ex4_1.htm


    
      

    

    Exhibit
4.1


    SECOND
AMENDMENT AND WAIVER AGREEMENT

     

    SECOND AMENDMENT AND WAIVER
AGREEMENT (this “Agreement”), dated as of March
11, 2009, by and between EnterConnect Inc., a Nevada corporation with
headquarters located at 100 Century Center Court, Suite 650, San Jose,
California 95112-4537  (the “Company”) and Highbridge
International LLC (the “Investor” or “Highbridge”).

     

    WHEREAS:

     

    1. A.        The
Company and Investor are parties to that certain Securities Purchase Agreement,
dated as of December 20, 2007, as amended by the Amendment and Waiver Agreement,
dated as of December 17, 2008, by and among the Company and the Required Holders
(the “Securities Purchase
Agreement”), pursuant to which, among other things, the Investor and
certain other investors (the “Other Investors” and
collectively with the Investor, the “Investors”) purchased from the
Company (i) senior secured notes (the “Notes”) and (ii) warrants (the
“Warrants”) which are
exercisable to acquire shares of the Company’s common stock, par value $0.001
per share (the “Common
Stock”) (the “Warrant
Shares”).

     

    2. B.       
 The Company and the Investor desire to enter into this Agreement, pursuant
to which, among other things, the Company and the Investor shall amend certain
of the Transaction Documents, Investor shall consent to certain actions by the
Company, and Investor shall waive certain rights under the Transaction
Documents.

     

    3. Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings ascribed to them in the Securities Purchase Agreement, the Registration
Rights Agreement, the Notes and Warrants.

     

    NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual promises hereinafter set
forth, the Company and the Investor hereby agree as follows:

     

    
      	
               
      

            	
              1.

            	
              AMENDMENTS AND
      WAIVERS.

            


    

     

    (a)           Amendments.  Upon
the Effective Date (as defined below):

     

    (i)           Section
4(o)(iv) of the Securities Purchase Agreement shall be amended to read in full
as follows:

     

    “(iv)                      The
restrictions contained in subsections (ii) and (iii) of this Section 4(o) shall
not apply in connection with (a) the issuance of any Excluded Securities (as
defined in the Notes), (b) the  issuance and sale by the Company to
Onset Capital LLC, John Thomas Financial, Inc. (“JTF”), or such other
party(ies) acceptable to the Required Holders and the Company, in their
respective discretion, of one or more bridge loan notes (the “Bridge Notes”) in the
aggregate principal amount of Two Hundred Fifty Thousand Dollars ($250,000),
which Bridge Notes shall be substantially in the form of that Bridge Note
attached as Exhibit K, or in some other form acceptable to the Required Holders
and the Company (the “Bridge
Notes Issuance”), (c) the issuance of up to 100,000 shares of Common
Stock to JFT as compensation in connection with the provision by JTF to the
Company of financial and strategic advisory services (the “JTF Issuance”), and (d) up to
$1,000,000 of Series A Convertible Preferred Stock and accompanying warrants on
substantially the terms as set forth in the Series A Convertible Preferred Stock
Purchase Agreement attached hereto as Exhibit L (and the Certificate of
Designation for the Series A Convertible Preferred Stock, and the form of
Warrant, attached thereto), or in a similar form reasonably acceptable to the
Required Holders and the Company (the “Preferred Stock
Issuance”).”

    
       

    

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    (ii)          The
form of Bridge Notes (as defined above) and the form of Series A Convertible
Preferred Stock Purchase Agreement (as referenced above) (which are attached
hereto as Exhibits A and B, respectively) shall be added to the Securities
Purchase Agreement as Exhibits K and L, respectively.

     

    (iii)         The
third sentence of Section 9(e) of the Securities Purchase Agreement is hereby
amended to read as follows:

     

    “No
provision hereof may be waived other than by an instrument in writing signed by
the party against whom enforcement is sought; provided, however,
that the holders of at least a majority of the aggregate number of Registrable
Securities issued and issuable hereunder and under the Notes may waive a right
for the benefit of all of the Buyers by signing an instrument in writing
indicating such waiver.”

     

    (b)           Consent. The
Investors consent to the Bridge Notes Issuance and the Preferred Stock
Issuance.

     

    (c)           Waiver of Warrant Shares
Adjustment.  Each Investor waives any adjustment to the number
of Warrant Shares issuable upon exercise of the SPA Warrants that would occur as
a result of the Bridge Loan Issuance and the Preferred Stock
Issuance.

     

    (d)           Effective
Date.  This Agreement and the amendments, consents and waivers
contained herein shall be effective at such time as agreements in the same form
and substance as this Agreement other than the identity of the Investor are
executed by the Company and the Required Holders and the holders of at least a
majority of the aggregate number of Registrable Securities issued and issuable
under the Securities Purchases Agreement and under the Notes (such time, the
“Effective
Date”).

     

    
      	
               
      

            	
              2.

            	
              OTHER AMENDMENTS TO
      TRANSACTION DOCUMENTS.

            


    

     

    (a)           Ratifications.  The
Company hereby confirms and agrees that, except as otherwise expressly provided
in this Agreement, the Securities Purchase Agreement and each other Transaction
Document are, and shall continue to be, in full force and effect and are hereby
ratified and confirmed in all respects, except that, on and after the Effective
Date, (i) all references in the Securities Purchase Agreement or the other
Transaction Documents to "this Agreement", "hereto", "hereof", "hereunder" or
words of like import referring to the Securities Purchase Agreement shall mean
the Securities Purchase Agreement as amended by this Agreement, (ii) all
references in the Securities Purchase Agreement or the other Transaction
Documents to “Notes” or “Note” or words of like import referring to the Notes or
a Note shall mean the Notes as amended by this Agreement, (iii) the defined term
“Transaction Documents” is hereby amended to include this
Agreement.

     

    
      
        
           


        

        
          2

          
            

          

        

        
           


        

      

    

    


    (b)           Amendment to the
Notes.  The definition of “Excluded Securities” set forth in
Section (29)(l) of the Notes is amended to read as follows:

     

    "Excluded Securities" means (A)
any Common Stock issued or issuable: (i) in connection with any Approved Stock
Plan; (ii) upon conversion of the Notes or upon the exercise of the Warrants;
(iii) upon conversion, exercise or exchange of any Options or Convertible
Securities which are outstanding on the day immediately preceding the
Subscription Date, provided that the terms of such Options or Convertible
Securities are not amended, modified or changed on or after the Subscription
Date; or (iv) pursuant to a bona fide firm commitment underwritten public
offering with a nationally recognized underwriter which generates gross proceeds
to the Company in excess of $10,000,000 (other than an "at-the-market offering"
as defined in Rule 415(a)(4) under the 1933 Act and "equity lines"), and (B) the
securities issued pursuant to the JFT Issuance, the Bridge Notes Issuance, and
the Preferred Stock Issuance.”

     

    
      	
               
      

            	
              3.

            	
              CERTAIN COVENANTS AND
      AGREEMENTS; WAIVER

            


    

     

    (a)           Disclosure of Transactions
and Other Material Information.  Within the timeframe required
under the 1934 Act, the Company shall file a Current Report on Form 8-K
describing the terms of this Agreement and attaching this Agreement, along with
the Exhibits hereto (the “8-K
Filing”).  From and after the filing of the 8-K Filing with the
SEC, the Investor shall not be in possession of any material, nonpublic
information received from the Company, any of its Subsidiaries or any of their
respective officers, directors, employees or agents, that is not disclosed in
the 8-K Filing.  The Company shall not, and shall cause each of its
Subsidiaries and its and each of their respective officers, directors, employees
and agents, not to, provide the Investor with any material, nonpublic
information regarding the Company or any of its Subsidiaries from and after the
filing of the 8-K Filing with the SEC without the express written consent of the
Investor.  Subject to the foregoing, neither the Company, its
Subsidiaries nor the Investor shall issue any press releases or any other public
statements with respect to the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of the Investor, to make
any press release or other public disclosure with respect to such transactions
(i) in substantial conformity with the 8-K Filing and contemporaneously
therewith and (ii) as is required by applicable law and
regulations.

     

    (b)           Fees and
Expenses.  Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.

     

    (c)           Proceeds of Company
Financing.  The Company will use the proceeds of the Bridge
Notes and the Preferred Stock Issuance for general corporate purposes and not
for the repayment of any Indebtedness of the Company other than accounts
payable; provided that the proceeds of the Preferred Stock Issuance may be used
to pay off the Bridge Notes in accordance with their terms.

     

    
      
        
           


        

        
          3

          
            

          

        

        
           


        

      

    

    


    
      	
               
      

            	
              4.

            	
              MISCELLANEOUS.

            


    

     

    (a)           Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.

     

    (b)           Headings.  The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.

     

    (c)           Severability.  If
any provision of this Agreement is prohibited by law or otherwise determined to
be invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).

     

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

     

    
      
        
           


        

        
          4

          
            

          

        

        
           


        

      

    

    


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

     

    (f)           Further
Assurances.  Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

     

    (g)           No Strict
Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.

     

    (h)           Entire Agreement; Effect on
Prior Agreements; Amendments.  Except for the Transaction
Documents in effect prior to this Agreement (to the extent any such Transaction
Document is not amended by this Agreement), this Agreement supersedes all other
prior oral or written agreements between the Investor, the Company, their
affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor the Investor makes any representation,
warranty, covenant or undertaking with respect to such matters.  No
provision of this Agreement may be amended other than by an instrument in
writing signed by the Company.  No provision hereof may be waived
other than by an instrument in writing signed by the party against whom
enforcement is sought.  No consideration shall be offered or paid to
any Person to amend or consent to a waiver or modification of any provision of
any of the Transaction Documents unless the same consideration also is offered
to all of the parties to the Transaction Documents, holders of Notes or holders
of the Warrants, as the case may be.  The Company has not, directly or
indirectly, made any agreements with the Investor relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents.

     

    (i)       
    Notices.  Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same.  The addresses and facsimile numbers for such communications
shall be:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    if to the
Company:

     

    EnterConnect
Inc.

    100
Century Center Court

    Suite
650

    
      San Jose,
California 95112-4537

    

    
      Telephone:
(408)
441-9500

    

    
      Facsimile:
(408)
452-9040

    

    
      Attention:
Sam Jankovich

    

    


    with a
copy to:

     

    Taylor English
Duma LLC

    1600
Parkway Circle, Suite 400

    Atlanta,
Georgia 30339

    
      Facsimile
No.: (770)
434-7376

    

    
      Telephone
No.: (770)
434-6868

    

    
      Attention:
Bruce S. Richards,
Esq.

    

    


    if to the
Investor, to its address and facsimile number set forth in the Schedule of
Buyers attached to the Securities Purchase Agreement, or, in each case, to such
other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

     

    (j)          
 Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns in accordance
with the terms of the Securities Purchase Agreement.

     

    (k)           Survival.  The
representations and warranties of the Company and the Investor contained herein
and the agreements and covenants set forth herein shall survive the Effective
Date.

     

    (l)        
   Remedies.  The
Investor and each holder of the Securities shall have all rights and remedies
set forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract and
all of the rights which such holders have under any law.  Any Person
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law.  Furthermore, the Company
recognizes that in the event that it fails to perform, observe, or discharge any
or all of its obligations under this Agreement, any remedy at law may prove to
be inadequate relief to the Investor.  The Company therefore agrees
that the Investor shall be entitled to seek temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages and
without posting a bond or other security.

     

    
      
        
           


        

        
          6

          
            

          

        

        
           


        

      

    

    


    (m)           Independent Nature of
Investors’ Obligations and Rights. The obligations of the Investor under
this Agreement or any other Transaction Document are several and not joint with
the obligations of any other Investor, and the Investor shall not be responsible
in any way for the performance of the obligations of any other Investor under
any Transaction Document.  Nothing contained herein or in this
Agreement or any other Transaction Document, and no action taken by the Investor
pursuant hereto, shall be deemed to constitute the Investor and other investors
as a partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Investor and other investors are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement or any other Transaction Document
and the Company acknowledges that the Investor is not acting in concert or as a
group with respect to such obligations or the transactions contemplated by this
Agreement and any other Transaction Document. The Company and the Investor
confirm that the Investor has independently participated in the negotiation of
the transactions contemplated hereby with the advice of its own counsel and
advisors. The Investor shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this
Agreement or out of any other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose.

     

    
      
        
           


        

        
          7

          
            

          

        

        
           


        

      

    

    


    IN WITNESS WHEREOF, the
Investor and the Company have caused their respective signature page to this
Agreement to be duly executed as of the date first written above.

     

     

    
      
        
          
            
              
                
                  	 
      	
                          COMPANY:

                        
	 
      	 
      	 
      
	 
      	
                          ENTERCONNECT
      INC.

                        
	 	 	 
	 	 	 
	 
      	
                          By:

                        	
                          /s/
      Sam Jankovich

                        
	 
      	 
      	 
      
	 
      	 
      	
                          Sam
      Jankovich, Chief Executive
Officer

                        


                

              

            

          

        

      

    

     

     

    
      [Signature
Page to Second Amendment and Waiver Agreement]

       

    

    
      
        
           


        

        
          8

          
            

          

        

        
           


        

      

    

    


    IN WITNESS WHEREOF, the
Investor and the Company have caused their respective signature page to this
Agreement to be duly executed as of the date first written above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	 
      	
                                    INVESTOR:

                                  
	 
      	 
      	 
      	 
      
	 
      	
                                    HIGHBRIDGE
      INTERNATIONAL LLC

                                  
	 
      	
                                    By
      Highbridge Capital Management, LLC,

                                  
	 
      	
                                    Its
      Trading Manger

                                  
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                                    By:

                                  	
                                    /s/ Eric Colandrea

                                  
	 
      	 
      	
                                    Name:

                                  	
                                    Eric
      Colandrea

                                  
	 
      	 
      	
                                    Title:

                                  	
                                    Senior
      Vice
President

                                  


                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
       

      [Signature
Page to Second Amendment and Waiver Agreement]

       

    

    
      
        
           


        

        
          9

          
            

          

        

        
           


        

      

    

    


    EXHIBIT
A

     

    FORM OF
BRIDGE NOTES

     

    
       

    

    
      
        
           


        

        
          10

          
            

          

        

        
           


        

      

    

    


    This
note has not been registered under the Securities Act of 1933, as amended, or
applicable state securities laws.  This note has been acquired for
investment and not with a view to distribution or resale, and may not be sold,
mortgaged, pledged, hypothecated or otherwise transferred without an effective
registration statement for such securities under the Securities Act of 1933, as
amended, and any applicable state securities laws, or the availability of an
exemption from the registration provisions of the Securities Act of 1933, as
amended, and applicable state securities laws, as represented by an opinion of
counsel reasonably satisfactory to the company if reasonably requested by the
company.

    


    This
note is subject to those restrictions on transfer as set forth herein, and is
negotiable only in compliance with the terms of this note.

    


    ENTERCONNECT
INC.

    


    CONVERTIBLE PROMISSORY
NOTE

     

    
      
        	
                $____________.00

              	
                _______________,
      2009

              


      

    

    


    FOR VALUE RECEIVED, the undersigned,
EnterConnect Inc., a Nevada corporation (the “Company”), hereby promises to
pay to _________________ (“Payee,” and, together with any
permitted transferee then the duly endorsed and recorded holder hereof, the
“the Holder”), the
principal amount of ___________________________ and No/100 Dollars ($_______.00)
plus interest at the rate provided for herein from the date hereof on such
principal amount or such lesser amount as is then currently outstanding, in such
currency of the United States of America as at the time will be legal tender for
the payment of public and private debts, with principal and interest payable as
herein provided.

     

    5.         
   INTEREST RATE AND PAYMENT
PROVISIONS.

     

    (a)           Except
as otherwise provided herein, the principal amount of this Convertible
Promissory Note (this “Note”) outstanding from time
to time will bear interest from the date hereof through the date on which the
principal amount hereof and all accrued interest thereon are paid in full, at a
simple interest rate equal to five percent (5%) per annum (the “Note Rate”).

     

    (b)           Unless
previously converted into Series A Securities (as defined below), all unpaid
interest and principal on this Note will be due and payable by the Company in
full on the first date on which the restrictions on payment of this Note under
the terms of Section 2 below are no longer in effect, or (ii) immediately before
a Liquidation Transaction (the “Maturity Date”); provided that
such date may be extended by consent of the Company and the
Holder.  For purposes hereof, a “Liquidation Transaction” means
a liquidation, dissolution, or winding up of the Company, or the Company’s sale,
lease, conveyance, or other disposition of all or substantially all of its
property or business or merger with or into or consolidation with any other
corporation, limited liability company or other entity (other than a
wholly-owned subsidiary of the Company).  All payments made by the
Company on this Note will be applied first to the payment of accrued but unpaid
interest on this Note and then to the reduction of the unpaid principal amount
of this Note.

     

    (c)           If
the principal amount of this Note, and all accrued but unpaid interest thereon,
is not paid on the Maturity Date, then interest will accrue on such unpaid
amount at the Note Rate plus five percent (5%) from and after any such date or
occurrence to the date of the payment in full of the principal amount of this
Note and all accrued but unpaid interest thereon.

     

    
      
        
           


        

        
          11

          
            

          

        

        
           


        

      

    

    


    6.            
SUBORDINATION.  EXCEPT
AS OTHERWISE PROVIDED HEREIN, THIS NOTE WILL BE SUBORDINATED IN RIGHT OF PAYMENT
TO ALL OBLIGATIONS OF THE COMPANY OWING ON THOSE CERTAIN SENIOR SECURED NOTES
ISSUED BY THE COMPANY PURSUANT TO THAT CERTAIN SECURITIES PURCHASE AGREEMENT,
DATED AS OF DECEMBER 20, 2007, BY AND AMONG THE COMPANY, HIGHBRIDGE
INTERNATIONAL LLC (“HIGHBRIDGE”), AND VARIOUS OTHER
INVESTORS IN THE SENIOR NOTES, AS AMENDED BY THOSE CERTAIN AMENDMENTS ENTITLED
AMENDMENT AND WAIVER AGREEMENT, DATED AS OF DECEMBER 17, 2008, AND SECOND
AMENDMENT AND WAIVER AGREEMENT, DATED AS OF MARCH 9, 2009, BY AND AMONG THE
COMPANY AND THE HOLDERS OF
CONVERTIBLE PROMISSORY NOTES ISSUED PURSUANT TO THE SECURITIES PURCHASE
AGREEMENT, AS AMENDED, REPRESENTING AT LEAST A MAJORITY OF THE AGGREGATE
PRINCIPAL AMOUNT OF SUCH NOTES THEN OUTSTANDING (THE “SENIOR
NOTES PURCHASE AGREEMENT”), NOW OR HEREAFTER
ARISING, TOGETHER WITH ALL COSTS OF COLLECTING SUCH OBLIGATIONS (INCLUDING
REASONABLE ATTORNEYS’ FEES), INCLUDING, WITHOUT LIMITATION, ALL INTEREST
ACCRUING AFTER THE COMMENCEMENT BY OR AGAINST THE COMPANY OF ANY BANKRUPTCY,
REORGANIZATION OR SIMILAR PROCEEDING, AND ALL OBLIGATIONS UNDER THE SENIOR NOTES
PURCHASE AGREEMENT (THE “SENIOR
DEBT”).  THE HOLDER
WILL NOT DEMAND OR RECEIVE FROM THE COMPANY (AND THE COMPANY WILL NOT PAY TO THE
HOLDER) ALL OR ANY PART OF THE AMOUNTS OWING UNDER THIS NOTE, BY WAY OF PAYMENT,
PREPAYMENT, SETOFF, LAWSUIT OR OTHERWISE, NOR WILL THE HOLDER COMMENCE,
PROSECUTE OR PARTICIPATE IN ANY ADMINISTRATIVE, LEGAL OR EQUITABLE ACTION
ADVERSARIAL TO THE COMPANY IN RESPECT OF THIS NOTE, FOR SO LONG AS ANY PORTION
OF THE SENIOR DEBT REMAINS OUTSTANDING AND UNTIL 91 DAYS AFTER ANY PORTION OF IT
REMAINS OUTSTANDING.

     

    7.          
  LOSS,
THEFT, DESTRUCTION OR MUTILATION OF NOTE.  UPON RECEIPT OF EVIDENCE
SATISFACTORY TO IT OF THE LOSS, THEFT, DESTRUCTION OR MUTILATION OF THIS NOTE OR
ANY NOTE ISSUED IN EXCHANGE THEREFOR AND, IF REQUESTED IN THE CASE OF ANY SUCH
LOSS, THEFT OR DESTRUCTION, UPON DELIVERY OF AN INDEMNITY AGREEMENT REASONABLY
SATISFACTORY TO THE COMPANY, OR, IN THE CASE OF ANY SUCH MUTILATION, UPON
SURRENDER AND CANCELLATION OF THIS NOTE, THE COMPANY WILL ISSUE A NEW NOTE OF
LIKE TENOR AND AMOUNT AND DATED THE DATE OF THE ORIGINAL NOTE, IN LIEU OF SUCH
LOST, STOLEN, DESTROYED OR MUTILATED NOTE.

     

    8.            
SERIES A FINANCING AND
CONVERSION OF NOTE.

     

    
      
        
           


        

        
          12

          
            

          

        

        
           


        

      

    

    


    (a)           The
parties acknowledge that (i) the Company is seeking to issue and sell, within
the ninety (90) day period following the date hereof, shares of its Series A
Convertible Preferred Stock, accompanied by warrants to purchase the Company’s
Common Stock (collectively, the “Series A Securities”), to
existing and potentially new investors in the Company, and that Payee, as a
placement agent, and potentially other placement agents, may assist with the
placement of the Series A Securities, and (ii) the Company will seek to raise a
maximum of One Million Dollars ($1,000,000.00) of equity capital through such
issuance and sale (the “Financing”).   The
Holder will have the option, but not the obligation, concurrent with the closing
of the Financing (whether the Financing occurs within such ninety (90) day
period, or whether Company, in its sole discretion, extends the ninety (90) day
period in order to raise the minimum amount), to convert the outstanding
principal balance of this Note plus any unpaid accrued interest as of the date
of the Financing into Series A Securities on the same terms and conditions as
given to the other investors in the Financing.  The Company will give
the Holder written notice of the Financing, which notice will include the
material terms of the Financing, at least five (5) business days prior to the
consummation of the Financing, which notice will be deemed waived by the Holder
if the Holder converts this Note into Series A Securities as a part of the
Financing.  At the closing of the Financing, if the Holder has elected
to convert this Note as part of the Financing, the Holder will deliver to the
Company this Note to be converted into Series A Securities, this Note will be
canceled and of no further force and effect, and the Company will issue the
Series A Securities to the Holder.

     

    (b)           Any
conversion under Section 4.1 above will be subject to all the terms and
conditions of the Financing applicable to the holders of the Series A Securities
to be issued to the other investors, including, but not limited to, the
conversion rights or exercise rights, preemptive rights, registration rights and
other protective rights granted and the benefit of any representations and
warranties made in connection with the Series A Securities being issued in the
Financing, and the Holder, upon conversion, will be entitled to all such
benefits and rights of the purchaser(s) of Series A Securities.  Upon
any conversion under Section 4.1 above, the Holder will become a party to and
execute any agreements that are being entered into by the other purchasers of
Series A Securities in connection with their issuance and sale.

     

    (c)           Notwithstanding
any other provisions herein, upon the closing of the Financing, if any amounts
remain outstanding under this Note, the Company will pay the Holder all amounts
owing under this Note out of the proceeds from the Financing.

     

    9.           PAYEE
REPRESENTATIONS.  THIS NOTE IS ISSUED TO PAYEE IN RELIANCE ON PAYEE’S
REPRESENTATIONS TO THE COMPANY, AS FOLLOWS:

     

    (a)           This
Note is acquired for investment for its own account, not as a nominee or agent,
and not with a view to the sale or distribution of any part thereof, and Payee
has no present intention of selling, granting participation in, or otherwise
distributing this Note.

     

    (b)           Payee
has no contract, undertaking, agreement, or arrangement with any person to sell,
transfer or grant participations to such person, or to any third person, with
respect to this Note.

     

    (c)           Payee
understands that this Note has not been registered under the Securities Act of
1933 (the “Act”),
because the issuance of this Note is exempt from registration under the Act, and
the Company’s reliance on such exemption is predicated in part on Payee’s
representations set forth herein.

     

    (d)           Payee
is experienced in evaluating early-stage companies such as the Company, is able
to fend for itself in the transactions such as the issuance of this Note, has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of its investment, has the ability to bear
the economic risks of its investment, has had access, prior to the issuance of
this Note, to all such information as it deemed necessary or appropriate (to the
extent the Company possessed such information or could acquire it without
unreasonable effort or expense), has had, prior to the issuance of this Note,
the opportunity to ask questions of, and receive answers from, the Company
concerning the terms and conditions of the Company’s offering of this Note, (to
the extent the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify the accuracy of any
information furnished to it or to which it had access.

     

    10.           COMPANY
REPRESENTATION.  COMPANY HEREBY REPRESENTS THAT IT HAS THE REQUISITE
CORPORATE POWER AND AUTHORITY TO ISSUE AND SELL THIS NOTE TO
PAYEE.

     

    11.           RESTRICTION
ON TRANSFER.  PAYEE ACKNOWLEDGES THAT NEITHER THIS
NOTE,  NOR SERIES A SECURITIES THAT MAY BE PURCHASED BY THE HOLDER
PURSUANT TO EXERCISE OF THE HOLDER’S OPTION DESCRIBED IN SECTION 4.1 ABOVE, MAY
BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE ACT
OR AN EXEMPTION THEREFROM, AND THAT, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT COVERING THIS NOTE OR THE PARTICULAR SERIES A SECURITIES IN QUESTION,
OR AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT, THIS NOTE AND ANY
SERIES A SECURITIES AS APPLICABLE MUST BE HELD INDEFINITELY.  THE
HOLDER AGREES THAT IN NO EVENT WILL IT MAKE A TRANSFER OR DISPOSITION OF ANY OF
THIS NOTE OR ANY SERIES A SECURITIES, UNLESS AND UNTIL (I) THE HOLDER WILL HAVE
NOTIFIED THE COMPANY OF THE PROPOSED DISPOSITION AND THE CIRCUMSTANCES
SURROUNDING THE DISPOSITION, AND (II) IF REQUESTED BY THE COMPANY, THE HOLDER
WILL HAVE FURNISHED TO THE COMPANY, AT ITS EXPENSE, AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH TRANSFER MAY BE
MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT.  PAYEE
ACKNOWLEDGES THAT NO PUBLIC MARKET NOW EXISTS FOR THIS NOTE OR WILL EXIST FOR
THE SERIES A SECURITIES, AND THAT THERE IS NO ASSURANCE THAT A PUBLIC MARKET
WILL EVER EXIST FOR ANY SUCH SECURITIES.

     

    
      
        
           


        

        
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    12.           UNCONDITIONAL OBLIGATION;
FEES, WAIVERS, ETC.

     

    (a)           The
obligations to make the payments provided for in this Note are absolute and
unconditional and not subject to any defense, set-off, counterclaim, rescission,
recoupment or adjustment whatsoever.

     

    (b)           If
the Holder will seek to enforce the collection of any amount of principal of or
interest on this Note or the terms of this Note, there will be immediately due
and payable from the Company, in addition to the then unpaid principal of, and
accrued unpaid interest on, this Note, all costs and expenses incurred by the
Holder in connection therewith, including, without limitation, reasonable
attorneys’ fees and disbursements. Any such costs and expenses will be paid
directly by the Company, or will be paid by the Company to the Holder as and
when bills are received or such costs and expenses are incurred.

     

    (c)           No
forbearance, indulgence, delay or failure to exercise any right or remedy with
respect to this Note will operate as a waiver, or as acquiescence in any
default, nor will any single or partial exercise of any right or remedy preclude
any other or further exercise thereof or the exercise of any other right or
remedy.

     

    (d)           This
Note may be amended only upon the written agreement of the Company and the
Holder.  Compliance with a provision of this Note may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only in writing by the party exercising the waiver.

     

    (e)           The
Company hereby expressly waives demand and presentment for payment, notice of
nonpayment, notice of dishonor, protest, notice of protest, bringing of suit,
and diligence in the Holder’s taking any action to collect amounts called for
hereunder, and will be directly and primarily liable for the payment of all sums
owing and to be owing hereon, regardless of and without any notice, diligence,
act or omission with respect to the collection of any amount called for
hereunder.

     

    13.           MISCELLANEOUS.

     

    (a)           The
headings of the various paragraphs of this Note are for convenience of reference
only and will in no way modify any of the terms or provisions of this
Note.

     

    
      
        
           


        

        
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    (b)           All
notices, demands and other communications provided for hereunder will be in
writing and will be deemed effective: (a) upon personal delivery to the party to
be noticed; (b) upon electronic confirmation when sent via facsimile; or (c) one
(1) business day after deposit with a nationally recognized overnight carrier,
specifying next day delivery, with written verification of
receipt.  All communications and notices will be sent as
follows:

     

    
      
        
          	
                  If
      to the Company, to:

                	 
      	
                  If
      to Payee, to:

                
	 
      	 
      	 
      
	
                  EnterConnect
      Inc.

                	 
      	 
      
	
                  100
      Century Center Court, Ste. 650

                	 
      	 
      
	
                  San
      Jose, CA  95112-4537

                	 
      	 
      
	
                  Attention: 
      Chief
      Executive Officer

                	 
      	
                  Attention:

                
	
                  Facsimile: 
      (408)
      452-9040

                	 
      	
                  Facsimile:

                


        

      

    

    


    or to
such other address as such party (or, where applicable, the Holder) will
designate in writing, and will be deemed given when received.

    


    (c)           This
Note and the obligations of the Company and the rights of the Holder will be
governed by and construed in accordance with the laws of the New York, without
giving effect to its principles regarding conflicts of law.

     

    (d)           This
Note may be transferred or assigned only upon its surrender to the Company for
registration of transfer, duly endorsed, accompanied by a duly executed written
instrument of transfer in a form reasonably satisfactory to the
Company.  Thereupon, this Note will be reissued to, and registered in
the name of, the transferee, or a new Note for like principal amount and
interest will be issued to, and registered in the name of, the
transferee.  Interest and principal will be paid solely to the
registered Holder of this Note.  Such payment will constitute full
discharge of the Company’s obligation to pay such interest and
principal.  Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by the Company without the prior written consent of the
Holder.

     

    (e)           This
Note will be binding upon and will inure to the benefit of the Company, the
Payee, and their respective successors and permitted assigns.

     

    


    [Signature follows on next
page]

    


    
      
        
           


        

        
          15

          
            

          

        

        
           


        

      

    

    


    IN WITNESS WHEREOF, the
Company has executed and delivered this Convertible Promissory Note as of the
date first written above.

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 
      	 
      	 
      	 
      	
                                      EnterConnect
      Inc.

                                    
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
                                      By:

                                    	 
      
	 
      	 
      	 
      	 
      	 
      	
                                      Sam
      Jankovich, Chief Executive Officer

                                    
	 
      	 
      	 
      	 
      	 
      	 
      
	
                                      Acknowledged
      and Agreed:

                                    	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                                      By:

                                    	 
      	 
      	 
      	 
      
	
                                      Name:

                                    	 
      	 
      	 
      	 
      
	
                                      Title:

                                    	 
      	 
      	 
      	 
      


                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
           


        

        
          16

          
            

          

        

        
           


        

      

    

    


    EXHIBIT
B

     

    FORM OF
SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

     

    


    
      
        
           


        

        
          17

          
            

          

        

        
           


        

      

    

    


    SERIES
A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

     

    This
SERIES A CONVERTIBLE
PREFERRED STOCK PURCHASE
AGREEMENT (this “Agreement”), is made as of
_________________, 2009, by and among EnterConnect Inc., a Nevada corporation,
with headquarters located at 100 Century Center Court, Suite 650, San Jose,
California 95112-4537 (the ”Company”), and the investors
listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively, the
“Buyers”), with
reference to the following facts:

     

    The
Company and each Buyer are executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of the
Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of
Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange
Commission (the “SEC”)
under the 1933 Act.

     

    The
Company’s Articles of Incorporation (the “Articles”), as amended and
currently in effect, authorize 10,000,000 shares of Preferred Stock, par value
$0.001 per share (“Preferred
Stock”), none of which is currently issued and
outstanding.  Pursuant to the Articles, the Company’s Board of
Directors has provided for Series A Convertible Preferred Stock (the “Series A Stock”), and has
caused to be filed, pursuant to the provisions of the Nevada Revised Statutes
(the “NRS”), a
certificate establishing the number of shares of Series A Stock available for
issuance, and setting forth the powers, preferences and rights of the shares and
the qualifications, limitations and restrictions thereof, a copy of which is
attached hereto as Exhibit A (the “Series A
Designation”).  The Series A Stock is convertible into the
Company's common stock, par value $0.001 per share (“Common Stock”) (as converted,
the “Conversion
Shares”), in accordance with the terms of the Series A
Designation.

     

     Each
Buyer wishes to purchase, and the Company wishes to issue and sell, upon the
terms and conditions stated in this Agreement, (i) that aggregate number of
shares of Series A Stock set forth opposite the Buyer’s name in column (3) on
the Schedule of Buyers and (ii) warrants, in substantially the form attached
hereto as Exhibit
B (the “Warrants”), to acquire up to
that number of shares of the Company’s Common Stock set forth opposite such
Buyer's name in column (4) of the Schedule of Buyers (as exercised,
collectively, the ”Warrant
Shares”), which Warrant Shares shall be equal to the number of Series A
Stock.

     

    The
Series A Stock, the Conversion Shares, the Warrants and the Warrant Shares
collectively are referred to herein as the “Securities.”

     

    
      
        
           


        

        
          18

          
            

          

        

        
           


        

      

    

    


     NOW, THEREFORE, the Company
and each Buyer hereby agree as follows:

     

    1.           
 PURCHASE AND
SALE OF SERIES A STOCK AND WARRANTS.

     

    (a)           Purchase of Series A Stock
and Warrants.

     

    (i)     
      Shares and
Warrants. Subject to the
satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below,
the Company shall issue and sell to each Buyer, and each Buyer severally, but
not jointly, shall purchase from the Company on the Closing Date (as defined
below), (x) that number of shares of Series A Stock set forth opposite such
Buyer's name in column (3) on the Schedule of Buyers and (y) Warrants to acquire
up to that number of Warrant Shares as is set forth opposite such Buyer's name
in column (4) on the Schedule of Buyers, (the “Closing”).

     

    (ii)           Closing.  The
date and time of the Closing (the “Closing Date”) shall be 10:00
a.m., New York City time, on the date hereof (or such later date as is mutually
agreed to by the Company and each Buyer) after notification of satisfaction (or
waiver) of the conditions to the Closing set forth in Sections 6 and 7 below at
the offices of Taylor English Duma LLP, 1600 Parkwood Circle, Suite 400,
Atlanta, Georgia 30339.

     

    (iii)          Purchase
Price.  The aggregate purchase price for the shares of Series A
Stock and the Warrants to be purchased by each such Buyer at the Closing (the
“Purchase Price”) shall
be the amount set forth opposite each Buyer's name in column (5) of the Schedule
of Buyers.  Each Buyer shall pay $.10 for each share of Series A Stock
and the related Warrant to be purchased by such Buyer at the
Closing.

     

    (b)           Form of
Payment.  On the Closing Date, (i) each Buyer shall pay its
Purchase Price to the Company for the shares of Series A Stock and the Warrants
to be issued and sold to such Buyer at the Closing, by wire transfer of
immediately available funds in accordance with the Company's written wire
instructions (or by such other means as agreed to by Company) and (ii) the
Company shall deliver to each Buyer certificates representing the shares of
Series A Stock that such Buyer is then purchasing hereunder along with the
Warrants that such Buyer is purchasing, in each case duly executed on behalf of
the Company and registered in the name of such Buyer or its
designee.

     

    2.           
 BUYER'S
REPRESENTATIONS AND WARRANTIES.  Each Buyer, severally and
not jointly, represents and warrants with respect to only itself that, as of the
date hereof and as of the Closing Date:

     

    (a)           No Sale or
Distribution.  Such Buyer is acquiring the Series A Stock, and
the Warrants, and upon conversion of the Series A Stock and exercise of the
Warrants (other than pursuant to a Cashless Exercise (as defined in the
Warrants)) will acquire the Conversion Shares issuable upon conversion of the
Series A Stock and the Warrant Shares issuable upon exercise of the Warrants,
for its own account and not with a view towards, or for resale in connection
with, the public sale or distribution thereof, except pursuant to sales
registered or exempted under the 1933 Act.  Such Buyer does not
presently have any agreement or understanding, directly or indirectly, with any
Person to distribute any of the Securities.

     

    
      
        
           


        

        
          19

          
            

          

        

        
           


        

      

    

    


    (b)           Accredited Investor
Status.  Such Buyer is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D.

     

    (c)           Reliance on
Exemptions.  Such Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Securities.

     

    (d)           Information.  Such
Buyer and its advisors, if any, have been furnished with all materials relating
to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities that have been requested by such
Buyer.  Such Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company.  Neither such inquiries
nor any other due diligence investigations conducted by such Buyer or its
advisors, if any, or its representatives shall modify, amend or affect such
Buyer's right to rely on the Company's representations and warranties contained
herein.  Such Buyer understands that its investment in the Securities
involves a high degree of risk and is able to afford a complete loss of such
investment.  Such Buyer has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision
with respect to its acquisition of the Securities, and is not relying on the
Company in that regard.

     

    (e)           No Governmental
Review.  Such Buyer understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or
suitability of the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.

     

    (f)          
 Transfer or
Resale.  Such Buyer understands that: (i) the Securities have
not been and are not being registered under the 1933 Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) such Buyer shall have delivered to the
Company an opinion of counsel, in a generally acceptable form, to the effect
that such Securities to be sold, assigned or transferred may be sold, assigned
or transferred pursuant to an exemption from such registration, or (C) such
Buyer provides the Company with reasonable assurance that such Securities can be
sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated
under the 1933 Act, as amended (or a successor rule thereto) (collectively,
“Rule 144”); (ii) any
sale of the Securities made in reliance on Rule 144 may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of the Securities under circumstances in which the seller
(or the Person (as defined in Section 3(s)) through whom the sale is made) may
be deemed to be an underwriter (as that term is defined in the 1933 Act) may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
Person is under any obligation to register the Securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder.  The Securities may be pledged in connection
with a bona fide margin account or other loan or financing arrangement secured
by the Securities and such pledge of Securities shall not be deemed to be a
transfer, sale or assignment of the Securities hereunder, and no Buyer effecting
a pledge of Securities shall be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement
or any other Transaction Document (as defined in Section 3(b)), including,
without limitation, this Section 2(f).

     

    
      
        
           


        

        
          20

          
            

          

        

        
           


        

      

    

    


    (g)           Legends.  Such
Buyer understands that the certificates or other instruments representing the
Series A Stock and the Warrants and, until such time as the resale of the
Conversion Shares and the Warrant Shares have been registered under the 1933
Act, the stock certificates representing the Conversion Shares and the Warrant
Shares, except as set forth below, shall bear any legend as required by the
“blue sky” laws of any state and a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of such
stock certificates):

     

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

     

    The
legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if, unless otherwise required by state securities laws, (i) such
Securities are registered for resale under the 1933 Act, (ii) in connection with
a sale, assignment or other transfer, such holder provides the Company with an
opinion of a law firm reasonably acceptable to the Company, in a generally
acceptable form, to the effect that such sale, assignment or transfer of the
Securities may be made without registration under the applicable requirements of
the 1933 Act, or (iii) such holder provides the Company with reasonable
assurance that the Securities can be sold, assigned or transferred pursuant to
Rule 144.

     

    
      
        
           


        

        
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    (h)           Validity;
Enforcement.  This Agreement a has been duly and validly
authorized, executed and delivered on behalf of such Buyer and shall constitute
the legal, valid and binding obligations of such Buyer enforceable against such
Buyer in accordance with its terms, except as such enforceability may be limited
by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies.

     

    (i)        
   No
Conflicts.  The execution, delivery and performance by such
Buyer of this Agreement and the consummation by such Buyer of the transactions
contemplated hereby and thereby will not (i) result in a violation of the
organizational documents of such Buyer or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
such Buyer is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment  or decree (including federal and state
securities laws) applicable to such Buyer, except in the case of clauses (ii)
and (iii) above, for such conflicts, defaults, rights or violations which would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Buyer to perform its obligations
hereunder.

     

    (j)           
Residency.  Such
Buyer is a resident of that jurisdiction specified below its address in column 2
on the Schedule of Buyers.

     

    (k)           Certain Trading
Activities.  Other than with respect to the transactions
contemplated herein, since the time that such Buyer was first contacted by the
Company or any other Person regarding this investment in the Company, neither
the Buyer nor any affiliate of such Buyer that (x) had knowledge of the
transactions contemplated hereby, (y) has or shares discretion relating to such
Buyer's investments or trading or information concerning such Buyer's
investments and (z) is subject to such Buyer's review or input concerning such
affiliate's investments or trading (collectively, “Trading Affiliates”) has
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Buyer or Trading Affiliate, effected or agreed to
effect any transactions in the securities of the Company.  Such Buyer
hereby covenants and agrees not to, and shall cause its Trading Affiliates not
to, engage, directly or indirectly, in any transactions in the securities of the
Company or involving the Company's securities during the period from the date
hereof until such time as (i) the transactions contemplated by this Agreement
are first publicly announced as described in Section 4(i) hereof or (ii) this
Agreement is terminated in full pursuant to Section 8 hereof.

     

    3.           
 REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.  The Company represents and
warrants to each of the Buyers that, as of the date hereof and as of the Closing
Date:

     

    (a)           Organization and
Qualification.  The Company is duly organized and validly
existing and, to the extent legally applicable, in good standing under the laws
of the state of Nevada, and has the requisite power and authorization to own its
properties and to carry on its business as now being conducted.  The
Company is duly qualified as a foreign entity to do business and to the extent
legally applicable, is in good standing in every jurisdiction in which its
ownership of property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not reasonably be expected to have a
Material Adverse Effect.  As used in this Agreement, “Material Adverse Effect” means
any material adverse effect on the business, properties, assets, operations,
results of operations, condition (financial or otherwise) or prospects of the
Company, individually or taken as a whole, or on the transactions contemplated
hereby or in the other Transaction Documents or by the agreements and
instruments to be entered into in connection herewith or therewith, or on the
authority or ability of the Company to perform its obligations under the
Transaction Documents (as defined below).  The Company has no
“subsidiaries” (which for purposes of this Agreement means any joint venture or
any entity in which the Company, directly or indirectly, owns any of the capital
stock or holds an equity or similar interest).

     

    
      
        
           


        

        
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    (b)           Authorization; Enforcement;
Validity.  The Company has the requisite corporate power and
authority to enter into and perform its obligations under this Agreement and the
Warrants and each of the other agreements entered into by the parties hereto in
connection with the transactions contemplated by this Agreement (collectively,
the “Transaction
Documents”) and to issue the Securities in accordance with the terms
hereof and thereof.  The execution and delivery of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of
the Series A Stock and the Warrants, the reservation for issuance and the
issuance of the Conversion Shares issuable upon conversion
of the Series A Stock and the reservation for issuance and issuance of Warrant
Shares issuable upon exercise of the Warrants have been duly authorized by the
Company's Board of Directors and no further filing, consent, or authorization is
required by the Company, its Board of Directors or its
stockholders.  This Agreement and the other Transaction Documents of
even date herewith have been duly executed and delivered by the Company, and
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors'
rights and remedies.

     

    (c)           Issuance of
Securities.  Upon issuance in accordance with the terms of the
Transaction Documents, the Series A Stock and the Warrants shall be free from
all taxes, liens and charges with respect to the issue thereof.  As of
the Closing, a number of shares of Common Stock shall have been duly authorized
and reserved for issuance to the holders of the Series A Stock and the Warrants
which equals or exceeds 130% of the aggregate of the maximum number of shares of
Common Stock issuable (i) upon conversion of the Series A Stock, and (ii) upon
exercise of the Warrants.  Upon conversion or exercise in accordance
with the Series A Stock or the Warrants, as the case may be, the Conversion
Shares and the Warrant Shares, respectively, will be validly issued, fully paid
and nonassessable and free from all preemptive or similar rights, taxes, liens
and charges with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Common Stock.  Assuming the
accuracy of each of the representations and warranties set forth in Section 2 of
this Agreement, the offer and issuance by the Company of the Securities is
exempt from registration under the 1933 Act.

     

    
      
        
           


        

        
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    (d)           No
Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Series A Stock and Warrants and reservation for issuance and
issuance of the Conversion Shares and the Warrant Shares) will not (i) result in
a violation of any article of incorporation, certificate of formation, any
certificate of designations or other constituent documents of the Company, any
capital stock of the Company or bylaws of the Company or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) in any respect under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree, including
foreign, federal and state securities laws and regulations and the rules and
regulations of The OTC Bulletin Board (the “Principal Market”) applicable
to the Company or by which any property or asset of the Company is bound or
affected.

     

    (e)           Consents.  The
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its obligations under or contemplated by the
Transaction Documents, in each case in accordance with the terms hereof or
thereof.

     

    (f)     
      No General Solicitation;
Placement Agent's Fees.  Neither the Company, nor any of its
affiliates, nor 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) in connection with the offer or sale of the
Securities.  The Company intends to utilize one or more placement
agents in connection with its efforts to issue and sell the Securities, and
shall be responsible for the payment of any placement agent's fees, financial
advisory fees, or brokers' commissions (other than for persons engaged by any
Buyer or its investment advisor) relating to or arising out of the transactions
contemplated hereby.  The Company anticipates that it may pay
placement agent fees up to an amount equal to 10% of the purchase price for the
Securites sold, plus an amount up to 3% in non-accountable expenses, plus
warrants to acquire equity in the Company.

     

    (g)           No Integrated
Offering.  None of the Company, any of its affiliates, or any
Person acting on their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would require registration of any of the Securities under the
1933 Act, or cause this offering of the Securities to be integrated with prior
offerings by the Company for purposes of any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of
any exchange or automated quotation system on which any of the securities of the
Company are listed or designated.  None of the Company, its affiliates
or any Person acting on their behalf will take any action or steps referred to
in the preceding sentence that would require registration of any of the
Securities under the 1933 Act or cause the offering of the Securities to be
integrated with other offerings.

     

    (h)           Dilutive
Effect.  The Company understands and acknowledges that the
number of Conversion Shares issuable upon conversion of the Series A Stock and
the Warrant Shares issuable upon exercise of the Warrants will increase in
certain circumstances.  The Company further acknowledges that its
obligation to issue Conversion Shares upon conversion of the Series A Stock in
accordance with this Agreement and its obligation to issue the Warrant Shares
upon exercise of the Warrants in accordance with this Agreement and the Warrants
is, in each case, absolute and unconditional regardless of the dilutive effect
that such issuance may have on the ownership interests of other stockholders of
the Company.

     

    
      
        
           


        

        
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    (i)       
    Application of Takeover
Protections; Rights Agreement.  The Company and its board of
directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s Articles of Incorporation or the
laws of the state of its incorporation which is or could become applicable to
any Buyer as a result of the transactions contemplated by this Agreement,
including, without limitation, the Company's issuance of the Securities and any
Buyer's ownership of the Securities.  The Company and its board of
directors have taken all necessary action, if any, in order to render
inapplicable any stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.

     

    (j)         
  SEC
Documents; Financial Statements.  Since the effectiveness of
the Company's Registration Statement on the Form SB-2, the Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the 1934 Act (all
of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements, notes and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the “SEC
Documents”).  The Company has delivered to the Buyers or their
respective representatives true, correct and complete copies of the SEC
Documents not available on the EDGAR system.  As of their respective
filing dates, the SEC Documents complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.  As of their respective filing dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).  No other information provided by or on behalf of the
Company to the Buyers which is not included in the SEC Documents, including,
without limitation, information referred to in Section 2(d) of this Agreement or
in any disclosure schedules, contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstance under which they are or were made, not
misleading.

     

    
      
        
           


        

        
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    (k)           No Undisclosed Events,
Liabilities, Developments or Circumstances.  No event,
liability, development or circumstance has occurred or exists, or is
contemplated to occur with respect to the Company or its respective business,
properties, prospects, operations or financial condition, that would be required
to be disclosed by the Company under applicable securities laws on a
registration statement on Form S-1 filed with the SEC relating to an issuance
and sale by the Company of its Common Stock and which has not been publicly
announced.

     

    (l)          
 Conduct of
Business; Regulatory Permits.  The Company is not in violation
of any term of or in default under its Articles of Incorporation, any
certificate of designations of any outstanding series of preferred stock of the
Company or the Bylaws or their organizational charter or bylaws,
respectively.  The Company is not in violation of any judgment, decree
or order or any material statute, ordinance, rule or regulation applicable to
the Company, and the Company will not conduct its business in violation of any
of the foregoing, except for possible violations which could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.  Without limiting the generality of the foregoing, the Company
is not in violation of any of the rules, regulations or requirements of the
Principal Market and has no knowledge of any facts or circumstances that would
reasonably lead to delisting or suspension of the Common Stock by the Principal
Market in the foreseeable future.  Since November 30, 2007 (i) the
Common Stock has been designated for quotation on the Principal Market, (ii)
trading in the Common Stock has not been suspended by the SEC or the Principal
Market and (iii) the Company has received no communication, written or oral,
from the SEC or the Principal Market regarding the suspension or delisting of
the Common Stock from the Principal Market.  The Company possesses all
certificates, authorizations and permits issued by the appropriate regulatory
authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any such Subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization or
permit.

     

    (m)          Equity
Capitalization.  Immediately prior to the Closing, the
authorized capital stock of the Company consists of (i) 10,000,000 shares of Preferred
Stock, $0.001 par value, of which as of that time none are issued and
outstanding, and (ii) 100,000,000 shares of Common Stock, $.001 par value, of
which as of that time 27,205,261 shares are issued and outstanding. All of the
Company’s outstanding shares have been validly issued and are fully paid and
nonassessable.

     

    (n)           Intellectual Property
Rights.  The Company owns or possesses adequate rights or
licenses to use all trademarks, service marks and all applications and
registrations therefor, trade names, patents, patent rights, copyrights,
original works of authorship, inventions, trade secrets and other intellectual
property rights necessary to conduct its business as now conducted.

     

    (o)           Environmental
Laws.  The Company (i) ise in compliance with any and all
Environmental Laws (as hereinafter defined), (ii) has received all permits,
licenses or other approvals required of them under applicable Environmental Laws
to conduct its business and (iii) is in compliance with all terms and conditions
of any such permit, license or approval where, in each of the foregoing clauses
(i), (ii) and (iii), the failure to so comply could be reasonably expected to
have, individually or in the aggregate, a Material Adverse
Effect.  The term “Environmental Laws” means all
federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.

     

    
      
        
           


        

        
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    (p)           Tax
Status.  The Company (i) has made or filed all foreign, federal
and state income and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and (iii) has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply.  There
are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.

     

    (q)           Investment Company
Status.  The Company is not, and upon consummation of the sale
of the Securities will not be, an “investment company,” a company controlled by
an “investment company” or an “affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment company” as such terms are defined
in the Investment Company Act of  1940, as amended.

     

    (r)         
  Transfer
Taxes.  On the Closing Date, all stock transfer or other taxes
(other than income or similar taxes) which are required to be paid in connection
with the sale and transfer of the Securities to be sold to each Buyer hereunder
will be, or will have been, fully paid or provided for by the Company, and all
laws imposing such taxes will be or will have been complied with.

     

    (s)       
    U.S. Real Property Holding
Corporation.  The Company is not, nor has it ever been, a U.S.
real property holding corporation within the meaning of Section 897 of the
Internal Revenue Code of 1986, as amended.

     

    (t)         
  Bank
Holding Company Act.  The Company is not subject to the Bank
Holding Company Act of 1956, as amended (the "BHCA") and to regulation by
the Board of Governors of the Federal Reserve System (the "Federal
Reserve").  The Company does not own or control, directly or
indirectly, five percent (5%) or more of the outstanding shares of any class of
voting securities or twenty-five (25%) or more of the total equity of a bank or
any equity that is subject to the BHCA and to regulation by the Federal
Reserve.  Neither the Company nor any of its affiliates exercises a
controlling influence over the management or policies of a bank or any entity
that is subject to the BHCA and to regulation by the Federal
Reserve.

     

    
      
        
           


        

        
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    (u)           Disclosure.  The
Company confirms that neither it nor any other Person acting on its behalf has
provided any of the Buyers or their agents or counsel with any information that
constitutes or could reasonably be expected to constitute material, nonpublic
information.  The Company understands and confirms that each of the
Buyers will rely on the foregoing representations in effecting transactions in
securities of the Company.  All disclosure provided to the Buyers
regarding the Company, their business and the transactions contemplated hereby,
including the Schedules to this Agreement, furnished by or on behalf of the
Company is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.  No event or circumstance has occurred or
information exists with respect to the Company or its or properties, prospects,
operations or financial conditions, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed.

     

    (v)           Acknowledgement Regarding
Buyers' Trading Activity.  Anything in this Agreement or
elsewhere herein to the contrary notwithstanding, but subject to compliance by
the Buyers with applicable law and the provisions of Section 2(k) hereto, it is
understood and acknowledged by the Company (i) that none of the Buyers have been
asked by the Company to agree, nor has any Buyer agreed with the Company, to
desist from purchasing or selling, long and/or short, securities of the Company,
or “derivative” securities based on securities issued by the Company or to hold
the Securities for any specified term; (ii) that past or future open market or
other transactions by any Buyer, including, without limitation, short sales or
“derivative” transactions, before or after the closing of this or future private
placement transactions, may negatively impact the market price of the Company's
publicly-traded securities; (iii) that any Buyer, and counter parties in
“derivative” transactions to which any such Buyer is a party, directly or
indirectly, presently may have a “short” position in the Common Stock, and (iv)
that each Buyer shall not be deemed to have any affiliation with or control over
any arm's length counter-party in any “derivative” transaction.  The
Company further understands and acknowledges that (a) one or more Buyers may
engage in hedging and/or trading activities at various times during the period
that the Securities are outstanding, including, without limitation, during the
periods that the value of the Conversion Shares and the Warrant Shares
deliverable with respect to Securities are being determined and (b) such hedging
and/or trading activities (if any) can reduce the value of the existing
stockholders' equity interest in the Company at and after the time the hedging
and/or trading activities are being conducted.  The Company
acknowledges that such aforementioned hedging and/or trading activities do not
constitute a breach of this Agreement, the Warrants or any of the documents
executed in connection herewith.

     

    4.          
  COVENANTS.

     

    (a)           Best
Efforts.  Each party shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in Sections 6
and 7 of this Agreement.

     

    (b)           Form D and Blue
Sky.  The Company agrees to file a Form D, if required under
U.S. securities laws, with respect to the Securities as required under
Regulation D and to provide a copy thereof to each Buyer promptly after such
filing.  The Company shall, on or before the Closing Date, take such
action as the Company shall reasonably determine is necessary in order to obtain
an exemption for or to qualify the Securities for sale to the Buyers at the
Closing pursuant to this Agreement under applicable securities or “Blue Sky”
laws of the states of the United States (or to obtain an exemption from such
qualification), and shall provide evidence of any such action so taken to the
Buyers on or prior to the Closing Date.  The Company shall make all
filings and reports relating to the offer and sale of the Securities required
under applicable securities or “Blue Sky” laws of the states of the United
States following the Closing Date.

     

    
      
        
           


        

        
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    (c)           Use of
Proceeds.  The Company will use the proceeds from the sale of
the Securities for general corporate purposes, including general and
administrative expenses and not for (i) the repayment of any outstanding
Indebtedness of the Company or (ii) the redemption or repurchase of any of its
equity securities.

     

    (d)           Fees.  The
Company shall be responsible for the payment of any Agents’ fees relating to or
arising out of the transactions contemplated herebyt.  The Company
shall pay, and hold each Buyer harmless against, any liability, loss or expense
(including, without limitation, reasonable attorney's fees and out-of-pocket
expenses) arising in connection with any claim relating to any such
payment.

     

    (e)           Pledge of
Securities.  The Company acknowledges and agrees that Buyer may
pledge the Securities in connection with a bona fide margin agreement or other
loan or financing arrangement that is secured by the Securities.  The
pledge of Securities shall not be deemed to be a transfer, sale or assignment of
the Securities hereunder, and no Investor effecting a pledge of Securities shall
be required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction
Document, including, without limitation, Section 2(f) hereof; provided that
Buyer and its pledgee shall be required to comply with the provisions of Section
2(f) hereof in order to effect a sale, transfer or assignment of Securities to
such pledgee.  The Company hereby agrees to execute and deliver such
documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by an
Investor.

     

    (f)          
 Disclosure of
Transactions and Other Material Information.  On or before 8:30
a.m., New York City time, on the first Business Day following the date of this
Agreement, the Company shall issue a press release and file a Current Report on
Form 8-K describing the terms of the transactions contemplated by the
Transaction Documents in the form required by the 1934 Act and attaching the
material Transaction Documents (including, without limitation, this Agreement,
the Series A Designation, and the form of Warrant as exhibits to such filing
(including all attachments, the “8-K Filing”).  From
and after the filing of the 8-K Filing with the SEC, no Buyer shall be in
possession of any material, nonpublic information received from the Company or
any of its officers, directors, employees or agents that is not disclosed in the
8-K Filing.  The Company shall not, and shall cause its officers,
directors, employees and agents, not to, provide any Buyer with any material,
nonpublic information regarding the Company from and after the filing of the 8-K
Filing with the SEC without the express prior written consent of such
Buyer.  If a Buyer has, or believes it has, received any such
material, nonpublic information regarding the Company, it shall provide the
Company with written notice thereof.  Subject to the foregoing,
neither the Company nor any Buyer shall issue any press releases or any other
public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior
approval of any Buyer, to make any press release or other public disclosure with
respect to such transactions in substantial conformity with the 8-K Filing and
contemporaneously therewith and (ii) as is required by applicable law and
regulations.

     

    
      
        
           


        

        
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    (g)           Restriction on Redemption
and Cash Dividends.  So long as any Series A Stock is
outstanding, the Company shall not, directly or indirectly, redeem, or declare
or pay any cash dividend or distribution on, the Common Stock without the prior
written consent of the holders of a majority of the Series A Stock.

     

    (h)           Corporate
Existence.  So long as any Buyer beneficially owns any
Securities, the Company shall not be party to any Fundamental Transaction (as
defined in the Notes) unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Series A
Designation and the Warrants.

     

    (i)     
      Reservation of
Shares.  The Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance to the holders
of the Series A Stock and the Warrants, no less than 130% of the sum
of  the number of shares of Common Stock issuable (i) upon conversion
of the Series A Stock issued at the Closing and (ii) upon exercise of the
Warrants issued at the Closing (without taking into account any limitations on
the Conversion of the Series A Stock or exercise of the Warrants set forth in
the Series A Designation and Warrants, respectively).

     

    (j)        
   Closing
Documents.  On or prior to fourteen (14) calendar days after
the Closing Date, the Company agrees to deliver, or cause to be delivered, to
each Buyer executed copies of the Transaction Documents, Securities and other
document required to be delivered to any party pursuant to Section 7
hereof.

     

    5.          
  REGISTER;
TRANSFER AGENT INSTRUCTIONS.

     

    (a)           Register.  The
Company shall maintain at its principal executive offices (or such other office
or agency of the Company as it may designate by notice to each holder of
Securities), a register for the Series A Stock and the Warrants in which the
Company shall record the name and address of the Person in whose name the Series
A Stock and the
Warrants have been issued (including the name and address of each transferee),
the number of shares of Series A Stock held by such Person, the number of
Conversion Shares issuable upon conversion of the Series A Stock and the number
of Warrant Shares issuable upon exercise of the Warrants held by such
Person.  The Company shall keep the register open and available at all
times during business hours for inspection of any Buyer or its legal
representatives.

     

    (b)           Transfer Agent
Instructions.  The Company shall issue irrevocable instructions
to its transfer agent, and any subsequent transfer agent, to issue certificates
or credit shares to the applicable balance accounts at The Depository Trust
Company (“DTC”),
registered in the name of each Buyer or its respective nominee(s), for the
Conversion Shares and the Warrant Shares issued at the Closing or upon
conversion of the Series A Stock or exercise of the Warrants in such amounts as
specified from time to time by each Buyer to the Company upon conversion of the
Series A Stock or exercise of the Warrants in the form of Exhibit C attached
hereto (the “Irrevocable
Transfer Agent Instructions”).  The Company warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred to
in this Section 5(b), and stop transfer instructions to give effect to Section
2(g) hereof, will be given by the Company to its transfer agent, and that the
Securities shall otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement and the other
Transaction Documents.  If a Buyer effects a sale, assignment or
transfer of the Securities in accordance with Section 2(f), the Company shall
permit the transfer and shall promptly instruct its transfer agent to issue one
or more certificates or credit shares to the applicable balance accounts at DTC
in such name and in such denominations as specified by such Buyer to effect such
sale, transfer or assignment.  In the event that such sale, assignment
or transfer involves Conversion Shares or Warrant Shares sold, assigned or
transferred pursuant to an effective registration statement or pursuant to Rule
144, the transfer agent shall issue such Securities to the Buyer, assignee or
transferee, as the case may be, without any restrictive legend.  The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to a Buyer.  Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section 5(b)
will be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Section 5(b), that a Buyer shall be
entitled to seek, in addition to all other available remedies, an order and/or
injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required.

     

    
      
        
           


        

        
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    6.          
  CONDITIONS
TO THE COMPANY'S OBLIGATION TO SELL.

     

    The
obligation of the Company hereunder to issue and sell the Series A Stock and the
related Warrants to each Buyer at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion by providing each Buyer with prior
written notice thereof:

     

    (i)          
 Such Buyer shall have executed each of the Transaction Documents to which
it is a party and delivered the same to the Company.

     

    (ii)           The
Company shall have obtained all governmental, regulatory or third party
consents, approvals, waivers or amendments to agreements or instruments, if any,
necessary for the sale of the Securities.

     

    (iii)          Such
Buyer and each other Buyer shall have delivered to the Company the Purchase
Price for the Series A Stock and the related Warrants being purchased by such
Buyer at the Closing by wire transfer of immediately available funds pursuant to
the wire instructions provided by the Company.

     

    (iv)          The
representations and warranties of such Buyer shall be true and correct in all
material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date, which shall be true and correct as of such specified
date), and such Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Buyer at or prior
to the Closing Date.

     

    
      
        
           


        

        
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    7.           
 CONDITIONS TO
EACH BUYER'S OBLIGATION TO PURCHASE.

     

    The
obligation of each Buyer hereunder to purchase the Series A Stock and the
related Warrants at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer's sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company with prior written
notice thereof:

     

    (i)           
The Company shall have duly executed and delivered to such Buyer (i) each of the
Transaction Documents and (ii) the certificates representing the shares of
Series A Stock being purchased by such Buyer at the Closing pursuant to this
Agreement, and (iii) the related Warrants being purchased by such Buyer at the
Closing pursuant to this Agreement.

     

    (ii)           The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer
Agent Instructions, in the form of Exhibit C attached
hereto, which instructions shall have been delivered to and acknowledged in
writing by the Company's transfer agent.

     

    (iii)          The
representations and warranties of the Company shall be true and correct in all
material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date, which shall be true and correct as of such specified
date) and the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Closing Date.

     

    (iv)          The
Common Stock (I) shall be designated for quotation or listed on the Principal
Market and (II) shall not have been suspended, as of the Closing Date, by the
SEC or the Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened, as of the
Closing Date, either (A) in writing by the SEC or the Principal Market or (B) by
falling below the minimum listing maintenance requirements of the Principal
Market.

     

    (v)           The
Company shall have obtained all governmental, regulatory or third party
consents, approvals, waivers or amendments to agreements or instruments, if any,
necessary for the sale of the Securities.

     

    8.         
   TERMINATION.  In the event that the
Closing shall not have occurred with respect to a Buyer on or before five (5)
Business Days from the date hereof due to the Company's or such Buyer's failure
to satisfy the conditions set forth in Sections 6 and 7 above (and the
nonbreaching party's failure to waive such unsatisfied condition(s)), the
nonbreaching party shall have the option to terminate this Agreement with
respect to such breaching party at the close of business on such date without
liability of any party to any other party; provided, however, that if this
Agreement is terminated pursuant to this Section 8, the Company shall remain
obligated to reimburse the non-breaching Buyers for the expenses described in
Section 4(g) above.

     

    
      
        
           


        

        
          32

          
            

          

        

        
           


        

      

    

    


    9.          
  MISCELLANEOUS.

     

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

     

    (b)           Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.

     

    (c)           Headings.  The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.

     

    (d)           Severability.  If
any provision of this Agreement is prohibited by law or otherwise determined to
be invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).

     

    
      
        
           


        

        
          33

          
            

          

        

        
           


        

      

    

    


    (e)           Entire Agreement;
Amendments.  This Agreement and the other Transaction Documents
supersede all other prior oral or written agreements between the Buyers, the
Company, their affiliates and Persons acting on their behalf with respect to the
matters discussed herein, and this Agreement, the other Transaction Documents
and the instruments referenced herein and therein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters.  No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least a majority of the aggregate number of
Registrable Securities issued and issuable hereunder and under the Notes, and
any amendment to this Agreement made in conformity with the provisions of this
Section 9(e) shall be binding on all Buyers and holders of Securities as
applicable.  No provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is
sought.  No such amendment shall be effective to the extent that it
applies to less than all of the holders of the applicable Securities then
outstanding.  No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration also is offered to all of
the parties to the Transaction Documents, holders of Notes or holders of the
Warrants, as the case may be.  The Company has not, directly or
indirectly, made any agreements with any Buyers relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents.  Without limiting the
foregoing, the Company confirms that, except as set forth in this Agreement, no
Buyer has made any commitment or promise or has any other obligation to provide
any financing to the Company or otherwise.

     

    (f)           Notices.  Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same.  The addresses and facsimile numbers for such communications
shall be:

     

    
      
        
           


        

        
          34

          
            

          

        

        
           


        

      

    

    


    If to the
Company:

     

    EnterConnect
Inc.

    100
Century Center Court, Suite 650

    San Jose,
California 95112-4537

    Telephone:  (408)
441-9500

    Facsimile:  (408)
452-9040

    Attention:  Sam
Jankovich

     

    Copy
to:

     

    Taylor
English Duma LLC

    1600
Parkway Circle, Suite 400

    Atlanta,
Georgia 30339

    Telephone
No.:  (770) 434-6868

    Facsimile
No.:   (770) 434-7376

    Attn.:  Bruce
S. Richards, Esq.

    


    If to the
Transfer Agent:

     

    Interwest
Transfer Co., Inc.

    1981 East
4800 South, Suite 100

    PO Box
17136

    Salt Lake
City, UT 84117

    Telephone:  801-272-9294

    Facsimile:  801-277-3147

    Attn:  Brandy
Montalvo

    


    If to a
Buyer, to its address and facsimile number set forth on the Schedule of
Buyers,

     

    or to
such other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

     

    (g)           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including
any purchasers of the Series A Stock or the Warrants.  The Company
shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the holders of at least a majority of the aggregate
number of Registrable Securities issued and issuable hereunder and under the
Series A Stock, including by way of a Fundamental Transaction (unless the
Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Series A Designation and the
Warrants).  A Buyer may assign some or all of its rights hereunder
without the consent of the Company, in which event such assignee shall be deemed
to be a Buyer hereunder with respect to such assigned rights

     

    
      
        
           


        

        
          35

          
            

          

        

        
           


        

      

    

    


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

     

    (i)       
    Survival.  Unless
this Agreement is terminated under Section 8, the representations and warranties
of the Company and the Buyers contained in Sections 2 and 3, and the agreements
and covenants set forth in Sections 4, 5 and 9 shall survive the Closing and the
delivery and exercise of Securities, as applicable.  Each Buyer shall
be responsible only for its own representations, warranties, agreements and
covenants hereunder.

     

    (j)         
  Further
Assurances.  Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

     

    (k)           No Strict
Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.

     

    (l)         
  Remedies.  Each
Buyer and each holder of the Securities shall have all rights and remedies set
forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract and
all of the rights which such holders have under any law.  Any Person
having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law.  Furthermore, the Company
recognizes that in the event that it fails to perform, observe, or discharge any
or all of its obligations under the Transaction Documents, any remedy at law may
prove to be inadequate relief to the Buyers.  The Company therefore
agrees that the Buyers shall be entitled to seek temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages and without posting a bond or other security.

     

    (m)           Independent Nature of
Buyers' Obligations and Rights.  The obligations of each Buyer
under any Transaction Document are several and not joint with the obligations of
any other Buyer, and no Buyer shall be responsible in any way for the
performance of the obligations of any other Buyer under any Transaction
Document.  Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as, and the Company acknowledges that the Buyers
do not so constitute, a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Buyers are in any way
acting in concert or as a group, and the Company will not assert any such claim
with respect to such obligations or the transactions contemplated by the
Transaction Documents and the Company acknowledges that the Buyers are not
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents.  The Company
acknowledges and each Buyer confirms that it has independently participated in
the negotiation of the transaction contemplated hereby with the advice of its
own counsel and advisors.  Each Buyer shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional
party in any proceeding for such purpose.

     

    [Signature
Page  Follows]

     

    
      
        
           


        

        
          36

          
            

          

        

        
           


        

      

    

    


    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Series A
Convertible Preferred Stock Purchase Agreement to be duly executed as of the
date first written above.

     

    
      
        
          
            
              
                
                  
                    
                      	 
      	
                              COMPANY:

                            
	 
      	 
      	 
      	 
      
	 
      	
                              ENTERCONNECT
      INC.

                            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                              By:

                            	 
      
	 
      	 
      	
                              Name:

                            	
                              Sam
      Jankovich

                            
	 
      	 
      	
                              Title:

                            	
                              Chairman
      & Chief Executive
Officer

                            


                    

                  

                

              

            

          

        

      

    

     

    
       

      [Signature
Page to Series A Convertible Preferred Stock Purchase Agreement]

       

    

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Series A
Convertible Preferred Stock Purchase Agreement to be duly executed as of the
date first written above.

    


    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	
                                BUYERS:

                              
	 	 
	 	 
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                                By:

                              	 
      
	 
      	 
      	
                                Name:

                              	 
      
	 
      	 
      	
                                Title:

                              	 
      


                      

                    

                  

                

              

            

          

        

      

    

     

     

    [Signature
Page to Series A Convertible Preferred Stock Purchase Agreement]

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    SCHEDULE
OF BUYERS

     

    


    
      
        
          
            
              
                
                  	
                          (1)

                           

                        	
                          (2)

                           

                        	
                          (3)

                           

                        	
                          (4)

                           

                        	
                          (5)

                           

                        
	
                          
                            Buyer

                          

                        	
                          
                            Address
      and

                            Facsimile
      Number

                          

                        	
                          
                            Number
      of Shares of Series A Stock

                          

                        	
                          
                            Number
      of

                            Warrant
      Shares

                          

                        	
                          
                            Purchase
      Price

                          

                        
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      


                

              

            

          

        

      

    

     

    
       

      Schedule
of Buyers - 1

       

    

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    EXHIBITS

     

    
      	
              Exhibit
      A 

            	
              Series
      A Designation

            


    

    
      	
              Exhibit
      B 

            	
              Form
      of Warrant

            


    

    
      	
              Exhibit
      C 

            	
              Form
      of Irrevocable Transfer Agent
Instructions

            


    

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

     

    


    SERIES A
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

    


    Exhibit
A

    


    Series A
Designation


    


    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    EnterConnect
Inc.

    


    CERTIFICATE
OF DESIGNATION:  SERIES A STOCK

    


    Pursuant
to Nevada Revised Statutes Sections 78.195 and 78.1955, the Board of Directors
(the “Board”) of
EnterConnect Inc., a Nevada corporation (the “Company”), hereby establishes
in this Certificate of Designation (“Certificate”) a series of
authorized but unissued preferred stock of the Company (“Preferred Stock”) to be
designated “Series A Convertible Preferred Stock” (“Series A
Stock”).  This Certificate is a “Preferred Stock Designation” referred
to in Article IV of the Company’s Articles of Incorporation (the
“Articles”).  The Board hereby establishes the following voting
powers, designations, preferences, limitations, restrictions, and relative
rights for the Series A Stock:

     

    1.           
 DESIGNATION:  Series
A Convertible Preferred Stock.

     

    2.            
NUMBER OF SHARES IN
SERIES A STOCK:  [Insert number of shares]

     

    3.           
 VOTING
POWER:  Registered holders of Series A Stock (“Holders”) will have no voting
rights with respect to matters presented to the stockholders of the Company for
their action or consideration.

     

    4.            
DIVIDEND
PREFERENCE:  The Series A Stock will have the following
dividend provisions:

     

    (a)           Dividends
will automatically accrue with respect to issued and outstanding shares of
Series A Stock at the annual rate of 12% (on the basis of a 360-day year) on the
Series A Liquidation Amount for that stock and be payable quarterly in arrears
on January 1, April 1, July 1, and October 1 (an “Dividend Date”) of each year
(the “Preferred
Dividend”).  The Preferred Dividend will be pro-rated for any
partial quarter.  The Preferred Dividend shall be payable to the
Holder of the Series A Stock (i) in cash in an amount equal to one-half (1/2) of
the Preferred Dividend due on such Dividend Date, and (ii) in additional shares
of Series A Stock, with the number of shares equal to the remaining one-half
(1/2) of the Preferred Dividend divided by the Conversion Price as of the
applicable Dividend Date).

     

    (b)           
The Holders of shares of Series A Stock will be entitled to receive dividends
out of any assets legally available therefor, prior and in preference to any
declaration or payment of any dividend (payable other than in Common Stock or
other securities and rights convertible into or entitling the Holder thereof to
receive, directly or indirectly, additional shares of Common Stock of the
Company) on the Common Stock of the Company, payable when, as and if declared by
the Board.  Any dividends paid with respect to the Series A Stock will
reduce the Series A Liquidation Amount with respect to such Series A Stock as of
the date of such payment; provided, however, that if, notwithstanding the
prohibitions herein, dividends are paid with respect to all classes and series
of capital stock of the Company, such dividends will not be applied to reduce
the applicable Series A Liquidation Amount.

     

    (c)           As
long as any shares of Series A Stock are issued and outstanding:  (i)
no dividends whatsoever, whether in cash or in property, will be declared or
paid, and no distribution will be made, on any shares of Common Stock, and (ii)
no shares of Common Stock will be purchased, redeemed, or acquired by the
Company and no funds will be paid into or set aside or made available for a
sinking fund for the purchase, redemption or acquisition thereof.  The
provisions of this Section 4(c) may be waived upon the consent of the holders of
67% of the then outstanding shares of Series A Stock.

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    5.        
    LIQUIDATION:  The Series A Stock
will have the following liquidation preferences:

     

    (a)        
  Liquidation.  In
the event of any liquidation, dissolution or winding up of the Company, either
voluntary or involuntary, the holders of the Series A Stock will be entitled to
receive, prior and in preference to any distribution of any of the assets of the
Company to the holders of Common Stock of the Company, by reason of their
ownership thereof, an amount per share equal to the Series A Original Purchase
Price (as defined below) for each share of Series A Stock then held by
them, plus accrued
or declared but unpaid dividends, minus any prior dividends paid with respect to
the Series A Stock in accordance with and subject to Section 4(a)
above  (the “Series A
Liquidation Amount”).  If, upon the occurrence of such event,
the assets and funds thus distributed among the holders of the Series A Stock
will be insufficient to permit the payment to such holders of the full aforesaid
preferential amounts, the entire assets and funds of the Company legally
available for distribution to the Series A Stock will be distributed ratably
among the holders of the Series A Stock in proportion to the preferential amount
each such Holder is otherwise entitled to receive.  The “Series A Original Purchase
Price” will mean the per share original purchase price paid by holders of
Series A Stock per share (subject to adjustment for stock splits, stock
dividends, reclassifications and the like).

     

    (b)         
 Certain
Divestitures.

     

    (i)           
 Deemed
Liquidation.  For purposes of this Section 5, a liquidation,
dissolution, or winding up of the Company will be deemed to occur if the Company
sells, leases, conveys, or otherwise disposes of all or substantially all of its
property or business or merges with or into or consolidates with any other
corporation, limited liability company or other entity (other than a
wholly-owned subsidiary of the Company) (any such transaction, a “Liquidation Transaction”),
provided that none of the following will be considered a Liquidation
Transaction: (i) a merger effected exclusively for the purpose of changing the
domicile of the Company, (ii) an equity financing in which the Company is the
surviving Company, (iii) a transaction in which the stockholders of the Company
immediately prior to the transaction own 50% or more of the voting power of the
surviving company following the transaction, or (iv) a transaction which the
holders of a majority of the Series A Stock elect to treat as other than a
Liquidation Transaction.  In the event of a merger or consolidation of
the Company that is deemed pursuant to this section to be a Liquidation
Transaction, all references in this Section 5(b)
to “assets of the Company” will be deemed instead to refer to the aggregate
consideration to be paid to the holders of the Company’s capital stock in such
merger or consolidation.  Nothing in this subsection 5(b)(i) or
otherwise in this Section 5 will require the distribution to stockholders of
anything other than proceeds of such transaction in the event of a merger or
consolidation of the Company.

     

    (ii)           Valuation of
Consideration.  In the event of a Liquidation Transaction as
described in Section 5(b)(i) above (a “Deemed Liquidation”), if the
consideration received by the Company is other than cash, its value will be
deemed its fair market value.  Any securities will be valued as
follows:

     

    Securities
not subject to investment letter or other similar restrictions on free
marketability:

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    (A)        If
traded on a securities exchange or The Nasdaq Stock Market (“Nasdaq”), the value will be
based on a formula approved by the Board and derived from the closing prices of
the securities on such exchange or Nasdaq over a specified time
period;

     

    (B)         If
actively traded over-the-counter, the value will be based on a formula approved
by the Boardand derived from the closing bid or sales prices (whichever is
applicable) of such securities over a specified time period; and

     

    (C)         If
there is no active public market, the value will be the fair market value
thereof, as determined in good faith by the Board.

     

    The
method of valuation of securities subject to investment letter or other
restrictions on free marketability (other than restrictions arising solely by
virtue of a stockholder’s status as an affiliate or former affiliate) will be to
make an appropriate discount from the market value determined as specified above
in this Section 5(b)(ii) to reflect the approximate fair market value thereof,
as determined in good faith by the Board.

     

    (c)        
  Notice of
Liquidation Transaction.  The Company will give each Holder of
record of Series A Stock written notice of any impending Liquidation Transaction
not later than 10 days prior to the stockholders’ meeting called to approve such
Liquidation Transaction, or 10 days prior to the closing of such Liquidation
Transaction, whichever is earlier, and will also notify such holders in writing
of the final approval of such Liquidation Transaction.  The first of
such notices will describe the material terms and conditions of the impending
Liquidation Transaction and the provisions of this Section 5, and the Company
will thereafter give such holders prompt notice of any material
changes.  Unless such notice requirements are waived, the Liquidation
Transaction will not take place sooner than 10 days after the Company has given
the first notice provided for herein or sooner than 10 days after the Company
has given notice of any material changes provided for
herein.  Notwithstanding the other provisions of this Certificate or
in the Articles, all notice periods or requirements in this Certificate may be
shortened or waived, either before or after the action for which notice is
required, upon the written consent of the holders of a majority of the
outstanding shares of Series A Stock, voting together as a single class, that
are entitled to such notice rights.

     

    (d)      
    Effect of
Noncompliance.  In the event the requirements of this Section
5(b) are not complied with, the Company will forthwith either cause the closing
of the Liquidation Transaction to be postponed until the requirements of this
Section have been complied with, or cancel such Liquidation Transaction, in
which event the rights, preferences, privileges and restrictions of the holders
of Series A Stock will revert to and be the same as such rights, preferences,
privileges and restrictions existing immediately prior to the date of the first
notice referred to in Section 5(c).

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    6.            
CONVERSION OF SERIES A
STOCK:   The Series A Stock shall be convertible into
shares of the Company's common stock, par value $0.001 per share (the “Common Stock”), on the terms
and conditions set forth in this Section 6 (“Conversion
Rights”).:

     

    (a)           Conversion
Right.  Subject to the provisions of Section 6(d), at any time
or times on or after the Subscription Date, the Holder shall be entitled to
convert any portion of their outstanding Series A Stock into fully paid and
non-assessable shares of Common Stock in accordance with Section 6(c), at the
Conversion Rate (as defined below).  The Company shall not issue any
fraction of a share of Common Stock upon any conversion.  If the
issuance would result in the issuance of a fraction of a share of Common Stock,
the Company shall round such fraction of a share of Common Stock up to the
nearest whole share.  The Company shall pay any and all taxes that may
be payable with respect to the issuance and delivery of Common Stock upon
conversion of any Conversion Amount.

     

    (b)           Conversion
Rate.  The number of shares of Common Stock issuable upon
conversion of any Conversion Amount pursuant to Section 6(a) shall be determined
by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion
Rate”).

     

    (i)           “Conversion Amount” means the
portion of the Original Purchase Price to be converted.

     

    (ii)           “Conversion Price” means, as
of any Conversion Date (as defined below) or other date of determination, $0.10,
subject to adjustment as provided herein.

     

    (c)           Mechanics of
Conversion.

     

    (i)          
 Optional
Conversion.  To convert any Conversion Amount into shares of
Common Stock on any date (a "Conversion Date"), the Holder
shall (A) transmit to the Company by facsimile (or otherwise deliver), for
receipt on or prior to 11:59 p.m., New York City Time, on such date, a copy of
an executed notice of conversion in the form provided by the Company therefor
(the "Conversion
Notice") and (B) if applicable, surrender the appropriate stock
certificates to a common carrier for delivery to the Company as soon as
practicable on or following such date.  On or before the first (1st)
Trading Day following the date of receipt of a Conversion Notice, the Company
shall transmit by facsimile a confirmation of receipt of such Conversion Notice
to the Holder and the Company's transfer agent (the "Transfer
Agent").  On or before the second (2nd)
Trading Day following the date of receipt of a Conversion Notice (the "Share Delivery Date"), the
Company shall (1) (x) provided that the Transfer Agent is participating in
Depository Trust Company's ("DTC") Fast Automated
Securities Transfer Program credit such aggregate number of shares of Common
Stock to which the Holder shall be entitled to the Holder's or its designee's
balance account with DTC through its Deposit Withdrawal Agent Commission system
or (y) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and deliver to the address as specified in
the Conversion Notice, a certificate, registered in the name of the Holder or
its designee, for the number of shares of Common Stock to which the Holder shall
be entitled and (2) pay to the Holder in cash, by wire transfer of immediately
available funds, an amount equal to the accrued and unpaid dividends through
(but not including) the Conversion Date.  If the Series A Stock is
physically surrendered for conversion as required by Section 6(c)(iii) and the
Holder is not converting all of the Series A Stock represented by the
certificate surrendered, then the Company shall as soon as practicable and in no
event later than three (3) Business Days after receipt of this Series A Stock
and at its own expense, issue and deliver to the holder a new Series A Stock
certificate representing the Series A Stock not converted.  The Person
or Persons entitled to receive the shares of Common Stock issuable upon a
conversion of the Series A Stock shall be treated for all purposes as the record
holder or holders of such shares of Common Stock on the Conversion
Date.

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    (ii)           Automatic
Conversion.  Each share of Series A Stock will automatically
and immediately be converted into shares of Common Stock at the Conversion Price
at the time in effect for such share upon the Company’s sale of its Common Stock
in a firm commitment underwritten public offering pursuant to a registration
statement under the Securities Act of 1933, as amended (the “Securities Act”) (any such
public offering, an “IPO”), which results in
aggregate net proceeds to the Company of not less than $10,000,000 with an
offering price per share (prior to underwriters’ commissions and expenses) of
not less than 500% of the Conversion Price (such an offering meeting such
qualifications, a “Qualified
Offering”).

     

    (iii)          Company's Failure to Timely
Convert.  If the Company shall fail to issue a certificate to
the Holder or credit the Holder's balance account with DTC, as applicable, for
the number of shares of Common Stock to which the Holder is entitled upon
conversion of any Conversion Amount on or prior to the date which is three (3)
Trading Days after the Conversion Date (a "Conversion Failure"), then (A)
the Company shall pay damages to the Holder for each day of such Conversion
Failure in an amount equal to one and one-half percent (1.5%) of the product of
(I) the sum of the number of shares of Common Stock not issued to the Holder on
or prior to the Share Delivery Date and to which the Holder is entitled, and
(II) the Closing Sale Price of the Common Stock on the Share Delivery Date and
(B) the Holder, upon written notice to the Company, may void its Conversion
Notice with respect to, and retain or have returned, as the case may be, any
portion of this Series A Stock that has not been converted pursuant to such
Conversion Notice; provided that the
voiding of a Conversion Notice shall not affect the Company's obligations to
make any payments which have accrued prior to the date of such notice pursuant
to this Section 3(c)(iii) or otherwise. In addition to the foregoing, if within
three (3) Trading Days after the Company's receipt of the facsimile copy of a
Conversion Notice the Company shall fail to issue and deliver a certificate to
the Holder or credit the Holder's balance account with DTC for the number of
shares of Common Stock to which the Holder is entitled upon such holder's
conversion of any Conversion Amount or on any date of the Company's obligation
to deliver shares of Common Stock as contemplated pursuant to clause (ii) below,
and if on or after such Trading Day the Holder purchases (in an open market
transaction or otherwise) Common Stock to deliver in satisfaction of a sale by
the Holder of Common Stock issuable upon such conversion that the Holder
anticipated receiving from the Company (a "Buy-In"), then the Company
shall, within three (3) Trading Days after the Holder's request and in the
Holder's discretion, either (i) pay cash to the Holder in an amount equal to the
Holder's total purchase price (including brokerage commissions and other
out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the
"Buy-In Price"), at
which point the Company's obligation to issue and deliver such certificate or to
credit the Holder's balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon such Holder's conversion of any
Conversion Amount shall terminate, or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing such Common
Stock and pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Bid Price on the Conversion Date.

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    (iv)           Pro Rata Conversion;
Disputes.  In the event that the Company receives a Conversion
Notice from more than one Holder of Series A Stock for the same Conversion Date
and the Company can convert some, but not all, of such portions of the Series A
Stock submitted for conversion, the Company, subject to Section 6(d), shall
convert from each Holder of Series A Stock electing to have Series A Stock
converted on such date a pro rata amount of such Holder's portion of its Series
A Stocks submitted for conversion based on the number or shares of Series A
Stock submitted for conversion on such date by such Holder relative to the
number of shares of all Series A Stock submitted for conversion on such
date.  In the event of a dispute as to the number of shares of Common
Stock issuable to the Holder in connection with a conversion of Series A Stock,
the Company shall issue to the Holder the number of shares of Common Stock not
in dispute and resolve such dispute in accordance with Section
10(d).

     

    (d)           Limitations on
Conversions--Beneficial Ownership.  The Company shall not
effect any conversion of this Series A Stock, and the Holder of this Series A
Stock shall not have the right to convert any portion of this Series A Stock
pursuant to Section 3(a), to the extent that after giving effect to such
conversion, the Holder (together with the Holder's affiliates) would
beneficially own in excess of 4.99% (the "Maximum Percentage") of the
number of shares of Common Stock outstanding immediately after giving effect to
such conversion.  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 conversion of
this Series A Stock with respect to which the determination of such sentence is
being made, but shall exclude the number of shares of Common Stock which would
be issuable upon (A) conversion of the remaining, non-converted portion of this
Series A Stock beneficially owned by the Holder or any of its affiliates and (B)
exercise or conversion of the unexercised or non-converted portion of any other
securities of the Company (including, without limitation, any Other Series A
Stocks or Warrants) subject to a limitation on conversion or exercise analogous
to the limitation contained herein beneficially owned by the Holder or any of
its affiliates.  Except as set forth in the preceding sentence, for
purposes of this Section 6(d)(i), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange
Act").  For purposes of this Section 6(d)(i), in determining
the number of outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as reflected in (x) the Company's
most recent Form 10-KSB, Form 10-QSB, Form 8-K, or other public filing with the
SEC, as the case may be, (y) a more recent public announcement by the Company or
(z) any other notice by the Company or the Transfer Agent setting forth the
number of shares of Common Stock outstanding.  For any reason at any
time, upon the written or oral request of the Holder, the Company shall within
one (1) Business Day confirm orally and in writing to the Holder the number of
shares of Common Stock then outstanding.  In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including this Series A
Stock, by the Holder or its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported.  By written notice to
the Company, the Holder may from time to time increase or decrease the Maximum
Percentage to any other percentage not in excess of 9.99% specified in such
notice; provided that (i) any such increase will not be effective until the
sixty-first (61st) day
after such notice is delivered to the Company, and (ii) any such increase or
decrease will apply only to the Holder and not to any other holder of Series A
Stocks.

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    (e)           Adjustment of Conversion
Price and Number of Shares of Common Stock.  The Conversion
Price and the number shares of Common Stock subject to the Conversion Rights
shall be adjusted from time to time as follows:

     

    (i)           Adjustment upon Issuance of
shares of Common Stock.  If and whenever on or after the
Subscription Date applicable to Holder’s purchase of Series A Stock the Company
issues or sells, or in accordance with this Section 6(e) is deemed to have
issued or sold, any shares of Common Stock (including the issuance or sale of
shares of Common Stock owned or held by or for the account of the Company, but
excluding shares of Common Stock deemed to have been issued by the Company in
connection with any Excluded Securities (as defined below) for a consideration
per share (the "New Issuance
Price") less than a price (the "Applicable Price") equal to
the Conversion Price in effect immediately prior to such issue or sale or deemed
issuance or sale (the foregoing a "Dilutive Issuance"), then
immediately after such Dilutive Issuance, the Conversion Price then in effect
shall be reduced to an amount equal to the New Issuance Price.  Upon
each such adjustment of the Conversion Price hereunder, the number of shares of
Common Stock subject to the Conversion Rights shall be adjusted to the number of
shares of Common Stock determined by multiplying the Conversion Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
acquirable upon exercise of its Conversion Rights immediately prior to such
adjustment and dividing the product thereof by the Conversion Price resulting
from such adjustment.  For purposes of determining the adjusted
Conversion Price under this Section 2(e), the following shall be
applicable:

     

    (x)          Issuance of
Options.  If the Company in any manner grants any Options and
the lowest price per share for which one share of Common Stock is issuable upon
the exercise of any such Option or upon conversion, exercise or exchange of any
Convertible Securities issuable upon exercise of any such Option is less than
the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
granting or sale of such Option for such price per share.  For
purposes of this Section 6(e)(i)(x), the "lowest price per share for which one
share of Common Stock is issuable upon exercise of such Options or upon
conversion, exercise or exchange of such Convertible Securities issuable upon
exercise of any such Option" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to any
one share of Common Stock upon the granting or sale of the Option, upon exercise
of the Option and upon conversion, exercise or exchange of any Convertible
Security issuable upon exercise of such Option.  No further adjustment
of the Conversion Price or the number of shares of Common Stock subject to the
Conversion Rights shall be made upon the actual issuance of such shares of
Common Stock or of such Convertible Securities upon the exercise of such Options
or upon the actual issuance of such shares of Common Stock upon conversion,
exercise or exchange of such Convertible Securities.

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    (y)          Issuance of Convertible
Securities.  If the Company in any manner issues or sells any
Convertible Securities and the lowest price per share for which one share of
Common Stock is issuable upon the conversion, exercise or exchange thereof is
less than the Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of
the issuance or sale of such Convertible Securities for such price per
share.  For the purposes of this Section 6(e)(i)(y), the "lowest price
per share for which one share of Common Stock is issuable upon the conversion,
exercise or exchange thereof" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to one
share of Common Stock upon the issuance or sale of the Convertible Security and
upon conversion, exercise or exchange of such Convertible
Security.  No further adjustment of the Conversion Price or number of
shares of Common Stock subject to the Conversion Rights shall be made upon the
actual issuance of such shares of Common Stock upon conversion, exercise or
exchange of such Convertible Securities, and if any such issue or sale of such
Convertible Securities is made upon exercise of any Options for which adjustment
of its Conversion Rights has been or is to be made pursuant to other provisions
of this Section 6(e), no further adjustment of the Conversion Price or number of
shares of Common Stock subject to the Conversion Rights shall be made by reason
of such issue or sale.

    


    (z)          Change in Option Price or
Rate of Conversion.  If the purchase price provided for in any
Options, the additional consideration, if any, payable upon the issue,
conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or
exchangeable for shares of Common Stock increases or decreases at any time, the
Conversion Price and the number of shares of Common Stock subject to Conversion
Rights in effect at the time of such increase or decrease shall be adjusted to
the Conversion Price and the number of shares of Common Stock subject to
Conversion Rights which would have been in effect at such time had such Options
or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate, as
the case may be, at the time initially granted, issued or sold.  For
purposes of this Section 6(e)(i)(z), if the terms of any Option or Convertible
Security that was outstanding as of the date of issuance of its Conversion
Rights are increased or decreased in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the shares of
Common Stock deemed issuable upon exercise, conversion or exchange thereof shall
be deemed to have been issued as of the date of such increase or
decrease.  No adjustment pursuant to this Section 6(e)(i)(z) shall be
made if such adjustment would result in an increase of the Conversion Price then
in effect or a decrease in the number of shares of Common Stock subject to
Conversion Rights.

    


    (xx)         Calculation of Consideration
Received.  In case any Option is issued in connection with the
issue or sale of other securities of the Company, together comprising one
integrated transaction in which no specific consideration is allocated to such
Options by the parties thereto, the Options will be deemed to have been issued
for a consideration of $0.01.  If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or
sold for cash, the consideration received therefor will be deemed to be the net
amount received by the Company therefor.  If any shares of Common
Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will
be the fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration received by
the Company will be the Closing Sale Price of such security on the date of
receipt.  If any shares of Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection
with any merger in which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such shares of Common Stock, Options or Convertible Securities, as the case may
be.  The fair value of any consideration other than cash or securities
will be determined jointly by the Company and the Required
Holders.  If such parties are unable to reach agreement within ten
(10) days after the occurrence of an event requiring valuation (the "Valuation Event"), the fair
value of such consideration will be determined within five (5) Business Days
after the tenth (10th) day following the Valuation Event by an independent,
reputable appraiser jointly selected by the Company and the Required
Holders.  The determination of such appraiser shall be final and
binding upon all parties absent manifest error and the fees and expenses of such
appraiser shall be borne by the Company.

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


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

    


    (zz)        Voluntary Adjustment By
Company.  The Company may at any time during the term of its
Conversion Rights reduce the then current Conversion Price to any amount and for
any period of time deemed appropriate by the Board of Directors of the
Company.

    


    (ii)           Adjustment upon Subdivision
or Combination of Common Stock.  If the Company at any time on
or after the Subscription Date subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Conversion Price in effect
immediately prior to such subdivision will be proportionately reduced and the
number of shares of Common Stock subject to the Conversion Rights will be
proportionately increased.  If the Company at any time on or after the
Subscription Date combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior to such
combination will be proportionately increased and the number of shares of Common
Stock subject to the Conversion Rights will be proportionately
decreased.  Any adjustment under this Section 6(e)(2) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.

     

    (iii)           Other
Events.  If any event occurs of the type contemplated by the
provisions of this Section 6(e) but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Board will make an appropriate adjustment in the Conversion Price and the number
of shares of Common Stock subject to the Conversion Rights so as to protect the
rights of the Holder; provided that no such adjustment pursuant to this Section
6(e) will increase the Conversion Price or decrease the number of shares of
Common Stock subject to the Conversion Rights as otherwise determined pursuant
to this Section 6.

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    7.         
   ADDITIONAL
PREFERENCE RIGHTS:  The Series A Stock will have the following
additional preference rights:

     

    (a)           Rights upon Distribution of
Assets.  If the Company declares or makes any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of
shares of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time
after the issuance of Conversion Rights, then, in each such case:

     

    (i)           
Any Conversion Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution will be reduced, effective as of the close
of business on such record date, to a price determined by multiplying such
Conversion Price by a fraction of which (i) the numerator will be the Closing
Bid Price of the shares of Common Stock on the Trading Day immediately preceding
such record date minus the value of the Distribution (as determined in good
faith by the Board) applicable to one share of Common Stock, and (ii) the
denominator will be the Closing Bid Price of the shares of Common Stock on the
Trading Day immediately preceding such record date; and

     

    (ii)           The
number of shares of Common Stock will be increased to a number of shares equal
to the number of shares of Common Stock obtainable immediately prior to the
close of business on the record date fixed for the determination of holders of
shares of Common Stock entitled to receive the Distribution multiplied by the
reciprocal of the fraction set forth in the immediately preceding paragraph (a);
provided that in the event that the Distribution is of shares of Common Stock
(or common stock) (“Other
Shares of Common Stock”) of a company whose common shares are traded on a
national securities exchange or a national automated quotation system, then the
Holder may elect to receive a warrant to purchase Other Shares of Common Stock
in lieu of an increase in the number of shares of Common Stock, the terms of
which will be identical to those of its Conversion Rights, except that such
warrant will be exercisable into the number of shares of Other Shares of Common
Stock that would have been payable to the Holder pursuant to the Distribution
had the Holder exercised its Conversion Rights immediately prior to such record
date and with an aggregate exercise price equal to the product of the amount by
which the exercise price of its Conversion Rights was decreased with respect to
the Distribution pursuant to the terms of the immediately preceding paragraph
(a) and the number of shares of Common Stock calculated in accordance with the
first part of this paragraph (b).

     

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

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    8.          
  NONCIRCUMVENTION.  The
Company hereby covenants and agrees that the Company will not, by amendment of
its Articles of Incorporation, Bylaws or through any reorganization, transfer of
assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale
of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of the Conversion Rights, and will
at all times in good faith carry out all the provisions of the Conversion Rights
and take all action as may be required to protect the rights of the
Holder.  Without limiting the generality of the foregoing, the Company
(i) will not increase the par value of any shares of Common Stock receivable
upon the exercise of any Conversion Rights above the Conversion Price then in
effect, (ii) will take all such actions as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of any Conversion Rights,
and (iii) will, so long as any of the shares of Series A Stock are outstanding,
take all action necessary to reserve and keep available out of its authorized
and unissued shares of Common Stock, solely for the purpose of effecting
exercise of the Series A Stock Conversion Rights, 130% of the number of shares
of Common Stock as will from time to time be necessary to effect the exercise of
the Conversion Rights then outstanding (without regard to any limitations on
exercise).

     

    9.          
  REISSUANCE
OF SERIES A STOCK .

     

    (a)           Transfer of Series A
Stock.  If any Series A Stock is to be transferred, the Holder
will surrender its Series A Stock certificate (“Stock Certificate”) to the
Company, whereupon the Company will forthwith issue and deliver upon the order
of the Holder a new Stock Certificate (in accordance with Section 9(d)),
registered as the Holder may request, representing the right to purchase the
number of Series A Stock being transferred by the Holder and, if less than the
total number of shares of Series A Stock is being transferred, a new Stock
Certificate (in accordance with Section 9(d)) to the Holder representing the
number of shares of Series A Stock not being transferred.

     

    (b)           Lost, Stolen or Mutilated
Stock Certificate.  Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of a Stock Certificate, and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation, upon surrender and cancellation
of the Stock Certificate, the Company will execute and deliver to the Holder a
new Stock Certificate (in accordance with Section 9(d)) representing the shares
of the Series A Stock registered in the name of the Holder.

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    (c)           Exchangeable for Multiple
Stock Certificates.  Series A Stock Certificates are
exchangeable, upon the surrender thereof by the Holder at the principal office
of the Company, for new Stock Certificates (in accordance with Section 9(d))
representing in the aggregate the number of shares of Series A Stock registered
to Holder, and each such new will represent the right to the number of shares of
Series A Stock as is designated by the Holder at the time of such surrender;
provided, however, that no Stock Certificates for fractional shares of Common
Stock will be given.

     

    (d)           Issuance of New
Warrants.  Whenever the Company is required to issue a new
Stock Certificate, such new Stock Certificate (i) will be of like tenor with
Conversion Rights, (ii) will represent, as indicated on the face of such new
Stock Certificate, the right to convert the Series A Stock to Common Stock,
(iii) will have an issuance date, as indicated on the face of such new Stock
Certificate which is the same as the original issuance date, and (iv) will have
the same rights and conditions.

     

    10.           COMPANY RIGHT TO
AMEND:  The Company reserves the right at any time and from
time to time to amend, alter, change or repeal any provision contained in this
Certificate, and any other provisions authorized by the law of the State of
Nevada at the time in force may be added or inserted, in the manner now or
thereafter prescribed herein or by applicable law, and all rights, preferences
and  privileges of whatsoever nature conferred upon stockholders,
directors or any other persons whomsoever by and pursuant to the Articles in its
present form or as hereafter amended or as hereafter amended are granted subject
to the rights reserved in the Articles and in this Section 10, provided,
however, that any amendment or repeal of the rights, preferences and privileges
conferred upon stockholders shall not adversely affect any right or protection
existing hereunder in respect of any act or omission occurring prior to such
amendment or repeal; and provided further that this Certificate shall not be
amended after the issuance of any shares of the Series A Stock created by this
Certificate.

     

    11.           RIGHT TO ISSUE OTHER SERIES
OF PREFERRED SHARES:  The Company and the Board hereby reserve
the right to create additional series of Preferred Stock with more favorable or
less favorable voting powers, preferences, limitations, restrictions and
relative rights than the Series A Stock, as provided for under the Articles and
applicable Nevada Revised Statutes.

     

    12.           MISCELLANEOUS PROVISIONS OF
THE SERIES A STOCK:

     

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

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    (b)           Amendment and
Waiver.  Except as otherwise provided herein, the provisions of
the Conversion Rights may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company complies with the terms and conditions of this Certificate
of Designation and / or the Company’s Articles of Incorporation; provided that
no such action may increase the exercise price of any Series A Stock or decrease
the number of shares or class of stock obtainable upon exercise of any Series A
Stock Conversion Right without the written consent of the Holder.  No
such amendment will be effective to the extent that it applies to less than all
of the holders of the Series A Stock then outstanding.

     

    (c)           Governing
Law.  The Conversion Rights will be governed by and construed
and enforced in accor­dance with, and all questions concerning the
construction, validity, interpretation and performance of its Conversion Rights
will be governed by, the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York.

     

    (d)           Dispute
Resolution.  In the case of a dispute as to the determination
of the Conversion Price or the arithmetic calculation of the Common Stock due
upon exercise of any Conversion Rights, the Company will submit the disputed
determinations or arithmetic calculations via facsimile within two (2) Business
Days of receipt of the Conversion Notice giving rise to such dispute, as the
case may be, to the Holder.  If the Holder and the Company are unable
to agree upon such determination or calculation of the Conversion Price or the
Common Stock within three (3) Business Days of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company will,
within two (2) Business Days submit via facsimile (a) the disputed determination
of the Conversion Price to an independent, reputable investment bank selected by
the Company and approved by the Holder  or (b) the disputed arithmetic
calculation of the Common Stock to the Company's independent, outside
accountant.  The Company will cause at its expense the investment bank
or the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the Holder of the results no later than
ten Business Days from the time it receives the disputed determinations or
calculations.  Such investment bank's or accountant's determination or
calculation, as the case may be, will be binding upon all parties absent
demonstrable error.

     

    (e)           Severability.   If
any provision of the Series A Stock is prohibited by law or otherwise determined
to be invalid or unenforceable by a court of competent jurisdiction, the
provision that would otherwise be prohibited, invalid or unenforceable will be
deemed amended to apply to the broadest extent that it would be valid and
enforceable, and the invalidity or unenforceability of such provision will not
affect the validity of the remaining provisions of the Series A Stock so long as
the Series A Stock as so modified continues to express, without material change,
the original intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the provision(s) in
question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that
would otherwise be conferred upon the parties.  The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or
unenforceable provision(s) with a valid provision(s), the effect of which comes
as close as possible to that of the prohibited, invalid or unenforceable
provision(s).

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    13.           CERTAIN
DEFINITIONS.  For purposes of the Series A Stock, the following
terms will have the following meanings:

     

    (a)           “Bloomberg” means Bloomberg
Financial Markets.

     

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

     

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

     

    (d)           “Common Stock” means (i) the
Company's shares of Common Stock (par value $0.01 per share), and (ii) any stock
capital into which such Common Stock will have been changed or any stock capital
resulting from a reclassification of such Common Stock.

     

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

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


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

     

    (g)       
   “Excluded
Securities” means any Common Stock issued or issuable: (i) in connection
with any employee benefit plan that has been approved by the Company’s Board
pursuant to which the Company's securities may be issued to any employee,
consultant, officer or director for services provided to the Company; (ii) upon
conversion of the Series A Stock or upon the exercise of any Warrants issued by
the Company; (iii) upon conversion, exercise or exchange of any Options or
Convertible Securities which are outstanding on the day immediately preceding
the Subscription Date, provided that the terms of such Options or Convertible
Securities are not amended, modified or changed on or after the Subscription
Date; or (iv) pursuant to a bona fide firm commitment underwritten public
offering with a nationally recognized underwriter which generates gross proceeds
to the Company in excess of $10,000,000 (other than an “at-the-market offering”
as defined in Rule 415(a)(4) under the 1933 Act and “equity
lines”).

     

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

     

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

     

    (j)         
  “Original Purchase
Price” means the aggregate purchase price paid for Series A Stock by the
original purchaser of that stock from the Company.

     

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

     

    (l)         
  “Principal
Market” means the OTC Bulletin Board.

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    (m)          “Required holders” means the
holders of the Series A Stock representing at least a majority of shares of the
Series A Stock Common Stock then outstanding.

     

    (n)          
“Subscription Date”
means the date of the applicable Series A Stock Purchase Agreement.

     

    (o)           “Trading Day” means any day on
which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is
then traded; provided that “Trading Day” will not include any day on which the
Common Stock is scheduled to trade on such exchange or market for less than 4.5
hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such exchange or
market, then during the hour ending at 4:00:00 p.m., New York
time).

     

    (p)           “Weighted Average Price” means,
for any security as of any date, the dollar volume-weighted average price for
such security on the Principal Market during the period beginning at 9:30:01
a.m., New York City Time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
City Time (or such other time as the Principal Market publicly announces is the
official close of trading), as reported by Bloomberg through its “Volume at
Price” function or, if the foregoing does not apply, the dollar volume-weighted
average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m.,
New York City Time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
City Time (or such other time as the Principal Market publicly announces is the
official close of trading), as reported by Bloomberg, or, if no dollar
volume-weighted average price is reported for such security by Bloomberg for
such hours, the average of the highest closing bid price and the lowest closing
ask price of any of the market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC (formerly the National Quotation Bureau,
Inc.).  If the Weighted Average Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Weighted
Average Price of such security on such date will be the fair market value as
mutually determined by the Company and the Holder.  If the Company and
the Holder are unable to agree upon the fair market value of such security, then
such dispute will be resolved pursuant to Section 12 with the term “Weighted
Average Price” being substituted for the term “Conversion Price.” All such
determinations will be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

     

    


    SERIES A
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

    


    Exhibit
B

    


    Warrant

     

    

    

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    [FORM
OF WARRANT]

    


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

    


    EnterConnect
Inc.

    


    Warrant
To Purchase Common Stock

    


    Warrant
No.:       

    Number
of Shares of Common Stock:       

    Date of
Issuance: February      ,
2009 (“Issuance
Date”)

    


    EnterConnect
Inc., a Nevada corporation (the “Company”), hereby certifies
that, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, [BUYER],
the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject
to the terms set forth below, to purchase from the Company, at the Exercise
Price (as defined below) then in effect, upon surrender of this Warrant to
Purchase Common Stock (including any Warrants to Purchase Common Stock issued in
exchange, transfer or replacement hereof, the “Warrant”), at any time or
times on or after the date hereof, but not after 11:59 p.m., New York time, on
the Expiration Date (as defined below),      
(     )1 fully paid nonassessable
shares of Common Stock (as defined below) (the “Warrant
Shares”).  Except as otherwise defined herein, capitalized
terms in this Warrant shall have the meanings set forth in Section
15.  This Warrant is one of the Warrants to purchase Common Stock (the
“Series A Warrants”)
issued pursuant to Section 1 of that certain Series A Convertible Preferred
Stock Purchase Agreement, dated as of February      ,
2009 (the “Subscription
Date”), by and among the Company and the investors (the “Buyers”) referred to therein
(the “Stock Purchase
Agreement”).

     

    ________________

    
      1       
Insert a
number of shares equal to 100% of the number of Conversion Shares (as defined in
the Stock Purchase Agreement) issuable as of the Closing Date upon conversion of
the Series A Stock issued to the Holder pursuant to the Stock Purchase
Agreement.

    

    


    
      
        
           


        

        
          21

          
            

          

        

        
           


        

      

    

    


    14.           EXERCISE OF
WARRANT.

     

    (i)          
 Mechanics of
Exercise.  Subject to the terms and conditions hereof
(including, without limitation, the limitations set forth in Section 1(f)), this
Warrant may be exercised by the Holder on any day on or after the date hereof,
in whole or in part, by (i) delivery of a written notice, in the form attached
hereto as Exhibit
A (the “Exercise
Notice”), of the Holder's election to exercise this Warrant and (ii) (A)
payment to the Company of an amount equal to the applicable Exercise Price
multiplied by the number of Warrant Shares as to which this Warrant is being
exercised (the “Aggregate
Exercise Price”) in cash or by wire transfer of immediately available
funds or (B) by notifying the Company that this Warrant is being exercised
pursuant to a Cashless Exercise (as defined in Section 1(d)).  The
Holder shall not be required to deliver the original Warrant in order to effect
an exercise hereunder.  Execution and delivery of the Exercise Notice
with respect to less than all of the Warrant Shares shall have the same effect
as cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares.  On or
before the first (1st)
Business Day following the date on which the Company has received each of the
Exercise Notice and the Aggregate Exercise Price (or notice of a Cashless
Exercise) (the “Exercise
Delivery Documents”), the Company shall transmit by facsimile an
acknowledgment of confirmation of receipt of the Exercise Delivery Documents to
the Holder and the Company's transfer agent (the “Transfer
Agent”).  On or before the third (3rd)
Business Day following the date on which the Company has received all of the
Exercise Delivery Documents (the “Share Delivery Date”), the
Company shall (X) provided that the Transfer Agent is participating in The
Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program, upon the request of the Holder, credit such
aggregate number of Warrant Shares to which the Holder is entitled pursuant to
such exercise to the Holder's or its designee's balance account with DTC through
its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is
not participating in the DTC Fast Automated Securities Transfer Program, issue
and dispatch by overnight courier to the address as specified in the Exercise
Notice, a certificate, registered in the Company's share register in the name of
the Holder or its designee, for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise.  Upon delivery of
the Exercise Delivery Documents, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date such Warrant
Shares are credited to the Holder's DTC account or the date of delivery of the
certificates evidencing such Warrant Shares, as the case may be.  If
this Warrant is submitted in connection with any exercise pursuant to this
Section 1(a) and the number of Warrant Shares represented by this Warrant
submitted for exercise is greater than the number of Warrant Shares being
acquired upon an exercise, then the Company shall as soon as practicable and in
no event later than three (3) Business Days after any exercise and at its own
expense, issue a new Warrant (in accordance with Section 6(d)) representing the
right to purchase the number of Warrant Shares purchasable immediately prior to
such exercise under this Warrant, less the number of Warrant Shares with respect
to which this Warrant is exercised.  No fractional shares of Common
Stock are to be issued upon the exercise of this Warrant, but rather the number
of shares of Common Stock to be issued shall be rounded up to the nearest whole
number.  The Company shall pay any and all taxes which may be payable
with respect to the issuance and delivery of Warrant Shares upon exercise of
this Warrant.

     

    
      
        
           


        

        
          22

          
            

          

        

        
           


        

      

    

    


    (ii)           Exercise
Price.  For purposes of this Warrant, “Exercise Price” means $0.15,
subject to adjustment as provided herein.

     

    (iii)           Company's Failure to Timely
Deliver Securities.  If the Company shall fail for any reason
or for no reason to issue to the Holder within three (3) Business Days of
receipt of the Exercise Delivery Documents, a certificate for the number of
shares of Common Stock to which the Holder is entitled and register such shares
of Common Stock on the Company's share register or to credit the Holder's
balance account with DTC for such number of shares of Common Stock to which the
Holder is entitled upon the Holder's exercise of this Warrant, then, in addition
to all other remedies available to the Holder, the Company shall pay in cash to
the Holder on each day after such third (3rd)
Business Day that the issuance of such shares of Common Stock is not timely
effected an amount equal to one and one-half percent (1.5%) of the product of
(A) the sum of the number of shares of Common Stock not issued to the Holder on
a timely basis and to which the Holder is entitled and (B) the Closing Sale
Price of the shares of Common Stock on the Trading Day immediately preceding the
last possible date which the Company could have issued such shares of Common
Stock to the Holder without violating Section 1(a).  In addition to
the foregoing, if within three (3) Trading Days after the Company's receipt of
the facsimile copy of a Exercise Notice the Company shall fail to issue and
deliver a certificate to the Holder and register such shares of Common Stock on
the Company's share register or credit the Holder's balance account with DTC for
the number of shares of Common Stock to which the Holder is entitled upon the
Holder's exercise hereunder, and if on or after such Trading Day the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares of Common Stock
issuable upon such exercise that the Holder anticipated receiving from the
Company (a “Buy-In”),
then the Company shall, within three (3) Business Days after the Holder's
request and in the Holder's discretion, either (i) pay cash to the Holder in an
amount equal to the Holder's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point
the Company's obligation to deliver such certificate (and to issue such shares
of Common Stock) or credit such Holder's balance account with DTC shall
terminate, or (ii) promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such shares of Common Stock or credit
such Holder's balance account with DTC and pay cash to the Holder in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such
number of shares of Common Stock, times (B) the Closing Bid Price on the date of
exercise.

     

    (iv)           Cashless Exercise.
 Notwithstanding
anything contained herein to the contrary, if a registration statement filed
pursuant to the 1933 Act is not available for the resale of the Warrant Shares
that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”),
the Holder may, in its sole discretion, exercise this Warrant in whole or in
part and, in lieu of making the cash payment otherwise contemplated to be made
to the Company upon such exercise in payment of the Aggregate Exercise Price,
elect instead to receive upon such exercise the “Net Number” of shares of Common
Stock determined according to the following formula (a “Cashless
Exercise”):

     

    
      
        
           


        

        
          23

          
            

          

        

        
           


        

      

    

     

    
      
        
          
            	
                    Net
      Number =

                  	
                    (A x B) - (A x C)

                  
	 
      	
                    B

                  
	
                    For
      purposes of the foregoing
formula:

                  


          

        

      

    

    


     

    
      	
               
      

            	
              A=

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

            


    

     

    
      	
               
      

            	
              B=

            	
              the
      Weighted Average Price of the shares of Common Stock (as reported by
      Bloomberg)  for the five (5) consecutive Trading Days ending on
      the date immediately preceding the date of the Exercise
      Notice.

            


    

     

    
      	
               
      

            	
              C=

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

            


    

    


    (v)           Disputes.  In
the case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall promptly issue
to the Holder the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 11.

     

    (vi)           Limitations on
Exercises—Beneficial Ownership.  The Company shall not effect
the exercise of this Warrant, and the Holder shall not have the right to
exercise this Warrant, to the extent that after giving effect to such exercise,
such Person (together with such Person's affiliates) would beneficially own in
excess of 4.99% (the “Maximum
Percentage”) of the shares of Common Stock outstanding immediately after
giving effect to such exercise.  For purposes of the foregoing
sentence, the aggregate number of shares of Common Stock beneficially owned by
such Person and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude shares of Common
Stock which would be issuable upon (i) exercise of the remaining, unexercised
portion of this Warrant beneficially owned by such Person and its affiliates and
(ii) exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company beneficially owned by such Person and its
affiliates (including, without limitation, any convertible notes or convertible
preferred stock or warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein.  Except as set forth in
the preceding sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended.  For purposes of this Warrant, in determining
the number of outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as reflected in (1) the Company's
most recent Form 10-K, Form 10-KSB, Form 10-Q, Form 10-QSB, Current Report on
Form 8-K or other public filing with the Securities and Exchange Commission, as
the case may be, (2) a more recent public announcement by the Company or (3) any
other notice by the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding.  For any reason at any time, upon
the written or oral request of the Holder, the Company shall within one Business
Day confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding.  In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including the Series A Stock and the
Series A Warrants, by the Holder and its affiliates since the date as of which
such number of outstanding shares of Common Stock was reported.  By
written notice to the Company, the Holder may from time to time increase or
decrease the Maximum Percentage to any other percentage not in excess of 9.99%
specified in such notice; provided that (i) any such increase will not be
effective until the sixty-first (61st) day
after such notice is delivered to the Company, and (ii) any such increase or
decrease will apply only to the Holder and not to any other holder of Series A
Warrants.  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(f) 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.

        

    
      
        
           


        

        
          24

          
            

          

        

        
           


        

      

    

    


    (vii)          Insufficient Authorized
Shares.  If at any time while this Warrant remains outstanding
the Company does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve for issuance upon
exercise of this Warrant at least a number of shares of Common Stock equal to
130% (the “Required Reserve
Amount”) of the number of shares of Common Stock as shall from time to
time be necessary to effect the exercise of all of this Warrant then outstanding
(an “Authorized Share
Failure”), then the Company shall immediately take all action necessary
to increase the Company's authorized shares of Common Stock to an amount
sufficient to allow the Company to reserve the Required Reserve Amount for this
Warrant then outstanding.  Without limiting the generality of the
foregoing sentence, as soon as practicable after the date of the occurrence of
an Authorized Share Failure, but in no event later than sixty (60) days after
the occurrence of such Authorized Share Failure, the Company shall hold a
meeting of its stockholders for the approval of an increase in the number of
authorized shares of Common Stock.  In connection with such meeting,
the Company shall provide each stockholder with a proxy statement and shall use
its best efforts to solicit its stockholders' approval of such increase in
authorized shares of Common Stock and to cause its board of directors to
recommend to the stockholders that they approve such proposal.

     

    15.           ADJUSTMENT OF EXERCISE PRICE
AND NUMBER OF WARRANT SHARES.  THE EXERCISE PRICE AND THE NUMBER OF
WARRANT SHARES SHALL BE ADJUSTED FROM TIME TO TIME AS
FOLLOWS:

     

    (i)           
Adjustment upon
Issuance of Shares of Common Stock.  If and whenever on or
after the Subscription Date the Company issues or sells, or in accordance with
this Section 2 is deemed to have issued or sold, any shares of Common Stock
(including the issuance or sale of shares of Common Stock owned or held by or
for the account of the Company, but excluding shares of Common Stock deemed to
have been issued by the Company in connection with any Excluded Securities for a
consideration per share (the “New Issuance Price”) less than
a price (the “Applicable
Price”) equal to the Exercise Price in effect immediately prior to such
issue or sale or deemed issuance or sale (the foregoing a “Dilutive Issuance”), then
immediately after such Dilutive Issuance, the Exercise Price then in effect
shall be reduced to an amount equal to the New Issuance Price (the number of
Warrant Shares shall not be adjusted).  For purposes of determining
the adjusted Exercise Price under this Section 2(a), the following shall be
applicable:

     

    
      
        
           


        

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

     

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

     

    (iii)          Change in Option Price or
Rate of Conversion.  If the purchase price provided for in any
Options, the additional consideration, if any, payable upon the issue,
conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or
exchangeable for shares of Common Stock increases or decreases at any time, the
Exercise Price and the number of Warrant Shares in effect at the time of such
increase or decrease shall be adjusted to the Exercise Price and the number of
Warrant Shares which would have been in effect at such time had such Options or
Convertible Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate, as the case
may be, at the time initially granted, issued or sold.  For purposes
of this Section 2(a)(iii), if the terms of any Option or Convertible Security
that was outstanding as of the date of issuance of this Warrant are increased or
decreased in the manner described in the immediately preceding sentence, then
such Option or Convertible Security and the shares of Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such increase or decrease.  No
adjustment pursuant to this Section 2(a) shall be made if such adjustment would
result in an increase of the Exercise Price then in effect or a decrease in the
number of Warrant Shares.

     

    
      
        
           


        

        
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    (iv)          Calculation of Consideration
Received.  In case any Option is issued in connection with the
issue or sale of other securities of the Company, together comprising one
integrated transaction in which no specific consideration is allocated to such
Options by the parties thereto, the Options will be deemed to have been issued
for a consideration of $0.01.  If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or
sold for cash, the consideration received therefor will be deemed to be the net
amount received by the Company therefor.  If any shares of Common
Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will
be the fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration received by
the Company will be the Closing Sale Price of such security on the date of
receipt.  If any shares of Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection
with any merger in which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such shares of Common Stock, Options or Convertible Securities, as the case may
be.  The fair value of any consideration other than cash or securities
will be determined jointly by the Company and the Required
Holders.  If such parties are unable to reach agreement within ten
(10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair
value of such consideration will be determined within five (5) Business Days
after the tenth (10th) day
following the Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Required Holders.  The determination
of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the
Company.

    


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

     

    
      
        
           


        

        
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    (vii)         Voluntary Adjustment By
Company.  The Company may at any time during the term of this
Warrant reduce the then current Exercise Price to any amount and for any period
of time deemed appropriate by the Board of Directors of the
Company.

     

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

     

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

     

    16.           RIGHTS UPON DISTRIBUTION OF
ASSETS.  IF THE COMPANY SHALL DECLARE OR MAKE ANY DIVIDEND OR OTHER
DISTRIBUTION OF ITS ASSETS (OR RIGHTS TO ACQUIRE ITS ASSETS) TO HOLDERS OF
SHARES OF COMMON STOCK, BY WAY OF RETURN OF CAPITAL OR OTHERWISE (INCLUDING,
WITHOUT LIMITATION, ANY DISTRIBUTION OF CASH, STOCK OR OTHER SECURITIES,
PROPERTY OR OPTIONS BY WAY OF A DIVIDEND, SPIN OFF, RECLASSIFICATION, CORPORATE
REARRANGEMENT, SCHEME OF ARRANGEMENT OR OTHER SIMILAR TRANSACTION) (A
“DISTRIBUTION”), AT ANY TIME AFTER THE
ISSUANCE OF THIS WARRANT, THEN, IN EACH SUCH CASE:

     

    (i)           
any Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution shall be reduced, effective as of the close
of business on such record date, to a price determined by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the Closing Bid
Price of the shares of Common Stock on the Trading Day immediately preceding
such record date minus the value of the Distribution (as determined in good
faith by the Company's Board of Directors) applicable to one share of Common
Stock, and (ii) the denominator shall be the Closing Bid Price of the shares of
Common Stock on the Trading Day immediately preceding such record date;
and

     

    
      
        
           


        

        
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    (ii)           the
number of Warrant Shares shall be increased to a number of shares equal to the
number of shares of Common Stock obtainable immediately prior to the close of
business on the record date fixed for the determination of holders of shares of
Common Stock entitled to receive the Distribution multiplied by the reciprocal
of the fraction set forth in the immediately preceding paragraph (a); provided
that in the event that the Distribution is of shares of Common Stock (or common
stock) (“Other Shares of Common
Stock”) of a company whose common shares are traded on a national
securities exchange or a national automated quotation system, then the Holder
may elect to receive a warrant to purchase Other Shares of Common Stock in lieu
of an increase in the number of Warrant Shares, the terms of which shall be
identical to those of this Warrant, except that such warrant shall be
exercisable into the number of shares of Other Shares of Common Stock that would
have been payable to the Holder pursuant to the Distribution had the Holder
exercised this Warrant immediately prior to such record date and with an
aggregate exercise price equal to the product of the amount by which the
exercise price of this Warrant was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding paragraph (a) and the number
of Warrant Shares calculated in accordance with the first part of this paragraph
(b).

     

    17.           PURCHASE
RIGHTS.  IN ADDITION TO ANY ADJUSTMENTS PURSUANT TO SECTION 2 ABOVE,
IF AT ANY TIME THE COMPANY GRANTS, ISSUES OR SELLS ANY OPTIONS, CONVERTIBLE
SECURITIES OR RIGHTS TO PURCHASE STOCK, WARRANTS, SECURITIES OR OTHER PROPERTY
PRO RATA TO THE RECORD HOLDERS OF ANY CLASS OF SHARES OF COMMON STOCK (THE
“PURCHASE
RIGHTS”), THEN
THE HOLDER WILL BE ENTITLED TO ACQUIRE, UPON THE TERMS APPLICABLE TO SUCH
PURCHASE RIGHTS, THE AGGREGATE PURCHASE RIGHTS WHICH THE HOLDER COULD HAVE
ACQUIRED IF THE HOLDER HAD HELD THE NUMBER OF SHARES OF COMMON STOCK ACQUIRABLE
UPON COMPLETE EXERCISE OF THIS WARRANT (WITHOUT REGARD TO ANY LIMITATIONS ON THE
EXERCISE OF THIS WARRANT) IMMEDIATELY BEFORE THE DATE ON WHICH A RECORD IS TAKEN
FOR THE GRANT, ISSUANCE OR SALE OF SUCH PURCHASE RIGHTS, OR, IF NO SUCH RECORD
IS TAKEN, THE DATE AS OF WHICH THE RECORD HOLDERS OF SHARES OF COMMON STOCK ARE
TO BE DETERMINED FOR THE GRANT, ISSUE OR SALE OF SUCH PURCHASE
RIGHTS.

     

    18.           NONCIRCUMVENTION.  THE
COMPANY HEREBY COVENANTS AND AGREES THAT THE COMPANY WILL NOT, BY AMENDMENT OF
ITS ARTICLES OF INCORPORATION, BYLAWS OR THROUGH ANY REORGANIZATION, TRANSFER OF
ASSETS, CONSOLIDATION, MERGER, SCHEME OF ARRANGEMENT, DISSOLUTION, ISSUE OR SALE
OF SECURITIES, OR ANY OTHER VOLUNTARY ACTION, AVOID OR SEEK TO AVOID THE
OBSERVANCE OR PERFORMANCE OF ANY OF THE TERMS OF THIS WARRANT, AND WILL AT ALL
TIMES IN GOOD FAITH CARRY OUT ALL THE PROVISIONS OF THIS WARRANT AND TAKE ALL
ACTION AS MAY BE REQUIRED TO PROTECT THE RIGHTS OF THE
HOLDER.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE COMPANY
(I) SHALL NOT INCREASE THE PAR VALUE OF ANY SHARES OF COMMON STOCK RECEIVABLE
UPON THE EXERCISE OF THIS WARRANT ABOVE THE EXERCISE PRICE THEN IN EFFECT, (II)
SHALL TAKE ALL SUCH ACTIONS AS MAY BE NECESSARY OR APPROPRIATE IN ORDER THAT THE
COMPANY MAY VALIDLY AND LEGALLY ISSUE FULLY PAID AND NONASSESSABLE SHARES OF
COMMON STOCK UPON THE EXERCISE OF THIS WARRANT, AND (III) SHALL, SO LONG AS ANY
OF THE SERIES A WARRANTS ARE OUTSTANDING, TAKE ALL ACTION NECESSARY TO RESERVE
AND KEEP AVAILABLE OUT OF ITS AUTHORIZED AND UNISSUED SHARES OF COMMON STOCK,
SOLELY FOR THE PURPOSE OF EFFECTING THE EXERCISE OF THE SERIES A WARRANTS, 130%
OF THE NUMBER OF SHARES OF COMMON STOCK AS SHALL FROM TIME TO TIME BE NECESSARY
TO EFFECT THE EXERCISE OF THE SERIES A WARRANTS THEN OUTSTANDING (WITHOUT REGARD
TO ANY LIMITATIONS ON EXERCISE).

     

    
      
        
           


        

        
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    19.           WARRANT HOLDER NOT DEEMED A
STOCKHOLDER.  EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, THE
HOLDER, SOLELY IN SUCH PERSON'S CAPACITY AS A HOLDER OF THIS WARRANT, SHALL NOT
BE ENTITLED TO VOTE OR RECEIVE DIVIDENDS OR BE DEEMED THE HOLDER OF SHARE
CAPITAL OF THE COMPANY FOR ANY PURPOSE, NOR SHALL ANYTHING CONTAINED IN THIS
WARRANT BE CONSTRUED TO CONFER UPON THE HOLDER, SOLELY IN SUCH PERSON'S CAPACITY
AS THE HOLDER OF THIS WARRANT, ANY OF THE RIGHTS OF A STOCKHOLDER OF THE COMPANY
OR ANY RIGHT TO VOTE, GIVE OR WITHHOLD CONSENT TO ANY CORPORATE ACTION (WHETHER
ANY REORGANIZATION, ISSUE OF STOCK, RECLASSIFICATION OF STOCK, CONSOLIDATION,
MERGER, CONVEYANCE OR OTHERWISE), RECEIVE NOTICE OF MEETINGS, RECEIVE DIVIDENDS
OR SUBSCRIPTION RIGHTS, OR OTHERWISE, PRIOR TO THE ISSUANCE TO THE HOLDER OF THE
WARRANT SHARES WHICH SUCH PERSON IS THEN ENTITLED TO RECEIVE UPON THE DUE
EXERCISE OF THIS WARRANT.  IN ADDITION, NOTHING CONTAINED IN THIS
WARRANT SHALL BE CONSTRUED AS IMPOSING ANY LIABILITIES ON THE HOLDER TO PURCHASE
ANY SECURITIES (UPON EXERCISE OF THIS WARRANT OR OTHERWISE) OR AS A STOCKHOLDER
OF THE COMPANY, WHETHER SUCH LIABILITIES ARE ASSERTED BY THE COMPANY OR BY
CREDITORS OF THE COMPANY.  NOTWITHSTANDING THIS SECTION 5, THE COMPANY
SHALL PROVIDE THE HOLDER WITH COPIES OF THE SAME NOTICES AND OTHER INFORMATION
GIVEN TO THE STOCKHOLDERS OF THE COMPANY GENERALLY, CONTEMPORANEOUSLY WITH THE
GIVING THEREOF TO THE STOCKHOLDERS.

     

    20.           REISSUANCE OF
WARRANTS.

     

    (i)          
 Transfer of
Warrant.  If this Warrant is to be transferred, the Holder
shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in
accordance with Section 6(d)), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less than the total number of Warrant Shares
then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 6(d)) to the Holder representing the right to purchase the number
of Warrant Shares not being transferred.

     

    
      
        
           


        

        
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    (ii)           Lost, Stolen or Mutilated
Warrant.  Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary form and,
in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance
with Section 6(d)) representing the right to purchase the Warrant Shares then
underlying this Warrant.

     

    (iii)           Exchangeable for Multiple
Warrants.  This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company, for a new Warrant
or Warrants (in accordance with Section 6(d)) representing in the aggregate the
right to purchase the number of Warrant Shares then underlying this Warrant, and
each such new Warrant will represent the right to purchase such portion of such
Warrant Shares as is designated by the Holder at the time of such surrender;
provided, however, that no Warrants for fractional shares of Common Stock shall
be given.

     

    (iv)           Issuance of New
Warrants.  Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of
like tenor with this Warrant, (ii) shall represent, as indicated on the face of
such new Warrant, the right to purchase the Warrant Shares then underlying this
Warrant (or in the case of a new Warrant being issued pursuant to Section 6(a)
or Section 6(c), the Warrant Shares designated by the Holder which, when added
to the number of shares of Common Stock underlying the other new Warrants issued
in connection with such issuance, does not exceed the number of Warrant Shares
then underlying this Warrant), (iii) shall have an issuance date, as indicated
on the face of such new Warrant which is the same as the Issuance Date, and (iv)
shall have the same rights and conditions as this Warrant.

     

    21.           NOTICES.  WHENEVER
NOTICE IS REQUIRED TO BE GIVEN UNDER THIS WARRANT, UNLESS OTHERWISE PROVIDED
HEREIN, SUCH NOTICE SHALL BE GIVEN IN ACCORDANCE WITH SECTION 9(F) OF THE STOCK
PURCHASE AGREEMENT.  THE COMPANY SHALL PROVIDE THE HOLDER WITH PROMPT
WRITTEN NOTICE OF ALL ACTIONS TAKEN PURSUANT TO THIS WARRANT, INCLUDING IN
REASONABLE DETAIL A DESCRIPTION OF SUCH ACTION AND THE REASON
THEREFOR.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE
COMPANY WILL GIVE WRITTEN NOTICE TO THE HOLDER (I) IMMEDIATELY UPON ANY
ADJUSTMENT OF THE EXERCISE PRICE, SETTING FORTH IN REASONABLE DETAIL, AND
CERTIFYING, THE CALCULATION OF SUCH ADJUSTMENT AND (II) AT LEAST FIFTEEN (15)
DAYS PRIOR TO THE DATE ON WHICH THE COMPANY CLOSES ITS BOOKS OR TAKES A RECORD
(A) WITH RESPECT TO ANY DIVIDEND OR DISTRIBUTION UPON THE SHARES OF COMMON
STOCK, (B) WITH RESPECT TO ANY GRANTS, ISSUANCES OR SALES OF ANY OPTIONS,
CONVERTIBLE SECURITIES OR RIGHTS TO PURCHASE STOCK, WARRANTS, SECURITIES OR
OTHER PROPERTY TO HOLDERS OF SHARES OF COMMON STOCK OR (C) FOR DETERMINING
RIGHTS TO VOTE WITH RESPECT TO ANY FUNDAMENTAL TRANSACTION, DISSOLUTION OR
LIQUIDATION, PROVIDED IN EACH CASE THAT SUCH INFORMATION SHALL BE MADE KNOWN TO
THE PUBLIC PRIOR TO OR IN CONJUNCTION WITH SUCH NOTICE BEING PROVIDED TO THE
HOLDER.

     

    
      
        
           


        

        
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    22.           AMENDMENT AND
WAIVER.  EXCEPT AS OTHERWISE PROVIDED HEREIN, THE PROVISIONS OF THIS
WARRANT MAY BE AMENDED AND THE COMPANY MAY TAKE ANY ACTION HEREIN PROHIBITED, OR
OMIT TO PERFORM ANY ACT HEREIN REQUIRED TO BE PERFORMED BY IT, ONLY IF THE
COMPANY HAS OBTAINED THE WRITTEN CONSENT OF THE REQUIRED HOLDERS; PROVIDED THAT
NO SUCH ACTION MAY INCREASE THE EXERCISE PRICE OF ANY SERIES A WARRANT OR
DECREASE THE NUMBER OF SHARES OR CLASS OF STOCK OBTAINABLE UPON EXERCISE OF ANY
SERIES A WARRANT WITHOUT THE WRITTEN CONSENT OF THE HOLDER.  NO SUCH
AMENDMENT SHALL BE EFFECTIVE TO THE EXTENT THAT IT APPLIES TO LESS THAN ALL OF
THE HOLDERS OF THE SERIES A WARRANTS THEN OUTSTANDING.

     

    23.           GOVERNING
LAW.  THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCOR­DANCE WITH, AND ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
INTERPRETATION AND PERFORMANCE OF THIS WARRANT SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR
ANY OTHER JURISDICTIONS) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTIONS OTHER THAN THE STATE OF NEW YORK.

     

    24.           CONSTRUCTION;
HEADINGS.  THIS WARRANT SHALL BE DEEMED TO BE JOINTLY DRAFTED BY THE
COMPANY AND ALL THE BUYERS AND SHALL NOT BE CONSTRUED AGAINST ANY PERSON AS THE
DRAFTER HEREOF.  THE HEADINGS OF THIS WARRANT ARE FOR CONVENIENCE OF
REFERENCE AND SHALL NOT FORM PART OF, OR AFFECT THE INTERPRETATION OF, THIS
WARRANT.

     

    25.           DISPUTE
RESOLUTION.  IN THE CASE OF A DISPUTE AS TO THE DETERMINATION OF THE
EXERCISE PRICE OR THE ARITHMETIC CALCULATION OF THE WARRANT SHARES, THE COMPANY
SHALL SUBMIT THE DISPUTED DETERMINATIONS OR ARITHMETIC CALCULATIONS VIA
FACSIMILE WITHIN TWO (2) BUSINESS DAYS OF RECEIPT OF THE EXERCISE NOTICE GIVING
RISE TO SUCH DISPUTE, AS THE CASE MAY BE, TO THE HOLDER.  IF THE
HOLDER AND THE COMPANY ARE UNABLE TO AGREE UPON SUCH DETERMINATION OR
CALCULATION OF THE EXERCISE PRICE OR THE WARRANT SHARES WITHIN THREE (3)
BUSINESS DAYS OF SUCH DISPUTED DETERMINATION OR ARITHMETIC CALCULATION BEING
SUBMITTED TO THE HOLDER, THEN THE COMPANY SHALL, WITHIN TWO (2) BUSINESS DAYS
SUBMIT VIA FACSIMILE (A) THE DISPUTED DETERMINATION OF THE EXERCISE PRICE TO AN
INDEPENDENT, REPUTABLE INVESTMENT BANK SELECTED BY THE COMPANY AND APPROVED BY
THE HOLDER  OR (B) THE DISPUTED ARITHMETIC CALCULATION OF THE WARRANT
SHARES TO THE COMPANY'S INDEPENDENT, OUTSIDE ACCOUNTANT.  THE COMPANY
SHALL CAUSE AT ITS EXPENSE THE INVESTMENT BANK OR THE ACCOUNTANT, AS THE CASE
MAY BE, TO PERFORM THE DETERMINATIONS OR CALCULATIONS AND NOTIFY THE COMPANY AND
THE HOLDER OF THE RESULTS NO LATER THAN TEN (10) BUSINESS DAYS FROM THE TIME IT
RECEIVES THE DISPUTED DETERMINATIONS OR CALCULATIONS.  SUCH INVESTMENT
BANK'S OR ACCOUNTANT'S DETERMINATION OR CALCULATION, AS THE CASE MAY BE, SHALL
BE BINDING UPON ALL PARTIES ABSENT DEMONSTRABLE ERROR.

     

    
      
        
           


        

        
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    26.           REMEDIES, OTHER OBLIGATIONS,
BREACHES AND INJUNCTIVE RELIEF.  THE REMEDIES PROVIDED IN THIS WARRANT
SHALL BE CUMULATIVE AND IN ADDITION TO ALL OTHER REMEDIES AVAILABLE UNDER THIS
WARRANT AND THE STOCK PURCHASE AGREEMENT, AT LAW OR IN EQUITY (INCLUDING A
DECREE OF SPECIFIC PERFORMANCE AND/OR OTHER INJUNCTIVE RELIEF), AND NOTHING
HEREIN SHALL LIMIT THE RIGHT OF THE HOLDER TO PURSUE ACTUAL DAMAGES FOR ANY
FAILURE BY THE COMPANY TO COMPLY WITH THE TERMS OF THIS WARRANT.  THE
COMPANY ACKNOWLEDGES THAT A BREACH BY IT OF ITS OBLIGATIONS HEREUNDER WILL CAUSE
IRREPARABLE HARM TO THE HOLDER AND THAT THE REMEDY AT LAW FOR ANY SUCH BREACH
MAY BE INADEQUATE.  THE COMPANY THEREFORE AGREES THAT, IN THE EVENT OF
ANY SUCH BREACH OR THREATENED BREACH, THE HOLDER OF THIS WARRANT SHALL BE
ENTITLED TO SEEK, IN ADDITION TO ALL OTHER AVAILABLE REMEDIES, TO AN INJUNCTION
RESTRAINING ANY BREACH, WITHOUT THE NECESSITY OF SHOWING ECONOMIC LOSS AND
WITHOUT ANY BOND OR OTHER SECURITY BEING REQUIRED.

     

    27.           TRANSFER. THIS WARRANT MAY BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED WITHOUT THE CONSENT OF THE COMPANY,
EXCEPT AS MAY OTHERWISE BE REQUIRED BY SECTION 2(F) OF THE STOCK PURCHASE
AGREEMENT.

     

    28.           SEVERABILITY. IF ANY PROVISION OF THIS
WARRANT IS PROHIBITED BY LAW OR OTHERWISE DETERMINED TO BE INVALID OR
UNENFORCEABLE BY A COURT OF COMPETENT JURISDICTION, THE PROVISION THAT WOULD
OTHERWISE BE PROHIBITED, INVALID OR UNENFORCEABLE SHALL BE DEEMED AMENDED TO
APPLY TO THE BROADEST EXTENT THAT IT WOULD BE VALID AND ENFORCEABLE, AND THE
INVALIDITY OR UNENFORCEABILITY OF SUCH PROVISION SHALL NOT AFFECT THE VALIDITY
OF THE REMAINING PROVISIONS OF THIS WARRANT SO LONG AS THIS WARRANT AS SO
MODIFIED CONTINUES TO EXPRESS, WITHOUT MATERIAL CHANGE, THE ORIGINAL INTENTIONS
OF THE PARTIES AS TO THE SUBJECT MATTER HEREOF AND THE PROHIBITED NATURE,
INVALIDITY OR UNENFORCEABILITY OF THE PROVISION(S) IN QUESTION DOES NOT
SUBSTANTIALLY IMPAIR THE RESPECTIVE EXPECTATIONS OR RECIPROCAL OBLIGATIONS OF
THE PARTIES OR THE PRACTICAL REALIZATION OF THE BENEFITS THAT WOULD OTHERWISE BE
CONFERRED UPON THE PARTIES.  THE PARTIES WILL ENDEAVOR IN GOOD FAITH
NEGOTIATIONS TO REPLACE THE PROHIBITED, INVALID OR UNENFORCEABLE PROVISION(S)
WITH A VALID PROVISION(S), THE EFFECT OF WHICH COMES AS CLOSE AS POSSIBLE TO
THAT OF THE PROHIBITED, INVALID OR UNENFORCEABLE
PROVISION(S).

     

    
      
        
           


        

        
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    29.           CERTAIN
DEFINITIONS.  FOR PURPOSES OF THIS WARRANT, THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:

     

    (i)        
   “Bloomberg” means Bloomberg
Financial Markets.

     

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

     

    (iii)          “Closing Bid Price” and “Closing Sale Price” means, for
any security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price,
as the case may be, then the last bid price or the last trade price,
respectively, of such security prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market is not the principal securities
exchange or trading market for such security, the last closing bid price or last
trade price, respectively, of such security on the principal securities exchange
or trading market where such security is listed or traded as reported by
Bloomberg, or if the foregoing do not apply, the last closing bid price or last
trade price, respectively, of such security in the over-the-counter market on
the electronic bulletin board for such security as reported by Bloomberg, or, if
no closing bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC (formerly the National Quotation Bureau,
Inc.).  If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Closing Bid Price or the Closing Sale Price, as the case may be, of such
security on such date shall be the fair market value as mutually determined by
the Company and the Holder.  If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be
resolved pursuant to Section 11.  All such determinations to be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation period.

     

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

     

    
      
        
           


        

        
          34

          
            

          

        

        
           


        

      

    

    


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

     

    (vi)          “Eligible Market” means the
Principal Market, the American Stock Exchange, The New York Stock Exchange,
Inc., The NASDAQ Global Market, The NASDAQ Global Select Market or The NASDAQ
Capital Market.

     

    (vii)         “Excluded Securities” means any
Common Stock issued or issuable: (i) in connection with any employee benefit
plan that has been approved by the Company’s Board of Directors pursuant to
which the Company's securities may be issued to any employee, consultant,
officer or director for services provided to the Company; (ii) upon conversion
of the Series A Stock or upon the exercise of the Series A Warrants; (iii) upon
conversion, exercise or exchange of any Options or Convertible Securities which
are outstanding on the day immediately preceding the Subscription Date, provided
that the terms of such Options or Convertible Securities are not amended,
modified or changed on or after the Subscription Date; or (iv) pursuant to a
bona fide firm commitment underwritten public offering with a nationally
recognized underwriter which generates gross proceeds to the Company in excess
of $10,000,000 (other than an "at-the-market offering" as defined in Rule
415(a)(4) under the 1933 Act and "equity lines").

     

    (viii)        “Expiration Date” means the
date sixty (60) months after the Issuance Date or, if such date falls on a day
other than a Business Day or on which trading does not take place on the
Principal Market (a “Holiday”), the next date that
is not a Holiday.

     

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

     

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

     

    (xi)          “Principal Market” means the OTC Bulletin
Board.

     

    (xii)         “Required Holders” means the
holders of the Series A Warrants representing at least a majority of shares of
Common Stock underlying the Series A Warrants then outstanding.

     

    (xiii)        “Series A Stock” means the
Series A Convertible Preferred Stock issued pursuant to the Stock Purchase
Agreement.

     

    (xiv)        “Trading Day” means any day on
which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is
then traded; provided that “Trading Day” shall not include any day on which the
Common Stock is scheduled to trade on such exchange or market for less than 4.5
hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such exchange or
market, then during the hour ending at 4:00:00 p.m., New York
time).

     

    
      
        
           


        

        
          35

          
            

          

        

        
           


        

      

    

    


    (xv)         “Weighted Average Price” means,
for any security as of any date, the dollar volume-weighted average price for
such security on the Principal Market during the period beginning at 9:30:01
a.m., New York City Time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
City Time (or such other time as the Principal Market publicly announces is the
official close of trading), as reported by Bloomberg through its “Volume at
Price” function or, if the foregoing does not apply, the dollar volume-weighted
average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30:01 a.m.,
New York City Time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
City Time (or such other time as the Principal Market publicly announces is the
official close of trading), as reported by Bloomberg, or, if no dollar
volume-weighted average price is reported for such security by Bloomberg for
such hours, the average of the highest closing bid price and the lowest closing
ask price of any of the market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC (formerly the National Quotation Bureau,
Inc.).  If the Weighted Average Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Weighted
Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder.  If the Company and
the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 11 with the term “Weighted
Average Price” being substituted for the term “Exercise Price.” All such
determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.

     

    [Signature
Page Follows]

    


    
      
        
           


        

        
          36

          
            

          

        

        
           


        

      

    

    


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

    


    


    
      
        
          
            	 
      	
                    ENTERCONNECT
      INC.

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	
                    Name:

                  	
                    Sam
      Jankovich

                  
	 
      	
                    Title:

                  	
                    Chairman
      & Chief Executive
Officer

                  


          

        

      

    

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    EXHIBIT
A

    


    EXERCISE
NOTICE

    TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
TO PURCHASE COMMON STOCK

    


    ENTERCONNECT
INC.

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

    


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

    


    
      	
               
      

            	
              ____________

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

            


    

    


    
      	
               
      

            	
              ____________

            	
              a
      “Cashless
      Exercise” with respect to _______________ Warrant
      Shares.

            


    

    


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

    


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

    


    
      
        
          
            
              
                
                  
                    
                      	
                              Date:
      _______________ __, ______

                            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                              Name
      of Registered Holder

                            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                              By:

                            	 
      	 
      
	 
      	
                              Name:

                            	 
      	 
      
	 
      	
                              Title:

                            	 
      	 
      


                    

                  

                

              

            

          

        

      

    

     

     

    
      Warrant –
Series A.FINAL.021909

    

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    ACKNOWLEDGMENT

     

    


    The Company hereby acknowledges this
Exercise Notice and hereby directs Interwest Transfer Co., Inc. to issue the
above indicated number of shares of Common Stock in accordance with the Transfer
Agent Instructions dated February __, 2009 from the Company and acknowledged and
agreed to by Interwest Transfer Co., Inc.

    


    
      
        
          
            	 
      	
                    ENTERCONNECT
      INC.

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	
                    Name:

                  
	 
      	 
      	
                    Title:

                  


          

        

      

    

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

     

    


    SERIES A
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

    


    Exhibit
C

    


    Irrevocable
Transfer Agent Instructions

     

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    IRREVOCABLE
TRANSFER AGENT INSTRUCTIONS

     

    ENTERCONNECT,
INC.

     

    March __,
2009

     

    Interwest
Transfer Co., Inc.

    1981 East
4800 South, Suite 100

    PO Box
17136

    Salt Lake
City, UT 84117

    Attention:  Brandy
Montalvo

    


    Ladies
and Gentlemen:

     

    Reference
is made to that certain Series A Convertible Preferred Stock Purchase Agreement,
dated as of February __, 2009 (the "Agreement"), by and among
EnterConnect Inc., a Nevada corporation (the "Company"), and the investors
named on the Schedule of Buyers attached thereto (collectively, the "Holders"), pursuant to which
the Company is issuing to the Holders (i) Series A Convertible Preferred Stock
(the "Series A Stock"),
which will be convertible into shares of the Company's common stock, $0.001 par
value per share (the "Common
Stock"), and (ii) warrants (the "Warrants"), which are
exercisable to purchase shares of Common Stock.

     

    This
letter shall serve as our authorization and direction to you (provided that you
are the transfer agent of the Company at such time), subject to any stop
transfer instructions that we may issue to you from time to time, if
any:

     

    
      	
               
      

            	
              1.

            	
              TO ISSUE SHARES OF
      COMMON STOCK UPON CONVERSION OF THE SERIES A STOCK (THE "CONVERSION
      SHARES")
      TO OR UPON THE ORDER OF A HOLDER FROM TIME TO TIME UPON DELIVERY TO YOU OF
      A PROPERLY COMPLETED AND DULY EXECUTED CONVERSION NOTICE, IN THE FORM
      ATTACHED HERETO AS EXHIBIT I, WHICH HAS BEEN ACKNOWLEDGED BY THE COMPANY
      AS INDICATED BY THE SIGNATURE OF A DULY AUTHORIZED OFFICER OF THE COMPANY
      THEREON;

            


    

     

    2.           
 TO ISSUE SHARES
OF COMMON STOCK UPON EXERCISE OF THE WARRANTS (THE "WARRANT
SHARES") TO OR
UPON THE ORDER OF A HOLDER FROM TIME TO TIME UPON DELIVERY TO YOU OF A PROPERLY
COMPLETED AND DULY EXECUTED EXERCISE NOTICE, IN THE FORM ATTACHED HERETO AS
EXHIBIT II, WHICH HAS BEEN ACKNOWLEDGED BY THE COMPANY AS INDICATED BY THE
SIGNATURE OF A DULY AUTHORIZED OFFICER OF THE COMPANY
THEREON.

     

    You
acknowledge and agree that so long as you have previously received (a) written
confirmation from the General Counsel of the Company (or its outside legal
counsel) that either (i) a registration statement covering resales of the
Conversion Shares or the Warrant Shares has been declared effective by the
Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933
Act"), or (ii) that sales of the Conversion Shares and the Warrant Shares
may be made in conformity with Rule 144 and 144A (collectively, “Rule 144”)
under the 1933 Act, and (b) if applicable, a copy of such registration
statement, then, within three (3) business days after your receipt of a notice
of transfer, Conversion Notice or the Exercise Notice, you shall issue the
certificates representing the Conversion Shares and/or the Warrant Shares, as
applicable, and such certificates shall not bear any legend restricting transfer
of the Conversion Shares or the Warrant Shares thereby and should not be subject
to any stop-transfer restriction; provided, however, that if such
Conversion Shares and Warrant Shares are not registered for resale under the
1933 Act or able to be sold under Rule 144, then the certificates for such
Conversion Shares and/or Warrant Shares shall bear the following
legend:

     

    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

     

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL, IN A REASONABLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

     

    A form of
written confirmation from the General Counsel of the Company or the Company's
outside legal counsel that a registration statement covering resales of the
Conversion Shares and the Warrant Shares has been declared effective by the SEC
under the 1933 Act is attached hereto as Exhibit
III.

    
 

    Please
execute this letter in the space indicated to acknowledge your agreement to act
in accordance with these instructions.  Should you have any questions
concerning this matter, please contact me at (770) 595-2570.

     

    
      
        
          
            
              
                
                  	 
      	
                          Very
      truly yours,

                        
	 	 
	 
      	
                          ENTERCONNECT,
      INC.

                        
	 	 
	 
      	
                          By:

                        	 
      
	 
      	 
      	
                          Name:
      Sam Jankovich

                        
	 
      	 
      	
                          Title:
      Chairman and Chief Executive
Officer

                        


                

              

            

          

        

      

    

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    THE
FOREGOING INSTRUCTIONS ARE

    ACKNOWLEDGED
AND AGREED TO

     

    this ___
day of February, 2009

     

    Interwest
Transfer Co., Inc.

     

    
      
        
          
            
              
                	
                        By:

                      	 
      	 
      
	 
      	
                        Name:

                      	 	 
      
	 
      	
                        Title:

                      	 	 
      


              

            

          

        

      

    

    


     

    Enclosures

     

    
      	
              cc:

            	
              Buyers

            


    

    Bruce S.
Richards, Esq., Taylor English Duma LLC

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    EXHIBIT
I


     

    ENTERCONNECT,
INC.

     

    CONVERSION
NOTICE

     

    The
undersigned represents that they are the holder of Series A Convertible
Preferred Stock (“Series A
Stock”) and/or Warrants in EnterConnect Inc. (the “Company”) issued pursuant to
the Series A Convertible Preferred Stock Purchase Agreement (the “Stock Purchase Agreement”),
dated __________________. 2009, among the Company and buyers of Series A Stock
and Warrants .  In accordance with and pursuant to the Stock Purchase
Agreement, the Warrant, and the Certificate of Designation filed with respect to
the Series A Stock, the undersigned hereby elects to convert the Conversion
Amount (as defined in the Certificate of Designation) indicated below into
shares of Common Stock par value $0.001 per share (the "Common Stock") of the Company,
as of the date specified below.

     

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              	
                                                                                                      Date
      of Conversion:

                                                                                                    	 
      
	 	 
	
                                                                                                      Aggregate
      Conversion Amount to be converted:   

                                                                                                    	 
      
	 	 
	
                                                                                                      Please
      confirm the following information:

                                                                                                    	 
      
	 	 
	
                                                                                                      Conversion
      Price:

                                                                                                    	 
      
	 	 
	
                                                                                                      Number
      of shares of Common Stock to be issued:  

                                                                                                    	 
      
	 
	
                                                                                                      Please
      issue the Common Stock into which the Series A Stock is being converted in
      the following name and to the following address:

                                                                                                    
	 	 
	
                                                                                                      Issue
      to:

                                                                                                    	 
      
	 
      	 
      
	 
      	 
      
	 	 
	
                                                                                                      Facsimile
      Number:

                                                                                                    	 
      
	 	 
	
                                                                                                      Authorization:

                                                                                                    	 
      
	 	 
	
                                                                                                      By:

                                                                                                    	 
      
	 	 
	
                                                                                                      Title:

                                                                                                    	 
      
	 	 
	
                                                                                                      Dated:

                                                                                                    	 
      
	 	 
	
                                                                                                      Account
      Number:

                                                                                                    	 
      
	
                                                                                                      (if
      electronic book entry transfer)

                                                                                                    	 
      
	 	 
	
                                                                                                      Transaction
      Code Number:

                                                                                                    	 
      
	
                                                                                                      (if
      electronic book entry transfer)

                                                                                                    	 
      


                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    ACKNOWLEDGMENT

     

    The
Company hereby acknowledges this Conversion Notice and hereby directs Interwest
Transfer Co., Inc. to issue the above indicated number of shares of Common Stock
in accordance with the Transfer Agent Instructions dated ________________, 200_
from the Company and acknowledged and agreed to by Interwest Transfer Co.,
Inc..

     

     

    
      
        
          
            
              	 
      	
                      ENTERCONNECT
      INC.

                    
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title:

                    


            

          

        

      

    

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    EXHIBIT
II


    


    


    EXERCISE
NOTICE

    TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
TO PURCHASE COMMON STOCK

    


    ENTERCONNECT
INC.

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

    


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

    


    
      	
               
      

            	
              ____________

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

            


    

    


    
      	
               
      

            	
              ____________

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

            


    

    


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

    


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

    


    Date:
_______________ __, ______

    


    


    
      
        
          
            
              
                
                  
                    	 	 
	
                            Name
      of Registered Holder

                          	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                            By:

                          	 
      	 
      
	 
      	
                            Name:

                          	 
      
	 
      	
                            Title:

                          	 
      


                  

                

              

            

          

        

      

    

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    ACKNOWLEDGMENT

    


    


    The Company hereby acknowledges this
Exercise Notice and hereby directs Interwest Transfer Co., Inc. to issue the
above indicated number of shares of Common Stock in accordance with the Transfer
Agent Instructions dated _______________________, 200_ from the Company and
acknowledged and agreed to by Interwest Transfer Co., Inc.

    


    
      
        
          
            
              	 
      	
                      ENTERCONNECT,
      INC.

                    
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title: