests
in a Person.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>"<font style="DISPLAY: inline; FONT-WEIGHT: bold">Representative</font>" with respect
to a particular Person, any director, officer, manager, employee, agent,
consultant, advisor, accountant, financial advisor, legal counsel or other
representative of that Person.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Responsible Officers</font>&#8221; means
(a)&#160;for the Company, each of the Chief Executive Officer and Executive Vice
President of the Company, if any and (b)&#160;for Parent, each of the Chief
Executive Officer and Chief Financial Officer of Parent, if any.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">SEC</font>&#8221; means the U.S. Securities
and Exchange Commission.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Securities Act</font>&#8221; means the
Securities Act of 1933, as amended.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">SOX</font>&#8221; means the Sarbanes-Oxley
Act of 2002, as amended, and the rules and regulations promulgated
thereunder.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subsidiary</font>&#8221; means for any
Person at any time (a)&#160;any corporation of which such Person owns, either
directly or through its Subsidiaries, more than 50% of the total combined voting
power of all classes of voting securities of such corporation, or (b)&#160;any
partnership, association, joint venture, limited liability company or other
business organization, regardless of whether such business organization
constitutes a legal entity, in which such Person directly or indirectly owns
more than 50% of the total Equity Interests.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">47</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Tax</font>&#8221; or &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Taxes</font>&#8221; (including with
correlative meaning, &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Taxable</font>&#8221;) means (a)&#160;any
federal, foreign, state or local tax, including any income, gross income, gross
receipts, ad valorem, excise, sales, use, value added, admissions, business,
occupation, license, franchise, margin, capital, net worth, customs, premium,
real property, personal property, intangibles, capital stock, transfer, profits,
windfall profits, environmental, severance, fuel, utility, payroll, social
security, employment, withholding, disability, stamp, rent, recording,
registration, alternative minimum, add-on minimum, or other tax, assessment,
duty, fee, levy or other governmental charge of any kind whatsoever imposed by a
Governmental Authority (a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Tax
Authority</font>&#8221;), together with and including, without limitation, any and all
interest, fines, penalties, assessments and additions to tax resulting from,
relating to, or incurred in connection with any such tax or any contest or
dispute thereof, (b)&#160;any liability for the payment of any amount of the
type described in the immediately preceding clause&#160;(a) as a result of being
a member of a consolidated, affiliated, unitary or combined group with any other
corporation or entity at any time prior to and through the Closing Date, and
(c)&#160;any liability for the payment of any amount of the type described in
the preceding clauses&#160;(a) or (b)&#160;as a result of a contractual
obligation to any other Person or of transferee, successor or secondary
liability.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Tax Return</font>&#8221; means any report,
return, document, declaration or other information (including any attached
schedules and any amendments to such report, return, document, declaration or
other information) required to be supplied to or filed with any Tax Authority
with respect to any Tax, including an information return and any document with
respect to or accompanying payments, deposits or estimated Taxes, or with
respect to or accompanying requests for the extension of time in which to file
any such report, return, document, declaration or other
information.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Third Party</font>&#8221; means a Person
other than any of Parent, the Company or any of their Subsidiaries.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Transaction Documents</font>&#8221; means
the IR Escrow Agreement, IR Services Agreement<font style="DISPLAY: inline; FONT-WEIGHT: bold">, </font>the Milestone Escrow
Agreement and the Voting Agreement.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Voting Agreement</font>&#8221; means the
Stockholder Voting Agreement and the Irrevocable Proxy dated the date hereof by
and among the Parent and the stockholders named therein.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
8.2 References and Titles.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a) All
references in this Agreement to Exhibits, Schedules, Articles, Sections,
subsections and other subdivisions refer to the corresponding Exhibits,
Schedules, Articles, Sections, subsections and other subdivisions of or to this
Agreement, unless expressly provided otherwise. Titles appearing at the
beginning of any Articles, Sections, subsections or other subdivisions of this
Agreement are for convenience only, do not constitute any part of this
Agreement, and shall be disregarded in construing the language hereof. The words
&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">this Agreement,&#8221; &#8220;herein,&#8221;
&#8220;hereby,&#8221; &#8220;hereunder&#8221; and &#8220;hereof</font>,&#8221; and words of similar import, refer to
this Agreement as a whole and not to any particular Article, Section, subsection
or subdivision unless expressly so limited. The words &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">this Article</font>&#8221; and &#8220;this
Section,&#8221; and words of similar import, refer only to the Article, Section or
subsection hereof in which such words occur.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">48</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
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            </div>
          </div>
          <div id="HDR">
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            </div>
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        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b) The
word &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">or</font>&#8221; is not
exclusive, and the word &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">including</font>&#8221; (in its various
forms) means including without limitation. Pronouns in masculine, feminine or
neuter genders shall be construed to state and include any other gender, and
words, terms and titles (including terms defined herein) in the singular form
shall be construed to include the plural and vice versa, unless the context
otherwise requires.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c) A
reference in this Agreement to any statute shall be to such statute as amended
from time to time, and the rules and regulations promulgated
thereunder.</font><br></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ARTICLE
9</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">MISCELLANEOUS</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.1</font>&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Nonsurvival of Representations and
Warranties</font><font style="DISPLAY: inline; FONT-STYLE: italic">.</font>
Except as otherwise provided in this Agreement and except for the agreements
contained in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
1.6,</font> <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1.7</font>,
<font style="DISPLAY: inline; FONT-WEIGHT: bold">Article 2</font>, <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 5.11</font>, <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 5.12</font>, <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 5.13</font>, <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 5.15</font>, <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 5.16</font>, <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 9.10</font> and <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 9.13</font>, none of the
representations or warranties contained in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the consummation of the
Merger and only the covenants that by their terms survive the Effective Time
shall survive the Effective Time.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.2</font>&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Amendment.</font> This Agreement may
be amended by the Parties at any time by mutual consent;<font style="DISPLAY: inline; FONT-STYLE: italic"> provided</font>,<font style="DISPLAY: inline; FONT-STYLE: italic"> however</font>, that, after the
Company Stockholder Consent is obtained, no amendment shall be made that by
Applicable Law requires further approval by such stockholders, without such
further approval being obtained. This Agreement may not be amended
except&#160;by a written instrument signed by an authorized representative of
each of the Parties.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.3
&#160;Notices.</font> Any notice or other communication required or permitted
hereunder shall be in writing and, unless delivery instructions are otherwise
expressly set forth above herein, either delivered personally (effective upon
delivery), by facsimile transmission (effective on the next day after
transmission), by recognized overnight delivery service (effective on the next
day after delivery to the service), or by registered or certified mail, postage
prepaid and return receipt requested (effective on the third Business Day after
the date of mailing), at the following addresses or facsimile transmission
numbers (or at such other address(es) or facsimile transmission number(s) for a
Party as shall be specified by like notice):same day</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">49</font></div>
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        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
        <div style="MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left">
          <table cellpadding="0" cellspacing="0" width="90%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></div>
                </td>
                <td valign="bottom" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
                <td valign="bottom" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              </tr><tr>
                <td valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">To
      the Company:</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">AquaMed
      Technologies, Inc.</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">850
      Third Avenue, Suite 1807</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">New
      York, New York 10022</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Attention:&#160;&#160;Chief
      Executive Officer</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Facsimile:
      (646) 218-1401</font></div>
                </td>
                <td valign="bottom" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
                <td valign="bottom" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              </tr><tr>
                <td valign="bottom" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
                <td valign="bottom" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
                <td valign="bottom" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              </tr><tr>
                <td valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">with
      a copy</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(which
      shall not constitute notice) to:</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Haynes
      and Boone LLP</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">1221
      Avenue of the Americas, 26<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font>
      Floor</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">New
      York, New York 10020</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Attention:&#160;&#160;Rick
      A. Werner, Esq.</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Facsimile:
      (212) 884-8234</font></div>
                </td>
                <td valign="bottom" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
                <td valign="bottom" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              </tr><tr>
                <td valign="bottom" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
                <td valign="bottom" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
                <td valign="bottom" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              </tr><tr>
                <td valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">To
      Parent or Merger Sub:</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">HepaLife
      Technologies, Inc.</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">60
      State Street,</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Suite
      700,</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Boston,
      MA 02109</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(800)
      299-4869</font></div>
                </td>
                <td valign="bottom" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
                <td valign="bottom" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              </tr><tr>
                <td valign="bottom" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
                <td valign="bottom" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
                <td valign="bottom" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              </tr><tr>
                <td valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">with
      a copy</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(which
      shall not constitute notice) to:</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Sierchio
      &amp; Company LLP</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">430
      Park Avenue, 7<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font>
      Floor</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">New
      York, New York 10022</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Attention:&#160;&#160;&#160;Joseph
      Sierchio, Esq.</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Facsimile:
      (212) 246-3039</font></div>
                </td>
                <td valign="bottom" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
                <td valign="bottom" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              </tr></table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.4 Counterparts;
Facsimile Signature. </font>This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the Parties and delivered to the other Parties, it being understood that all
Parties need not sign the same counterpart. This Agreement may be executed by
facsimile signature and a facsimile signature shall constitute an original for
all purposes.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">50</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.5 Severability.</font>
Any term or provision of this Agreement that is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be deemed modified to the minimum
extent necessary to make such term or provision valid and enforceable,<font style="DISPLAY: inline; FONT-STYLE: italic"> provided</font> that if such term
or provision is incapable of being so modified, then such term or provision
shall be deemed ineffective to the extent of such invalidity or unenforceability
without rendering invalid or unenforceable the remaining terms and provisions of
this Agreement or affecting the validity or enforceability of any of the terms
or provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.6 Entire Agreement; No
Third Party Beneficiaries.</font> This Agreement (together with the Transaction
Documents and the documents and instruments delivered by the Parties in
connection with this Agreement and each of the Transaction Documents)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the Parties with respect to the
subject matter hereof and is solely for the benefit of the Parties and their
respective successors, legal representatives and assigns and does not confer on
any Person other than the Parties any rights or remedies hereunder. The
representations and warranties in this Agreement are the product of negotiations
among the Parties and are for the sole benefit of the Parties. Any inaccuracies
in such representations and warranties are subject to waiver by the Party for
whose benefit such representation and warranty was made in accordance with <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.9</font> without
notice of liability to any other Person.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.7 Assignment.</font>
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the Parties (whether by operation of Applicable Law
or otherwise) without the prior written consent of the other Parties, and any
such attempted assignment without such consent shall be immediately null and
void. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the Parties and their respective
successors and assigns.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.8 Waivers.</font> At
any time prior to the Effective Time, to the extent legally allowed:
(a)&#160;any Party may extend the time for the performance of any of the
obligations or other acts of the other Parties, (b)&#160;any Party for whose
benefit a representation or warranty was made may waive any inaccuracies in the
representations and warranties of the other Parties contained herein or in any
document delivered pursuant hereto, and (c)&#160;any Party may waive performance
of any of the covenants or agreements of the other Parties, or satisfaction of
any of the conditions to its obligations to effect the Merger, contained herein.
Any agreement on the part of a Party to any such extension or waiver shall be
valid only if set forth in a written instrument signed by an authorized
representative of such Party. Except as provided in this Agreement, no action
taken pursuant to this Agreement, including any investigation by or on behalf of
any Party, shall be deemed to constitute a waiver by the Party taking such
action of compliance with any representations, warranties, covenants or
agreements contained in this Agreement. The waiver by any Party of a breach of
any provision hereof shall not operate or be construed as a waiver of any prior
or subsequent breach of the same or any other provisions
hereof.</font></div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">51</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.9
Incorporation.</font> Exhibits and Schedules referred to herein are attached to
and by this reference are incorporated herein for all purposes.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.10 No Remedy in
Certain Circumstances</font>. Each Party agrees that should any Governmental
Authority hold any provision of this Agreement or part hereof to be null, void
or unenforceable, or order any Party to take any action inconsistent herewith or
not to take an action consistent herewith or required hereby, the validity,
legality and enforceability of the remaining provisions and obligations
contained or set forth herein shall not in any way be affected or impaired
thereby. Except as otherwise contemplated by this Agreement, to the extent that
a Party took an action inconsistent herewith or failed to take action consistent
herewith or required hereby pursuant to an Order or judgment of a court or other
competent Governmental Authority, such Party shall not incur any liability or
obligation unless such Party did not in good faith seek to resist or object to
the imposition or entering of such Order or judgment.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.11</font><font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">No Strict Construction.</font> Each
of the parties hereto acknowledges that this Agreement has been prepared jointly
by the parties hereto, and shall not be strictly construed against any party
hereto.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.12 </font><font style="DISPLAY: inline; FONT-WEIGHT: bold">No Liability of Officers and
Directors</font>.&#160;&#160;The parties hereto acknowledge that the individuals
executing this Agreement on behalf of the Parent, the Company and Merger Sub, do
so on behalf of such entities and not in their individual
capacities.&#160;&#160;As such no officer, director, employee or agent of the
Parent, the Company or&#160;&#160;Merger Sub shall have any liability
hereunder.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.13 </font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Applicable Law.</font> Except to the
extent that the laws of the State of Delaware or Florida are mandatorily
applicable to the Merger, this Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to the
conflicts of laws provisions thereof that would apply the laws of any other
state.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
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            </div>
          </div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">52</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.14&#160;Jurisdiction;
Waiver of Jury Trial</font>. The Parties agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be exclusively brought in any federal court located in the State of
New York or any New York state court, and each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. Process in any such suit,
action or proceeding may be served on any Party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the
foregoing, each Party agrees that service of process on such Party in the manner
provided in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section&#160;9.3</font> shall be
deemed effective service of process on such Party. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[Signature
Page follows]</font></div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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<DOCUMENT>
<TYPE>EX-2.2
<SEQUENCE>3
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OF MERGER</font></div>
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DELAWARE CORPORATION</font></div>
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TECHNOLOGIES, INC.</font></div>
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DELAWARE CORPORATION</font></div>
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General Corporation Law</font></div>
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corporation (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company</font>&#8221;), does hereby certify
as follows:</font></div>
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corporations, the Company and HT Acquisition Corp., a Delaware corporation
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corporation duly organized and existing under the laws of the State of
Delaware.</font></div>
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Agreement</font>&#8221;), dated as of May 11, 2010, among the Company, and Merger Sub,
and HepaLife Technologies, Inc., a Florida corporation, setting forth the terms
and conditions of the merger of Merger Sub with and into the Company (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Merger</font>&#8221;), has been approved,
adopted, certified, executed and acknowledged by each of the constituent
corporations in accordance with Section&#160;251 of the Delaware General
Corporation Law.</font></div>
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incorporation of the Company, as in effect immediately prior to the Merger,
shall be the certificate of incorporation of the Surviving
Corporation.</font></div>
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Merger Agreement is on file at the principal place of business of the Surviving
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<TYPE>EX-4.1
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THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS 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 &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">SECURITIES ACT</font>&#8221;), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.&#160;&#160;THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.</font></div>
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E COMMON STOCK PURCHASE WARRANT</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HEPALIFE
TECHNOLOGIES, INC.</font></div>
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      No. E-______ </font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
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      Date: _______________________</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">THIS SERIES E COMMON STOCK PURCHASE
WARRANT</font> (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Warrant</font>&#8221;) certifies
that, for value received, ____________________________ (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Holder</font>&#8221;) is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Initial Exercise
Date</font>&#8221;) and on or prior to the close of business on the five year
anniversary of the Initial Exercise Date (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Termination Date</font>&#8221;)
but not thereafter (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Exercise Period</font>&#8221;), to
subscribe for and purchase from HepaLife Technologies, Inc., a Florida
corporation (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Company</font>&#8221;), up to
<font style="DISPLAY: inline; FONT-WEIGHT: bold">_____________________
</font>shares (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Warrant Shares</font>&#8221;) of
common stock, par value $0.001 per share (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Common
Stock</font>&#8221;).&#160;&#160;The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(b).</font></font></div>
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WARRANT IS BEING ISSUED PURSUANT TO THE TERMS OF THAT THAT CERTAIN SUBSCRIPTION
AGREEMENT (THE &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">SUBSCRIPTION
AGREEMENT</font>&#8221;)&#160;&#160;BETWEEN THE COMPANY AND THE SUBSCRIBER SIGNATORY
THERETO AND ACCEPTED BY THE COMPANY ON MAY 11, 2010.</font></div>
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Warrant.</font>&#160;&#160;Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company of a duly executed facsimile copy of the Notice of Exercise Form annexed
hereto (or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of the Holder
appearing on the books of the Company); and, within 3 Trading Days (as defined
below) of the date said Notice of Exercise is delivered to the Company, the
Company shall have received&#160;&#160;payment of the aggregate Exercise Price
of the shares thereby purchased by wire transfer or cashier&#8217;s check drawn on a
United States bank.&#160;&#160;Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the
Company until the Holder has purchased all of the Warrant Shares available
hereunder and the Warrant has been exercised in full, in which case, the Holder
shall surrender this Warrant to the Company for cancellation within 3 Trading
Days of the date the final Notice of Exercise is delivered to the
Company.&#160;&#160;Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased.&#160;&#160;The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such
purchases.&#160;&#160;The Company shall deliver any objection to any Notice of
Exercise Form within 2 Business Days following receipt of such
notice.&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">The Holder
and any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof. </font>For purposes of this Agreement, the term &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Trading Day</font>&#8221; means
any day on which the New York Stock Exchange is open for business.</font></div>
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Price</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;The exercise
price per share of the Common Stock under this Warrant shall be <font style="DISPLAY: inline; FONT-WEIGHT: bold">$0.16,</font> subject to adjustment
hereunder (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Exercise
Price</font>&#8221;).</font></div>
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Limitations</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> The
Company shall not effect any exercise of this Warrant, and a Holder shall not
have the right to exercise any portion of this Warrant, pursuant to Section 1 or
otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, the Holder (together
with the Holder&#8217;s Affiliates (as defined in the Subscription Agreement), and any
other person or entity acting as a group together with the Holder or any of the
Holder&#8217;s Affiliates), would beneficially own shares of Common Stock in excess of
the Beneficial Ownership Limitation (as defined below).&#160; For purposes of
the foregoing sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which such
determination is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (A) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of its
Affiliates and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company&#160;&#160;subject to a
limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its Affiliates.&#160; Except
as set forth in the preceding sentence, for purposes of this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(c),</font> beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act of 1934 as amended (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Exchange Act</font>&#8221;) and
the rules and regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such calculation
is in compliance with Section 13(d) of the Exchange Act and the Holder is solely
responsible for any schedules required to be filed in accordance
therewith.&#160;&#160;&#160;To the extent that the limitation contained in this
<font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(c)</font> applies,
the determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates) and of which
portion of this Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed to be the
Holder&#8217;s determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates) and of which
portion of this Warrant is exercisable, in each case subject to the Beneficial
Ownership Limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination.&#160;&#160;&#160;In addition, a
determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder.&#160;&#160;For purposes of this Section
1(c), in determining the number of outstanding shares of Common Stock, a Holder
may rely on the number of outstanding shares of Common Stock as reflected in (x)
the Company&#8217;s most recent periodic or annual report, as the case may be, (y) a
more recent public announcement by the Company or (z) any other notice by the
Company or the Company&#8217;s transfer agent setting forth the number of shares of
Common Stock outstanding.&#160; Upon the written or oral request of a Holder,
the Company shall within two Trading Days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding.&#160; In any case,
the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported.&#160;&#160;The &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Beneficial Ownership
Limitation</font>&#8221; shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant.&#160;&#160;The Holder, upon not
less than 61 days&#8217; prior notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(c),</font> provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 1(c) shall continue to
apply.&#160;&#160;Any such increase or decrease will not be effective until the
61<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">st</font> day
after such notice is delivered to the Company.&#160;&#160;The provisions of this
paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 1(c) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of
this Warrant.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Mechanics of
Exercise</font>.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">i.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Delivery
of Certificates Upon Exercise</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;Certificates for
shares purchased hereunder shall be transmitted by the transfer agent of the
Company to the Holder by physical delivery to the address specified by the
Holder in the Notice of Exercise within 3 Trading Days from the delivery to the
Company of the Notice of Exercise Form, surrender of this Warrant (if required)
and payment of the aggregate Exercise Price as set forth above (&#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Warrant Share Delivery
Date</font>&#8221;).&#160;&#160;This Warrant shall be deemed to have been exercised on
the date the Exercise Price is received by the Company.&#160;&#160;The Warrant
Shares shall be deemed to have been issued, and the Holder or any other person
so designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Exercise Price and all taxes required
to be paid by the Holder, if any, pursuant to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(d)(v)</font> prior to the
issuance of such shares, have been paid.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ii.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Delivery
of New Warrants Upon Exercise</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;If this Warrant
shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver to the Holder a
new Warrant evidencing the rights of the Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iii.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Rescission
Rights</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;If the Company
fails to cause its transfer agent to transmit to the Holder a certificate or
certificates representing the Warrant Shares pursuant to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(d)(i)</font> by the Warrant
Share Delivery Date, then the Holder will have the right to rescind such
exercise.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iv.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">No
Fractional Shares or Scrip</font>.&#160;&#160;No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant.&#160;&#160;As to any fraction of a share which Holder would otherwise
be entitled to purchase upon such exercise, the Company shall at its election,
either pay a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up to the next
whole share.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">v.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Charges,
Taxes and Expenses</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;Issuance of
certificates for Warrant Shares shall be made without charge to the Holder for
any issue or transfer tax or other incidental expense in respect of the issuance
of such certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the Holder or in
such name or names as may be directed by the Holder; <font style="DISPLAY: inline; TEXT-DECORATION: underline">provided</font>, <font style="DISPLAY: inline; TEXT-DECORATION: underline">however</font>, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">vi.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Closing
of Books</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;The Company will
not close its stockholder books or records in any manner which prevents the
timely exercise of this Warrant, pursuant to the terms hereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
2.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Adjustment
Provisions</font>. During the Exercise Period, the Exercise Price and the number
of Warrant Shares issuable hereunder shall be subject to adjustment from time to
time as provided in this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2</font>.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Stock
Dividends and Splits</font>. If the Company, at any time during the Exercise
Period, subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) its shares of Common Stock into a
greater number of shares, then, after the date of record for effecting such
subdivision, the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced. If the Company, at any time during the
Exercise Period, combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) its shares of Common Stock into a
smaller number of shares, then, after the date of record for effecting such
combination, the Exercise Price in effect immediately prior to such combination
shall be proportionately increased.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Fundamental
Transaction</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> If,
at any time while this Warrant is outstanding, (A) the Company effects any
merger or consolidation of the Company with or into another Person (as defined
in the Subscription Agreement), (B) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (C)
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 (D) 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 &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Fundamental
Transaction</font>&#8221;), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Alternate
Consideration</font>&#8221;) receivable as a result of such merger, consolidation or
disposition of assets by a holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event. For purposes
of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.&#160;&#160;If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction.&#160;&#160;To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new warrant consistent with the
foregoing provisions and evidencing the Holder&#8217;s right to exercise such warrant
into Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2(b)</font> and insuring that
this Warrant (or any such replacement security) will be similarly adjusted upon
any subsequent transaction analogous to a Fundamental Transaction.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Calculations.</font>
All calculations under this Section 2 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 2,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">d)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Voluntary
Adjustment By Company</font><font style="DISPLAY: inline; TEXT-DECORATION: underline">.</font> The Company may at
any time during the term of this Warrant reduce the then current Exercise Price,
without in the sole discretion of the Company increasing the number of shares
issuable upon exercise of this Warrant, to any amount and for any period of time
deemed appropriate by the Board of Directors of the Company.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Notice to
Holder.</font></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">i.</font>&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Adjustment
to Exercise Price</font>. Whenever the Exercise Price is adjusted pursuant to
any provision of this Section 2, the Company shall promptly mail to the Holder a
notice setting forth the Exercise Price after such adjustment and setting forth
a brief statement of the facts requiring such adjustment.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ii.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Notice to
Allow Exercise by Holder</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> If (A) the Company shall
declare a dividend (or any other distribution in whatever form) on the Common
Stock; (B) the Company shall declare a special nonrecurring cash dividend on or
a redemption of the Common Stock; (C) the Company shall authorize the granting
to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights; (D) the
approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, of any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon the Warrant
Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the corporate action required to be specified in such notice.&#160;&#160;The
Holder is entitled to exercise this Warrant during the period commencing on the
date of such notice to the effective date of the event triggering such
notice.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Section
3</font>.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Transfer of
Warrant</font>.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Transferability</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.&#160;&#160;</font>Subject to
compliance with any applicable securities laws, this Warrant and all rights
hereunder (including, without limitation, any registration rights) are
transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer.&#160;&#160;Upon such
surrender and, if required, such payment, the Company shall execute and deliver
a new Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled.&#160;&#160;A
Warrant, if properly assigned, may be exercised by a new holder for the purchase
of Warrant Shares without having a new Warrant issued.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">New
Warrants</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney.&#160;&#160;Subject to compliance
with Section 3(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated
the Issue Date set forth above and shall be identical with this Warrant except
as to the number of Warrant Shares issuable pursuant thereto.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Warrant
Register</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Warrant Register</font>&#8221;),
in the name of the record Holder hereof from time to time.&#160;&#160;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.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">d)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Transfer
Restrictions</font>. <font style="DISPLAY: inline">If</font>, at the <font style="DISPLAY: inline">time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective </font>registration<font style="DISPLAY: inline"> statement under the Securities Act</font> and <font style="DISPLAY: inline">under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer, that the Holder
or transferee of this Warrant, as the case may be, </font><font style="DISPLAY: inline">comply with the transfer provisions the Subscription
Agreement.</font></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Section
4</font>.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Call of Warrant</font>.
&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Procedures.</font>
The Company may at any time, subject to the conditions set forth herein, call
for the exercise of this Warrant (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Call Notice</font>&#8221;) if the
fair market value of the Common Stock for the twenty (20) consecutive Trading
Days ending three (3) days prior to the date of the Call Notice is at least
$0.33, subject to adjustment for stock dividends, stock splits and other
anti-dilution provisions as provided for in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2</font> of this Warrant. For
purposes of this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
4(a),</font> &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">fair
market value</font>&#8221; at any date shall be deemed to be, as applicable: (i) the
last sale price as reported on the principal national securities exchange on
which the Common Stock is listed or admitted to trading; or (ii) if the Common
Stock is not listed or admitted for trading on any national securities exchange,
the average of the closing bid and asked prices, as reported on the OTC Bulletin
Board or if no such quotation is available, then the closing bid and asked
prices in the over-the-counter market as furnished by the National Quotation
Bureau, Inc; or (iii) if the Common Stock is not listed or admitted for trading
on any national securities exchange, no quotation is available on the OTC
Bulletin Board and no closing and asked prices are available from National
Quotation Bureau, Inc., then the value determined by an independent, qualified
appraiser selected by the Company in good faith. The Call Notice shall be deemed
effective upon mailing and the time of mailing is the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Effective Date of the
Notice</font>.&#8221; The Call Notice shall state the exercise period and cancellation
date not less than thirty (30) days from the Effective Date of the Notice (the
&#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Cancellation
Date</font>&#8221;). In the event the number of shares of Common Stock issuable upon
exercise of this Warrant being called are adjusted pursuant to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2</font> hereof, then upon
each such adjustment the Exercise Price will be adjusted by multiplying the
Exercise Price in effect immediately prior to such adjustment by a fraction, the
numerator of which is the number of shares of Common Stock issuable upon
exercise of this Warrant being exercised immediately prior to such adjustment
and the denominator of which is the number of shares of Common Stock issuable
upon exercise of this Warrant being exercised immediately after such adjustment.
The Holder may exercise this Warrant between the Effective Date of the Notice
and the Cancellation Date, such exercise being effective if done in accordance
with <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1</font> hereof,
and if this Warrant, with the form of election to purchase duly executed, and
the Exercise Price are actually received by the Company at its offices no later
than 5:00 PM Eastern Time on or prior to the Cancellation Date.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Return
of Warrant.</font> If the Holder does not wish to exercise this Warrant, the
Holder should mail this Warrant to the Company at its offices after receiving
the Call Notice required by this Section. If the Call Notice shall have been so
mailed, then, on and after such Cancellation Date, notwithstanding that this
Warrant subject to the Call Notice shall not have been surrendered for
redemption, the obligation evidenced by this Warrant not so surrendered or
effectively exercised shall be deemed no longer outstanding, and all rights with
respect hereto shall forthwith cease and terminate.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Section
5</font>.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Miscellaneous</font>.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">No Rights
as Shareholder Until Exercise</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;This Warrant does
not entitle the Holder to any voting rights or other rights as a shareholder of
the Company prior to the exercise hereof as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(a).</font></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Loss,
Theft, Destruction or Mutilation of Warrant</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock
certificate.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Saturdays,
Sundays, Holidays, etc</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a business day, then such action may be
taken or such right may be exercised on the next succeeding business
day.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">d)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Authorized
Shares</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;The Company
covenants that during the period the Warrant is outstanding, it will reserve
from its authorized and unissued Common Stock a sufficient number of shares to
provide for the issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant.&#160;&#160;The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant.&#160;&#160;The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or regulation, or of any
requirements of the Trading Market upon which the Common Stock may be
listed.&#160;&#160;The Company covenants that all Warrant Shares which may be
issued upon the exercise of the purchase rights represented by this Warrant
will, upon exercise of the purchase rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with
such issue).&#160;&#160;&#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Trading Market</font>&#8221; means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the NYSE Amex, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange or the OTC Bulletin Board.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its articles of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment.&#160;&#160;Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this
Warrant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">e)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Jurisdiction</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> All questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
determined in accordance with the provisions of the Subscription
Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">f)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Restrictions</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;The Holder
acknowledges that the Warrant Shares acquired upon the exercise of this Warrant,
if not registered, will have restrictions upon resale imposed by state and
federal securities laws.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">g)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Nonwaiver
and Expenses</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;No course of
dealing or any delay or failure to exercise any right hereunder on the part of
Holder shall operate as a waiver of such right or otherwise prejudice the
Holder&#8217;s rights, powers or remedies, notwithstanding the fact that all rights
hereunder terminate on the Termination Date.&#160;&#160;If the Company willfully
and knowingly fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to the Holder such
amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys&#8217; fees, including those of appellate
proceedings, incurred by the Holder enforcing any of its rights, powers or
remedies hereunder.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">h)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Notices</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;Any notice,
request or other document required or permitted to be given or delivered to the
Holder by the Company shall be delivered in accordance with the notice
provisions of the Subscription Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">i)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Limitation
of Liability</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;No provision
hereof, in the absence of any affirmative action by the Holder to exercise this
Warrant to purchase Warrant Shares, and no enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the
Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">j)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Remedies</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> The Holder, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Warrant.&#160;&#160;The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive and not to assert the
defense in any action for specific performance that a remedy at law would be
adequate.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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and Assigns</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;Subject to
applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of the
Holder.&#160;&#160;The provisions of this Warrant are intended to be for the
benefit of all holders from time to time of this Warrant and shall be
enforceable by the Holder or holder of Warrant Shares.</font></div>
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be modified or amended or the provisions hereof waived with the written consent
of the Company and the Holder.</font></div>
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possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.</font></div>
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headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.</font></div>
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Company has caused this Warrant to be executed by its officer thereunto duly
authorized as of the date first above indicated.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
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                <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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                <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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                <td valign="top" width="3%" style="PADDING-BOTTOM: 2px">
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OF EXERCISE</font></div>
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Warrant)</font></div>
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INC.</font></font></div>
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undersigned hereby elects to purchase ______________Warrant Shares of the
Company pursuant to the terms of the attached <font style="DISPLAY: inline; FONT-WEIGHT: bold">Series E Warrant</font> (only if
exercised in full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.</font></div>
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issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:</font></div>
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Investor</font>.&#160;&#160;The undersigned is an &#8220;accredited investor&#8221; as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.</font></div>
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OF HOLDER]</font></div>
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_______________________________________________________________________</font></div>
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_________________________________________________</font></div>
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Authorized Signatory:
___________________________________________________________________</font></div>
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Authorized Signatory:
____________________________________________________________________</font></div>
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_______________________________________________________________________________________</font></div>
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FORM</font></div>
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assign the foregoing warrant, execute</font></div>
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all<font style="FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">1</font>;
or</font></div>
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foregoing Series E Warrant and all rights evidenced thereby are hereby assigned
to</font></div>
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whose address is</font></div>
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_______</font></div>
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<tr>
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              <td width="20%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td width="20%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td width="20%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td width="20%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td width="20%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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              <td width="20%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td width="20%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td width="20%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td width="20%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td width="20%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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              <td width="20%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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Guaranteed:&#160;&#160;___________________________________________</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTE:&#160;&#160;The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Series E Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust
company.&#160;&#160;Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Series E Warrant.</font></div>
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if the entire Series E Warrant is being assigned.</font></div>
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">2</font> If
less than the entire Series E Warrant is being assigned, please indicate the
number of shares as to which the assignment is to be
effected.</font></div>
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<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>5
<FILENAME>e606965_ex4-2.htm
<TEXT>
<html>
<head>
    <title>Unassociated Document</title>
    <!--Licensed to: edata-->
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    <!--Copyright 1995 - 2009 Thomson Reuters. All rights reserved.-->
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<body bgcolor="#ffffff" style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
    <div>&#160;</div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS 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 &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">SECURITIES ACT</font>&#8221;), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.&#160;&#160;THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SERIES
F COMMON STOCK PURCHASE WARRANT</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HEPALIFE
TECHNOLOGIES, INC.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    </div>
    <div>
      <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Warrant
      No. F-______ </font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">

                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Warrant
      Shares: <font style="DISPLAY: inline; FONT-WEIGHT: bold">_________</font>
      </font></div>
              </div>
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            <td width="5%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            <td nowrap width="25%">

              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">

                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Issue
      Date: _______________________</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Initial
      Exercise Date: ________________</font></div>
            </td>
          </tr></table>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">THIS SERIES F COMMON STOCK PURCHASE
WARRANT</font> (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Warrant</font>&#8221;) certifies
that, for value received, ____________________________ (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Holder</font>&#8221;) is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Initial Exercise
Date</font>&#8221;) and on or prior to the close of business on the five year
anniversary of the Initial Exercise Date (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Termination Date</font>&#8221;)
but not thereafter (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Exercise Period</font>&#8221;), to
subscribe for and purchase from HepaLife Technologies, Inc., a Florida
corporation (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Company</font>&#8221;), up to
<font style="DISPLAY: inline; FONT-WEIGHT: bold">_____________________
</font>shares (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Warrant Shares</font>&#8221;) of
common stock, par value $0.001 per share (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Common
Stock</font>&#8221;).&#160;&#160;The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(b).</font></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THIS
WARRANT IS BEING ISSUED PURSUANT TO THE TERMS OF THAT THAT CERTAIN SUBSCRIPTION
AGREEMENT (THE &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">SUBSCRIPTION
AGREEMENT</font>&#8221;), BETWEEN THE COMPANY AND THE SUBSCRIBER SIGNATORY THERETO AND
ACCEPTED BY THE COMPANY ON MAY 11, 2010.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Section
1</font>.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Exercise</font>.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Exercise of
Warrant.</font>&#160;&#160;Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company of a duly executed facsimile copy of the Notice of Exercise Form annexed
hereto (or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of the Holder
appearing on the books of the Company); and, within 3 Trading Days (as defined
below) of the date said Notice of Exercise is delivered to the Company, the
Company shall have received&#160;&#160;payment of the aggregate Exercise Price
of the shares thereby purchased by wire transfer or cashier&#8217;s check drawn on a
United States bank.&#160;&#160;Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the
Company until the Holder has purchased all of the Warrant Shares available
hereunder and the Warrant has been exercised in full, in which case, the Holder
shall surrender this Warrant to the Company for cancellation within 3 Trading
Days of the date the final Notice of Exercise is delivered to the
Company.&#160;&#160;Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased.&#160;&#160;The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such
purchases.&#160;&#160;The Company shall deliver any objection to any Notice of
Exercise Form within 2 Business Days following receipt of such
notice.&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">The Holder
and any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof. </font>For purposes of this Agreement, the term &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Trading Day</font>&#8221; means
any day on which the New York Stock Exchange is open for business.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Exercise
Price</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;The exercise
price per share of the Common Stock under this Warrant shall be <font style="DISPLAY: inline; FONT-WEIGHT: bold">$0.20,</font> subject to adjustment
hereunder (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Exercise
Price</font>&#8221;).</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Exercise
Limitations</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> The
Company shall not effect any exercise of this Warrant, and a Holder shall not
have the right to exercise any portion of this Warrant, pursuant to Section 1 or
otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, the Holder (together
with the Holder&#8217;s Affiliates (as defined in the Subscription Agreement), and any
other person or entity acting as a group together with the Holder or any of the
Holder&#8217;s Affiliates), would beneficially own shares of Common Stock in excess of
the Beneficial Ownership Limitation (as defined below).&#160; For purposes of
the foregoing sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which such
determination is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (A) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of its
Affiliates and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company&#160;&#160;subject to a
limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its Affiliates.&#160; Except
as set forth in the preceding sentence, for purposes of this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(c),</font> beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act of 1934 as amended (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Exchange Act</font>&#8221;) and
the rules and regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such calculation
is in compliance with Section 13(d) of the Exchange Act and the Holder is solely
responsible for any schedules required to be filed in accordance
therewith.&#160;&#160;&#160;To the extent that the limitation contained in this
<font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(c)</font> applies,
the determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates) and of which
portion of this Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed to be the
Holder&#8217;s determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates) and of which
portion of this Warrant is exercisable, in each case subject to the Beneficial
Ownership Limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination.&#160;&#160;&#160;In addition, a
determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder.&#160;&#160;For purposes of this Section
1(c), in determining the number of outstanding shares of Common Stock, a Holder
may rely on the number of outstanding shares of Common Stock as reflected in (x)
the Company&#8217;s most recent periodic or annual report, as the case may be, (y) a
more recent public announcement by the Company or (z) any other notice by the
Company or the Company&#8217;s transfer agent setting forth the number of shares of
Common Stock outstanding.&#160; Upon the written or oral request of a Holder,
the Company shall within two Trading Days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding.&#160; In any case,
the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported.&#160;&#160;The &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Beneficial Ownership
Limitation</font>&#8221; shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant.&#160;&#160;The Holder, upon not
less than 61 days&#8217; prior notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(c),</font> provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 1(c) shall continue to
apply.&#160;&#160;Any such increase or decrease will not be effective until the
61<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">st</font> day
after such notice is delivered to the Company.&#160;&#160;The provisions of this
paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 1(c) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of
this Warrant.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Mechanics of
Exercise</font>.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">i.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Delivery
of Certificates Upon Exercise</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;Certificates for
shares purchased hereunder shall be transmitted by the transfer agent of the
Company to the Holder by physical delivery to the address specified by the
Holder in the Notice of Exercise within 3 Trading Days from the delivery to the
Company of the Notice of Exercise Form, surrender of this Warrant (if required)
and payment of the aggregate Exercise Price as set forth above (&#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Warrant Share Delivery
Date</font>&#8221;).&#160;&#160;This Warrant shall be deemed to have been exercised on
the date the Exercise Price is received by the Company.&#160;&#160;The Warrant
Shares shall be deemed to have been issued, and the Holder or any other person
so designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Exercise Price and all taxes required
to be paid by the Holder, if any, pursuant to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(d)(v)</font> prior to the
issuance of such shares, have been paid.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ii.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Delivery
of New Warrants Upon Exercise</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;If this Warrant
shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver to the Holder a
new Warrant evidencing the rights of the Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iii.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Rescission
Rights</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;If the Company
fails to cause its transfer agent to transmit to the Holder a certificate or
certificates representing the Warrant Shares pursuant to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(d)(i)</font> by the Warrant
Share Delivery Date, then the Holder will have the right to rescind such
exercise.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iv.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">No
Fractional Shares or Scrip</font>.&#160;&#160;No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant.&#160;&#160;As to any fraction of a share which Holder would otherwise
be entitled to purchase upon such exercise, the Company shall at its election,
either pay a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up to the next
whole share.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">v.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Charges,
Taxes and Expenses</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;Issuance of
certificates for Warrant Shares shall be made without charge to the Holder for
any issue or transfer tax or other incidental expense in respect of the issuance
of such certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the Holder or in
such name or names as may be directed by the Holder; <font style="DISPLAY: inline; TEXT-DECORATION: underline">provided</font>, <font style="DISPLAY: inline; TEXT-DECORATION: underline">however</font>, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">vi.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Closing
of Books</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;The Company will
not close its stockholder books or records in any manner which prevents the
timely exercise of this Warrant, pursuant to the terms hereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
2.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Adjustment
Provisions</font>. During the Exercise Period, the Exercise Price and the number
of Warrant Shares issuable hereunder shall be subject to adjustment from time to
time as provided in this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2</font>.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Stock
Dividends and Splits</font>. If the Company, at any time during the Exercise
Period, subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) its shares of Common Stock into a
greater number of shares, then, after the date of record for effecting such
subdivision, the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced. If the Company, at any time during the
Exercise Period, combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) its shares of Common Stock into a
smaller number of shares, then, after the date of record for effecting such
combination, the Exercise Price in effect immediately prior to such combination
shall be proportionately increased.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Fundamental
Transaction</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> If,
at any time while this Warrant is outstanding, (A) the Company effects any
merger or consolidation of the Company with or into another Person (as defined
in the Subscription Agreement), (B) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (C)
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 (D) 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 &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Fundamental
Transaction</font>&#8221;), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Alternate
Consideration</font>&#8221;) receivable as a result of such merger, consolidation or
disposition of assets by a holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event. For purposes
of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.&#160;&#160;If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction.&#160;&#160;To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new warrant consistent with the
foregoing provisions and evidencing the Holder&#8217;s right to exercise such warrant
into Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2(b)</font> and insuring that
this Warrant (or any such replacement security) will be similarly adjusted upon
any subsequent transaction analogous to a Fundamental Transaction.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Calculations.</font>
All calculations under this Section 2 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 2,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">d)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Voluntary
Adjustment By Company</font><font style="DISPLAY: inline; TEXT-DECORATION: underline">.</font> The Company may at
any time during the term of this Warrant reduce the then current Exercise Price,
without in the sole discretion of the Company increasing the number of shares
issuable upon exercise of this Warrant, to any amount and for any period of time
deemed appropriate by the Board of Directors of the Company.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Notice to
Holder.</font></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">i.</font>&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Adjustment
to Exercise Price</font>. Whenever the Exercise Price is adjusted pursuant to
any provision of this Section 2, the Company shall promptly mail to the Holder a
notice setting forth the Exercise Price after such adjustment and setting forth
a brief statement of the facts requiring such adjustment.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ii.&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Notice to
Allow Exercise by Holder</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> If (A) the Company shall
declare a dividend (or any other distribution in whatever form) on the Common
Stock; (B) the Company shall declare a special nonrecurring cash dividend on or
a redemption of the Common Stock; (C) the Company shall authorize the granting
to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights; (D) the
approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, of any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon the Warrant
Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the corporate action required to be specified in such notice.&#160;&#160;The
Holder is entitled to exercise this Warrant during the period commencing on the
date of such notice to the effective date of the event triggering such
notice.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Section
3</font>.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Transfer of
Warrant</font>.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Transferability</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.&#160;&#160;</font>Subject to
compliance with any applicable securities laws, this Warrant and all rights
hereunder (including, without limitation, any registration rights) are
transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer.&#160;&#160;Upon such
surrender and, if required, such payment, the Company shall execute and deliver
a new Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled.&#160;&#160;A
Warrant, if properly assigned, may be exercised by a new holder for the purchase
of Warrant Shares without having a new Warrant issued.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">New
Warrants</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney.&#160;&#160;Subject to compliance
with Section 3(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. All Warrants issued on transfers or exchanges shall be dated
the Issue Date set forth above and shall be identical with this Warrant except
as to the number of Warrant Shares issuable pursuant thereto.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Warrant
Register</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Warrant Register</font>&#8221;),
in the name of the record Holder hereof from time to time.&#160;&#160;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.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">d)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Transfer
Restrictions</font>. <font style="DISPLAY: inline">If</font>, at the <font style="DISPLAY: inline">time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective </font>registration<font style="DISPLAY: inline"> statement under the Securities Act</font> and <font style="DISPLAY: inline">under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer, that the Holder
or transferee of this Warrant, as the case may be, </font><font style="DISPLAY: inline">comply with the transfer provisions the Subscription
Agreement.</font></font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Section
4</font>.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Call of Warrant</font>.
&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Procedures.</font>
The Company may at any time, subject to the conditions set forth herein, call
for the exercise of this Warrant (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Call Notice</font>&#8221;) if the
fair market value of the Common Stock for the twenty (20) consecutive Trading
Days ending three (3) days prior to the date of the Call Notice is at least
$0.41, subject to adjustment for stock dividends, stock splits and other
anti-dilution provisions as provided for in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2</font> of this Warrant. For
purposes of this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
4(a),</font> &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">fair
market value</font>&#8221; at any date shall be deemed to be, as applicable: (i) the
last sale price as reported on the principal national securities exchange on
which the Common Stock is listed or admitted to trading; or (ii) if the Common
Stock is not listed or admitted for trading on any national securities exchange,
the average of the closing bid and asked prices, as reported on the OTC Bulletin
Board or if no such quotation is available, then the closing bid and asked
prices in the over-the-counter market as furnished by the National Quotation
Bureau, Inc; or (iii) if the Common Stock is not listed or admitted for trading
on any national securities exchange, no quotation is available on the OTC
Bulletin Board and no closing and asked prices are available from National
Quotation Bureau, Inc., then the value determined by an independent, qualified
appraiser selected by the Company in good faith. The Call Notice shall be deemed
effective upon mailing and the time of mailing is the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Effective Date of the
Notice</font>.&#8221; The Call Notice shall state the exercise period and cancellation
date not less than thirty (30) days from the Effective Date of the Notice (the
&#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Cancellation
Date</font>&#8221;). In the event the number of shares of Common Stock issuable upon
exercise of this Warrant being called are adjusted pursuant to <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2</font> hereof, then upon
each such adjustment the Exercise Price will be adjusted by multiplying the
Exercise Price in effect immediately prior to such adjustment by a fraction, the
numerator of which is the number of shares of Common Stock issuable upon
exercise of this Warrant being exercised immediately prior to such adjustment
and the denominator of which is the number of shares of Common Stock issuable
upon exercise of this Warrant being exercised immediately after such adjustment.
The Holder may exercise this Warrant between the Effective Date of the Notice
and the Cancellation Date, such exercise being effective if done in accordance
with <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1</font> hereof,
and if this Warrant, with the form of election to purchase duly executed, and
the Exercise Price are actually received by the Company at its offices no later
than 5:00 PM Eastern Time on or prior to the Cancellation Date.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Return
of Warrant.</font> If the Holder does not wish to exercise this Warrant, the
Holder should mail this Warrant to the Company at its offices after receiving
the Call Notice required by this Section. If the Call Notice shall have been so
mailed, then, on and after such Cancellation Date, notwithstanding that this
Warrant subject to the Call Notice shall not have been surrendered for
redemption, the obligation evidenced by this Warrant not so surrendered or
effectively exercised shall be deemed no longer outstanding, and all rights with
respect hereto shall forthwith cease and terminate.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
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          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Section
5</font>.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Miscellaneous</font>.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">No Rights
as Shareholder Until Exercise</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;This Warrant does
not entitle the Holder to any voting rights or other rights as a shareholder of
the Company prior to the exercise hereof as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1(a).</font></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Loss,
Theft, Destruction or Mutilation of Warrant</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock
certificate.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Saturdays,
Sundays, Holidays, etc</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a business day, then such action may be
taken or such right may be exercised on the next succeeding business
day.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">d)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Authorized
Shares</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;The Company
covenants that during the period the Warrant is outstanding, it will reserve
from its authorized and unissued Common Stock a sufficient number of shares to
provide for the issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant.&#160;&#160;The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant.&#160;&#160;The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or regulation, or of any
requirements of the Trading Market upon which the Common Stock may be
listed.&#160;&#160;The Company covenants that all Warrant Shares which may be
issued upon the exercise of the purchase rights represented by this Warrant
will, upon exercise of the purchase rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with
such issue).&#160;&#160;&#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Trading Market</font>&#8221; means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the NYSE Amex, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange or the OTC Bulletin Board.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its articles of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment.&#160;&#160;Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this
Warrant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        </div>
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          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">e)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Jurisdiction</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> All questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
determined in accordance with the provisions of the Subscription
Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">f)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Restrictions</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;The Holder
acknowledges that the Warrant Shares acquired upon the exercise of this Warrant,
if not registered, will have restrictions upon resale imposed by state and
federal securities laws.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">g)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Nonwaiver
and Expenses</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;No course of
dealing or any delay or failure to exercise any right hereunder on the part of
Holder shall operate as a waiver of such right or otherwise prejudice the
Holder&#8217;s rights, powers or remedies, notwithstanding the fact that all rights
hereunder terminate on the Termination Date.&#160;&#160;If the Company willfully
and knowingly fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to the Holder such
amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys&#8217; fees, including those of appellate
proceedings, incurred by the Holder enforcing any of its rights, powers or
remedies hereunder.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">h)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Notices</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;Any notice,
request or other document required or permitted to be given or delivered to the
Holder by the Company shall be delivered in accordance with the notice
provisions of the Subscription Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">i)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Limitation
of Liability</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;No provision
hereof, in the absence of any affirmative action by the Holder to exercise this
Warrant to purchase Warrant Shares, and no enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the
Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">j)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Remedies</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font> The Holder, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Warrant.&#160;&#160;The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive and not to assert the
defense in any action for specific performance that a remedy at law would be
adequate.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
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          </div>
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      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">k)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Successors
and Assigns</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;Subject to
applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of the
Holder.&#160;&#160;The provisions of this Warrant are intended to be for the
benefit of all holders from time to time of this Warrant and shall be
enforceable by the Holder or holder of Warrant Shares.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">l)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Amendment</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;This Warrant may
be modified or amended or the provisions hereof waived with the written consent
of the Company and the Holder.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">m)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Severability</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font>&#160;&#160;Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">n)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Headings</font>.&#160;&#160;The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">IN WITNESS WHEREOF</font>, the
Company has caused this Warrant to be executed by its officer thereunto duly
authorized as of the date first above indicated.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">
        <table border="0" cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td colspan="3" valign="top" width="100%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">HEPALIFE TECHNOLOGIES,
      INC.</font></font></div>
              </td>
            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            </tr><tr>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px">

                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">By:&#160;</font></div>
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OF EXERCISE</font></div>
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INC.</font></font></div>
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Company pursuant to the terms of the attached <font style="DISPLAY: inline; FONT-WEIGHT: bold">Series F Warrant</font> (only if
exercised in full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.</font></div>
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Investor</font>.&#160;&#160;The undersigned is an &#8220;accredited investor&#8221; as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.</font></div>
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all<font style="FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">1</font>;
or</font></div>
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to</font></div>
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the face of the Series F Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust
company.&#160;&#160;Officers of corporations and those acting in a fiduciary or
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less than the entire Series F Warrant is being assigned, please indicate the
number of shares as to which the assignment is to be
effected.</font></div>
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<DOCUMENT>
<TYPE>EX-9.1
<SEQUENCE>6
<FILENAME>e606965_ex9-1.htm
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<head>
    <title>Unassociated Document</title>
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    <div>&#160;</div>
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</a><a name="bmkPageNumber"><!--EFPlaceholder-->
</a>STOCKHOLDER VOTING AGREEMENT AND
IRREVOCABLE PROXY</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THIS
STOCKHOLDER VOTING AGREEMENT AND IRREVOCABLE PROXY (this &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Agreement</font>&#8221;) is made,
entered into, and effective as of May 11, 2010, by and among HepaLife
Technologies, Inc., a Florida corporation (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Company</font>&#8221;), Harborview
Master Fund LP (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Agent</font>&#8221;) and the
persons listed on <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule A</font> to this
Agreement (each, a &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Stockholder</font>&#8221; and,
collectively, the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Stockholders</font>&#8221;).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">RECITALS</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">WHEREAS,
concurrently with the execution and delivery of this Agreement, the Company is
entering into an Agreement and Plan of Merger (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Merger Agreement</font>&#8221;),
by and among the Company, HT Acquisition Corp., a Delaware corporation (&#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Merger Sub</font>&#8221;), and
AquaMed Technologies, Inc., a Delaware corporation ("<font style="DISPLAY: inline; TEXT-DECORATION: underline">AquaMed</font>") pursuant to
which Merger Sub shall be merged with and into AquaMed with AquaMed surviving as
a wholly-owned subsidiary of the Company;</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">WHEREAS,
pursuant to the Merger Agreement, all of the issued and outstanding shares of
Company Merger Stock (as defined in the Merger Agreement) will be exchanged and
converted into the right to receive shares of Parent Common Stock (as defined in
the Merger Agreement) constituting the Merger Consideration (as defined in the
Merger Agreement), all upon the terms and subject to the conditions set forth in
the Merger Agreement;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">WHEREAS,
as of the date of this Agreement, each Stockholder is the &#8220;beneficial owner&#8221; (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
which meaning shall apply for all purposes of this Agreement) of the number of
shares of the outstanding common stock of the Company as set forth on Schedule A
of this Agreement;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">WHEREAS,
pursuant to Section 1.6(b) of the Merger Agreement, at the Effective Time (as
defined in the Merger Agreement), the size of the Board of Directors of the
Company (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Board of
Directors</font>&#8221;) shall be three members, and each of the Stockholders desires
to vote the Shares (as defined below) in favor of the election of the
individuals set forth on <font style="DISPLAY: inline; FONT-WEIGHT: bold">Schedule 1.6(b)</font> of the Merger
Agreement, subject to the terms and provisions of this Agreement;
and</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">WHEREAS,
each capitalized term used herein but not otherwise defined shall have the
meaning as set forth in the Merger Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AGREEMENT</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOW,
THEREFORE, in and as consideration of and for the foregoing premises and the
representations, warranties, agreements, and covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Voting</font>.&#160;&#160;During
the term of this Agreement, the Stockholders agree to vote, or cause to be voted
(at all meetings of stockholders of the Company and pursuant to all written
consents in lieu of voting at a meeting), all shares of the Company&#8217;s voting
securities now or hereafter owned by them, whether beneficially or otherwise, or
as to which they have voting power (the &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Shares</font>&#8221;) in
accordance with the provisions of this Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">- 1
-</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
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          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Board of
Directors</font>.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td style="WIDTH: 72pt">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">(a)</font></font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Voting</font>.&#160;&#160;The
      Board of Directors of the Company shall initially consist of three (3)
      directors comprised of the individuals set forth on Schedule 1.6(b) of the
      Merger Agreement.&#160;&#160;During the term of this Agreement, each of
      the Stockholders agrees to vote, or cause to be voted, all Shares
      beneficially owned by such Person, in such a manner as may be necessary
      (whether at an annual, special, adjourned or postponed meeting of
      shareholders, by written consent or otherwise) to elect the individuals
      set forth on Schedule 1.6(b) of the Merger Agreement (each, a &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Director</font>&#8221;) as
      members of the Board of Directors.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td style="WIDTH: 72pt">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">(b)</font></font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Vacancies</font>.&#160;&#160;In
      the event that any Director is removed for cause, resigns or is otherwise
      unable or unwilling to serve as a director of the Company prior to the
      expiration of the term of such Director, the holders of the Shares will
      take such action necessary to cause the election or appointment of a
      replacement director designated by the remaining Directors to fill the
      vacancy and serve as a director of the Company for the unexpired term of
      such Director.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Proxy</font>.&#160;&#160;In
order to implement the voting agreement set forth in Section 1 and Section 2,
and limited thereto, each Stockholder&#160;&#160;hereby grants to the Agent,
with the Agent having full power of substitution, a proxy (a &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Proxy</font>&#8221;) to vote, on
all matters relating solely to the election of directors and the filling of
vacancies on the Board of Directors as contemplated by Section 2 above and
consistent with the terms and conditions of the Merger Agreement, on which the
Shares are entitled to vote, any and all Shares which such Stockholder is
entitled to vote, and to give written consents in lieu of voting such Shares, in
the same manner that the Agent votes, or provides written consent in lieu of a
vote as to, Shares owned by the Agent.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Irrevocable Proxy</font>.
EACH STOCKHOLDER ACKNOWLEDGES THAT ITS PROXY IS COUPLED WITH AN INTEREST, AND
AGREES THAT ITS PROXY IS IRREVOCABLE.&#160;&#160;THE PROXY WILL AUTOMATICALLY
EXPIRE UPON TERMINATION OF THIS AGREEMENT PURSUANT TO SECTION 8
BELOW.&#160;&#160;SUBJECT TO THE FOREGOING, THIS PROXY WILL SURVIVE THE DEATH,
DISABILITY, OR INCAPACITY OF THE STOCKHOLDERS.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Exercise of
Rights</font>.&#160;&#160;Each Stockholder agrees and acknowledges that nothing
in this Agreement limits the ability of the Agent to exercise any of the Agent&#8217;s
rights under this Agreement or as a stockholder of the Company in accordance
with the Agent&#8217;s own interests without regard to the interests of such
Stockholder.&#160;&#160;The Agent has the right to vote or exercise (or refrain
from voting or exercising) this proxy at any time and from time to time as it
may elect in its sole discretion.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Reasonable Efforts to
Cooperate</font>.&#160;&#160;Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use all best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper, and/or advisable under applicable laws to consummate and make
effective the transactions contemplated by this Agreement.&#160;&#160;Each party
hereto shall promptly consult with the other parties hereto and provide any
necessary information and material with respect to all filings made by any party
hereto with any Governmental Authority in connection with this Agreement and the
transactions contemplated hereby.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Representations and
Warranties of Each Stockholder</font>.&#160;&#160;Each Stockholder hereby
represents and warrants, severally and not jointly, as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Ownership of
Shares</font>.&#160;&#160;Such Stockholder is the &#8220;beneficial owner&#8221; of, and has
the sole power to vote and dispose of, the number of Shares set forth opposite
the name of such Stockholder on <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule A</font> hereto,
free and clear of any security interests, liens, charges, encumbrances,
equities, claims, options or limitations of whatever nature and free of any
other limitation or restriction (including, without limitation, any restriction
on the right to vote, sell, or otherwise dispose of such Shares), except, in
each case, as may exist by reason of this Agreement or pursuant to applicable
law.&#160;&#160;The number of Shares set forth opposite the name of such
Stockholder on <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule A</font> hereto
represents all of the shares of capital stock of the Company beneficially owned
by such Stockholder as of the date of this Agreement.&#160;&#160;Except as
permitted by this Agreement, the Shares beneficially owned by such Stockholder,
and the certificates representing such Shares are now, and at all times during
the term hereof shall be, held by such Stockholder, or by a nominee or custodian
for the benefit of such Stockholder, free and clear of all liens, proxies,
voting trusts or agreements, understandings or arrangements or any other rights
whatsoever, except for any such liens or proxies arising hereunder. This
Agreement is not intended, nor shall any provision hereof be construed in any
manner, to restrict a Stockholder&#8217;s right to sell, transfer or otherwise dispose
of any Shares owned by such Stockholder at any time, including, during the term
of this Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Power; Binding
Agreement</font>.&#160;&#160;Such Stockholder has the power and authority to
enter into and perform all of such Stockholder&#8217;s obligations under this
Agreement.&#160;&#160;This Agreement has been duly and validly executed and
delivered by such Stockholder and, assuming due execution and delivery by, and
enforceability against such Stockholder, constitutes a legal, valid and binding
agreement of such Stockholder, enforceable against such Stockholder in
accordance with its terms, except as such enforcement may be limited by any
equitable defense.&#160;&#160;There is no beneficiary or holder of a voting
trust certificate or other interest of any trust of which such Stockholder is a
trustee, or any party to any other agreement or arrangement, whose consent is
required for the execution and delivery of this Agreement or the consummation by
such Stockholder of the transactions contemplated thereby.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Consents; No
Conflicts</font>.&#160;&#160;No filing with, and no permit, authorization,
consent or approval of, any Governmental Authority is necessary for the
execution and delivery of this Agreement by such Stockholder, the consummation
by such Stockholder of the transactions contemplated hereby and the compliance
by such Stockholder with the provisions hereof and none of the execution and
delivery of this Agreement by such Stockholder, the consummation by such
Stockholder of the transactions contemplated hereby or compliance by such
Stockholder with any of the provisions hereof, except in cases in which any
conflict, breach, default or violation described below would not interfere with
the ability of such Stockholder to perform such Stockholder&#8217;s obligations
hereunder, shall (i) conflict with or result in any breach of any organizational
documents applicable, (ii) result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or give rise to any
third party right of termination, cancellation, modification or acceleration)
under, any of the terms, conditions or provisions of any note, loan agreement,
bond, mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind,
including, without limitation, any voting agreement, proxy arrangement, pledge
agreement, stockholders agreement or voting trust, to which such Stockholder is
a party or by which such Stockholder or any properties or assets of such
Stockholder may be bound, or (iii) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to such Stockholder or
any properties or assets of such Stockholder.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Termination</font>.&#160;&#160;This
Agreement and the rights granted the Agent hereunder shall terminate with
respect to any Stockholder upon the earlier of:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a) June
30, 2010;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b) on
the date that the Articles of Amendment are filed with the Secretary of State of
the State of Florida, all as described in the Company&#8217;s Information Statement on
Schedule 14C as filed with the Securities and Exchange Commission on May 7,
2010; or</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c) the
date on which such Stockholder shall no longer beneficially own the
Shares.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">No
Limitation</font>.&#160;&#160;Notwithstanding any other provision hereof,
nothing in this Agreement shall be construed to prohibit any Stockholder that is
or has been designated as a member of the Board of Directors from taking any
action solely in his or her capacity as a member of the Board of Directors or
from exercising his or her fiduciary duties as a member of such Board of
Directors.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Miscellaneous</font><font style="DISPLAY: inline; FONT-STYLE: italic">.</font></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Entire
Agreement</font>.&#160;&#160;This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties hereto with respect to the subject matter
hereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Assignment</font>.&#160;&#160;This
Agreement shall not be assigned by operation of law or otherwise without the
prior written consent of each Stockholder.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Successors and
Assigns</font>.&#160;&#160;Without limiting any other rights the Stockholders
may have hereunder in respect of any transfer of any Shares, each Stockholder
agrees that this Agreement and the obligations hereunder shall not attach to the
Shares beneficially owned by such Stockholder and shall not be binding upon any
person to which legal or beneficial ownership of such Shares shall pass, whether
by operation of law or otherwise, other such Stockholder&#8217;s heirs, guardians,
administrators, successors or affiliates.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Amendment</font>.&#160;&#160;This
Agreement may not be amended, changed or otherwise modified except by an
instrument in writing signed by the Stockholders, and the Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Notice</font>.&#160;&#160;All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly received if
given) by hand delivery or by facsimile transmission with confirmation of
receipt, as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If to the
Company:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HepaLife
Technologies, Inc.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">850 Third
Avenue, Suite 1801</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">New York,
NY 10022</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attention:&#160;&#160;Chief
Executive Officer</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Facsimile:&#160;&#160;(646)
218-1401</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">with a
copy (which shall not constitute notice) to:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Haynes
and Boone, LLP</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1221
Avenue of the Americas</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26th
Floor</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">New York,
NY 10020</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attention:
Rick A. Werner, Esq.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Facsimile:
(212) 884-8234</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If to the
Agent:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harborview
Master Fund LP</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">850 Third
Avenue</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Suite
1801</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">New York,
NY 10011</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attention:
David Stefansky</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Facsimile:
646-218-1401</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">with a
copy (which shall not constitute notice) to:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Haynes
and Boone, LLP</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1221
Avenue of the Americas</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26th
Floor</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">New York,
NY 10020</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attention:
Rick A. Werner, Esq.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Facsimile:
(212) 884-8234</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If to a
Stockholder:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At the
addresses and facsimile numbers set forth on <font style="DISPLAY: inline; TEXT-DECORATION: underline">Schedule A</font>
hereto.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">or to
such other address or facsimile number as the person to whom notice is given may
have previously furnished to the other parties hereto in writing in the manner
set forth above.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Severability</font>.&#160;&#160;Whenever
possible, each provision or portion of any provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law but
if any provision or portion of any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction such invalidity, illegality or unenforceability shall
not affect any other provision or portion of any provision in such jurisdiction,
and this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision or portion
of any provision had never been contained herein.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(g)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Remedies</font>.&#160;&#160;All
rights, powers and remedies provided under this Agreement or otherwise available
in respect hereof at law or in equity shall be cumulative and not alternative,
and the exercise of any thereof by any party shall not preclude the simultaneous
or later exercise of any other such right, power or remedy by such
party.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(h)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Waiver</font>.&#160;&#160;The
failure of any party hereto to exercise any right, power or remedy provided
under this Agreement or otherwise available in respect hereof at law or in
equity, or to insist upon compliance by any other party hereto with its
obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Third
Parties</font>.&#160;&#160;This Agreement shall be binding upon and inure solely
to the benefit of each party hereto and any other third party successor, and
nothing in this Agreement, express or implied, is intended to confer upon any
other person any rights or remedies of any nature whatsoever under or by reason
of this Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(j)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Governing
Law</font>.&#160;&#160;This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(k)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Specific Performance;
Consent to Jurisdiction</font>.&#160;&#160;The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached.&#160;&#160;It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any state
court located in the State of New York, County of New York, or any Federal court
located in the Southern District of New York, this being in addition to any
other remedy to which they are entitled at law or in equity and the Company and
Agent shall not be required to post any bond or other security in connection
with any equitable remedy.&#160;&#160;In addition, each of the parties hereto
(i) consents to submit itself to the personal jurisdiction of any state court
located in the State of New York, County of New York, or any Federal court
located in the Southern District of New York in the event any dispute arises out
of this Agreement or any transaction contemplated by this Agreement, (ii) agrees
that it shall not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (iii) agrees that it shall
not bring any action relating to this Agreement or any transaction contemplated
by this Agreement in any court other than any such court.&#160;&#160;The parties
hereto irrevocably and unconditionally waive any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of New York, County
of New York or in any Federal court located in the Southern District of New
York, and hereby further irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in a inconvenient forum.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(l)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Headings</font>.&#160;&#160;The
descriptive headings used herein are inserted for convenience of reference only
and are not intended to be part of or to affect the meaning or interpretation of
this Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(m)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Counterparts</font>.&#160;&#160;This
Agreement may be executed in counterparts (by fax or otherwise), each of which
shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Remainder
of Page Intentionally Left Blank.&#160;&#160;Signature Page(s)
Follow.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Stockholder
Voting Agreement and Irrevocable Proxy effective as of the date first written
above.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">
        <table border="0" cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td colspan="2" valign="top" width="3%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">THE
      COMPANY:</font></div>
                <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">HEPALIFE
      TECHNOLOGIES, INC.</font></div>
              </td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            </tr><tr>
              <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            </tr><tr>
              <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            </tr><tr>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></div>
              </td>
              <td valign="top" width="3%" style="BORDER-BOTTOM: #ffffff solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">By:
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              <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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              <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            </tr></table>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
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        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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          </div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SCHEDULE
A</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders</font></div>
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      <div align="left">
        <table cellpadding="2" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#d9d9d9">
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            </tr><tr>
              <td align="left" valign="top" width="56%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-DECORATION: underline"><font style="DISPLAY: inline">Ranjit Bogal</font></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-DECORATION: underline"><font style="DISPLAY: inline">1962 Knox Road</font></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-DECORATION: underline"><font style="DISPLAY: inline">Vancouver, BC V6T 1S6</font></font></div>
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      Alberta Ltd.</font></div>
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      West 1st Avenue</font></div>
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      216</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Vancouver,
      British Columbia, V6J 1G1</font></div>
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      (604) 659-5029</font></div>
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              <td align="right" valign="top" width="23%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">34,261,174</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="top" width="56%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">GRQ
      Consultants, Inc.</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">#600
      -595 South Federal Highway</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Boca
      Raton, FL&#160;&#160;33432</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Facsimile:
      (561) 544-2456</font></div>
              </td>
              <td align="right" valign="top" width="23%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">16,047,115</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="56%" style="BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="23%" style="BORDER-RIGHT: black 0.5pt solid; BORDER-LEFT: black 0.5pt solid; BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr></table>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>7
<FILENAME>e606965_ex10-1.htm
<TEXT>
<html>
<head>
    <title>Unassociated Document</title>
    <!--Licensed to: edata-->
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    <!--Copyright 1995 - 2009 Thomson Reuters. All rights reserved.-->
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<body bgcolor="#ffffff" style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
    <div>&#160;</div>
    <div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
Investor Relations Service Agreement is made and entered into between HepaLife
Technologies, Inc. (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company</font>&#8221;) and Cogito, Corp.
(the &#8220;Consultant&#8221;) as of May 11, 2010.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>In consideration of and for the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Purpose.</font>&#160;&#160;The
Company hereby employs the Consultant during the Term (as defined below) to
render Public Relations Services (as defined below) to the Company, upon the
terms and conditions as set forth herein.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Term.</font>&#160;&#160;Subject to
the earlier termination of this Agreement as set forth in Section 5 hereof, this
Agreement shall be effective for a twelve-month period (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Term</font>&#8221;) commencing on the date
hereof (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Effective
Date</font>&#8221;).</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Duties of
Consultant.</font>&#160;&#160;During the term of this Agreement, the Consultant
shall provide to the Company investor relations services which may include, but
which may not necessarily be limited, to those outlined in Exhibit A attached
hereto (collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Public Relations Services</font>&#8221;).
Notwithstanding the foregoing, it is understood and acknowledged by the parties
that the Consultant: (a) shall perform its analysis and reach its conclusions
about the Company independently, and that the Company shall have no involvement
therein; and (b) shall not render advice and/or services to the Company in any
manner, directly or indirectly, that is in connection with the offer or sale of
securities in a capital raising transaction or that could result in or be deemed
to be &#8220;market making&#8221; activities.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Compensation;
Expenses and Payment; Escrow Agreement.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;In
consideration of the Services, the Consultant shall be paid:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 108pt"></font>(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
a monthly consulting fee of $5,000 (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Monthly Fee</font>&#8221;);
and</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;upon
submission of supporting documentation, reimbursed for out-of-pocket expenses
incurred by it in connection with the Investor Relations Services, including,
but not limited to, all charges for travel, printing costs and other expenses
spent on the Company&#8217;s behalf (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Expense
Reimbursement</font>&#8221;).&#160;&#160;The Escrow Agent (as defined below) shall
immediately pay such expenses upon the submission of invoices therefor.
Collectively, the Monthly Fee and the Expense Reimbursement are herein referred
to herein as the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Consulting
Expenses</font>.&#8221;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;In
order to ensure prompt payment of the Consulting Expenses, on the Effective
Date, the Company, subject to the terms of that certain Escrow Agreement dated
May 11, 2010(the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Escrow
Agreement</font>&#8221;), by and among the Alfred V. Greco, PLLC, as the escrow agent
(the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Escrow Agent</font>&#8221;),
the Company and the Consultant, simultaneously with the execution and delivery
of this Agreement, shall deposit with the Escrow Agent $271,503 and will, in
accordance with&#160;&#160;the terms of the Escrow Agreement, deposit with the
Escrow Agent on or before May 17, 2010, an additional $230,000 if, as described
in the Escrow Agreement, the Company receives on or before May 17, 2010
additional proceeds from the Financing (as defined in the Escrow Agreement) of
up to $250,000 in the aggregate; collectively, the aggregate deposits, of up to
$501,503, to be&#160;&#160;deposited by the Company to the Escrow
Agent,&#160;&#160;is herein referred to as the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Escrowed
Funds.</font>&#8221;&#160;&#160;&#160;The Escrow Agent shall disburse the Consulting
Expense in payment of the Consulting Expenses, in accordance with the terms of
the Escrow Agreement.&#160;&#160;&#160;&#160;If any Escrow Funds remain upon the
termination of this Agreement, such funds shall be returned to the Company. It
is acknowledged that the deposit of the Escrowed Funds with the Escrow Agent is
an accommodation to the Company by the Consultant, which would otherwise have
required payment in full upon execution of this Agreement.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
&#160;Earlier Termination.</font></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Anything
herein to the contrary notwithstanding, this Agreement will automatically
terminate should the Escrowed Funds be depleted prior to the expiration of the
twelve month term. Otherwise, this Agreement will terminate on the one year
anniversary of this Agreement unless otherwise extended by the parties
hereto.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;In
addition, the Company, at its option exercisable in its sole discretion,
&#160;shall havethe right to terminate&#160;this Agreement
upon&#160;three&#160;(3) days prior written notice to </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the&#160;Consultant
&#160;for &#8220;Cause.&#8221;&#160;&#160;For purposes of this Agreement, &#8220;Cause&#8221; shall
mean:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the&#160;Consultant&#160;&#160;&#160;&#160;shall:
<a name="Elonc6O"><!--EFPlaceholder-->
</a>(A)&#160;apply for or consent <a name="El2oc6O"><!--EFPlaceholder-->
</a>to the appointment of a receiver, trustee,
custodian, intervenor, or liquidator of itself or of all or a substantial part
of its assets; <a name="Elopc6O"><!--EFPlaceholder-->
</a>(B)&#160;file a voluntary
petition in bankruptcy or admit in writing that it is unable <a name="El2qc6O"><!--EFPlaceholder-->
</a>to pay its debts as they become due; <a name="Elorc6O"><!--EFPlaceholder-->
</a>(C)&#160;make a general assignment for the
benefit of creditors; <a name="Elosc6O"><!--EFPlaceholder-->
</a>(D)&#160;file a
petition or answer seeking reorganization or an arrangement with creditors or <a name="El2uc6O"><!--EFPlaceholder-->
</a>to take advantage of any&#160;d<a name="El2tc6O"><!--EFPlaceholder-->
 </a><a name="Elrvc6O"><!--EFPlaceholder-->
</a>ebtor&#160;relief&#160;laws; <a name="Elowc6O"><!--EFPlaceholder-->
</a>(E)&#160;file an answer admitting the
material allegations of, or consent <a name="El2xc6O"><!--EFPlaceholder-->
</a>to,
or default in answering, a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding; or <a name="Eloyc6O"><!--EFPlaceholder-->
</a>(F)&#160;take corporate action for the
purpose of effecting any of the foregoing;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;an
order, order for relief, judgment or decree shall be entered by any court of
competent jurisdiction or other competent authority approving a petition seeking
reorganization of&#160;the Consultant, or appointing a receiver, custodian,
trustee, intervenor, or liquidator of the Consultant, or of all or substantially
all of its assets, and such order, judgment or decree shall <a name="El25d6O"><!--EFPlaceholder-->
</a>continue unstayed and in effect for a
period of sixty (60) days;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
Securities and Exchange Commission or any other&#160;federal, state or local
governmental authority shall&#160;impose sanctions against&#160;the Consultant
for violation of federal or state securities laws; and</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iv)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
conviction of, or plea of guilty or no contest to, a felony or any other crime
involving moral turpitude, fraud, theft, embezzlement or dishonesty by an
officer of the Consultant.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>In the event of a termination for Cause
pursuant to this Section 5(b), the Escrow Agreement shall provide for the
immediate release of the remaining amounts held in escrow by the Escrow Agent to
the Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Confidentiality.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Consultant
acknowledges that as a consequence of its relationship with the Company, it may
be given access to confidential information which may include the following
types of information; financial statements and related financial information
with respect to the Company and its subsidiaries (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Confidential Financial
Information</font>&#8221;), trade secrets, products, product development, product
packaging, future marketing materials, business plans, certain methods of
operations, procedures, improvements, systems, customer lists, supplier lists
and specifications, and other private and confidential materials concerning the
Company&#8217;s business (collectively, &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Confidential
Information</font>&#8221;).</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Consultant
covenants and agrees to hold such Confidential Information strictly confidential
and shall only use such information solely to perform its duties under this
Agreement, and Consultant shall refrain from allowing such information to be
used in any way for its own private or commercial
purposes.&#160;&#160;Consultant shall also refrain from disclosing any such
Confidential Information to any third parties.&#160;&#160;Consultant further
agrees that upon termination or expiration of this Agreement, it will return all
Confidential Information and copies thereof to the Company and will destroy all
notes, reports and other material prepared by or for it containing Confidential
Information.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Notwithstanding
the foregoing, nothing herein shall be construed as prohibiting Consultant from
disclosing any Confidential Information (a) which at the time of disclosure,
Consultant can demonstrate either (i)&#160;&#160;was in the public domain and
generally available to the public or (ii) thereafter becomes a part of the
public domain and is generally available to the public by publication or
otherwise through no act of the Consultant; (b) which Consultant can establish
was independently developed by a third party who developed it without the use of
the Confidential Information and who did not acquire it directly or indirectly
from Consultant under an obligation of confidence; (c) which Consultant can show
was received by it after the termination of this Agreement from a third party
who did not acquire it directly or indirectly from the Company under an
obligation of confidence; or (d) which the Consultant can reasonably demonstrate
such disclosure is required by law or in any legal proceeding, governmental
investigation, or other similar proceeding.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.&#160;&#160;&#160;&#160;&#160;&#160;&#160;
&#160;&#160; Severability.</font>&#160;&#160;If any provision of this Agreement
shall be held or made invalid by a statute, rule, regulation, decision of a
tribunal or otherwise, the remainder of this Agreement shall not be affected
thereby and, to this extent, the provisions of this Agreement shall be deemed to
be severable.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">8.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Governing Law; Venue;
Jurisdiction.</font>&#160;&#160;This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of New York, without
reference to principles of conflicts or choice of law thereof.&#160;&#160;Each
of the parties consents to the jurisdiction of the U.S. District Court in the
Southern District of New York in connection with any dispute arising under this
Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on <font style="DISPLAY: inline; FONT-STYLE: italic; TEXT-DECORATION: underline">forum</font><font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font><font style="DISPLAY: inline; FONT-STYLE: italic; TEXT-DECORATION: underline">non</font><font style="DISPLAY: inline; FONT-STYLE: italic">&#160;</font><font style="DISPLAY: inline; FONT-STYLE: italic; TEXT-DECORATION: underline">conveniens</font>,
to the bringing of any such proceeding in such jurisdictions.&#160;&#160;Each
party hereby agrees that if another party to this Agreement obtains a judgment
against it in such a proceeding, the party which obtained such judgment may
enforce same by summary judgment in the courts of any country having
jurisdiction over the party against whom such judgment was obtained, and each
party hereby waives any defenses available to it under local law and agrees to
the enforcement of such a judgment.&#160;&#160;Each party to this Agreement
irrevocably consents to the service of process in any such proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such party at it address set forth herein.&#160;&#160;Nothing herein shall
affect the right of any party to serve process in any other manner permitted by
law.&#160;&#160;Each party waives its right to a trial by jury.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>9.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Miscellaneous.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td style="WIDTH: 72pt">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
      notice or other communication between parties hereto shall be sufficiently
      given if sent by certified or registered mail, postage prepaid, if to the
      Company, addressed to it at:</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HepaLife
Technologies, Inc.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">850 Third
Avenue, Suite 1801</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">New York,
NY 10022</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attention:&#160;&#160;Chief
Executive Officer</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Facsimile:
(800) 299-4869</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">if to
Consultant, addressed to it at:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cogito
Corp.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3138
Madeira Avenue</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Costa
Mesa, CA&#160;&#160;92626</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attention:
Cynthia Mulcahy</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Facsimile
number: (714) 424-9999</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">or to
such address as may hereafter be designated in writing by one party to the
other.&#160;&#160;Any notice or other communication hereunder shall be deemed
given three days after deposit in the mail if mailed by certified mail, return
receipt requested, or on the day after deposit with an overnight courier service
for next day delivery, or on the date delivered by hand or by facsimile with
accurate confirmation generated by the transmitting facsimile machine, at the
address or number designated above (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received).</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td style="WIDTH: 72pt">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
      Agreement embodies the entire Agreement and understanding between the
      Company and the Consultant and supersedes any and all negotiations, prior
      discussions and preliminary and prior arrangements and understandings
      related to the central subject matter
hereof.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td style="WIDTH: 72pt">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
      Agreement has been duly authorized, executed and delivered by and on
      behalf of the Company and the
Consultant.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td style="WIDTH: 72pt">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
      services to be provided by the Consultant hereunder will be provided in
      compliance with all applicable laws, rules and
  regulations.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td style="WIDTH: 72pt">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
      Agreement and all rights, liabilities and obligations hereunder shall be
      binding upon and inure to the benefit of each party&#8217;s successors but may
      not be assigned without the prior written approval of the other
      party.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">IN WITNESS WHEREOF</font>, the
parties hereto have executed this Agreement on the date first written
above</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt" align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td colspan="2" valign="top" width="3%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">HEPALIFE
      TECHNOLOGIES, INC.</font></div>
              </td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            </tr><tr>
              <td valign="top" width="3%" style="BORDER-BOTTOM: #ffffff solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">By:
      </font></div>
              </td>
              <td align="left" nowrap valign="top" width="35%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">      </font>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">/s/
      Richard Rosenblum</font></div>
              </td>
              <td valign="top" width="62%" style="BORDER-BOTTOM: #ffffff solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
            </tr><tr>
              <td valign="top" width="3%">
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<tr>
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      Cynthia Mulcahy</font></div>
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            <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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            <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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A</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Public
Relations Services</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td style="WIDTH: 36pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Non-deal
      road show including meetings with brokers, fund managers and high
      net-worth investors.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td style="WIDTH: 36pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Placement
      of Company in print and television
media.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td style="WIDTH: 36pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Assistance
      in the preparation and distribution of press
  releases.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td style="WIDTH: 36pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Assistance
      in identifying and introducing the Company to potential financial
      analysts.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td style="WIDTH: 36pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.</font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Calls
      to brokers and investment advisors.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td style="WIDTH: 36pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.</font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Arranging
      for interviews on web and television financial news
    programs.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td style="WIDTH: 36pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.</font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investor
      line to handle call volume.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td style="WIDTH: 36pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.</font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Strategic
      advice, including technical analysis to ensure that press release
      distribution and other dissemination of news releases generates the
      maximum impact.</font></div>
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        <div>
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<tr valign="top">
                <td style="WIDTH: 36pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.</font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Email
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      related services, including&#160;periodic review and analysis of the
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    etc.</font></div>
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                <td style="WIDTH: 36pt">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11.</font></div>
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                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Comprehensive
      marketing campaign, including outsourcing to third-party providers email,
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      the Company to investors.</font></div>
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<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>8
<FILENAME>e606965_ex10-2.htm
<TEXT>
<html>
<head>
    <title>Unassociated Document</title>
    <!--Licensed to: edata-->
    <!--Document Created using EDGARizerAgent5.1.5.0-->
    <!--Copyright 1995 - 2009 Thomson Reuters. All rights reserved.-->
</head>
<body bgcolor="#ffffff" style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
    <div>&#160;</div>
    <div style="TEXT-ALIGN: center"><img src="palladiumlogo.jpg" alt=""></div>
    <div>&#160;</div>
    <div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Palladium
Capital Advisors, LLC</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">230 Park
Avenue, Suite 539</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">New York,
New York 10169</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tel (646)
485-7297&#160;&#160;&#160;&#160;&#160;Fax (646) 390-6328</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Email
jp@palladiumcapital.com</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 351pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">May 6,
2010</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr. Amit
S. Dang, CEO</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HepaLife
Technologies Inc.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">60 State
Street</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Suite
700</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Boston,
MA&#160;02109</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Re:&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Placement Agent
Agreement</font></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dear Mr.
Dang:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This will
confirm the understanding and agreement (the &#8220;Agreement&#8221;) between PALLADIUM
CAPITAL ADVISORS, LLC, a Delaware limited liability company (&#8220;Palladium&#8221;), and
HEPALIFE TECHNOLOGIES INC., a Florida corporation (the &#8220;Company&#8221;), as
follows:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
Company hereby engages Palladium on a best efforts basis as its agent in a
private placement pursuant to which the Company is selling a minimum (the
&#8220;Minimum Number&#8221;) of 9,400,000 units and up to a maximum (the &#8220;Maximum Number&#8221;)
of 20,000,000 units (collectively, the &#8220;Units&#8221;), of the Company&#8217;s securities at
a price of $0.125 per Unit, on a &#8220;best efforts, all or none&#8221; basis with respect
to the Minimum Number and on a &#8220;best efforts&#8221; basis with respect to the
remaining 10,600,000 Units (the &#8220;Offering&#8221;) with each Unit consisting of (i) one
(1) share of common Stock; (ii) one half of one five year Series E Stock
Purchase Warrant that has an exercise price of $0.16 per share; and (iii) one
half of one five year Series F Stock Purchase Warrant that has an exercise price
of $0.20 per share (the &#8220;Offering&#8221;).</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
appointment and authorization of Palladium under Section 1 of this Agreement
shall commence on the date hereof and shall expire on the earlier of the
termination of (i) this Agreement or (ii) the termination of the
Offering&#160;&#160;(the &#8220;Term&#8221;).</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
Company acknowledges and agrees that Palladium will be using, and relying upon,
the Company to furnish Palladium, upon request, with written materials and
information, including but not limited to financial statements, to be provided
to potential Investors (the &#8220;Materials&#8221;) describing the Company and the Offering
concerning the Company&#8217;s business, operations, assets, liabilities and
receivables, and Palladium will be using, and relying upon, such Materials
supplied by the Company, its officers, agents, and others and any other publicly
available information without any independent investigation or verification
thereof or independent appraisal by Palladium of the Company or its business or
assets. (For purposes hereof, the &#8220;Investors&#8221; mean a limited number of
institutional, accredited individual or strategic investors.) Palladium does not
assume responsibility for the accuracy or completeness of the Materials,
including but not limited to any disclosure materials related to the Offering,
except for such information that is independently produced and provided in
writing by Palladium to the Company for inclusion in the Materials. The Company
shall provide Palladium with access to the Company&#8217;s officers, directors,
accountants, counsel and other advisors, and shall keep Palladium fully informed
of any events that might have a material effect on the financial condition of
the Company.&#160;&#160;The Company represents and warrants to Palladium that
all information concerning the Company, including, without limitation, all
information contained in the Materials, will be true, complete and accurate in
all material respects and will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in light of the circumstances under which such statements
are made. If at any time prior to the completion of the Offering an event occurs
which would<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>cause
the Materials (as supplemented or amended) to contain an untrue statement of a
material fact or to omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the Company will notify Palladium immediately of such
event.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
Company agrees to pay Palladium, upon each closing with Investors in connection
with the Offering (each, a &#8220;Closing&#8221;), the following compensation: (i) 8% of the
aggregate cash consideration raised in such Closing from such Investors, and
(ii) warrants to purchase such number of shares of the common stock of the
Company equal to 8% of the aggregate number of fully diluted and/or converted
shares of common stock as are purchased by Investors taking into consideration
any increase in shares on the same terms and conditions as the warrants
purchased by the Investors (the &#8220;Warrants&#8221;). Half of the Warrants that Palladium
will receive will be Series E Stock Purchase Warrants and half of the Warrants
that Palladium will receive will be Series F Stock Purchase
Warrants.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
Company agrees to pay or issue to Palladium, upon and in the event of receipt by
the Company of $250,000 from Ralph Reider or one of his affiliates on or before
May 17, 2010, Two Million (2,000,000) fully paid and non-assessable shares of
the common stock of the Company (the &#8220;Compensation Shares&#8221;).</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
Compensation Shares are payable solely upon consummation of the acquisition of
the stock or assets of AquaMed Technologies, Inc. by the Company and the
satisfaction of the conditions set forth in Section 4(b) above.&#160;The fees
set forth in Section 4(a) are payable for (i) any Closing&#160;that occurs
during the Term with respect to Investors introduced by Palladium, or (ii) any
private placement of unregistered securities by the Company (a &#8220;Private
Placement&#8221;) at any time during the 18-month period following the Term if such
Private Placement involves an Investor introduced by Palladium that has
previously concluded a Closing with the Company.&#160;&#160;Notwithstanding
anything to the contrary set forth herein (including Section 2 of this
Agreement), after the initial Closing, Palladium shall only receive the
compensation set forth in Section 4(a) above solely with respect to Investors
introduced to the Company by Palladium and shall not receive any compensation
from proceeds received by the Company from Investors that were not introduced to
the Company by Palladium.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
Warrants will be purchased for a nominal sum and will have the same terms as the
Series E and Series F Stock Purchase Warrants, as the case may be.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;All
cash compensation payable hereunder by the Company to Palladium shall be paid by
wire transfer.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
Company shall reimburse Palladium for its reasonable and customary out-of-pocket
and incidental expenses incurred during the Term, including the fees and
expenses of its legal counsel and those of any advisor retained by Palladium,
not to exceed $5,000 in the aggregate.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
Company agrees to provide indemnification as set forth in Annex A attached
hereto and made a part hereof.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Upon
a Closing, the Company agrees that Palladium has the right to place notices
and/or advertisements in financial and other newspapers and journals (whether in
print or on the internet), and to publicize on its own website and/or marketing
materials, at its own expense, describing its services to the Company
hereunder.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
provisions of Sections 4, 5, and 6 (including, without limitation, the
provisions of indemnification referred to in Section 6) shall survive the
expiration or termination of this Agreement.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
Company represents to Palladium that there is no other person or entity that is
or will be entitled to a finder's fee or any type of brokerage commission in
connection with the transactions contemplated by this Agreement as a result of
any agreement or understanding with it; provided, however, it is understood and
agreed that Palladium may work on the Offering with one or more co-placement
agents and it shall be the sole responsibility of Palladium to compensate such
co-placement agents for their fees related to such
work.&#160;&#160;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Nothing
contained in this Agreement shall limit or restrict the right of Palladium or of
any member, employee, agent or representative of Palladium, to be a shareholder,
member, partner, director, officer, employee, agent or representative of, or to
engage in, any other business, whether of a similar nature or not, nor to limit
or restrict the right of Palladium to render services of any kind to any other
corporation, company, firm, individual or association.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
failure or neglect of the parties hereto to insist, in any one or more
instances, upon the strict performance of any of the terms or conditions of this
Agreement, or their waiver of strict performance of any of the terms or
conditions of this Agreement, shall not be construed as a waiver or
relinquishment in the future of such term or condition, but the same shall
continue in full force and effect.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Any
notices hereunder shall be in writing, and shall be sent to the Company and to
Palladium at their respective addresses set forth above.&#160;&#160;Any notice
shall be given by registered or certified mail, postage prepaid, and shall be
deemed to have been given when deposited in the United States
mail.&#160;&#160;Either party may designate any other address to which notice
shall be given by giving written notice to the other party of such change of
address in the manner herein provided.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;This
Agreement shall inure to the benefit of and be binding upon the respective,
Affiliates, successors and assigns of the parties hereto.&#160;&#160;The term
&#8220;Affiliates&#8221; shall mean, with respect to any person or entity, any other person
or entity who, directly or indirectly, through one or more intermediaries
controls, is controlled by, or is under common control with such person or
entity and any spouse, parent or issue of any such person; &#8220;control&#8221; means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of a person or entity whether through ownership of
voting securities, by contract or otherwise.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;This
Agreement has been made in the State of New York and shall be construed and
governed in accordance with the laws thereof without giving effect to principles
governing conflicts of law.&#160;&#160;The parties irrevocably agree that any
legal action or proceeding under, arising out of or in any manner relating to
this Agreement shall be brought exclusively in any court of competent
jurisdiction in the County of New York, State of New York.&#160;&#160;Each of
the parties, by its execution and delivery of this Agreement, expressly and
irrevocably assents and submits to the jurisdiction of any of such courts in any
such action or proceeding.&#160;&#160;The parties further irrevocably consent to
the service of any complaint, summons, notice or other process relating to any
such action or proceeding by delivery thereof to such party by hand or by
registered or certified mail in the manner prescribed in Section 12
hereof.&#160;&#160;The parties further irrevocably consent that any judgment
rendered by such court in the State of New York may be entered in other court
having competent jurisdiction thereof.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;This
Agreement contains the entire agreement between the parties, may not be altered
or modified, except in writing and signed by the party to be charged thereby,
and supersedes any and all previous agreements between the parties relating to
the subject matter hereof.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Palladium
will not have any rights or obligations in connection with the sale and purchase
of the Units contemplated by this Agreement except as expressly provided in this
Agreement.&#160;&#160;In no event will Palladium be obligated to purchase the
Securities for its own account or for the accounts of its
customers.&#160;&#160;Palladium will have the right, but not the obligation,
however, to determine the allocation of the Units among potential purchasers
introduced by Palladium (or its co-placement agents), provided that such
allocation is reasonably acceptable to the Company.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">17.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Palladium
is acting as financial advisor and is not an expert on, and cannot render
opinions regarding, legal, accounting, regulatory or tax matters. The Company
should consult with its other professional advisors concerning these matters
before undertaking the Offering.&#160;&#160;All services, advice and information
and reports provided by Palladium to the Company in connection with this
assignment shall be for the sole benefit of the Company and shall not be relied
upon by any other person.&#160;&#160;Notwithstanding anything to the contrary
contained herein, it is understood and agreed that there are no third-party
beneficiaries to this Agreement.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Palladium
is delighted to accept this engagement and looks forward to working with you on
this assignment.&#160;&#160;Please confirm that the foregoing correctly sets
forth our understanding by signing the enclosed duplicate of this letter in the
space provided and returning it, whereupon this letter shall constitute a
binding agreement as of the date first above written.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">
        <div>
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<tr>
                <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td colspan="2" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Very
      truly yours,</font></div>
                  <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">PALLADIUM
      CAPITAL ADVISORS, LLC</font></div>
                </td>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              </tr><tr>
                <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              </tr><tr>
                <td align="left" valign="top" width="50%" style="BORDER-BOTTOM: #ffffff solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></div>
                </td>
                <td valign="top" width="3%" style="BORDER-BOTTOM: #ffffff solid">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">By:&#160;</font></div>
                </td>
                <td align="left" nowrap valign="top" width="35%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">/s/
      Joel Padowitz</font></td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: #ffffff solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              </tr><tr>
                <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td align="left" nowrap valign="bottom" width="35%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Joel
      Padowitz, Chief Executive Officer</font></div>
                </td>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              </tr><tr>
                <td valign="top" width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
              </tr></table>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">
        <div align="left">
          <table border="0" cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
                <td colspan="2" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">ACCEPTED
      AND AGREED</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">AS
      OF THE DATE FIRST</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">ABOVE
      WRITTEN:</font></div>
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follows</font><font style="DISPLAY: inline; FONT-SIZE: 10pt">]</font></font></div>
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A</font></div>
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Agreement, the Company hereby agrees as follows:</font></div>
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      out-of-pocket expenses (including reasonable fees and expenses for legal
      counsel) as they are incurred in connection with the investigation of,
      preparation for or defense of any pending or threatened claim, or any
      litigation, proceeding or other action in respect thereof (collectively, a
      &#8220;Claim&#8221;).&#160;&#160;The Company also agrees (in connection with the
      foregoing) to indemnify and hold harmless each Indemnified Party from and
      against any and all out-of-pocket losses, claims, damages and liabilities,
      joint or several, to which any Indemnified Party may become subject,
      including any amount paid in settlement of any litigation or other action
      (commenced or threatened) to which the Company shall have consented in
      writing (such consent not to be unreasonably withheld), whether or not any
      Indemnified Party is a party and whether or not liability resulted;
      provided, however, that the Company shall not be liable pursuant to this
      paragraph in respect of any loss, claim, damage or liability to the extent
      that a court or other agency having competent jurisdiction shall have
      determined by final judgment (not subject to further appeal) that such
      loss, claim, damage or liability was incurred solely as a direct result of
      the willful misconduct or gross negligence of such Indemnified
      Party.&#160;&#160;The Company also agrees that no Indemnified Party shall
      have any liability (whether direct or indirect, in contract or tort or
      otherwise) to the Company or its partners, security holders or creditors
      related to or arising out of the engagement of Palladium pursuant to, or
      the performance by Palladium of the services contemplated by, this
      Agreement except to the extent that any loss, claim, damage or liability
      is determined in a final judgment (not subject to further appeal) by a
      court to have resulted solely from willful misconduct or gross negligence
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      pending or threatened Claim in respect of which indemnification may be
      reasonably sought hereunder (whether or not any Indemnified Person is an
      actual or potential party to such Claim), unless such settlement,
      compromise or consent includes an unconditional, irrevocable release of
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      covered hereby in which such Indemnified Party is not named as a
      defendant, the Company agrees to reimburse Palladium and such Indemnified
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      amounts due under the Indemnification Provisions of this Annex A shall be
      payable within ten (10) days after written notice of such event giving
      rise to the indemnification obligations, and if not paid within such
      10-day period, such amounts shall bear interest at a rate of 1.5% per
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Person.</font></div>
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<tr>
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                  <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></td>
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Agreement</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; FONT-VARIANT: small-caps">By
and Between</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-VARIANT: small-caps">Hepalife Technologies, Inc.,
</font>a Florida corporation (the &#8220;Company&#8221;) and the subscriber whose name is
set forth on the signature pages affixed hereto (the &#8220;Subscriber&#8221; </font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; FONT-VARIANT: small-caps"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Recitals</font></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>, the Company is
offering, a minimum (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Minimum Number</font>&#8221;) of 9,400,000
units and up to a maximum (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Maximum Number</font>&#8221;) of 20,000,000
units (collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Units</font><font style="DISPLAY: inline; FONT-STYLE: italic">&#8221;</font>), of the Company&#8217;s common
stock, $0.001 par value per share (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Common Stock</font>&#8221;), at a price of
$0.125 per Unit (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Purchase
Price</font>&#8221;), on a &#8220;best efforts, all or none&#8221; basis with respect to the
Minimum Number and on a &#8220;best efforts&#8221; basis with respect to the remaining
10,6400,000 Units (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Offering</font>&#8221;).</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>, each Unit consists of
(i) one (1) share (collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Unit Shares</font>&#8221;)of the Company&#8217;s
<font style="DISPLAY: inline; FONT-WEIGHT: bold">Common Stock</font>; (ii) one
half of one Series E Stock Purchase Warrant in the form of <font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Exhibit
A</font> hereto (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Series E
Warrants</font>&#8221;); and one half of one Series F Stock Purchase Warrant in the
form of <font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Exhibit
B</font> hereto (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Series F
Warrants</font>&#8221; and together with the Series E Warrants, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Warrants</font>&#8221;).</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>, one Series E Warrant
entitles the holder to purchase one additional common share (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Series E Shares</font>&#8221;) at a price
of $0.16 for a period of five (5) years from the <font style="DISPLAY: inline; FONT-WEIGHT: bold">Closing Date</font> as such term is
defined in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1.3</font>
hereof; and one Series F Warrant entitles the holder to purchase one additional
common share (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Series F
Shares</font>&#8221;) at a price of $0.20 for a period of five (5) years from the
Closing Date; collectively, the Series E Shares and the Series F Shares are
referred to herein as the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Warrant Shares.&#8221;</font></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>, the Company is
conducting this Offering as a consequence of its having entered into a
non-binding Memorandum of Intent dated February 24, 2010 (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">MOI</font>&#8221;) with AquaMed
Technologies, Inc. (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">AquaMed</font>&#8221;), which MOI
contemplates the Company&#8217;s acquisition of all of the outstanding shares, on a
fully-diluted basis, of AquaMed (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">AquaMed Acquisition</font>&#8221;) in
exchange for an aggregate of 80,000,000 shares of the Company&#8217;s Common Stock,
provided that certain preconditions are satisfied.&#160;&#160;One of the
preconditions to the consummation of the AquaMed Acquisition is that, on the
closing date of the AquaMed Acquisition, the Company has cash on hand (after
deduction of accrued and unpaid liabilities) and/or held in escrow pursuant to
this Offering for its benefit an aggregate of $3,600,000.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS,</font> the Units will only
be offered and sold to a limited number of subscriber who are &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">accredited investors</font>,&#8221; as such
term is defined in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2.7
</font>hereof.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>, the Company and the
Subscriber are executing and delivering this Agreement in reliance upon an
exemption from securities registration afforded by, but not limited to, the
provisions of Section 4(2) and 4(6) of the Securities Act of 1933, as amended
(the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">1933 Act</font>&#8221;), and
Regulation D (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Regulation
D</font>&#8221;) and Regulation S (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Regulation S</font>&#8221;) each as
promulgated by the United States Securities and Exchange Commission (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Commission</font>&#8221;) under the 1933
Act.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>, pending the Closing,
as such term is defined in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1.3</font> hereof, the
parties hereto desire to have the aggregate proceeds from the sale of Units held
in escrow by <font style="DISPLAY: inline; FONT-WEIGHT: bold">Alfred V. Greco,
LLP</font> (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Escrow
Agent</font>&#8221;) pursuant to the terms of an Escrow Agreement by and among, the
Company, AquaMed and the Escrow Agent, substantially in the form attached hereto
as<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Exhibit
C</font> (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Escrow
Agreement</font>&#8221;).</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>, the Company has
engaged Palladium Capital Advisors, LLC (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Placement Agent</font>&#8221;) on a
non-exclusive basis to assist the Company in placing the Units in the Offering
as described herein.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>,&#160;the undersigned
Subscriber hereby subscribes to purchase the number of Units set forth on the
signature page attached hereto (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subscribed Units</font>&#8221;), at an
aggregate price as set forth on such signature page hereto (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subscription Amount</font>&#8221;), subject
to the terms and conditions of this Agreement and on the basis of the
representations, warranties, covenants and agreements contained
herein.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>, the Company desires
to enter into this Agreement to issue and sell the Subscribed Units to the
Subscriber and the Subscriber desires to purchase the number of Subscribed Units
from the Company all on the terms and conditions set forth herein.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">NOW, THEREFORE</font>, in
consideration of the mutual covenants and other agreements contained in this
Agreement the Company and the Subscriber hereby agree as follows:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.
Subscription for Units; Subscription Procedures; Closing.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">1.1</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subscription. </font>Subject to the
terms and conditions hereinafter set forth, the Subscriber hereby irrevocably
subscribes for and agrees to purchase from the Company the Subscribed Units and
simultaneously with the Subscriber&#8217;s execution and delivery of this Agreement,
herewith has transmitted the Subscription Amount in the form of either (i) a
valid check or (ii) a wire transfer of funds, to the Escrow Agent as
follows:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(a) <font style="DISPLAY: inline; FONT-WEIGHT: bold">Check.</font> If by check, payable to
as Escrow Agent, and delivered to:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Alfred V. Greco, PLLC</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>199 Main Street</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>White Plains, New York
10601</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(b) <font style="DISPLAY: inline; FONT-WEIGHT: bold">Wire Transfer.</font> If by wire
transfer of funds to:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
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              </td>
              <td valign="top" width="54%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">HSBC
      BANK</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="16%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="54%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">666
      FIFTH AVENUE, NEW YORK, NEW YORK 10103</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="16%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">ABA
      Routing #:</font></div>
              </td>
              <td valign="top" width="54%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">021001088</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="16%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Beneficiary:</font></div>
              </td>
              <td valign="top" width="54%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Alfred
      V. Greco, PLLC Attorney Escrow Account</font></div>
              </td>
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              <td valign="top" width="16%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Account
      #:</font></div>
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              </td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Reference:</font></div>
              </td>
              <td valign="top" width="54%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#8220;HepaLife
      Technologies, Inc. &#8211; [insert Subscriber&#8217;s
name]&#8221;</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">1.2</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subscription
Procedure.</font>&#160;&#160;To complete a subscription for the Units, the
Subscriber must fully comply with the subscription procedure provided in this
<font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1.2</font> on or before
the Closing Date<a name="tab2"><!--EFPlaceholder-->
 </a>:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">Subscription
Agreement</font>.&#160;&#160;On or before the Closing Date, the Subscriber shall
review, complete and execute the Signature Page to this Agreement; and shall
have completed the Subscriber Questionnaire and Certification set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 8 </font>hereof, and shall
return this Agreement, as executed to the Company c/o Sierchio &amp; Company,
LLP, 430 Park Avenue, Suite 702, New York, New York 10022. &#160;Executed
documents may be delivered to by facsimile or electronic mail (e-mail), provided
that the Subscriber delivers the original copies of the documents as soon as
practicable thereafter.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b</font>)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subscription
Amount.</font>&#160;&#160;Simultaneously with the delivery of this Agreement, as
provided herein, the Subscriber shall deliver the Subscription Amount to the
Escrow Agent as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1.1</font> above. Subject to
<font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 1.4</font> below, the
minimum subscription is $100,000 (the &#8220;Minimum Investment&#8221;).</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">1.3</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Closings; Closing
Date</font>.&#160;&#160;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Date and Place of Closing.</font> The
consummation of the transactions contemplated herein shall take place at the
offices of Sierchio &amp; Company, 430 Park Avenue, Suite 702, New York, New
York 10022, upon the satisfaction or waiver of all conditions to closing set
forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Sections 4
</font>and<font style="DISPLAY: inline; FONT-WEIGHT: bold"> 5</font> hereof (the
&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Closing
Conditions</font>&#8221;).&#160;&#160; Anything herein to the contrary
notwithstanding, upon acceptance by the Company of subscriptions equal to at
least the Minimum Number and the satisfaction of the Closing Conditions, the
Company shall have the right at any time thereafter, prior to the <font style="DISPLAY: inline; FONT-WEIGHT: bold">Offering Termination Date</font> (as
defined below), to effect an initial closing with respect to the Offering (the
&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Initial
Closing</font>&#8221;).&#160;&#160;Thereafter, the Company shall continue to accept
additional subscriptions for, and continue to have closings (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subsequent Closings</font>&#8221; and
together with the Initial Closing, each a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Closing</font>&#8221; and the date thereof
the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Closing Date</font>&#8221;) with
respect to subscriptions from new or existing investors, from time to time up to
and including the Offering Termination Date.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Purchases by the Company&#8217;s Affiliates
and Placement Agents.</font> The Subscriber understands that the Company&#8217;s,
AquaMed&#8217;s,&#160;&#160;and the Placement Agent&#8217;s respective officers, directors,
employees and/or affiliates may purchase Units which purchases may be used to
satisfy the Minimum Number.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
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          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(c)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subscriber&#8217;s Closing
Deliveries</font>.&#160;&#160;At the Closing, the Subscriber shall have
delivered to:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
the Company, the following:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)
</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
Agreement, and the completed Subscriber Questionnaire and Certification
incorporated therein;</font></div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For U.S.
citizens or residents of the U.S., an Internal Revenue Service Form
W-9;</font></div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
individual investors, a copy of one form of government issued picture
identification (e.g. state issued driver&#8217;s license or passport);
and</font></div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;to
the Escrow Agent, the Subscription Amount.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(d)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company&#8217;s Closing
Deliveries</font>.&#160;&#160;At the Closing, the Company shall have delivered
to</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 108pt"></font>(1)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
Subscriber:&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;If
accepted by the Company, a duly countersigned copy of this
Agreement;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
copy of the written instructions to its transfer agent to issue and deliver
certificates representing the Unit Shares acquired by the Subscriber, all as
more fully set forth on the signature page hereto, to the address set forth on
the aforesaid signature page; and</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
the Escrow Agent, written (i) notice of the satisfaction of the Closing
Conditions and (ii) direction to release the Escrowed Funds to the
Company.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">1.4</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Discretion to Accept or
Reject Subscriptions</font>.&#160;&#160;The Subscriber understands and agrees
that the Company in its sole discretion reserves the right to accept or reject
this or any other subscription for Units, in whole or in part, notwithstanding
prior receipt by the Subscriber of notice of acceptance of this
subscription.&#160;&#160;Anything herein to the contrary notwithstanding, the
Company in its sole discretion, may accept subscriptions for less than the
Minimum Investment.&#160;&#160;The Company shall have no obligation hereunder
until the Company shall execute and deliver to the Subscriber an executed copy
of this Agreement.&#160;&#160;If this subscription is rejected in whole, or the
offering of Units is terminated, all funds received from the Subscriber will be
returned without interest or offset, and this Agreement shall thereafter be of
no further force or effect.&#160;&#160;If this subscription is rejected in part,
the funds for the rejected portion of this subscription will be returned without
interest or offset, and this Agreement will continue in full force and effect to
the extent this subscription was accepted.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 30.35pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">1.5</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Termination of the
Offering.</font>&#160; This Offering will terminate upon the earlier to occur of
(a) the date on which the Company has received accepted subscriptions for the
Maximum Number (b) May 31, 2010, unless such date is extended for a period not
to exceed 60 days, without notice thereof being required to be given to the
Subscriber, or (c) in the sole discretion of the Company at any time after it
has received accepted subscriptions for the Minimum Number (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Offering Termination
Date</font>&#8221;).</font></div>
    </div>
    <div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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          </div>
        </div>
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          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subscriber Representations and
Warranties.&#160;</font>&#160;The Subscriber hereby represents and warrants to
and agrees with the Company that:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.1</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Authorization; Power and
Enforceability.</font>&#160;&#160;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(a)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Authorization;
Enforceability.</font>&#160;The Subscriber has the requisite power and authority
to enter into and perform this Agreement and the other <font style="DISPLAY: inline; FONT-WEIGHT: bold">Transaction Documents</font>, as that
term is defined in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
3.3</font> hereof, and to purchase the Subscribed Units being sold to it
hereunder.&#160;&#160;The execution, delivery and performance of this Agreement
and the other Transaction Documents by the Subscriber and the consummation by it
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action, and no further consent or authorization of the
Subscriber or its Board of Directors or stockholders, if applicable, is
required.&#160;&#160;This Agreement and the other Transaction Documents when
executed and delivered by Subscriber constitute a valid and binding obligation
of the Subscriber, enforceable against the Subscriber in accordance with the
terms thereof.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">(b)</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Corporate and Other
Entities.</font>&#160;&#160;If the Subscriber is a corporation, partnership,
limited liability company, trust, employee benefit plan, individual retirement
account, Keogh Plan, or other tax-exempt entity, (i) it is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization and (ii) it is authorized and qualified to purchase the Units and
the Person signing this Agreement and the other Transaction Documents on behalf
of such entity has been duly authorized by such entity to do so.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.2</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;No
Conflicts.</font>&#160;&#160;The execution, delivery and performance of this
Agreement and the other Transaction Documents and the consummation by the
Subscriber of the transactions contemplated hereby and thereby or relating
hereto or thereto do not and will not (i) result in a violation of the
Subscriber&#8217;s charter documents, bylaws or other organizational documents, if
applicable, (ii) conflict with nor constitute a default (or an event which with
notice or lapse of time or both would become a default) under any agreement to
which the Subscriber is a party, nor (iii) result in a violation of any law,
rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to the Subscriber or its properties (except for
such conflicts, defaults and violations as would not, individually or in the
aggregate, have a material adverse effect on Subscriber).&#160;&#160;The
Subscriber is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental agency in order
for it to execute, deliver or perform any of its obligations under this
Agreement and the other Transaction Documents&#160;&#160;nor to purchase the
Units in accordance with the terms hereof, provided that for purposes of the
representation made in this sentence, the Subscriber is assuming and relying
upon the accuracy of the relevant representations and agreements of the Company
herein.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
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          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.3</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Information. </font>The
Subscriber hereby acknowledges and hereby represents that the Subscriber has
been furnished by the Company during the course of the Offering with all
information regarding the Company, the terms and conditions of the Offering and
any additional information that the Subscriber, its purchaser representative,
attorney and/or accountant has requested or desired to know, and has been
afforded the opportunity to ask question of and receive answers from duly
authorized officers or other representatives of the Company concerning the
Company and the terms and conditions of the Offering.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.4</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Risk
Acknowledgement.&#160;&#160;</font>The Subscriber recognizes that the purchase
of the Subscribed Units involves a high degree of risk including, without
limitation, the following: (a) the Company is a development stage business with
limited operating history and requires and will require substantial funds in
addition to the proceeds of the Offering; (b) a purchase of the Units is highly
speculative, and only investors who can afford the loss of their entire
investment should consider purchasing Units; (c) the Subscriber may not be able
to liquidate its investment in the Units; (d) transferability of the Units is
limited; and (e) the Company has not paid a dividend on its capital stock since
inception and does not anticipate paying any dividends in the foreseeable
future.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.5</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">No Offering Materials. </font>In
reaching its decision to purchase the Subscribed Units, the Subscriber has
relied solely upon the information and representations provided by the Company
herein.&#160;&#160;To the extent necessary, the Subscriber has retained, at its
own expense, and relied upon appropriate professional advice regarding the
investment, tax and legal merits and consequences of this Agreement, the other
Transaction Documents and the purchase of the Subscribed Units hereunder. The
Subscriber disclaims reliance on any statements made or information provided by
any Person or entity in the course of the Subscriber&#8217;s consideration of an
investment in the Units other than those set forth herein.&#160;&#160;The
Subscriber acknowledges and agrees that the Subscriber has not relied upon the
independent investigation or verification, if any, which may have been
undertaken by the Placement Agent.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.6</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Communication of
Offer</font>.&#160;&#160;The offer to sell the Units was directly communicated
to Subscriber by the Company or the Placement Agents (or an authorized agent or
representative of the Company or a Placement Agent).&#160;&#160;The Subscriber
represents that no Units were offered or sold to it by means of any form of
general solicitation or general advertising and that at no time was Subscriber
presented with or solicited by any leaflet, newspaper or magazine article, radio
or television advertisement, or any other form of general advertising or
solicited or invited to attend a promotional meeting otherwise than in
connection and concurrently with such communicated offer.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.7</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Accredited Investor Status.</font>
The Subscriber is, and will be on the Closing Date, an "<font style="DISPLAY: inline; FONT-WEIGHT: bold">accredited investor</font>,&#8221; as such
term is defined in Regulation D as reflected by the Subscriber&#8217;s responses to
the questions contained in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 8
</font>hereof.&#160;&#160;If the Subscriber is a natural Person, the Subscriber
has reached the age of majority in the state or other jurisdiction in which the
Subscriber resides, has adequate means of providing for the Subscriber&#8217;s current
financial needs and contingencies, is able to bear the substantial economic
risks associated with the purchase of the Units, has no need for liquidity with
respect to such purchase, and, at the present time, can afford a complete loss
of such investment.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
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        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.8</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Experience of the Subscriber.</font>
The Subscriber, its advisers (who are not compensated by or affiliated with the
Company, including the Placement Agent, directly or indirectly), if any, and
designated representatives, if any, have the knowledge and experience in
financial and business matters necessary to evaluate the merits and risks of its
prospective investment in the Company, and have carefully reviewed and
understand the risks of, and other considerations relating to, the purchase of
Units and the tax consequences of the investment, and have the ability to bear
the economic risks of the investment and protect the Subscriber&#8217;s interests in
connection with the transaction contemplated hereby.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.9</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">No Governmental
Review.</font>&#160;&#160;The Subscriber acknowledges and understands that no
United States federal or state agency, including the Commission has passed on or
made recommendations or endorsement of the Units or the suitability of the
investment contemplated hereby; nor, have such authorities passed upon or
endorsed the merits of the offering of the Units.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.10</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Compliance with Securities
Act.</font>&#160;&#160;&#160;The Subscriber understands and agrees that the
Units have not been registered under the 1933 Act or any applicable state
securities laws, by reason of their issuance in a transaction that does not
require registration under the 1933 Act (based in part on the accuracy of the
representations and warranties of the Subscriber contained herein), and that
such Units must be held indefinitely unless a subsequent disposition is
registered under the 1933 Act or any applicable state securities laws or is
exempt from such registration.&#160;In any event, and subject to compliance with
applicable securities laws, the Subscriber may enter into lawful hedging
transactions in the course of hedging the position they assume and the
Subscriber may also enter into lawful short positions or other derivative
transactions relating to the Units, or interests in the Units, and deliver the
Units, or interests in the Units, to close out their short or other positions or
otherwise settle other transactions, or loan or pledge the Units, or interests
in the Units, to third parties who in turn may dispose of these
Units.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.11</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Purchase of Units for the
Subscriber&#8217;s Account</font>.&#160;&#160;On the Closing Date, the Subscriber will
purchase subscribed for Units for which it has subscribed as principal for its
own account for investment only and not with a view toward, or for resale in
connection with, the public sale or any distribution thereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.12</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Restricted
Securities.</font>&#160;&#160;&#160;The Subscriber understands that the Units
have not been registered under the 1933 Act and Subscriber will not sell, offer
to sell, assign, pledge, hypothecate or otherwise transfer any of the Units
unless pursuant to an effective registration statement under the 1933 Act, or
unless an exemption from registration is available.&#160;&#160;Notwithstanding
anything to the contrary contained in this Agreement, the Subscriber may
transfer (without restriction and without the need for an opinion of counsel)
the Units to its Affiliates (as defined below) provided that each such Affiliate
is an &#8220;accredited investor&#8221; under Regulation D and such Affiliate agrees to be
bound by the terms and conditions of this Agreement. For the purposes of this
Agreement, an &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Affiliate</font>&#8221; of any Person or
entity means any other Person or entity directly or indirectly controlling,
controlled by or under direct or indirect common control with such Person or
entity.&#160;&#160;For purposes of this definition, &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">control</font>&#8221; means the power to
direct the management and policies of such Person or firm, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.&#160;&#160;The Subscriber understands and hereby acknowledges that
the Company has no obligation or intention to register the Units, the Unit
Shares, the Warrants or the Warrant Shares under the 1933 Act or any state
securities or &#8220;blue sky&#8221; laws.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.13</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Acknowledgement of and Consent to
Restrictive Legend</font>.&#160;&#160;The certificates representing the Units
and the securities comprising the Units shall bear the following or similar
legend:&#160;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">FOR U.S. PERSONS</font>:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE &#8220;1933
ACT&#8221;), OR APPLICABLE STATE SECURITIES LAWS.&#160;&#160;THESE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT, OR (B)
AN OPINION OF COUNSEL (REASONABLY SATISFACTORY TO THE COMPANY), THAT
REGISTRATION IS NOT REQUIRED UNDER SAID 1933 ACT.</font>&#8221;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FOR
NON-U.S. PERSONS:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;THESE
SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S.
PERSONS (AS DEFINED IN REGULATION S) PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE &#8220;1933 ACT&#8221;). ACCORDINGLY, NONE OF
THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE
1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY
BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S.
PERSONS EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933
ACT.&#8221;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.14</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Non-US Persons.</font>&#160;&#160;If
the Subscriber is not a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">U.S.
Person</font>&#8221; as defined in Regulation S, the Subscriber further represents and
warrants to the Company that:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;it
is acquiring the Units in an offshore transaction pursuant to Regulation S and
the&#160;Subscriber was outside the United States when receiving and executing
this Agreement;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
Subscriber has not acquired the Units as a result of, and will not itself engage
in, any &#8220;directed selling efforts&#8221; (as defined in Regulation S) in the United
States in respect of the Units which would include any activities undertaken for
the purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the resale of the Units;
provided, however, that the Subscriber may sell or otherwise dispose of the
Units pursuant to registration of the Units under the 1933 Act and any
applicable state and provincial securities laws or under an exemption from such
registration requirements and as otherwise provided herein;</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
Subscriber understands and agrees that offers and sales of any of the Units
prior to the expiration of a period of one year after the date of transfer of
the Units under this Agreement (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Distribution Compliance
Period</font>&#8221;), shall only be made in compliance with the safe harbor
provisions set forth in Regulation S, pursuant to the registration provisions of
the 1933 Act or an exemption therefrom, and that all offers and sales after the
Distribution Compliance Period shall be made only in compliance with the
registration provisions of the 1933 Act or an exemption therefrom, and in each
case only in accordance with all applicable securities laws;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
Subscriber understands and agrees not to engage in any hedging transactions
involving the Units prior to the end of the Distribution Compliance Period
unless such transactions are in compliance with the 1933 Act;
and&#160;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
Subscriber hereby represents that it has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with any invitation to
subscribe for the Units or any use of this Agreement, including: (i) the legal
requirements within its jurisdiction for the purchase of the Units; (ii) any
foreign exchange restrictions applicable to such purchase; (iii) any
governmental or other consents that may need to be obtained; and (iv) the income
tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale or transfer of the Units. The Subscriber&#8217;s
subscription and payment for, and its continued beneficial ownership of the
Units, will not violate any applicable securities or other laws of the
Subscriber&#8217;s jurisdiction.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.15</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Definitive Agreement</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">.&#160;&#160;</font>The Subscriber
acknowledges that the Company and AquaMed are negotiating the terms and
conditions of a definitive agreement with respect to the AquaMed Acquisition
(the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Definitive
Agreement</font>&#8221;).&#160;&#160;If the Definitive Agreement is not executed by
May 31, 2010 (unless such date is extended by the Company and AquaMed), or if
the transactions contemplated by the Definitive Agreement are not consummated by
May 31, 2010 the Subscription Amount transmitted to the Escrow Agent by the
Subscriber will be returned to the Subscriber and this Agreement will terminate
and be of no further force or effect. The undersigned acknowledges that any
extension of the Offering is not a basis for the Subscriber&#8217;s revocation of its
subscription.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.16</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Address.</font> The Subscriber
represents that the address of the Subscriber furnished by the Subscriber on the
signature page hereof is the Subscriber&#8217;s principal residence if the Subscriber
is an individual or its principal business address if it is a corporation or
other entity.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.17</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">FINRA
Affiliation.</font>&#160;&#160;The Subscriber acknowledges that if he or she is
a Registered Representative of a Financial Industry Regulatory Authority (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">FINRA</font>&#8221;) member firm, he or she
must give such firm the notice required by NASD Rule 3050, receipt of which must
be acknowledged by such firm in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 8 </font>below.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.18</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">No Brokers.</font>&#160;&#160;Except
as to the Placement Agent, the Subscriber represents and warrants that is has
not engaged, consented to or authorized any broker, finder or intermediary to
act on its behalf, directly or indirectly, as a broker, finer or intermediary in
connection with the transactions contemplated hereby.&#160;&#160;The Subscriber
hereby agrees to indemnify and hold harmless the Company from and against all
fees, commission or other payments owning to any such Person or firm action on
behalf of such the Subscriber hereunder.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.19</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Other Offerings. </font>The<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>Subscriber acknowledges
that the Company will, from time to time, offer and sell additional shares of
Common Stock and/or preferred stock on such terms and conditions as its Board of
Directors, in its sole discretion, may determine. The terms and conditions of
the offer and sale of any such additional shares of Common Stock may be
different from and on better than the terms of this Offering and may result in
substantial dilution to the existing shareholders.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.20</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Confidentiality.</font> The
Subscriber agrees not to issue any public statement with respect the
Subscriber&#8217;s investment or proposed investment in the Company or the terms of
any agreement or covenant between it and the Company without the Company&#8217;s prior
written consent, except such disclosures as may be required under applicable law
or under any applicable order, rule or regulation.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.21</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">No Consents.</font>&#160;&#160;The
Subscriber represents that no authorization, approval, consent or license of any
Person (collectively, &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subscriber Consents</font>&#8221;) is
required to be obtained for the purchase of the Subscribed Units by the
Subscriber, other than as have been obtained and which Subscriber Consents are
in full force and effect.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.22</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Irrevocability of the Subscription.
</font>The Subscriber understands, acknowledges and agrees with the Company
that, except as otherwise set forth herein, the subscription to purchase the
Subscribed Units is irrevocable by the Subscriber, that except as required by
law, the Subscriber is not entitled to cancel, terminate or revoke this
Agreement or any agreements of the Subscriber hereunder and that this Agreement
and such other agreements shall survive the death or disability of the
Subscriber and shall be binding upon and inure to the benefit of the parties and
their respective heirs, executors, administrators, successors, legal
representatives and permitted assigns.&#160;&#160;If the Subscriber is more than
one Person, the obligations of the Subscriber hereunder shall be joint and
several and the agreements, representations, warranties and acknowledgments
herein contained shall be deemed to be made by and be binding upon each such
Person, his/her heirs, executors, administrators, successors, legal
representatives and permitted assigns.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.23</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Certain Trading Activities.</font>
The Subscriber has not directly or indirectly, nor has any Person acting at the
direction of the Subscriber, engaged in any transactions in the securities of
the Company (including, without limitation, any short sales involving the
Company's securities) since the earlier to occur of (i) the time the Subscriber
was first contacted by the Company or the Placement Agent regarding an
investment in the Company and (ii) the 30<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top"> th</font> day
prior to the date of this Agreement. The Subscriber covenants that neither it
nor any Person acting at the direction of the Subscriber will engage in any
transactions in the securities of the Company (including short sales) after the
date hereof and prior to the date that the transactions contemplated by this
Agreement are publicly disclosed.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">2.24</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Reliance.</font>&#160;The Subscriber
understands and acknowledges that (i) the Subscribed Units are being offered and
sold to the Subscriber without registration under the 1933 Act in a private
placement that is intended to be exempt from the registration provisions of the
1933 Act and (ii) the availability of such exemption, depends in part on, and
the Company will rely upon, the accuracy and truthfulness of, the foregoing
representations and warranties and the Subscriber hereby consents to such
reliance.<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>The
Subscriber agrees that the representations, warranties and covenants of the
Subscriber contained herein (or in any representation letter or questionnaire
executed and delivered by the Subscriber pursuant to the provisions hereof)
shall be true and correct both as of the execution of this Agreement and as of
the Closing Date, and shall survive the completion of the distribution of the
Subscribed Units. <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>The Subscriber hereby
agrees to notify the Company immediately of any change in any representation,
warranty, covenant or other information relating to the Subscriber contained in
this Agreement, or any exhibit hereto, which takes place prior to
Closing.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">The Company Representations and
Warranties. </font>The Company represents and warrants to and agrees with the
Subscriber that:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Due
Incorporation</font>.&#160;&#160;The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power to own its properties and to
carry on its business as presently conducted.&#160;&#160;The Company is duly
qualified as a foreign corporation to do business and is in good standing in
each jurisdiction where the nature of the business conducted or property owned
by it makes such qualification necessary, other than those jurisdictions in
which the failure to so qualify would not have a Material Adverse
Effect.&#160;&#160;For purposes of this Agreement, a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Material Adverse Effect</font>&#8221; shall
mean a material adverse effect on the financial condition, results of
operations, prospects, properties or business of the Company and its
Subsidiaries taken as a whole.&#160;&#160;For purposes of this Agreement, &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subsidiary</font>&#8221; means, with
respect to any entity at any date, any corporation, limited or general
partnership, limited liability company, trust, estate, association, joint
venture or other business entity&#160;of which more than 50% of (i)&#160;the
outstanding capital stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors or other managing
body of such entity, (ii)&#160;in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership or limited
liability company or (iii)&#160;in the case of a trust, estate, association,
joint venture or other entity, the beneficial interest in such trust, estate,
association or other entity business is, at the time of determination, owned or
controlled directly or indirectly through one or more intermediaries, by such
entity.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Outstanding
Stock</font>.&#160;&#160;All issued and outstanding shares of capital stock and
other equity interests in the Company have been duly authorized and validly
issued and are fully paid and non-assessable.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.3</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Authority;
Enforceability</font>.&#160;&#160;This Agreement and any other agreements
delivered together herewith or therewith&#160;&#160;or in connection herewith or
therewith (collectively, the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Transaction Documents</font>&#8221;) have
been duly authorized, executed and delivered by the Company and are valid and
binding agreements of the Company enforceable in accordance with their terms,
subject to 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.&#160;&#160;The
Company has full corporate power and authority necessary to enter into and
deliver this Agreement and to perform its obligations thereunder.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.4</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Capitalization and Additional
Issuances.</font>&#160;&#160;&#160;The authorized and outstanding capital stock
of the Company&#160;is set forth in the <font style="DISPLAY: inline; FONT-WEIGHT: bold">Exchange Act Documents</font>, as
such term is defined in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
3.9</font> hereof.&#160;&#160;Except as set forth in the Exchange Act Documents,
there are no options, warrants, or rights to subscribe to, securities, rights,
understandings or obligations convertible into or exchangeable for or giving any
right to subscribe for any shares of capital stock or other equity interest of
the Company or any of its Subsidiaries.&#160;&#160;The only officer, director,
employee and consultant stock option or stock incentive plan or similar plan
currently in effect or contemplated by the Company is described in the<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>Exchange Act
Documents.&#160;Except as set forth in the Exchange Act Documents&#160;there are
no outstanding agreements or preemptive or similar rights affecting the
Company's Common Stock. The Company has no direct or indirect Subsidiaries other
than those set forth in the Exchange Act Documents.&#160;&#160;Except as
disclosed in the Exchange Act Documents, the Company owns, directly or
indirectly, all of the capital stock of its Subsidiaries free and clear of any
and all liens, and all the issued and outstanding shares of capital stock of
each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.5</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Consents.</font>&#160;&#160;&#160;No
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any governmental authority, is required
by the Company or any Affiliate of the Company in connection with the
consummation of the transactions contemplated by this Agreement, except as may
be required in connection with filings pursuant to Regulation D, or otherwise in
connection with the Definitive Agreement, or which otherwise would not have a
Material Adverse Effect or the consummation of any of the other agreements,
covenants or commitments of the Company or any Subsidiary contemplated hereby.
Any such qualifications and filings will, in the case of qualifications, be
effective on the Closing and will, in the case of filings, be made within the
time prescribed by law.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.6</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">No Violation or
Conflict.</font>&#160;&#160;If the representations and warranties of the
Subscriber in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2</font>
are true and correct, then neither the issuance nor the sale of the Units nor
the performance of the Company&#8217;s obligations under this Agreement by the Company
will, except as set forth in the Definitive Agreement:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;violate,
conflict with, result in a breach of, or constitute a default (or an event which
with the giving of notice or the lapse of time or both would be reasonably
likely to constitute a default) under (A) the articles or certificate of
incorporation, charter or bylaws of the Company, (B) to the Company's knowledge,
any decree, judgment, order, law, treaty, rule, regulation or determination
applicable to the Company of any court, governmental agency or body, or
arbitrator having jurisdiction over the Company or over the properties or assets
of the Company or any of its Affiliates, (C) the terms of any bond, debenture,
note or any other evidence of indebtedness, or any agreement, stock option or
other similar plan, indenture, lease, mortgage, deed of trust or other
instrument to which the Company or any of its Affiliates is a party, by which
the Company or any of its Affiliates is bound, or to which any of the properties
of the Company or any of its Affiliates is subject, or (D) the terms of any
"lock-up" or similar provision of any underwriting or similar agreement to which
the Company, or any of its Affiliates is a party except the violation, conflict,
breach, or default of which would not have a Material Adverse Effect;
or</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;result
in the creation or imposition of any lien, charge or encumbrance upon the
Subscribed Units or any of the assets of the Company or any of its Affiliates
except in favor of the Subscriber as described herein; or</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;result
in the triggering of any piggy-back or other registration rights of any Person
or entity holding securities of the Company or having the right to receive
securities of the Company.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.7</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">The Units</font>.&#160;&#160;The
Units upon issuance:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;are,
or will be, free and clear of any security interests, liens, claims or other
encumbrances, subject only to restrictions upon transfer under the 1933 Act and
any applicable state securities laws;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;have
been, or will be, duly and validly authorized and validly issued, and
non-assessable;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;will
not have been issued or sold in violation of any preemptive or other similar
rights of the holders of any securities of the Company or rights to acquire
securities of the Company;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;will
not subject the holders thereof to personal liability by reason of being such
holders; and</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<a name="tab1"><!--EFPlaceholder-->
 </a></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;assuming
the representations and warranties of the Subscriber as set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 2 </font>hereof are true and
correct, will not result in a violation of Section 5 under the 1933
Act.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.8</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Litigation</font>.&#160;&#160;Except
as set forth in the Exchange Act Documents, there is no litigation, arbitration,
mediation, action, suit, claim, proceeding or investigation, whether legal or
administrative, pending against the Company or any of its Subsidiaries or, to
the Company&#8217;s knowledge, threatened against the Company or any of its
Subsidiaries or any of their respective assets, properties or operations, at
applicable law or in equity, before or by any governmental authority or any
order of any governmental authority that, individually or in the aggregate, and
taking into consideration the aggregate amounts reserved for any such matters in
the Company Financial Statements (as defined in Section 3.10), has had or caused
or would reasonably be expected to have or cause a Material Adverse
Effect.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.9</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Information Concerning
Company</font>.&#160;&#160;Since December 31, 2008, all reports and statements,
including all amendments, required to be filed by the Company with the
Commission under the Securities Exchange Act of 1934, as amended (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Exchange Act</font>&#8221;), have been
filed.&#160;&#160;Such filings, together with all amendments and all documents
incorporated by reference therein, are referred to as &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Exchange Act
Documents</font>.&#8221;&#160;&#160;Each Exchange Act Document conformed in all
material respects to the requirements of the Exchange Act and the rules and
regulations thereunder, and no Exchange Act Document, at the time each such
document was filed, included any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The Company is not a &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">shell company</font>&#8221; as contemplated
by Rule 144;&#160;&#160;however, it was previously a <font style="DISPLAY: inline; FONT-WEIGHT: bold">shell company</font>&#8221; as contemplated
by Rule 144 which ceased to&#160;&#160;be such, and has filed current &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Form 10 Information</font>&#8221; (as
defined in Rule 144) with the Commission more than twelve months prior to the
date hereof<font style="DISPLAY: inline; FONT-WEIGHT: bold">.</font></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.10</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Financial
Statements.&#160;</font>As of their respective dates, the financial statements
of the Company included in the Exchange Act Documents (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company Financial Statements</font>&#8221;)
for its most recently completed fiscal year and any subsequent interim period
have been prepared in accordance with generally accepted accounting principles
in the United States (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">GAAP</font>&#8221;), consistently applied,
during the periods involved (except (i) as may be otherwise indicated in such
Company Financial Statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may exclude footnotes or may be
condensed or summary statements) and, fairly present in all material respects,
on the basis stated therein and on the date thereof, the financial position of
the Company at the respective dates therein specified and its results of
operations and cash flows for the periods then ended (subject, in the case of
unaudited interim statements, to normal year-end audit
adjustments).</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.11</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Material Changes; Undisclosed Events,
Liabilities or Developments.</font>&#160;&#160;Since December 31, 2009, except
as specifically disclosed in a subsequent Exchange Act Document filed prior to
the date hereof, (i) there has been no event, occurrence or development that has
had or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company&#8217;s Financial Statements pursuant to GAAP
or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any issued and
outstanding shares of its Common Stock, and (v) the Company has not issued any
equity securities to any officer, director or Affiliate.&#160;&#160;The Company
does not have pending before the Commission any request for confidential
treatment of information.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.12</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Regulatory
Permits.&#160;</font>&#160;The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct its businesses, except where
the failure to possess such permits could not have, or reasonably be expected to
result in, a Material Adverse Effect (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Material Permits</font>&#8221;), and the
Company has not received any notice of proceedings relating to the revocation or
modification of any Material Permit.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.13</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Title to and Condition of
Assets.</font>&#160;&#160;As of the date hereof, Company or its Subsidiaries
have good and valid title to the assets of the Company and its Subsidiaries,
other than defects or irregularities of title that do not materially impair the
ownership or operation of such assets and in each case free and clear of all
liens, except for liens permitted under the Definitive Agreement or liens that
have not had or caused and would not reasonably be expected to have or cause a
Material Adverse Effect. The assets of the Company and its Subsidiaries are in
good operating condition, normal wear and tear excepted.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.14</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Internal Accounting
Controls.&#160;</font>&#160;The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management&#8217;s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management&#8217;s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.&#160;&#160;The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company is made known to the Company&#8217;s
certifying officers by others within the Company, particularly during the period
in which the Company&#8217;s Form 10-K or 10-Q, as the case may be, are being
prepared.&#160;&#160;The Company&#8217;s certifying officers have evaluated the
effectiveness of the Company&#8217;s controls and procedures as of the end of the
reporting period covered by the Company&#8217;s Form 10-K and each of the Company&#8217;s
Forms 10-Q filed with the Commission (each such date, the<font style="DISPLAY: inline; FONT-WEIGHT: bold"> &#8220;Evaluation Date&#8221;</font>) and
presented in each such report their conclusions about the effectiveness of the
Company&#8217;s disclosure controls and procedures based on their evaluations as of
the applicable Evaluation Date.&#160;&#160;Since the Evaluation Date of the
Company&#8217;s most recently filed Form 10-K or Form 10-Q, there have been no
significant changes in the Company&#8217;s disclosure controls and procedures, the
Company&#8217;s internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) or 15d-15(f)) or, to the Company&#8217;s knowledge, in other factors
that could significantly affect the Company&#8217;s internal controls over financial
reporting.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.15</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">No Integrated Offering</font>.&#160;
Neither the Company, nor any of its Affiliates, nor any Person acting on its or
their behalf, has directly or indirectly made any offers or sales of any
security of the Company nor solicited any offers to buy any security of the
Company under circumstances that would cause the offer of the Units pursuant to
this Agreement to be integrated with prior offerings by the Company for purposes
of the 1933 Act or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of the OTC Bulletin
Board.&#160;&#160;No prior offering will impair the exemptions relied upon in
this Offering or the Company&#8217;s ability to timely comply with its obligations
hereunder.&#160;&#160;Neither the Company nor any of its Affiliates will take
any action or steps that would cause the offer or issuance of the Units to be
integrated with other offerings which would impair the exemptions relied upon in
this Offering or the Company&#8217;s ability to timely comply with its obligations
hereunder.&#160;&#160;The Company will not conduct any offering other than the
transactions contemplated hereby that may be integrated with the offer or
issuance of the Units that would impair the exemptions relied upon in this
Offering or the Company&#8217;s ability to timely comply with its obligations
hereunder.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.16</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">No General
Solicitation</font>.&#160;&#160;Neither the Company, nor any of its Affiliates,
nor to its knowledge, any Person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D under the 1933 Act) in connection with the offer or sale of the
Units.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.17</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">No Disagreements with Accountants and
Lawyers</font>.&#160;There are no material disagreements of any kind presently
existing, or reasonably anticipated by the Company to arise between the Company
and the accountants and lawyers previously and presently employed by the
Company, including but not limited to disputes or conflicts over payment owed to
such accountants and lawyers, nor have there been any such disagreements during
the two years prior to the Closing Date.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.18</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Investment
Company</font>.&#160;&#160;&#160;Neither the Company nor any Affiliate of the
Company is an &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">investment
company</font>&#8221; within the meaning of the Investment Company Act of 1940, as
amended.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.19</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Foreign Corrupt
Practices</font>.&#160;&#160;Neither the Company, nor to the knowledge of the
Company, any agent or other Person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any Person acting on its behalf of
which the Company is aware) which is&#160;&#160;in violation of law, or (iv)
violated in any material respect any provision of the Foreign Corrupt Practices
Act of 1977, as amended.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.20</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Listing</font>.&#160;&#160;The
Company's Common Stock is quoted on the OTC Bulletin Board under the symbol
&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">HPLF</font>.&#8221;&#160;&#160;The
Company has not received any oral or written notice that its Common Stock is not
eligible nor will become ineligible for quotation on the OTC Bulletin Board nor
that its Common Stock does not meet all requirements for the continuation of
such quotation and (ii) the Company satisfies all the requirements for the
continued quotation of its Common Stock on the OTC Bulletin Board.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.21</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Acknowledgment Regarding Subscriber&#8217;s
Purchase of the Units</font>.&#160;&#160;The Company acknowledges and agrees
that the Subscriber is acting solely in the capacity of an arm&#8217;s length
purchaser with respect to the Transaction Documents and the transactions
contemplated thereby.&#160;&#160;The Company further acknowledges that no
Subscriber is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby, and any advice given by any Subscriber or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Subscriber&#8217;s purchase of the Subscribed Units.&#160;</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">3.22</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Disclosure.</font>&#160;&#160;The
information set forth herein, taken together with the Exchange Act Documents, as
of the date hereof contains no untrue statement of a material fact nor omits to
state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">4.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subscriber&#8217;s Conditions of Closing.
</font>The Subscriber&#8217;s obligation to purchase the Subscribed Units is subject
to the satisfaction or waiver, on or before the Closing Date, of the conditions
contained in this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
4</font>.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">4.1</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Representations, Warranties and
Covenants. </font>The representations, warranties and covenants of the Company
set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 3</font>
hereof shall be true in all material respects on and as of the Closing
Date.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">4.2</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Closing Deliveries.</font> The
conditions in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
1.3(d)</font> hereof shall have been satisfied or waived in writing by the
Subscriber.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">4.3</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Definitive
Agreement.</font>&#160;&#160;The transactions contemplated by the Definitive
Agreement shall have been contemporaneously consummated.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">4.4</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Minimum Number.</font>&#160;&#160;The
Minimum Number of Units shall have been subscribed for and with the Subscription
Amount therefor deposited with the Escrow Agent.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">4.5</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company&#8217;s
Covenants.</font>&#160;&#160;All covenants, agreements and conditions contained
in this Agreement to be performed by the Company on or prior to the date of such
Closing shall have been performed, complied with in all material respects, or
waived in writing by the Subscriber.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">4.6</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">No Adverse Action or Decision.</font>
There shall be no action, suit, investigation or proceeding pending, or to the
Company&#8217;s knowledge, threatened, against or affecting the Company or any of its
properties or rights, or any of its affiliates, associates, officers or
directors, before any court, arbitrator, or administrative or governmental body
that (i) seeks to restrain, enjoin, prevent the consummation of or otherwise
adversely affect the transactions contemplated by this Agreement, or (ii)
questions the validity or legality of any such transaction or seeks to recover
damages or to obtain other relief in connection with any such
transaction.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">5.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Company&#8217;s Conditions of Closing.
</font>The Company&#8217;s obligation to sell the Subscribed Units is subject to the
satisfaction or waiver, on or before the Closing Date, of the conditions
contained in this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
5</font>.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">5.1</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Representations, Warranties and
Covenants.</font> The representations, warranties and covenants of the
Subscriber set forth in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
2</font> hereof shall be true in all material respects on and as of the Closing
Date.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">5.2</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Closing Deliveries.</font> The
conditions in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
1.3(c)</font> hereof shall have been satisfied or waived in writing by the
Company.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">5.3</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Definitive
Agreement.</font>&#160;&#160;The transactions contemplated by the Definitive
Agreement shall have been contemporaneously consummated.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">5.4</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Minimum Number.</font>&#160;&#160;The
Minimum Number of Units shall have been subscribed for and with the Subscription
Amount therefor deposited with the Escrow Agent..</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">5.5</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Subscriber&#8217;s
Covenants.</font>&#160;&#160;All covenants, agreements and conditions contained
in this Agreement to be performed by the Subscriber on or prior to the date of
such Closing shall have been performed, complied with in all material respects,
or waived in writing by the Company.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">5.6</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">No Adverse Action or Decision.
</font>There shall be no action, suit, investigation or proceeding pending, or
to the Company&#8217;s knowledge, threatened, against or affecting the Company or any
of its properties or rights, or any of its affiliates, associates, officers or
directors, before any court, arbitrator, or administrative or governmental body
that (i) seeks to restrain, enjoin, prevent the consummation of or otherwise
adversely affect the transactions contemplated by this Agreement, or (ii)
questions the validity or legality of any such transaction or seeks to recover
damages or to obtain other relief in connection with any such
transaction.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">6.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Covenants of the
Company.</font>&#160;&#160;The Company covenants and agrees with the Subscriber
as follows:</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">6.1</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Stop
Orders</font>.&#160;&#160;Subject to the three day prior notice requirement
described in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section
6.5,</font> the Company will advise the Subscriber, within twenty-four hours
after it receives notice of issuance by the Commission, any state securities
commission or any other regulatory authority of any stop order or of any order
preventing or suspending any offering of any securities of the Company, or of
the suspension of the qualification of the Common Stock of the Company for
offering or sale in any jurisdiction, or the initiation of any proceeding for
any such purpose.&#160;&#160;The Company will not issue any stop transfer order
or other order impeding the sale, resale or delivery of any of the Units, except
as may be required by any applicable federal or state securities laws and unless
contemporaneous notice of such instruction is given to the
Subscriber.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Reserved.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">6.3</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Market
Regulations</font>.&#160;&#160;If required, the Company shall notify the
Commission, the Principal Market and applicable state authorities, in accordance
with their requirements, of the transactions contemplated by this Agreement, and
shall take all other necessary action and proceedings as may be required and
permitted by applicable law, rule and regulation, for the legal and valid
issuance of the Units to the Subscriber and promptly provide copies thereof to
the Subscriber.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">6.4</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Use of
Proceeds</font>.&#160;&#160;&#160;The proceeds of the Offering will be employed
by the Company for working capital.</font></div>
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      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">6.5</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Confidentiality</font>.&#160;&#160;From
the date of this Agreement and until Closing Date, the Company agrees that
except as may be required by law or in connection with a Form 8-K, Form 10-Q,
Form 10-K or in correspondence with the Commission regarding same, it will not
disclose publicly or privately the identity of the Subscriber unless expressly
agreed to in writing by Subscriber or only to the extent required by law and
then only upon not less than three business days prior notice to
Subscriber.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">6.6</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Return of Subscription Amount.</font>
If the Closing Conditions have not been satisfied on or prior to the Offering
Termination Date, the Company, in writing, will so notify the Escrow Agent
pursuant to the terms of the Escrow Agreement and direct the Escrow Agent to
return the Subscription Amount to the Subscriber in accordance with the terms of
the Escrow Agreement.&#160;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Miscellaneous</font>.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Notices</font>.&#160;&#160;All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.&#160;&#160;Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Company, to: Hepalife Technologies,
Inc., 60 State Street, Suite 700, Boston, Massachusetts 02109, with a copy
(which shall not constitute notice) to Sierchio &amp; Company, LLP, 430 Park
Avenue, Suite 702, New York, New York 10022, Facsimile 212-246-3039; and (ii) if
to the Subscriber, to: the addresses and fax numbers indicated on the signature
page hereto.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.2</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Entire Agreement;
Assignment</font>.&#160;&#160;This Agreement and other Transaction Documents
delivered in connection herewith represent the entire agreement between the
parties hereto with respect to the subject matter hereof.&#160;&#160;Neither the
Company nor the Subscribers has relied on any representations not contained or
referred to in this Agreement and the documents delivered
herewith.&#160;&#160;&#160;No right or obligation of the Company shall be
assigned without prior notice to and the written consent of the Subscriber. The
Subscriber may not assign this Agreement without the prior written consent of
the Company.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.3</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Indemnification.</font>&#160;&#160;The
Subscriber agrees to indemnify and hold harmless the Company and the Placement
Agent, and their respective officers, directors, employees, agents, control
Persons and affiliates from and against all losses, liabilities, claims,
damages, costs, fees and expenses whatsoever (including, but not limited to, any
and all expenses incurred in investigating, preparing or defending against any
litigation commenced or threatened) based upon or arising out of (i) any sale or
distribution of the Units by the Subscriber in violation of the 1933 Act or any
applicable state securities or &#8220;blue sky&#8221; laws or (ii) any actual or alleged
false acknowledgment, representation or warranty, or misrepresentation or
omission to state a material fact, or breach by the Subscriber of any covenant
or agreement made by the Subscriber herein, in any Transaction Document, or in
any other document delivered in connection with this Agreement or any
Transaction Document.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.4</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Counterparts/Execution</font>.&#160;&#160;This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.&#160;&#160;In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.5</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Calendar
Days</font>.&#160;&#160;&#160;All references to &#8220;days&#8221; in the Transaction
Documents shall mean calendar days unless otherwise stated.&#160;&#160;The terms
&#8220;business days&#8221; and &#8220;trading days&#8221; shall mean days that the New York Stock
Exchange is open for trading for three or more hours.&#160;&#160;Time periods
shall be determined as if the relevant action, calculation or time period were
occurring in New York City.&#160;&#160;Any deadline that falls on a non-business
day in any of the Transaction Documents shall be automatically extended to the
next business day and interest, if any, shall be calculated and payable through
such extended period.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.6</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Captions; Certain
Definitions</font>.&#160;&#160;The captions of the various sections and
paragraphs of this Agreement have been inserted only for the purposes of
convenience; such captions are not a part of this Agreement and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.&#160;&#160;As used in this Agreement the term
&#8220;Person&#8221; shall mean and include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof. All pronouns
and any variations thereof used herein shall be deemed to refer to the
masculine, feminine, neuter, singular or plural as the identity of the Person or
Persons referred to may require.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.7</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Severability</font>.&#160;&#160;In
the event that any term or provision of this Agreement shall be finally
determined to be superseded, invalid, illegal or otherwise unenforceable
pursuant to applicable law by an authority having jurisdiction and venue, that
determination shall not impair or otherwise affect the validity, legality or
enforceability: (i) by or before that authority of the remaining terms and
provisions of this Agreement, which shall&#160;be enforced as if the
unenforceable term or provision were deleted, or (ii) by or before any other
authority of any of the terms and provisions of this Agreement.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.8</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Successor
Laws</font>.&#160;&#160;References in the Transaction Documents to laws, rules,
regulations and forms shall also include successors to and functionally
equivalent replacements of such laws, rules, regulations and forms.&#160;&#160;A
successor rule to Rule 144 shall include any rule that would be available to a
non-Affiliate of the Company for the sale of Common Stock not subject to volume
restrictions and after a six month holding period.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.9</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Irrevocability; Binding
Effect.</font>&#160;&#160;The Subscriber hereby acknowledges and agrees that the
subscription hereunder is irrevocable by the Subscriber, except as required by
applicable law, and that this Agreement shall survive the death or disability of
the Subscriber and shall be binding upon and inure to the benefit of the parties
and their heirs, executors, administrators, successors, legal representatives
and permitted assigns.&#160;&#160;If the Subscriber is more than one Person, the
obligations of the Subscriber hereunder shall be joint and several and the
agreements, representations, warranties and acknowledgments herein shall be
deemed to be made by and be binding upon each such Person and such Person&#8217;s
heirs, executors, administrators, successors, legal representatives and
permitted assigns.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.10</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Modification.</font>&#160;&#160;Except
as otherwise expressly provided herein, any term of this Agreement may be
amended and observance of any term of this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely) with the written consent
of the Company and subscribers holding Units equal to at least sixty-six and
two-third percent (66 2/3%) of the then subscribed for Units. Any amendment or
waiver effected in accordance with this <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 7.10</font> shall be binding
upon the Subscriber and the Company (even if the Subscriber does not consent to
such amendment or waiver), and upon the effectiveness of such amendment or
waiver, the Company shall promptly give notice to the Subscriber if the
Subscriber has not previously consented thereto in writing.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.11</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Fees.&#160;&#160;</font>Unless
otherwise specifically provided,<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>each of the parties
hereto shall pay its own fees and expenses (including the fees of any attorneys,
accountants, appraisers or others engaged by such party) in connection with this
Agreement and the transactions contemplated hereby, whether or not the
transactions contemplated hereby are consummated. Anything herein to the
contrary notwithstanding,&#160;the Company on the one hand, and the Subscriber
(for himself only) on the other hand, agree to indemnify the other against and
hold the other harmless from any and all liabilities to any Persons other than
the Placement Agent, claiming brokerage commissions, finder&#8217;s fees or due
diligence fees on account of services purported to have been rendered on behalf
of the indemnifying party in connection with this Agreement or the transactions
contemplated hereby or in connection with any investment in the Company at any
time, whether or not such investment was consummated and arising out of such
party&#8217;s actions.&#160;&#160;The Company will pay the Placement Agent a cash
commissions equal to eight percent (8%) of the gross proceeds derived from the
sale of the Units through the services of the Placement Agent to investors
introduced to the Company by the Placement Agents (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Placement Agent
Investors</font>&#8221;).&#160;&#160;The Company will also issue a number of Series E
Warrants and Series F Warrants to the Placement Agent equal to four percent (4%)
of the aggregate number of Unit Shares sold to&#160;&#160;the Placement Agent
Investors.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.12</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Survival of
Representations.</font>&#160;&#160;All representations, warranties and
agreements contained herein or made in writing by or on behalf of any party to
this Agreement in connection herewith shall survive the execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereby.</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.13</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Confidentiality.</font>&#160;&#160;The
Subscriber acknowledges and agrees that any information or data the Subscriber
has acquired from or about the Company or may acquire in the future, not
otherwise properly in the public domain was received in
confidence.&#160;&#160;The Subscriber agrees not to divulge, communicate or
disclose, except as may be required by law or for the performance of this
Agreement, or use to the detriment of the Company or for the benefit of any
other Person, or misuse in any way, any confidential information of the Company,
including any scientific, technical, trade or business secrets of the Company
and any scientific, technical, trade or business materials that are treated by
the Company as confidential or proprietary, including, but not limited to,
internal personnel and financial information of the Company or its affiliates,
information regarding AquaMed, the manner and methods of conducting the business
of the Company or its affiliates and confidential information obtained by or
given to the Company about or belonging to third parties.&#160;&#160;The
Subscriber understands that the Company may rely on this agreement of
confidentiality to comply with the exemptive provisions of Regulation FD under
the 1933 Act as set forth in Rule 100(a)(b)(2)(ii) of Regulation
FD.&#160;&#160;In addition, the Subscriber acknowledges that it is aware that
the United States securities laws generally prohibit any Person who is in
possession of material nonpublic information about a public company such as the
Company from purchasing or selling securities of such company.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.14</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Binding Obligation. </font>Upon the
execution and delivery of this Agreement by the Subscriber, this Agreement shall
become a binding obligation of the Subscriber with respect to the purchase of
the Units as herein provide, subject, however to the right reserved by the
Company to enter into the same agreement with or other subscribers and to add
an/or remove other Persons as subscribers.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.15</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Further Assurances.</font> The
parties hereto agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this
Agreement.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.16</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">No Third Party Rights.</font> Nothing
in this Agreement shall create or be deemed to create any rights in any Person
or entity not a party to this Agreement, provided however that if the Subscriber
has been introduced by the Placement Agent, the Placement Agent may rely on the
representations of the Subscriber in<font style="DISPLAY: inline; FONT-WEIGHT: bold"> Section 2</font> hereof and the
representations and warranties of the Company in <font style="DISPLAY: inline; FONT-WEIGHT: bold">Section 3 </font>hereof.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">7.17</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Governing
Law.</font>&#160;&#160;&#160;All questions concerning the construction,
validity, enforcement and interpretation of this Agreement 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.&#160;&#160;Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in New York County, New
York 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 suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper.&#160;&#160;Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery). Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Each party 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
Agreement or the transactions contemplated hereby.&#160;&#160;If either party
shall commence an action or proceeding to enforce any provisions of the
documents contemplated herein, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorney&#8217;s fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">22</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Subscriber
Questionnaire and Certification.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;US
PERSONS</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Subscriber has initialed those representations applicable to the Subscriber and
hereby represents and warrants that those representations which are initialed
are true and correct.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">FOR
      INDIVIDUAL INVESTORS:</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">1.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that he or she has an individual net worth, or together with
      his or her spouse a combined net worth, in excess of $1,000,000. For
      purposes of this representation, &#8220;net worth&#8221; means the excess of total
      assets at fair market value, including, home, home furnishings and
      automobiles, over total liabilities.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">2.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that he or she had an individual income of more than $200,000
      in each of the last two calendar years or joint income with his or her
      spouse in excess of $300,000 in each of those years and reasonably expects
      to reach the same income level in the current calendar
    year.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">FOR
      CORPORATIONS, PARTNERSHIPS OR LIMITED LIABILITY
  COMPANIES:</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">3.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is a corporation, Massachusetts or similar business
      trust, or partnership not formed for the specific purpose of acquiring
      Units with total assets in excess of
$5,000,000.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<a name="hangingindent"><!--EFPlaceholder-->
 </a></font></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="75%" style="TEXT-ALIGN: justify">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">For
      purposes of determining &#8220;net worth,&#8221; the principal residence owned by an
      individual must be valued either at (A) cost, including the cost of
      improvements, net of current encumbrances upon the property, or (B) the
      appraised value of the property as determined upon a written appraisal
      used by an institutional lender making a loan to the individual secured by
      the property, including the cost of subsequent improvements, net of
      current encumbrances upon the property. &#8220;Institutional lender&#8221; means a
      bank, savings and loan company, industrial loan company, credit union or
      personal property broker or a company whose principal business is as a
      lender upon loans secured by real property and that has such loans
      receivable in the amount of $2,000,000 or
more.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">4.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that all of its equity owners meet the standard set out in
      Statement (1) above ($ 1,000,000 net worth) or Statement (2) above
      ($200,000 individual income or $300,000 joint income). For purposes of
      this representation, &#8220;net worth&#8221; means the excess of total tangible assets
      at current value less total liabilities. Please list below the names of
      all equity owners of Subscriber.&#160;&#160;EACH SUCH EQUITY OWNER MUST
      COMPLETE A SUBSCRIBER QUESTIONNAIRE AND CERTIFICATION.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Name
      of All Equity Owners</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">_____________________________________________</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">_____________________________________________
      </font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">_____________________________________________</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">FOR
      TRUSTS OTHER THAN EMPLOYEE BENEFIT TRUSTS:</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">5.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it has total assets in excess of $5,000,000, was not
      formed for the specific purpose of acquiring Units and that the investment
      is being directed by a sophisticated Person as defined below. For purposes
      of this representation, a &#8220;sophisticated Person&#8221; means a Person who has
      such knowledge and experience in financial and business matters that he or
      she is capable of evaluating the merits and risks of the prospective
      investment.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">6.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is (a) a bank as defined in Section 3(a)(2) of the 1933
      Act, (b) acting in its fiduciary capacity as trustee, (c) subscribing for
      the purchase of the securities being offered on behalf of a
      trust.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">7.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is a revocable trust that may be amended or revoked at
      any time by its grantors and that all of its grantors meet the standard
      set out in Statement (1) above ($1,000,000 net worth) or statement (2)
      (above $200,000 individual income or $300,000 joint income). Please list
      below the names of all grantors.&#160;&#160;EACH SUCH&#160;&#160;GRANTOR
      MUST COMPLETE A SUBSCRIBER QUESTIONNAIRE AND
  CERTIFICATION.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Name
      of Grantors</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
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              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">_____________________________________________</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">_____________________________________________</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr></table>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">24</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">FOR
      EMPLOYEE BENEFIT PLAN; OR STATE PLANS:</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
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              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">8.</font></div>
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              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is an employee benefit plan within the meaning of Title
      I of the Employee Retirement Income Security Act of 1974, as amended
      (&#8220;ERISA&#8221;), with respect to which the decision to invest was made by a plan
      fiduciary as defined in Section 3(21) of ERISA that is a bank, savings and
      loan association, insurance company or investment adviser registered under
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    Act</font>&#8221;).</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">9.</font></div>
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              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is an employee benefit plan within the meaning of Title
      I of ERISA and it has total assets in excess of
  $5,000,000.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">10.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is a self-directed plan with respect to which the
      decision to invest was made solely by Persons who are &#8220;accredited
      investors&#8221; within the meaning of Regulation D under the 1933
      Act.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">11.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is a plan established and maintained by a state, its
      political subdivisions, or an agency or instrumentality of a state or its
      political subdivisions, for the benefit of its employees, and that it has
      total assets in excess of $5,000,000.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">FOR
      CHARITABLE ORGANIZATIONS:</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">12.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is an organization described in Section 501(c)(3) of
      the Internal Revenue Code of 1986, as amended not formed for the specific
      purpose of acquiring Units with total assets in excess of
      $5,000,000.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="66%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">OTHER
      ACCREDITED INVESTORS:</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">13.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is either a non-resident alien of the United States, a
      foreign entity (i.e., not formed under the laws of any state of the United
      States or its territories) or a bank as defined in Section 3 (a)(2) of the
      1933Act whether acting in its individual or fiduciary
      capacity.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">14.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is a savings and loan association or other institution
      specified in Section 3(a)(5)(A) of the 1933 Act whether acting in its
      individual or fiduciary capacity.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">15.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is a broker or dealer registered pursuant to Section 15
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              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">16.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is an insurance company as defined in
      Section&#160;2(13) of the 1933 Act.</font></div>
              </td>
            </tr></table>
        <div>&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">25</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div>&#160;</div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">17.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
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      Act.</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
              <td valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">18.</font></div>
              </td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Subscriber
      represents that it is a business development company as defined in Section
      2(a) (48) of the 1940 Act.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
              </td>
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              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
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              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
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              <td valign="top" width="62%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
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            </tr><tr>
              <td valign="top" width="13%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">____________</font></div>
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      represents that it is a private business development company as defined in
      Section 202(a)(22) of the 1940 Act.</font></div>
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            </tr></table>
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NON-U.S. PERSON SUBSCRIBERS</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(If
the Subscriber is not a U.S. Person the Subscriber must<font style="DISPLAY: inline; FONT-STYLE: italic"> INITIAL</font> this
section):</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Initial _______</font> The Subscriber
is not a &#8220;U.S. Person&#8221; as defined in Regulation S; and specifically the
Subscriber is not:</font></div>
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      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 21.5pt"></font>1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
natural Person resident in the United States of America, including its
territories and possessions (&#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">United States</font>&#8221;);</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 21.65pt"></font>2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
partnership or corporation organized or incorporated under the laws of the
United States;</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 21.65pt"></font>3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;an
estate of which any executor or administrator is a U.S. Person;</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 21.9pt"></font>4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
trust of which any trustee is a U.S. Person;</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 21.95pt"></font>5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;an
agency or branch of a foreign entity located in the United States;</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 21.4pt"></font>6.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
non-discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary for the benefit or account of a U.S.
Person;</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 21.65pt"></font>7.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
discretionary account or similar account (other than an estate or trust) held by
a dealer or other fiduciary organized, incorporated, or (if an individual)
resident in the United States; or</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 21.65pt"></font>8.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;a
partnership or corporation: (i) organized or incorporated under the laws of any
foreign jurisdiction; and (ii) formed by a U.S. Person principally for the
purpose of investing in securities not registered under the 1933 Act, unless it
is organized or incorporated, and owned, by accredited investors (as defined in
Rule 501(a) under the 1933 Act) who are not natural Persons, estates or
trusts.</font></div>
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      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
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          </div>
        </div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">And, in
addition:</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 21.85pt"></font>9.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the
Subscriber was not offered the Units in the United States;</font></div>
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time the buy-order for the Units was originated, the Subscriber was outside the
United States; and</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 21.65pt"></font>11.&#160;&#160;&#160;&#160;&#160;&#160;the
Subscriber is purchasing the Units for its own account and not on behalf of any
U.S. Person (as defined in Regulation S) and a sale of the Units has not been
pre-arranged with a purchaser in the United States.</font></div>
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</a><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[COMPANY&#8217;S
SIGNATURE PAGE FOLLOWS]</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">27</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HEPALIFE
TECHNOLOGIES, INC.</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">IN
WITNESS WHEREOF, the Company has duly executed this Subscription
Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div>
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<tr>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Dated:</font></div>
              </td>
              <td valign="top" width="21%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">,
      2010</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="42%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="37%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">HEPALIFE
      TECHNOLOGIES, INC.</font></div>
              </td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="42%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="31%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="42%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="31%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="42%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="7%" style="PADDING-BOTTOM: 2px">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">By:</font></div>
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              <td valign="top" width="31%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
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              <td valign="top" width="10%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="42%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="7%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Name:&#160;&#160;</font></div>
              </td>
              <td valign="top" width="31%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Amit
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              </td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="42%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="7%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Title:</font></div>
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              <td valign="top" width="31%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Chief
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              </td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="42%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="31%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="42%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="31%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr></table>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[SUBSCRIBER&#8217;S
SIGNATURE PAGE FOLLOWS]</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">28</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HEPALIFE
TECHNOLOGIES, INC.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSCRIBER
SIGNATURE PAGE</font></div>
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Subscriber hereby executes this Subscription Agreement.</font></div>
      <div>&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Dated:</font></div>
              </td>
              <td valign="top" width="21%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="62%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">,
      2010</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="22%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="3%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">X</font></div>
              </td>
              <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">$0.125</font></div>
              </td>
              <td valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">=</font></div>
              </td>
              <td valign="top" width="42%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">$</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="22%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Number
      of Units</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="15%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Price
      per Share</font></div>
              </td>
              <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="42%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Purchase
      Price</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SUBSCRIBER</font>
      (individual)&#160;&#160;&#160;</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">SUBSCRIBER</font>
      (entity)</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Signature</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Name
      of Entity</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Print
      Name</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Signature</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="8%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Print
      Name:&#160;</font></div>
              </td>
              <td valign="top" width="33%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Signature
      (if Joint Tenants or Tenants in Common)</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="8%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Title:</font></div>
              </td>
              <td valign="top" width="33%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Address
      of Principal Residence:</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Address
      of Executive Offices:</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Social
      Security Number(s):</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">IRS
      Tax Identification Number:</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%" style="BORDER-BOTTOM: black 2px solid"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Telephone
      Number:</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
              <td colspan="2" valign="top" width="41%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Telephone
      Number:</font></div>
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<DOCUMENT>
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<SEQUENCE>11
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<html>
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2010</font></div>
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and Exchange Commission</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">100 F
Street N.E.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Washington,
DC 20549</font></div>
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read Item 4.01 of Form 8-K dated on or around May 17, 2010 of HepaLife
Technologies, Inc. and are in agreement with the statements contained therein
concerning our firm.</font></div>
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PETERSON SULLIVAN LLP</font></div>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>12
<FILENAME>e606965_ex99-1.htm
<TEXT>
<html>
<head>
    <title>Unassociated Document</title>
    <!--Licensed to: edata-->
    <!--Document Created using EDGARizerAgent5.1.5.0-->
    <!--Copyright 1995 - 2009 Thomson Reuters. All rights reserved.-->
</head>
<body bgcolor="#ffffff" style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
      <div align="center">
        <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="90%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-WEIGHT: normal; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Richard Rosenblum</font>
      </font>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: normal; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">President, HepaLife Technologies, Inc.</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: normal; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Phone:&#160;&#160;&#160;(646) 218-1400</font></div>
              </td>
              <td nowrap width="10%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">      </font>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">HepaLife
      Technologies, Inc.</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">850
      Third Avenue, Suite 1801</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">New
      York, New York 10022</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;</font></div>
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            </tr></table>
      </div>
      <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 36pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">News
Release</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman">HepaLife&#8482;
Announces Successful Acquisition of AquaMed Technologies, Inc.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HepaLife&#8217;s
acquires AquaMed Technologies, Inc., a proven transdermal drug delivery platform
and wound care device manufacturer.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-WEIGHT: bold">New York, NY &#8211; May 17</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">, 2010</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>- HepaLife Technologies,
Inc. (OTCBB: HPLF) (FWB: HL1) (WKN: 500625), on May 11, 2010, HepaLife
Technologies, Inc., a Florida corporation (&#8220;HepaLife&#8221;), consummated a merger
(the &#8220;Merger&#8221;) whereby HepaLife acquired all of the issued and outstanding
common and preferred shares of AquaMed Technologies, Inc., a privately held
Delaware corporation (&#8220;AquaMed&#8221;) in exchange for 84.8 million shares of HPLF
common stock. As a result of the Merger, AquaMed became a wholly-owned
subsidiary of HepaLife.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Additionally, HepaLife consummated
private placements on May 11, 2010 of 9,400,000 units&#160;&#160;of its
securities and on May 14, 2010 of 2,000,000 units of its securities at a price
of $0.125 per unit and received aggregate gross proceeds of $ $1,425,000. Each
unit consisted of (i) one (1) share of HepaLife Common Stock, (ii) one half of
one five year Series E Stock Purchase Warrant&#160;&#160;with an exercise price
of $0.16 per share, and (iii) one half of one five year Series F Stock Purchase
Warrant&#160;&#160;with an exercise price of $0.20 per share.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Palladium
Capital Advisors, LLC served as the sole placement agent for the private
placements, and acted as advisor to HepaLife for the Merger.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>As a result of the transaction,
effective May 11, 2010, Amit S. Dang resigned as President and CEO of HepaLife.
Richard Rosenblum assumed the title of President of HepaLife and David Stefansky
became its Chairman. Matthew Harriton will serve as CEO of the AquaMed
subsidiary. Amit Dang commented, &#8220;We believe that the acquisition of AquaMed
with its proven delivery platform and experienced management team will enable
the company to continue to build shareholder value and advance the
commercialization of the HepaMate<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">TM</font>
product.&#8221;</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">
    </div>
    <div>&#160;</div>
    <div align="center">
      <table bgcolor="white" cellpadding="2" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
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            <td width="30%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">      </font>
              <div style="DISPLAY: block; TEXT-INDENT: 0pt; TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: times new roman">See
      over for more</font></div>
            </td>
          </tr></table>
    </div>
    <div>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">&#160;</div>
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              <td width="50%" style="TEXT-ALIGN: right"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-WEIGHT: bold">HepaLife Acquires
      AquaMed</font></font></td>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ABOUT
AQUAMED TECHNOLOGIES, INC.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AquaMed
develops, manufactures and markets high water content, electron beam
cross-linked, aqueous polymer hydrogels used for transdermal drug delivery,
wound care, medical diagnostics, and cosmetics.&#160;&#160;These gels are
produced using unique proprietary manufacturing technologies which enable
AquaMed to develop, manufacture and market electron beam cross-linked aqueous
polymer sheet hydrogels.&#160;&#160;AquaMed is believed to be one of two known
manufacturers in the world of these gels. AquaMed specializes in custom
hydrogels capitalizing on proprietary manufacturing technologies.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ABOUT
HEPALIFE TECHNOLOGIES, INC.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HepaLife
Technologies, Inc. (OTCBB: <font style="DISPLAY: inline; TEXT-DECORATION: underline">HPLF - News</font>) (FWB:
HL1) (WKN: 500625) is the developer of HepaMate&#8482; an extracorporeal cell-based
bioartificial liver system designed to combine blood detoxification with liver
cell therapy to provide whole liver function in patients with the most severe
forms of liver failure. HepaMate&#8482; is comprised of a blood plasma separation
cartridge, a hollow-fiber bioreactor filled with proprietary porcine liver
cells, a charcoal column, an oxygenator, circuit tubing and a plasma reservoir.
These components are assembled into a patented blood/plasma circulation system,
which is placed on the HepaDrive&#8482; perfusion platform. There are currently no
cell-based liver support systems commercially available or in Phase III clinical
trials in the US or Europe.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
HepaMate&#8482; technology is believed by HepaLife to be one of the most clinically
studied bioartificial liver in the world, tested in clinical studies involving
more than 200 patients with over 50 scientific papers and book chapters
published on the technology.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
statements contained in this press release regarding our ongoing research and
development and the results attained by us to-date have not been evaluated by
the Food and Drug Administration.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
additional information, please visit <font style="DISPLAY: inline; TEXT-DECORATION: underline">www.hepalife.com</font>.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
receive future press releases via email, please visit:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">http://www.hepalife.com/investor_alerts.php</font></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To view
the full HTML text of this release, please visit:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">http://www.hepalife.com/press_releases/20081117.html.php</font></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Legal Notice Regarding
Forward-Looking Statements</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;No
statement herein should be considered an offer or a solicitation of an offer for
the purchase or sale of any securities. This release contains forward-looking
statements that are based upon current expectations or beliefs, as well as a
number of assumptions about future events. Although HepaLife believes that the
expectations reflected in the forward-looking statements and the assumptions
upon which they are based are reasonable, it can give no assurance that such
expectations and assumptions will prove to have been correct. Forward-looking
statements, which involve assumptions and describe our future plans, strategies,
and expectations, are generally identifiable by use of the words &#8220;may,&#8221; &#8220;will,&#8221;
&#8220;should,&#8221; &#8220;could,&#8221; &#8220;expect,&#8221; &#8220;anticipate,&#8221; &#8220;estimate,&#8221; &#8220;believe,&#8221; &#8220;intend,&#8221; or
&#8220;project&#8221; or the negative of these words or other variations on these words or
comparable terminology. The reader is cautioned not to put undue reliance on
these forward-looking statements, as these statements are subject to numerous
factors and uncertainties, including but not limited to adverse economic
conditions, intense competition, lack of meaningful research results, entry of
new competitors and products, adverse federal, state and local government
regulation, inadequate capital, unexpected costs and operating deficits,
increases in general and administrative costs, termination of contracts or
agreements, technological obsolescence of HepaLife's products, technical
problems with the HepaLife's research and products, price increases for supplies
and components, litigation and administrative proceedings involving the
HepaLife, the possible acquisition of new businesses or technologies that result
in operating losses or that do not perform as anticipated, unanticipated losses,
the possible fluctuation and volatility of the HepaLife's operating results,
financial condition and stock price, losses incurred in litigating and settling
cases, dilution in the HepaLife's ownership of its business, adverse publicity
and news coverage, inability to carry out research, development and
commercialization plans, loss or retirement of key executives and research
scientists, changes in interest rates, inflationary factors, and other specific
risks. We currently have no commercial products intended to diagnose, treat,
prevent or cure any disease. The statements contained in this press release
regarding our on going research and development and the results attained by us
to-date have not been evaluated by the Food and Drug Administration. There can
be no assurance that further research and development, and /or whether clinical
trial results, if any, will validate and support the results of our preliminary
research and studies. Further, there can be no assurance that the necessary
regulatory approvals will be obtained or that HepaLife will be able to develop
commercially viable products on the basis of its technologies. In addition,
other factors that could cause actual results to differ materially are discussed
in HepaLife's most recent Form 10-Q and Form 10-K filings with the Securities
and Exchange Commission along with HepaLife&#8217;s Current Report on Form 8-K filed
with the Securities and Exchange Commission on May 17, 2010. These reports and
filings may be inspected and copied at the Public Reference Room maintained by
the U.S. Securities &amp; Exchange Commission at 100 F Street, N.E., Washington,
D.C. 20549. You can obtain information about operation of the Public Reference
Room by calling the U.S. Securities &amp; Exchange Commission at 1-800-SEC-0330.
The U.S. Securities &amp; Exchange Commission also maintains an Internet site
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the U.S. Securities &amp;
Exchange Commission at http://www.sec.gov. HepaLife undertakes no obligation to
publicly release the results of any revisions to these forward looking
statements that may be made to reflect the events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.</font></div>
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