Document:

Prepared and filed by St Ives Financial

FIFTEENTH AMENDMENT TO AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

BRANDYWINE OPERATING PARTNERSHIP, L.P.

THIS FIFTEENTH AMENDMENT, dated as of August 15, 2006 (the “Amendment”), further amends the Amended and Restated Agreement of Limited Partnership Agreement (as amended to date, the “Partnership Agreement”) of BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the “Partnership”). Capitalized terms used herein but not defined herein shall have the meanings given such terms in the Partnership Agreement.

BACKGROUND

A. Pursuant to the Partnership Agreement, Brandywine Realty Trust (the “General Partner”), as the general partner of the Partnership, has the power and authority to issue additional Partnership Interests to persons on such terms and conditions as the General Partner may deem appropriate.

B. The General Partner, pursuant to the exercise of such power and authority and in accordance with the Partnership Agreement, has determined to execute this Amendment to the Partnership Agreement to evidence the issuance of additional Partnership Interests consisting of Class A Units and the admission of the holders of such Partnership Interests as Limited Partners of the Partnership pursuant to the Agreement of Sale dated as of July 25, 2006 (the “Agreement of Sale”) among the General Partner, the Partnership, MJV, LLC, MJV 2355, LLC, Dulles 243 LLC (“Dulles”), Norman Perlmutter (“Perlmutter”) and Eric D. Mayer (“Mayer”).

C. Pursuant to the Agreement of Sale, the Partnership issued on the date hereof an aggregate of 424,608 Class A Units to Dulles (evidenced by Certificate A - 169). Pursuant to an assignment, executed on the date hereof, Dulles assigned and transferred its entire right, title and interest in and to 134,898 of such Class A Units to Bell Atlantic Master Trust (“BAMT”); and pursuant to an assignment, executed on the date hereof (the “Assignment to PIC”), Dulles assigned and transferred its entire right, title and interest in and to 289,710 of such Class A Units to PIC 243 LLC (“PIC”). Following such assignments and transfers by Dulles, Certificate A - 169 was cancelled and Certificate A - 170 (evidencing 134,898 Class A Units) was issued to BAMT and Certificate A - 171 (evidencing 289,710 Class A Units) was issued to PIC. Pursuant to an assignment, executed on the
date hereof immediately after the execution of the Assignment to PIC and the assignment and transfer effected thereby, PIC assigned and transferred its entire right, title and interest in and to 50% of the Class A Units received by it from Dulles to Perlmutter and assigned and transferred its entire right, title and interest in and to the remaining 50% of the Class A Units received by it from Dulles to Mayer. Following such assignments and transfers by PIC, Certificate A - 171 was cancelled and Certificate A - 172 (evidencing 144,855 Class A Units) was issued to Perlmutter and Certificate A - 173 (evidencing 144,855 Class A Units) was issued to Mayer. Accordingly, as of the date hereof and after giving effect to the foregoing assignments, neither Dulles nor PIC owns any Class A Units, and BAMT owns 134,898 Class A Units and each of Perlmutter and Mayer owns 144,855 Class A Units. BAMT, Perlmutter and Mayer are referred to below as the “Admitted Continuing Partners” and
Dulles and PIC are referred to below as the “Withdrawn Partners.”

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby amend the Partnership Agreement as follows:

1. The Partnership Agreement is hereby amended to reflect the admission and withdrawal on the date hereof of the Withdrawn Partners and the admission on the date hereof of the Admitted Continuing Partners, as Limited Partners, and the ownership by the Admitted Continuing Partners of the number of Class A Units listed opposite each Admitted Continuing Partner’s name on Schedule A. Attached as Schedule B is a list of the Partners of the Partnership prior to the issuance of the Class A Units pursuant to the Agreement of Sale, together with the number and class of Partnership Interests owned by such partners.

2. The Partnership Interests issued to Dulles and assigned directly and indirectly to the Admitted Continuing Partners constitute Class A Units under the Partnership Agreement; provided that any distribution to be received by the Admitted Continuing Partners on the Class A Units issued pursuant to the Agreement of Sale on account of the fiscal quarter in which they have been admitted to the Partnership shall be pro-rated to reflect the portion of the fiscal quarter of the Partnership for which the Admitted Continuing Partners held such Class A Units and shall not be pro-rata in accordance with their then Percentage Interests.

3. By execution of this Amendment to the Partnership Agreement by the General Partner, the Admitted Continuing Partners agree to be bound by each and every term of the Partnership Agreement as amended from time to time in accordance with the terms of the Partnership Agreement. The Withdrawn Partners are executing this Amendment to evidence their receipt of Class A Units and assignment of their entire right, title and interest in and to the Class A Units received by them and their withdrawal as partners in the Partnership.

4. On the date of this Amendment, each of the Admitted Continuing Partners shall execute and deliver to Brandywine Realty Trust an Irrevocable Proxy coupled with an Interest in the form set forth on Exhibit 1 hereto attached.

5. Except as expressly set forth in this Amendment to the Partnership Agreement, the Partnership Agreement is hereby ratified and confirmed in each and every respect.

6. This Amendment may be executed in any number of counterparts which, when taken together, shall constitute one and the same amendment. Any or all counterparts may be executed by facsimile.

Signature Page to Fifteenth Amendment to Amended and Restated Agreement of 

Limited Partnership of Brandywine Operating Partnership, L.P.

 

IN WITNESS WHEREOF, this Amendment to the Partnership Agreement has been executed and delivered as of the date first above written.

 

  	

 
 	
         
 	

GENERAL PARTNER:
 
	

 
 	

 
 	

BRANDYWINE REALTY TRUST
 
	

 
 	

 
 	

 
 	

By: 
 	
        
          

          /S/ Gerard H. Sweeney

      
	

 
 	

 
 	

 
 	

 
 	

 
	

 
 	

 
 	

 
 	

 
 	

Gerard H. Sweeney
 President and Chief Executive Officer
 

 

  	

ADMITTED CONTINUING PARTNERS:
 
	

 
 	
         
 	

Bell Atlantic Master Trust, a trust created
 under the laws of the State of New York
 
	

 
 	

 
 	

 
 	
        By: 
 	

Mellon Bank, as Trustee for the Bell Atlantic Master Trust (as directed by Verizon Investment Management Corp.), and not in its individual capacity
 
					

            

 

  	

 
 	
         
 	
         
 	
         
 	

By: 
 	

 
 
	

 
 	

 
 	

 
 	

 
 	

 
 	

 
	

 
 	

 
 	

 
 	

 
 	

Name:
 	

Carole Bruno
 
	

 
 	

 
 	

 
 	

 
 	

Title:
 	

Authorized Signatory
 

 

  	
         

      	
         

      	
         

      	
         

      	
        /S/
          Norman Perlmutter

      
	
         

      	
         

      	
         

      	
        
      
	
        
        

      
	
         

      	
         

      	
         

      	
        
      
	
        Norman
          Perlmutter
      

	
         

      	
         

      	
         

      	
         

      	
        /S/
          Eric D. Mayer

      
	
         

      	
         

      	
         

      	
        
      
	
        
        

      
	
         

      	
         

      	
         

      	
        
      
	
        Eric
          D. Mayer
      

 

  	

WITHDRAWN PARTNERS:
 
	

 
 	

 
 	

Dulles 243 LLC, a Delaware limited liability company
 
	

 
 	

 
 	
         
 	

By: 
 	
        

          /S/ Craig S. Arnson

      
	

 
 	

 
 	

 
 	

 
 	

 
	

 
 	

 
 	

 
 	

 
 	

Craig S. Arnson, a Vice President 
 
	

 
 	

 
 	

 
 	

PIC 243 LLC, a Delaware limited liability company
 
	

 
 	

 
 	

 
 	

By:
 	

  
 
	

 
 	

 
 	

 
 	

 
 	

 
	

 
 	

 
 	

 
 	

 
 	

Craig S. Arnson, a Vice PresidentPrepared and filed by St Ives Financial

    STELLAR
      TECHNOLOGIES, INC.

     

    

  

    

    

    Securities
      Purchase Agreement

    
       

      

    

      

       

    

    Units
      Comprised of

    Series
      B Convertible Preferred Stock and

    Warrants
      

     

    
      

    

      

    

    

    

    

    CONFIDENTIAL

    

    
    

    CONFIDENTIAL
      INFORMATION

     

    The
      Offeree, by
      accepting the Securities Purchase Agreement and the exhibits hereto relating
      to
      the proposed offering of Units by Stellar Technologies, Inc. (the “Company”),
      comprised of shares of its Series B Convertible Preferred Stock and warrants
      to
      acquire shares of its common stock,
      acknowledges
      and agrees that: (i) the
      offering documents have
      been
      furnished to the Offeree on a confidential basis solely for the purpose of
      enabling the Offeree to evaluate the offering; (ii)
      that
      the Offeree may not further distribute the offering documents without the prior
      written consent of the Company, except to the
      Offeree’s legal, financial or other personal advisors, if any, who will use the
      offering documents on the Offeree’s behalf solely for purposes of evaluating the
      offering; (iii) any reproduction or distribution of the offering documents,
      in
      whole or in part, or the direct or indirect disclosure of the contents of the
      offering documents for any other purpose without the prior written consent
      of
      the Company is prohibited; and (iv)
      the
      offeree shall
      be
      bound by all terms and conditions specified in the offering
      documents. 

    

    NOTICE
      TO OFFEREES

     

    THE
      SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
      OF
      1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER THE APPLICABLE SECURITIES
      LAWS OF ANY STATE OR OTHER JURISDICTION. THIS SECURITIES PURCHASE AGREEMENT
      AND
      THE OTHER OFFERING DOCUMENTS DO NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION
      OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR
      SOLICITATION WOULD BE UNLAWFUL. 

     

    THE
      SECURITIES ARE BEING SOLD FOR INVESTMENT PURPOSES ONLY, WITHOUT A VIEW TO RESALE
      OR DISTRIBUTION THEREOF, AND MAY NOT BE TRANSFERRED, RESOLD OR OFFERED FOR
      RESALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
      SECURITIES ACT AND EFFECTIVE REGISTRATION OR QUALIFICATION UNDER THE APPLICABLE
      SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, OR THE AVAILABILITY OF
      AN
      EXEMPTION THEREFROM. 

     

    NEITHER
      THE SECURITIES AND EXCHANGE COMMISSION NOR THE SECURITIES COMMISSION OR OTHER
      REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION HAS APPROVED OR
      DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF
      THIS
      SECURITIES PURCHASE AGREEMENT OR ANY OF THE OTHER OFFERING DOCUMENTS. ANY
      REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 

    

    
    

    ADDITIONAL
      INFORMATION

     

    Stellar
      Technologies, Inc. (the “Company”) files annual, quarterly and current reports,
      proxy statements and other information with the Securities and Exchange
      Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended.
      Reports, statements or other information that we file with the SEC are available
      to the public at the SEC’s Website at http://www.sec.gov, as well as our Website
      at www.stellartechnologies.com. Documents filed with the SEC include, but are
      not limited to, the following documents:

     

    
      	·     
               	
              Currents
                Reports on Form 8-K dated May 8 and May 19,
                2006;

            

    

     

    
      	·     
               	
              Quarterly
                Report on Form 10-QSB for the fiscal quarter ended March 31, 2006;
                and
                

            

    

     

    
      	·     
               	
              Annual
                Report on Form 10-KSB for the fiscal year ended June 30,
                2005.

            

    

     

    The
      Company will provide to each person to whom this agreement is sent, upon the
      written or oral request of such person, a copy of any or all of the documents
      referred to above. You may make such requests at no cost to you by writing
      or
      telephoning us at the following address or number:

    

    Stellar
      Technologies, Inc.

    7935
      Airport Pulling Road

    Suite
      201

    Naples,
      FL 34109

    (239)
      592-1816

    

    The
      Company has not authorized anyone to provide you with different information.
      You
      should not assume that the information in this agreement is accurate as of
      any
      date other than the date this agreement is sent to you for review or that the
      information filed with the SEC is accurate as of any date other than the date
      set forth on the front of the document containing such
      information.

    

    
    

    CONFIDENTIAL

    

    SECURITIES
      PURCHASE AGREEMENT

    

    THIS
      SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated _______________, 2006,
      by and between STELLAR TECHNOLOGIES, INC., a Colorado corporation (the
“Company”), and the purchaser or purchasers identified on the signature page
      hereof (“Purchaser”).

     

    RECITALS:

    

    WHEREAS,
      Purchaser desires to purchase and the Company desires to sell units comprised
      of
      shares of Series B Preferred Stock (as defined below) and warrants to acquire
      shares of common stock on the terms and conditions set forth
      herein.

     

    NOW,
      THEREFORE, in consideration of the premises hereof and the agreements set forth
      herein below, the parties hereto hereby agree as follows:

     

    1.
      The
      Offering.
      

     

    (a)
      Private
      Offering.
      The
      securities offered by this Agreement are being offered by the Company in a
      private offering (the "Offering") of shares of its Series B Convertible
      Preferred Stock, $.001 par value per share (the “Series B Preferred Stock”),
      convertible into shares of the Company’s common stock, $.001 par value per share
      (the “Common Stock”), and warrants (the “Warrants”) to acquire shares of Common
      Stock. The shares of Series B Preferred Stock and Warrants will be sold in
      units
      (the “Units”) comprised of one (1) share of Series B Preferred Stock and one (1)
      Warrant. The Company is offering up to 221,000 Units
      for
      an aggregate purchase price of $3,315,000; provided,
      however,
      that in
      the event of any over-allotments of Units during the offering period, the
      Company reserves the right to sell Units for an aggregate purchase price in
      excess of $3,315,000 to
      cover
      such over-allotments. The Units will be sold on a reasonable “best efforts”
basis at a purchase price of $15.00 per Unit (“Purchase Price”) pursuant to
      Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"),
      and/or Rule 506 of Regulation D thereunder. The Units are being offered solely
      to a limited number of “accredited investors” as that term is defined in Rule
      501(a) of the Securities Act during an offering period that will commence on
      June 6, 2006 and terminate at the sole discretion of the Company. 

     

    (i) Each
      share of Series B Preferred Stock may be converted into that number of shares
      of
      Common Stock equal to the original issue price of the Series B Preferred Stock
      ($15.00) divided by $0.15 (as same may be adjusted, the “Conversion Price”). The
      terms and conditions of the Series B Preferred Stock are set forth in the
      Certificate of Designation of Series B Convertible Preferred Stock attached
      hereto and made a part hereof as Exhibit
      A.
      

     

    (ii) Each
      Warrant is initially exercisable into 50 shares of Common Stock at an initial
      exercise price of $0.40 per share. The terms of the Warrant are set forth in
      the
      Form of Warrant, attached hereto and made a part hereof as Exhibit
      B.
      The
      shares of Series B Preferred Stock, the Warrants and shares of Common Stock
      issuable upon conversion of the shares of Series B Preferred Stock or exercise
      of the Warrants are hereinafter referred to collectively as the
“Securities.”

     

    

    
    

     

    (b)
      Use
      of
      Proceeds.
      Assuming all 221,000 Units are sold, the net proceeds to the Company are
      estimated to be approximately $3,029,800 (after deducting offering expenses
      payable by the Company estimated at $20,000 and assuming payment of the maximum
      amount of placement agent and finders’ fees of up to $265,200). The Company
      intends to use the net proceeds for general working capital purposes and other
      general corporate purposes which may include repayment of
      indebtedness.

     

    (c)
      Placement
      Agent and Finders Fees.
      The
      Company reserves the right to pay cash fees to agents, brokers, dealers and
      finders in connection with the sale of the Securities in an amount equal to
      up
      to eight percent (8%) of the Purchase Price of such Securities and to issue
      warrants to such persons to purchase shares of Common Stock equal to up to
      eight
      percent (8%) of the number of shares of Common Stock issuable upon conversion
      of
      the shares of Series B Preferred Stock included in the Units issued hereunder
      at
      an exercise price of $0.40 per share which terminate three years after the
      date
      of issuance.

     

    (d) Status
      of Concurrent Offering.
      Between
      May 1 and June 2, 2006, the Company has sold 79,000 Units for aggregate gross
      proceeds of $1,185,000 in an offering to a limited number of accredited
      investors who are not “US Persons” (the “Reg S Offering”). The Company intends
      to offer 221,000 Units in this Offering and the Reg S Offering until the
      offerings are terminated. 

    

    2.
      Sale
      and Purchase of Securities.

     

    (a)
      Sale
      and Purchase of Securities.
      Subject
      to the terms and conditions hereof, the Company agrees to sell, and Purchaser
      irrevocably subscribes for and agrees to purchase, the number of Units set
      forth
      on the signature page of this Agreement at a purchase price of
      $15.00 per
      Unit.
      The aggregate purchase price for the Units shall be as set forth on the
      signature page hereto and shall be payable upon execution hereof by check or
      wire transfer of immediately available funds.

     

    (b)
      Subscription
      Procedure.
      In
      order to purchase Units, Purchaser shall deliver to the Company, at its
      principal executive office identified below: (i) one completed and duly executed
      copy of this Agreement; and (ii) immediately available funds, or a certified
      check or bank check in an amount equal to the Purchase Price. Execution and
      delivery of this Agreement shall constitute an irrevocable subscription for
      that
      number of Units set forth on the signature page hereto. The minimum investment
      that may be made by a Purchaser is $45,000, although the Company may, in its
      sole discretion, accept subscriptions for a lesser amount. Payment for the
      Securities may be made by wire transfer to:

     

    AmSouth
      Bank

    Birmingham,
      AL

    S.W.I.F.T.,
      TID: AMSBUS44

    TELEX:
      682719

    AMSOBHM

    2

    

    
    

    

    For
      Credit to:       

    
      
        
          	 	
                  Customer
                    Name:

                	
                  Stellar
                    Technologies, Inc.

                
	 	
                  Customer
                    Address:

                	
                  7935
                    Airport Pulling Road

                
	 	 	
                  Suite
                    201

                
	 	 	
                  Naples,
                    FL 34109

                
	 	 	
                  USA 

                
	 	
                  Customer
                    Account:

                	
                  0046696598

                
	 	
                  AmSouth
                    Branch:

                	
                  Vanderbilt

                

        

      

    

    

    or
      by
      check made payable to: Stellar Technologies, Inc., 7935 Airport Pulling Road,
      Suite 201, Naples, FL 34109.
      Receipt
      by the Company of funds wired, or deposit and collection by the Company of
      the
      check tendered herewith, will not constitute acceptance of this Agreement by
      the
      Company. The Units subscribed for will not be deemed to be issued to, or owned
      by, Purchaser until the Company has executed this Agreement. All funds tendered
      by Purchaser will be held by the Company pending acceptance or rejection of
      this
      Agreement by the Company and the closing of Purchaser’s purchase of Units. This
      Agreement will either be accepted by the Company, in whole or in part, in its
      sole discretion, or rejected by the Company as promptly as practicable. If
      this
      Agreement is accepted only in part, Purchaser agrees to purchase such smaller
      number of Units as the Company determines to sell to Purchaser. If this
      Agreement is rejected for any reason, including the termination of the Offering
      by the Company, this Agreement and all funds tendered herewith will be promptly
      returned to Purchaser, without interest or deduction of any kind, and this
      Agreement will be void and of no further force or effect.

     

    (c)
      Closing.
      Subscriptions will be accepted by the Company in its sole discretion. Upon
      the
      Company’s execution of this Agreement, the subscription evidenced hereby, if not
      previously rejected by the Company, will, in reliance upon Purchaser’s
      representations and warranties contained herein, be accepted, in whole or in
      part, by the Company. If Purchaser’s subscription is accepted only in part, this
      Agreement will be marked to indicate such fact, and the Company will return
      to
      Purchaser the portion of the funds tendered by Purchaser representing the
      unaccepted portion of Purchaser’s subscription, without interest or deduction of
      any kind. Upon acceptance of this Agreement in whole or in part by the Company,
      the Company will issue certificates evidencing the Series B Preferred Stock
      registered in the name of Purchaser, together with a copy of Purchaser’s
      executed Agreement countersigned by the Company and a Warrant (“Warrant
      Certificate”) executed by the Company.

     

    3.
      Representations
      and Warranties of Purchaser.
      Purchaser represents and warrants to the Company as follows:

     

    (a)
      Organization
      and Qualification.
      

     

    (i)
      If
      Purchaser is an entity, Purchaser is duly organized, validly existing and in
      good standing under the laws of its jurisdiction of organization, with the
      corporate or other entity power and authority to own and operate its business
      as
      presently conducted, except where the failure to be or have any of the foregoing
      would not have a material adverse effect on Purchaser, and Purchaser is duly
      qualified as a foreign corporation or other entity to do business and is in
      good
      standing in each jurisdiction where the character of its properties owned or
      held under lease or the nature of their activities makes such qualification
      necessary, except for such failures to be so qualified or in good standing
      as
      would not have a material adverse effect on it.

     

    3

    

    
    

     

    (ii)
      If
      Purchaser is an entity, the address of its principal place of business is as
      set
      forth on the signature page hereto, and if Purchaser is an individual, the
      address of its principal residence is as set forth on the signature page
      hereto.

     

    (b)
      Authority;
      Validity and Effect of Agreement.
      

     

    (i)
      If
      Purchaser is an entity, Purchaser has the requisite corporate or other entity
      power and authority to execute and deliver this Agreement and perform its
      obligations under this Agreement. The execution and delivery of this Agreement
      by Purchaser, the performance by Purchaser of its obligations hereunder and
      all
      other necessary corporate or other entity action on the part of Purchaser have
      been duly authorized by its board of directors or similar governing body, and
      no
      other corporate or other entity proceedings on the part of Purchaser is
      necessary for Purchaser to execute and deliver this Agreement and perform its
      obligations hereunder. 

     

    (ii)
      This
      Agreement has been duly and validly authorized, executed and delivered by
      Purchaser and, assuming it has been duly and validly executed and delivered
      by
      the Company, constitutes a legal, valid and binding obligation of Purchaser,
      in
      accordance with its terms.

     

    (c)
      No
      Conflict; Required Filings and Consents.
      Neither
      the execution and delivery of this Agreement by Purchaser nor the performance
      by
      Purchaser of its obligations hereunder will: (i) if Purchaser is an entity,
      conflict with Purchaser’s articles of incorporation or bylaws, or other similar
      organizational documents; (ii) violate any statute, law, ordinance, rule or
      regulation, applicable to Purchaser or any of the properties or assets of
      Purchaser; or (iii) violate, breach, be in conflict with or constitute a default
      (or an event which, with notice or lapse of time or both, would constitute
      a
      default) under, or permit the termination of any provision of, or result in
      the
      termination of, the acceleration of the maturity of, or the acceleration of
      the
      performance of any obligation of Purchaser under, or result in the creation
      or
      imposition of any lien upon any properties, assets or business of Purchaser
      under, any material contract or any order, judgment or decree to which Purchaser
      is a party or by which it or any of its assets or properties is bound or
      encumbered except, in the case of clauses (ii) and (iii), for such violations,
      breaches, conflicts, defaults or other occurrences which, individually or in
      the
      aggregate, would not have a material adverse effect on its obligation to perform
      its covenants under this Agreement.

     

    (d)
      Accredited
      Investor.
      Purchaser
      is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
      D under the Securities Act. If Purchaser is an entity, Purchaser was not formed
      for the specific purpose of acquiring the Securities, and, if it was, all of
      Purchaser’s equity owners are “accredited investors” as defined
      above.

     

    4

    

    
    

    

    (e)
      No
      Government Review.
      Purchaser understands that neither the United States Securities and Exchange
      Commission (“SEC”) nor any securities commission or other governmental authority
      of any state, country or other jurisdiction has approved the issuance of the
      Securities or passed upon or endorsed the merits of the Securities, this
      Agreement or the Warrant Certificate (collectively, the “Offering Documents”),
      or confirmed the accuracy of, determined the adequacy of, or reviewed this
      Agreement or the Warrant Certificate.

     

    (f)
      Investment
      Intent.
      The
      Securities are being acquired for the Purchaser’s own account for investment
      purposes only, not as a nominee or agent and not with a view to the resale
      or
      distribution of any part thereof, and Purchaser has no present intention of
      selling, granting any participation in or otherwise distributing the same.
      By
      executing this Agreement, Purchaser further represents that Purchaser does
      not
      have any contract, undertaking, agreement or arrangement with any person to
      sell, transfer or grant participation to such person or third person with
      respect to any of the Securities.

     

    (g)
      Restrictions
      on Transfer.
      Purchaser understands that the Securities are “restricted securities” as such
      term is defined in Rule 144 under the Securities Act and have not been
      registered under the Securities Act or registered or qualified under any state
      securities law, and may not be, directly or indirectly, sold, transferred,
      offered for sale, pledged, hypothecated or otherwise disposed of without
      registration under the Securities Act and registration or qualification under
      applicable state securities laws or the availability of an exemption therefrom.
      In any case where such an exemption is relied upon by Purchaser from the
      registration requirements of the Securities Act and the registration or
      qualification requirements of such state securities laws, Purchaser shall
      furnish the Company with an opinion of counsel stating that the proposed sale
      or
      other disposition of such securities may be effected without registration under
      the Securities Act and will not result in any violation of any applicable state
      securities laws relating to the registration or qualification of securities
      for
      sale, such counsel and opinion to be satisfactory to the Company. Purchaser
      acknowledges that it is able to bear the economic risks of an investment in
      the
      Securities for an indefinite period of time, and that its overall commitment
      to
      investments that are not readily marketable is not disproportionate to its
      net
      worth.

     

    (h)
      Investment
      Experience.
      Purchaser has such knowledge, sophistication and experience in financial, tax
      and business matters in general, and investments in securities in particular,
      that it is capable of evaluating the merits and risks of this investment in
      the
      Securities, and Purchaser has made such investigations in connection herewith
      as
      it deemed necessary or desirable so as to make an informed investment decision
      without relying upon the Company for legal or tax advice related to this
      investment. In making its decision to acquire the Securities, Purchaser has
      not
      relied upon any information other than information provided to Purchaser by
      the
      Company or its representatives and contained herein and in the other Offering
      Documents.

     

    (i)
      Access
      to Information.
      Purchaser acknowledges that it has had access to and has reviewed all documents
      and records relating to the Company, including, but not limited to, the
      Company’s Quarterly Report on Form 10-QSB for the fiscal quarter ended March 31,
      2005 and the Company’s Annual Report on Form 10-KSB for the fiscal year ended
      June 30, 2005, that it has deemed necessary in order to make an informed
      investment decision with respect to an investment in the Securities; that it
      has
      had the opportunity to ask representatives of the Company certain questions
      and
      request certain additional information regarding the terms and conditions of
      such investment and the finances, operations, business and prospects of the
      Company and has had any and all such questions and requests answered to its
      satisfaction; and that it understands the risks and other considerations
      relating to such investment.

     

    5

    

    
    

     

    (j)
      Reliance
      on Representations.
      Purchaser
      understands that the Securities are being offered and sold to it in reliance
      on
      specific exemptions from the registration requirements of the federal and state
      securities laws and that the Company is relying in part upon the truth and
      accuracy of, and such Purchaser’s compliance with, the representations,
      warranties, agreements, acknowledgments and understandings of such Purchaser
      set
      forth herein in order to determine the availability of such exemptions and
      the
      eligibility of such Purchaser to acquire the Securities. Purchaser
      represents and warrants to the Company that any information that Purchaser
      has
      heretofore furnished or furnishes herewith to the Company is complete and
      accurate, and further represents and warrants that it will notify and supply
      corrective information to the Company immediately upon the occurrence of any
      change therein occurring prior to the Company's issuance of the Securities.
      Within five (5) days after receipt of a request from the Company, Purchaser
      will
      provide such information and deliver such documents as may reasonably be
      necessary to comply with any and all laws and regulations to which the Company
      is subject.

     

    (k)
      No
      General Solicitation.
      Purchaser is unaware of, and in deciding to participate in the Offering is
      in no
      way relying upon, and did not become aware of the Offering through or as a
      result of, any form of general solicitation or general advertising including,
      without limitation, any article, notice, advertisement or other communication
      published in any newspaper, magazine or similar media, or broadcast over
      television or radio or the internet, in connection with the
      Offering.

     

    (l)
      Placement
      and Finder’s Fees.
      No
      agent, broker, investment banker, finder, financial advisor or other person
      acting on behalf of Purchaser or under its authority is or will be entitled
      to
      any broker’s or finder’s fee or any other commission or similar fee, directly or
      indirectly, in connection with the Offering, and no person is entitled to any
      fee or commission or like payment in respect thereof based in any way on
      agreements, arrangements or understanding made by or on behalf of
      Purchaser.

     

    (m)
      Investment
      Risks.
      Purchaser understands that purchasing Securities in the Offering will subject
      Purchaser to certain risks, including, but not limited to, those set forth
      under
      the caption “Risk Factors” and elsewhere in the Company’s Annual Report on Form
      10-KSB and other periodic reports filed with the SEC, as well as each of the
      following:

     

    (i)
      The
      offering price of the Securities offered hereby has been determined solely
      by
      the Company and does not necessarily bear any relationship to the value of
      the
      Company’s assets, current or potential earnings of the Company, or any other
      recognized criteria used for measuring value, and therefore, there can be no
      assurance that the offering price of the Units is representative of the actual
      value of the underlying Securities.

     

    (ii)
      The
      Company has experienced net losses in each fiscal quarter since its inception
      and expects to continue to incur significant net losses for the foreseeable
      future. While the Company is unable to predict accurately its future operating
      expenses, it currently expects these expenses to increase substantially as
      it
      implements its business plan.

     

    6

    

    
    

     

    (iii)
      In
      order
      to fund its future operations, attract and retain employees, consultants and
      other service providers, and satisfy other obligations, the Company may be
      required to issue additional shares of Common Stock, securities exercisable
      or
      convertible into shares of Common Stock, or debt. Such securities may be issued
      for a purchase price consisting of cash, services or other consideration that
      may be materially different than the purchase price of the Units. The issuance
      of any such securities may result in substantial dilution to the relative
      ownership interests of the Company’s existing shareholders and substantial
      reduction in net book value per share. Additional equity securities may have
      rights, preferences and privileges senior to those of the holders of Common
      Stock, and any debt financing may involve restrictive covenants that may limit
      the Company’s operating flexibility.

     

    (iv)
      The
      Company has provided herein that it intends to use most of the
      net
      proceeds from the Offering for general working capital purposes and other
      general corporate purposes which may include repayment of indebtedness. Thus,
      Purchaser is making its investment in the Securities based in part upon very
      limited information regarding the specific uses to which the net proceeds will
      be applied.

     

    (v)
      An
      investment in the Securities may involve certain material legal, accounting
      and
      federal and state tax consequences. Purchaser should consult with its legal
      counsel, accountant and/or business adviser as to the legal, accounting, tax
      and
      related matters accompanying such an investment.

     

    (vi) Funds
      received in payment for the Units will be released to the Company upon its
      execution of this Agreement. The Company is not required to raise any minimum
      amount of proceeds prior to obtaining such funds. Because there is no minimum
      amount of Units the Company must sell before accepting funds in the Offering,
      investors participating in the Offering will not be assured that the Company
      will have sufficient funds to execute its business plan, satisfy expected
      expenditures, repay indebtedness as it becomes due, and support operations
      over
      the next 12 months and will bear the risk that the Company will be unable to
      secure the funds necessary to meet its current and anticipated financial
      obligations. 

    

    (n)
      Exclusive
      Offering Documents. In
      making
      its decision to purchase the Securities hereunder, Purchaser has not relied
      on
      any representations, warranties or information other than those set forth in
      this Agreement which Purchaser has independently investigated and verified
      to
      its satisfaction and neither the Company nor any person acting on its behalf
      has
      made any representation or warranty regarding the Company or the Securities
      except as set forth herein. 

     

    (o)
      Legends.
      The
      certificates and agreements evidencing the Securities shall have endorsed
      thereon the following legend (and appropriate notations thereof will be made
      in
      the Company's stock transfer books), and
      stop
      transfer instructions reflecting these restrictions on transfer will be placed
      with the transfer agent of the Securities:

     

    7

    

    
    

     

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
      REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT,
      AND
      WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
      TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE
      ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT
      OF
      1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
      SECURITIES LAWS.

     

    4.
      Representations
      and Warranties of the Company.
      The
      Company represents and warrants to Purchaser as follows:

     

    (a)
      Organization
      and Qualification.
      The
      Company is duly organized, validly existing and in good standing under the
      laws
      of its jurisdiction of organization, with the corporate power and authority
      to
      own and operate its business as presently conducted, except where the failure
      to
      be or have any of the foregoing would not have a material adverse effect on
      the
      Company. The Company is duly qualified as a foreign corporation or other entity
      to do business and is in good standing in each jurisdiction where the character
      of its properties owned or held under lease or the nature of their activities
      makes such qualification necessary, except for such failures to be so qualified
      or in good standing as would not have a material adverse effect on the
      Company.

     

    (b)
      Authority;
      Validity and Effect of Agreement.
      

     

    (i) The
      Company has the requisite corporate power and authority to execute and deliver
      this Agreement, perform its obligations under this Agreement, and conduct the
      Offering. The execution and delivery of this Agreement by the Company, the
      performance by the Company of its obligations hereunder, the Offering and all
      other necessary corporate action on the part of the Company have been duly
      authorized by its board of directors, and no other corporate proceedings on
      the
      part of the Company are necessary to authorize this Agreement or the Offering.
      This Agreement has been duly and validly executed and delivered by the Company
      and, assuming that it has been duly authorized, executed and delivered by
      Purchaser, constitutes a legal, valid and binding obligation of the Company,
      in
      accordance with its terms, subject to the effects of bankruptcy, insolvency,
      fraudulent conveyance, reorganization, moratorium and other similar laws
      relating to or affecting creditors’ rights generally, general equitable
      principles (whether considered in a proceeding in equity or at law) and an
      implied covenant of good faith and fair dealing.

     

    (ii) The
      Securities have been duly authorized and will be free and clear of all liens,
      charges, restrictions, claims and encumbrances imposed by or through the
      Company. The shares of Common Stock issuable upon conversion of the Series
      B
      Preferred Stock or exercise of the Warrants when issued and paid for in
      accordance with the Series B Preferred Stock or Warrants, as applicable, will
      be
      duly authorized, validly issued, fully paid and non-assessable shares of Common
      Stock with no personal liability resulting solely from the ownership of such
      shares and will be free and clear of all liens, charges, restrictions, claims
      and in encumbrances imposed by or through the Company. 

     

    8

    

    
    

     

    (c)
      No
      Conflict; Required Filings and Consents.
      Neither
      the execution and delivery of this Agreement by the Company nor the performance
      by the Company of its obligations hereunder will: (i) conflict with the
      Company’s certificate of incorporation or bylaws; (ii) violate any statute, law,
      ordinance, rule or regulation, applicable to the Company or any of the
      properties or assets of the Company; or (iii) violate, breach, be in conflict
      with or constitute a default (or an event which, with notice or lapse of time
      or
      both, would constitute a default) under, or permit the termination of any
      provision of, or result in the termination of, the acceleration of the maturity
      of, or the acceleration of the performance of any obligation of the Company,
      or
      result in the creation or imposition of any lien upon any properties, assets
      or
      business of the Company under, any material contract or any order, judgment
      or
      decree to which the Company is a party or by which it or any of its assets
      or
      properties is bound or encumbered except, in the case of clauses (ii) and (iii),
      for such violations, breaches, conflicts, defaults or other occurrences which,
      individually or in the aggregate, would not have a material adverse effect
      on
      its obligation to perform its covenants under this Agreement.

     

    (d)
      Placement
      and Finder’s Fees.
      Except
      as provided in Section 1(c), neither the Company nor any of its respective
      officers, directors, employees or managers, has employed any broker, dealer,
      finder, advisor or consultant, or incurred any liability for any investment
      banking fees, brokerage fees, commissions or finders’ fees, advisory fees or
      consulting fees in connection with the Offering for which the Company has or
      could have any liability.

     

    5.
      Indemnification.
      Purchaser agrees to indemnify, defend and hold harmless the Company and its
      respective affiliates and agents from and against any and all demands, claims,
      actions or causes of action, judgments, assessments, losses, liabilities,
      damages or penalties and reasonable attorneys' fees and related disbursements
      incurred by the Company that arise out of or result from a breach of any
      representations or warranties made by Purchaser herein, and Purchaser agrees
      that in the event of any breach of any representations or warranties made by
      Purchaser herein, the Company may, at its option, forthwith rescind the sale
      of
      the Units to Purchaser.

     

    6.
      Registration
      Rights.
      The
      Company covenants and agrees as follows:

     

    6.1 For
      the
      purpose of this Section 6, the following definitions shall apply:

     

    (a)
      “Exchange
      Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules
      and regulations of the SEC thereunder, all as the same shall be in effect at
      the
      time.

     

    (b)
      “Person”
      shall mean an individual, partnership (general or limited), corporation, limited
      liability company, joint venture, business trust, cooperative, association
      or
      other form of business organization, whether or not regarded as a legal entity
      under applicable law, a trust (inter vivos or testamentary), an estate of a
      deceased, insane or incompetent person, a quasi-governmental entity, a
      government or any agency, authority, political subdivision or other
      instrumentality thereof, or any other entity.

     

    9

    

    
    

     

    (c)
      “Register,”
      “registered,” and “registration” shall refer to a registration effected by
      preparing and filing a registration statement in compliance with the Securities
      Act, and the declaration or order of effectiveness of such registration
      statement or document by the SEC.

     

    (d)
      “Registration
      Statement” shall mean any registration statement of the Company filed with the
      SEC pursuant to the provisions of Section 6.2 of this Agreement, which covers
      the resale of the Restricted Stock on an appropriate form then permitted by
      the
      SEC to be used for such registration and the sales contemplated to be made
      thereby under the Securities Act, or any similar rule that may be adopted by
      the
      SEC, and all amendments and supplements to such registration statement,
      including any pre- and post- effective amendments thereto, in each case
      including the prospectus contained therein, all exhibits thereto and all
      materials incorporated by reference therein.

     

    (e)
      “Restricted
      Stock” shall mean (i) the shares of Common Stock issuable upon conversion of the
      Series B Preferred Stock; (ii) the shares of Common Stock issuable upon exercise
      of the Warrants; and (iii) any additional shares of Common Stock of the Company
      issued or issuable after the date hereof in respect of any of the foregoing
      securities, by way of a stock dividend or stock split; provided that as to
      any
      particular shares of Restricted Stock, such securities shall cease to constitute
      Restricted Stock when (x) a Registration Statement with respect to the sale
      of
      such securities shall have become effective under the Securities Act and such
      securities shall have been disposed of thereunder, (y) such securities are
      permitted to be transferred pursuant to Rule 144(k) (or any successor provision
      to such rule) under the Securities Act or (z) such securities are otherwise
      freely transferable to the public without further registration under the
      Securities Act.

     

    (f)
      “Selling
      Stockholders” shall mean Purchaser and any other purchaser of Units in the
      Offering, and their respective successors and assigns.

     

    6.2. Registration
      of the Securities.

     

    (a) The
      Company shall notify all Selling Stockholders in writing at least ten
      (10) days
      prior to the filing of any registration statement under the Securities Act
      for
      the purpose of registering securities of the Company, excluding registration
      statements on SEC Forms S-4, S-8 or any similar or successor forms, and will
      afford each such Selling Stockholder an opportunity to include in such
      registration statement all or part of such Restricted Stock held by such Selling
      Stockholder. Each Selling Stockholder desiring to include in any such
      registration statement all or any part of the Restricted Stock held by it shall,
      within five (5) days after the above-described notice from the Company, so
      notify the Company in writing. Such notice shall state the intended method
      of
      disposition of the Restricted Stock by such Selling Stockholder. If a Selling
      Stockholder decides not to include all of its Restricted Stock in any
      registration statement thereafter filed by the Company, such Selling Stockholder
      shall nevertheless continue to have the right to include any Restricted Stock
      in
      any subsequent registration statement or registration statements as may be
      filed
      by the Company with respect to offerings of its securities, all upon the terms
      and conditions set forth herein. The Company may, without the consent of the
      Selling Stockholders, withdraw such registration statement prior to its becoming
      effective if the proposal to register the securities proposed to be registered
      thereby is abandoned.

     

    10

    

    
    

     

    (b)
       In
      the
      event that any registration pursuant to Section 6.2(a) shall be, in whole or
      in
      part, an underwritten public offering of Common Stock on behalf of the Company,
      all Purchasers proposing to distribute their Restricted Stock through such
      underwriting shall enter into an underwriting agreement in customary form with
      the underwriter or underwriters selected for such underwriting by the Company.
      If the managing underwriter thereof advises the Company in writing that in
      its
      opinion the number of securities requested to be included in such registration
      exceeds the number which can be sold in an orderly manner in such offering
      within a price range acceptable to the Company, the Company shall include in
      such registration (i) first, the securities the Company proposes to sell, and
      (ii) second, the Restricted Stock and any other registrable securities eligible
      and requested to be included in such registration to the extent that the number
      of shares to be registered under this clause (ii) will not, in the opinion
      of
      the managing underwriter, adversely affect the offering of the securities
      pursuant to clause (i). In such a case, shares shall be registered pro rata
      among the holders of such Restricted Stock and registrable securities on the
      basis of the number of shares eligible for registration that are owned by all
      such holders and requested to be included in such registration. 

     

    (c) Notwithstanding
      anything to the contrary contained herein, the Company's obligation in Sections
      6.2(a) and 6.2(b) above shall extend only to the inclusion of the Restricted
      Stock in a Registration Statement. The Company shall have no obligation to
      assure the terms and conditions of distribution, to obtain a commitment from
      an
      underwriter relative to the sale of the Restricted Stock or to otherwise assume
      any responsibility for the manner, price or terms of the distribution of the
      Restricted Stock. 

     

    (d) The
      Company shall have the right to terminate or withdraw any registration initiated
      by it under this Section 6.2 prior to the effectiveness of such registration
      without thereby incurring liability to the holders of the Restricted Stock,
      regardless of whether any holder has elected to include securities in such
      registration. The Registration Expenses (as defined in Section 6.5) of such
      withdrawn registration shall be borne by the Company in accordance with
      Section 6.4 hereof.

     

    6.3. Registration
      Procedures.
      Whenever it is obligated to register any Restricted Stock pursuant to this
      Agreement, the Company shall:

     

    (a) prepare
      and file with the SEC a Registration Statement with respect to the Restricted
      Stock in the manner set forth in Section 6.2 hereof and use its reasonable
      best
      efforts to cause such Registration Statement to become effective as promptly
      as
      possible and to remain effective until the earlier of: (i) the sale of all
      shares of Restricted Stock covered thereby, (ii) the availability under Rule
      144
      for the Selling Stockholder to freely resell without restriction all Restricted
      Stock covered thereby, or (iii) two (2) years from the date of this
      Agreement;

     

    (b) prepare
      and file with the SEC such amendments (including post-effective amendments)
      and
      supplements to such Registration Statement and the prospectus used in connection
      therewith as may be necessary to keep such Registration Statement effective
      for
      the period specified in Section 6.3(a) above and to comply with the provisions
      of the Act with respect to the disposition of all Restricted Stock covered
      by
      such Registration Statement in accordance with the intended method of
      disposition set forth in such Registration Statement for such
      period;

     

    11

    

    
    

     

    (c) furnish
      to the Selling Stockholders such number of copies of the Registration Statement
      and the prospectus included therein (including each preliminary prospectus)
      as
      such person may reasonably request in order to facilitate the public sale or
      other disposition of the Restricted Stock covered by such Registration
      Statement;

     

    (d) use
      its
      reasonable best efforts to register or qualify the Restricted Stock covered
      by
      such Registration Statement under the state securities laws of such
      jurisdictions as any Selling Stockholder shall reasonably request; provided,
      however,
      that
      the Company shall not for any such purpose be required to qualify generally
      to
      transact business as a foreign corporation in any jurisdiction where it is
      not
      so qualified or to consent to general service of process in any such
      jurisdiction;

     

    (e) in
      the
      event of any underwritten public offering, enter into and perform its
      obligations under an underwriting agreement, in usual and customary form, with
      the managing underwriter(s) of such offering. Each Purchaser participating
      in
      such underwriting shall also enter into and perform its obligations under such
      an agreement, as described in Section 6.2(b);

     

    (f) immediately
      notify each Selling Stockholder at any time when a prospectus relating thereto
      is required to be delivered under the Act, of the happening of any event as
      a
      result of which the prospectus contained in such Registration Statement, as
      then
      in effect, includes an untrue statement of a material fact or omits to state
      a
      material fact required or necessary to be stated therein in order to make the
      statements contained therein not misleading in light of the circumstances under
      which they were made. The Company will use reasonable efforts to amend or
      supplement such prospectus in order to cause such prospectus not to include
      any
      untrue statement of a material fact or omit to state a material fact required
      to
      be stated therein or necessary to make the statements therein not misleading
      in
      the light of the circumstances under which they were made;

     

    (g) prepare
      and file with the SEC such amendments and supplements to such Registration
      Statement and the prospectus used in connection with such Registration
      Statements as may be necessary to comply with the provisions of the Securities
      Act with respect to the disposition of all securities covered by such
      Registration Statement;

     

    (h) use
      its
      reasonable best efforts to list the Restricted Stock covered by such
      Registration Statement on each exchange or automated quotation system on which
      similar securities issued by the Company are then listed (with the listing
      application being made at the time of the filing of such Registration Statement
      or as soon thereafter as is reasonably practicable); 

     

    (i) notify
      each Selling Stockholder of any threat by the SEC or state securities commission
      to undertake a stop order with respect to sales under the Registration
      Statement; and 

     

    12

    

    
    

     

    (j) cooperate
      in the timely removal of any restrictive legends from the shares of Restricted
      Stock in connection with the resale of such shares covered by an effective
      Registration Statement.

     

    6.4. Delay
      of Registration. 
      No
      Selling Stockholder shall have any right to obtain or seek an injunction
      restraining or otherwise delaying any such registration as the result of any
      controversy that might arise with respect to the interpretation or
      implementation of this Section 6.

     

    6.5 Expenses.

     

    (a) For
      the
      purposes of this Section 6.5, the term “Registration Expenses” shall mean: all
      expenses incurred by the Company in complying with Section 6.2 of this
      Agreement, including, without limitation, all registration and filing fees,
      printing expenses, fees and disbursements of counsel and independent public
      accountants for the Company, fees under state securities laws, fees of the
      National Association of Securities Dealers, Inc. (“NASD”), fees and expenses of
      listing shares of Restricted Stock on any securities exchange or automated
      quotation system on which the Company's shares are listed and fees of transfer
      agents and registrars. The term “Selling Expenses” shall mean: all underwriting
      discounts and selling commissions applicable to the sale of Restricted Stock
      and
      all accountable or non-accountable expenses paid to any underwriter in respect
      of such sale.

     

    (b) Except
      as
      otherwise provided herein, the Company will pay all Registration Expenses in
      connection with the Registration Statements filed pursuant to Section 6.2 of
      this Agreement. All Selling Expenses in connection with any Registration
      Statements filed pursuant to Section 6.2 of this Agreement shall be borne by
      the
      Selling Stockholders pro rata on the basis of the number of shares registered
      by
      each Selling Stockholder whose shares of Restricted Stock are covered by such
      Registration Statement, or by such persons other than the Company (except to
      the
      extent the Company may be a seller) as they may agree.

     

    6.6. Obligations
      of the Selling Stockholders.

     

    (a) In
      connection with each registration hereunder, each Selling Stockholder will
      furnish to the Company in writing such information with respect to it and the
      securities held by it and the proposed distribution by it, as shall be
      reasonably requested by the Company in order to assure compliance with
      applicable federal and state securities laws as a condition precedent to
      including the Selling Stockholder's Restricted Stock in the Registration
      Statement. Each Selling Stockholder shall also promptly notify the Company
      of
      any changes in such information included in the Registration Statement or
      prospectus as a result of which there is an untrue statement of material fact
      or
      an omission to state any material fact required or necessary to be stated
      therein in order to make the statements contained therein not misleading in
      light of the circumstances under which they were made.

     

    (b) In
      connection with the filing of the Registration Statement, each Selling
      Stockholder shall furnish to the Company in writing such information and
      affidavits as the Company reasonably requests for use in connection with such
      Registration Statement or prospectus.

     

    13

    

    
    

     

    (c) In
      connection with each registration pursuant to this Agreement, each Selling
      Stockholder agrees that it will not effect sales of any Restricted Stock until
      notified by the Company of the effectiveness of the Registration Statement,
      and
      thereafter will suspend such sales after receipt of telegraphic or written
      notice from the Company to suspend sales to permit the Company to correct or
      update a Registration Statement or prospectus. At the end of any period during
      which the Company is obligated to keep a Registration Statement current, each
      Selling Stockholder shall discontinue sales of Restricted Stock pursuant to
      such
      Registration Statement upon receipt of notice from the Company of its intention
      to remove from registration the Restricted Stock covered by such Registration
      Statement that remains unsold, and each Selling Stockholder shall notify the
      Company of the number of shares registered which remain unsold immediately
      upon
      receipt of such notice from the Company.

     

    6.7. Information
      Blackout and Holdbacks.

     

    (a) At
      any
      time when a Registration Statement effected pursuant to Section 6.2 is
      effective, upon written notice from the Company to Purchaser that the Company
      has determined in good faith that the sale of Restricted Stock pursuant to
      the
      Registration Statement would require disclosure of non-public material
      information, Purchaser shall suspend sales of Restricted Stock pursuant to
      such
      Registration Statement until such time as the Company notifies Purchaser that
      such material information has been disclosed to the public or has ceased to
      be
      material, or that sales pursuant to such Registration Statement may otherwise
      be
      resumed.

     

    (b) Notwithstanding
      any other provision of this Agreement, Purchaser shall not effect any public
      sale or distribution (including sales pursuant to Rule 144 under the Securities
      Act), if and when available, of equity securities of the Company, or any
      securities convertible into or exchangeable or exercisable for such securities,
      during the thirty (30) days prior to the commencement of any primary offering
      to
      be undertaken by the Company of shares of its unissued Common Stock (“Primary
      Offering”), which may also include other securities, and ending one hundred
      twenty (120) days after completion of any such Primary Offering, unless the
      Company, in the case of a non-underwritten Primary Offering, or the managing
      underwriter, in the case of an underwritten Primary Offering, otherwise
      agree.

     

    14

    

    
    

    6.8. Indemnification.

     

    (a) The
      Company agrees to indemnify, to the extent permitted by law, each Selling
      Stockholder, such Selling Stockholder’s respective partners, officers,
      directors, underwriters and each Person who controls any Selling Stockholder
      (within the meaning of the Securities Act) against all losses, claims, damages,
      liabilities and expenses caused by (i) any untrue statement of or alleged untrue
      statement of material fact contained in the Registration Statement, prospectus
      or preliminary prospectus or any amendment or supplement thereto, (ii) any
      omission of or alleged omission of a material fact required to be stated therein
      or necessary to make the statements therein not misleading, or (iii) any
      violation or alleged violation by the Company of the Securities Act, the
      Exchange Act, any state securities law or any rule or regulation promulgated
      under the Securities Act, the Exchange Act or any state securities law in
      connection with the offering covered by such Registration Statement
      (“Violations”); provided,
      however,
      that
      the indemnity agreement contained in this Section 6.8(a) shall not apply to
      amounts paid in settlement of any such loss, claim, damage, liability or action
      if such settlement is effected without the consent of the Company, which consent
      shall not be unreasonably withheld, nor shall the Company be liable in for
      any
      loss, claim, damage, liability or action to the extent that it arises out of
      or
      is based upon a Violation which occurs in reliance upon and in conformity with
      information furnished to the Company by such Selling Stockholder, partner,
      officer, director, underwriter or controlling person of such Selling
      Stockholder.

     

    (b) To
      the
      extent permitted by law, each Selling Stockholder shall indemnify and hold
      harmless the Company, each of its directors, its officers and each person,
      if
      any, who controls the Company within the meaning of the Securities Act, any
      underwriter and any other Selling Stockholder selling securities under such
      registration statement or any of such other Selling Stockholder’s partners,
      directors or officers or any person who controls such Selling Stockholder,
      against any losses, claims, damages or liabilities (joint or several) to which
      the Company or any such director, officer, controlling person, underwriter
      or
      other such Selling Stockholder, or partner, director, officer or controlling
      person of such other Selling Stockholder, may become subject under the
      Securities Act, the Exchange Act or other federal or state law, insofar as
      such
      losses, claims, damages or liabilities (or actions in respect thereto) arise
      out
      of or are based upon any Violation, in each case to the extent (and only to
      the
      extent) that such Violation occurs (i) in reliance upon and in conformity with
      information furnished by such Selling Stockholder to the Company, (ii) as a
      result of any failure to deliver a copy of the prospectus relating to such
      Registration Statement, or (iii) as a result of any disposition of the
      Restricted Stock in a manner that fails to comply with the permitted methods
      of
      distribution identified within the Registration Statement.

     

    (c) Any
      Person entitled to indemnification hereunder shall (i) give prompt written
      notice to the indemnifying party of any claim with respect to which it seeks
      indemnification (provided that the failure to give prompt notice shall not
      impair any Person's right to indemnification hereunder to the extent such
      failure has not prejudiced the indemnifying party), and (ii) unless in such
      indemnified party's reasonable judgment a conflict of interest between such
      indemnified and indemnifying parties may exist with respect to such claim,
      permit such indemnifying party to assume the defense of such claim with counsel
      reasonably satisfactory to the indemnified party. If such defense is assumed,
      the indemnifying party shall not be subject to any liability for any settlement
      made by the indemnified party without its consent (but such consent shall not
      be
      unreasonably withheld). An indemnifying party who is not entitled to, or elects
      not to, assume the defense of a claim shall not be obligated to pay the fees
      and
      expenses of more than one counsel for all parties indemnified by such
      indemnifying party with respect to such claim, unless in the reasonable judgment
      of any indemnified party a conflict of interest may exist between such
      indemnified party and any other of such indemnified parties with respect to
      such
      claim.

     

    15

    

    
    

     

    (d) If
      the
      indemnification provided for in this Section 6.8 is held by a court of
      competent jurisdiction to be unavailable to an indemnified party with respect
      to
      any losses, claims, damages or liabilities referred to herein, the indemnifying
      party, in lieu of indemnifying such indemnified party thereunder, shall to
      the
      extent permitted by applicable law contribute to the amount paid or payable
      by
      such indemnified party as a result of such loss, claim, damage or liability
      in
      such proportion as is appropriate to reflect the relative fault of the
      indemnifying party on the one hand and of the indemnified party on the other
      in
      connection with the violation(s) described in Section 6.8(a) that resulted
      in
      such loss, claim, damage or liability, as well as any other relevant equitable
      considerations. The relative fault of the indemnifying party and of the
      indemnified party shall be determined by a court of law by reference to, among
      other things, whether the untrue or alleged untrue statement of a material
      fact
      or the omission to state a material fact relates to information supplied by
      the
      indemnifying party or by the indemnified party and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      statement or omission; provided,
      that in
      no event shall any contribution by a Selling Stockholder hereunder exceed the
      net proceeds from the offering received by such Selling
      Stockholder.

     

    (e) The
      indemnification provided for under this Agreement shall remain in full force
      and
      effect regardless of any investigation made by or on behalf of the indemnified
      party or any officer, director or controlling Person of such indemnified party
      and shall survive the transfer of securities. The Company also agrees to make
      such provisions as are reasonably requested by any indemnified party for
      contribution to such party in the event the Company's indemnification is
      unavailable for any reason. 

     

    7.
      Confidentiality.
      Purchaser acknowledges and agrees that:

     

    (a)
      All
      of
      the information contained herein is of a confidential nature and may be regarded
      as material non-public information under Regulation FD of the Securities
      Act.

     

    (b)
      This
      Agreement has been furnished to Purchaser by the Company for the sole purpose
      of
      enabling Purchaser to consider and evaluate an investment in the Company, and
      will be kept confidential by Purchaser and not used for any other
      purpose.

     

    (c)
      The
      existence of this Agreement and the information contained herein shall not,
      without the prior written consent of the Company, be disclosed by Purchaser
      to
      any person or entity, other than Purchaser’s personal financial and legal
      advisors for the sole purpose of evaluating an investment in the Company, and
      Purchaser will not, directly or indirectly, disclose or permit Purchaser’s
      personal financial and legal advisors to disclose, any of such information
      without the prior written consent of the Company.

     

    16

    

    
    

     

    (d)
      Purchaser
      shall make its representatives aware of the terms of this section and to be
      responsible for any breach of this Agreement by such representatives.

     

    (e)
      Purchaser
      shall not, without the prior written consent of the Company, directly or
      indirectly, make any statements, public announcements or release to trade
      publications or the press with respect to the subject matter of this Agreement
      and the other Offering Documents. 

     

    (f)
      If
      Purchaser decides to not pursue further investigation of the Company or to
      not
      participate in the Offering, Purchaser will promptly return this Agreement,
      the
      other Offering Documents and any accompanying documentation to the
      Company.

     

    8.
      Non-Public
      Information.
      Purchaser acknowledges that information concerning the matters that are the
      subject matter of this Agreement may constitute material non-public information
      under United States federal securities laws, and that United States federal
      securities laws prohibit any person who has received material non-public
      information relating to the Company from purchasing or selling securities of
      the
      Company, or from communicating such information to any person under
      circumstances in which it is reasonably foreseeable that such person is likely
      to purchase or sell securities of the Company. Accordingly, until such time
      as
      any such non-public information has been adequately disseminated to the public,
      Purchaser shall not purchase or sell any securities of the Company, or
      communicate such information to any other person.

     

    9.
      Entire
      Agreement.
      This
      Agreement contains the entire agreement between the parties and supersedes
      all
      prior agreements and understandings, both written and oral, between the parties
      with respect to the subject matter hereto, and no party shall be liable or
      bound
      to any other party in any manner by any warranties, representations, guarantees
      or covenants except as specifically set forth in this Agreement. Nothing in
      this
      Agreement, express or implied, is intended to confer upon any party other than
      the parties hereto or their respective successors and assigns any rights,
      remedies, obligations or liabilities under or by reason of this Agreement,
      except as expressly provided in this Agreement.

     

    10.
      Amendment
      and Modification.
      This
      Agreement may not be amended, modified or supplemented except by an instrument
      or instruments in writing signed by the party against whom enforcement of any
      such amendment, modification or supplement is sought.

     

    11.
      Extensions
      and Waivers.
      At any
      time prior to the Closing, the parties hereto entitled to the benefits of a
      term
      or provision may (a) extend the time for the performance of any of the
      obligations or other acts of the parties hereto, (b) waive any inaccuracies
      in
      the representations and warranties contained herein or in any document,
      certificate or writing delivered pursuant hereto, or (c) waive compliance with
      any obligation, covenant, agreement or condition contained herein. Any agreement
      on the part of a party to any such extension or waiver shall be valid only
      if
      set forth in an instrument or instruments in writing signed by the party against
      whom enforcement of any such extension or waiver is sought. No failure or delay
      on the part of any party hereto in the exercise of any right hereunder shall
      impair such right or be construed to be a waiver of, or acquiescence in, any
      breach of any representation, warranty, covenant or agreement.

     

    17

    

    
    

     

    12.
      Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors and assigns, provided, however, that no party
      hereto may assign its rights or delegate its obligations under this Agreement
      without the express prior written consent of the other party hereto. Except
      as
      provided in Sections 5 and 6, nothing in this Agreement is intended to confer
      upon any person not a party hereto (and their successors and assigns) any
      rights, remedies, obligations or liabilities under or by reason of this
      Agreement.

     

    13.
      Survival
      of Representations, Warranties and Covenants.
      The
      representations and warranties contained herein shall survive the Closing and
      shall thereupon terminate two years from the Closing, except that the
      representations contained in Sections 3(a), 3(b), 4(a), and 4(b) shall survive
      indefinitely. All covenants and agreements contained herein which by their
      terms
      contemplate actions following the Closing shall survive the Closing and remain
      in full force and effect in accordance with their terms. All other covenants
      and
      agreements contained herein shall not survive the Closing and shall thereupon
      terminate.

     

    14.
      Headings;
      Definitions.
      The
      Section headings contained in this Agreement are inserted for convenience of
      reference only and will not affect the meaning or interpretation of this
      Agreement. All references to Sections contained herein mean Sections of this
      Agreement unless otherwise stated. All capitalized terms defined herein are
      equally applicable to both the singular and plural forms of such
      terms

     

    15.
      Severability.
      If any
      provision of this Agreement or the application thereof to any person or
      circumstance is held to be invalid or unenforceable to any extent, the remainder
      of this Agreement shall remain in full force and effect and shall be reformed
      to
      render the Agreement valid and enforceable while reflecting to the greatest
      extent permissible the intent of the parties.

     

    16.
      Notices.
      All
      notices hereunder shall be sufficiently given for all purposes hereunder if
      in
      writing and delivered personally, sent by documented overnight delivery service
      or, to the extent receipt is confirmed, telecopy, telefax or other electronic
      transmission service to the appropriate address or number as set forth
      below:

     

    If
      to
      the Company:

     

    Stellar
      Technologies, Inc.

    7935
      Airport Pulling Road

    Suite
      201

    Naples,
      FL 34109

    Attention:
      Chief Executive Officer

    

    with
      a
      copy to:

     

    Fox
      Rothschild LLP

    997
      Lenox
      Drive, Building 3

    Lawrenceville,
      NJ 08648

    Attention:
      Vincent A. Vietti, Esquire

    18

    

    
    

     

    If
      to
      Purchaser:

     

    To
      that
      address indicated on the signature page hereof.

     

    17.
      Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Florida, without regard to the laws that might otherwise govern under
      applicable principles of conflicts of laws thereof, except to the extent that
      the General Corporation Law of the State of Colorado shall apply to the internal
      corporate governance of the Company.

     

    18.
      Arbitration.
      If
      a
      dispute arises as to the interpretation of this Agreement, it shall be decided
      in an arbitration proceeding conforming to the Rules of the American Arbitration
      Association applicable to commercial arbitration then in effect at the time
      of
      the dispute. The arbitration shall take place in Miami, Florida. The decision
      of
      the arbitrators shall be conclusively binding upon the parties and final, and
      such decision shall be enforceable as a judgment in any court of competent
      jurisdiction. The parties shall share equally the costs of the
      arbitration.

     

    19.
      Counterparts.
      This
      Agreement may be executed and delivered by facsimile in two or more
      counterparts, each of which shall be deemed to be an original, but all of which
      together shall constitute one and the same agreement.

    

    [Signature
      page follows]

     

    19

    

    
    

    IN
      WITNESS WHEREOF, intending to be legally bound, the parties hereto have caused
      this Agreement to be executed as of the date set forth below.

     

    
      
        
          
            
              

            	 	 	 	
                  PURCHASER

                
	 	 	 	 	 
	
                  Date:

                	
                	 	 
	 	
                  

                	 	
                  

                
	 	 	 	
                  

                    By:

                	 
	 	 	 	 	
                  

                
	 	 	 	 	
                  Name:

                
	 	 	 	 	
                  Title:

                
	 	 	 	 	
                  Address:

                	
                   

                  
                    

                  

                
	 	 	 	 	
                   

                  
                    

                  

                
	 	 	 	 	
                   

                  
                    

                  

                
	 	 	 	 	 
	 	 	 	 	
                  Social
                    Security

                  or
                    Tax ID No.:

                	 
                
	 	 	 	 	 	
                  

                
	 	 	 	 	 
	 	 	 	
                  Number
                    of Units Purchased:

                	
                   

                  
                    

                  

                
	 	 	 	 	 
	 	 	 	
                  Purchase
                    Price 

                
	 	 	 	
                  @
                    $15.00 per Unit: $

                	 
                  

                
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
                  STELLAR
                    TECHNOLOGIES, INC.

                
	 	 	 	 	 
	 	 	 	 	 
	
                  Date:

                	 	 	
                  By:

                	 
	 	
                  

                	 	 	
                  
                    

                    Name:

                  
                    Title:

                  

                

              

               

              20

              

              
              

              Exhibit
                A

              

              Form
                of

              Certificate
                of Designation

              of

              Series
                B
                Convertible Preferred Stock

              of

              Stellar
                Technologies, Inc.

              

              Pursuant
                to Section 7-106-102 of the

              Colorado
                Business Corporation Act

               

              

            

              

              

              Stellar
                Technologies, Inc., a Colorado corporation (the "Corporation"), does
                hereby
                certify that, pursuant to the authority contained in its Articles
                of
                Incorporation, as amended, and in accordance with the provisions
                of Section
                7-106-102 of the Colorado Business Corporation Act, the Corporation’s Board of
                Directors has duly adopted the following resolutions creating a series
                of
                Preferred Stock designated as Series B Convertible Preferred Stock:

              

              RESOLVED,
                that
                the Corporation hereby designates and creates a series of the authorized
                Preferred Stock of the Corporation, designated as Series B Convertible
                Preferred
                Stock, as follows:

              

              FIRST:
                that,
                of the 10,000,000 shares of Preferred Stock, par value $0.001 per
                share,
                authorized to be issued by the Corporation, 400,000 shares are hereby
                designated
                as "Series B Convertible Preferred Stock." The rights, preference,
                privileges
                and restrictions granted to and imposed upon the Series B Convertible
                Preferred
                Stock are as set forth below:

               

              1. Definitions.  For
                purposes of this resolution, the following definitions shall apply:

              

              (a) "Board"
                shall
                mean the Board of Directors of the Corporation.

              

              (b) "Common
                Stock"
                shall
                mean the Common Stock, $0.001 par value per share, of the
                Corporation.

              

              (c) “Conversion
                Price”
shall
                mean $0.15 per share, as adjusted.  

              

              (d) "Original
                Issue Price"
                shall
                mean $15.00 per share for the Series B Preferred Stock.

              

              (e)
                 "Series
                B Preferred Stock"
                shall
                mean the Series B Preferred Convertible Stock, $0.001 par value per
                share, of
                the Corporation.

              

              
              

               

              2. Dividends
                and Distributions.

               

              (a) The
                holders of the then outstanding shares of Series B Preferred Stock
                shall be
                entitled to receive, in preference to the holders of Junior Securities
                (as
                defined in Section 2(d) below), cumulative dividends (the “Series B
                Payment-in-Kind Dividends”) when and as if they may be declared by the Board out
                of funds legally available therefore, at a per share equal to eight
                percent (8%)
                per annum of the Original Issue Price (based on a 365 day year).
                The Series B
                Payment-in-Kind Dividends shall accrue on the Series B Preferred
                Stock
                commencing on the date of original issuance thereof.

               

              (b) All
                Series B Payment-in-Kind Dividends shall be cumulative, whether or
                not earned or
                declared and whether or not there are profits, surplus or other funds
                of the
                Corporation legally available for the payment of dividends. All Series
                B
                Payment-in-Kind Dividends payable by the Corporation on the Series
                B Preferred
                Stock pursuant to this Section 2 shall be paid in shares of Common
                Stock valued
                for this purpose in accordance with the formula set forth in Section
                2(c) below.
                In conjunction with the payment of any Series B Payment-in-Kind Dividend,
                the
                Corporation shall promptly issue and deliver to the holders of the
                shares of
                Series B Preferred Stock, a certificate or certificates for the number
                of
                additional shares of Common Stock to be so issued. Any shares of
                Common Stock
                issued to the holders of Series B Preferred Stock on account of any
                Series B
                Payment-in-Kind Dividend shall be deemed to be issued on the Dividend
                Payment
                Date (as defined in Section 2(c) below). All numbers relating to
                the calculation
                of dividends pursuant to this Section 2 shall be subject to appropriate
                adjustment whenever there shall occur a stock split, combination,
                reclassification or other similar event involving or affecting a
                change in the
                Corporation’s capital structure to provide to the holders of shares of Series
                B
                Preferred Stock the same economic return with respect to Series B
                Payment-in-Kind Dividends as they would have received in the absence
                of such
                event.

               

              (c) If
                the
                Corporation declares Series B Payment-in-Kind Dividends to the holders
                of shares
                of Series B Preferred Stock, such payment shall be equal to the number
                of shares
                of Common Stock that the dividend payment would purchase for a purchase
                price
                equal to average daily Closing Price (as defined in Section 2(e)
                below) for the
                five (5) consecutive Trading Days (as defined in Section 2(e) below)
                immediately
                preceding the date on which such Series B Payment-in-Kind Dividends
                are to be
                paid (each, a “Dividend Payment Date”), and the Corporation shall pay such
                dividend, including all shares (and any cash adjustment), within
                three (3)
                business days of the Dividend Payment Date for which such payment
                in shares of
                Common Stock applies. In lieu of any fractional share of Common Stock
                which
                would otherwise be issued in payment of a dividend on a Dividend
                Payment Date,
                the Corporation shall pay a cash adjustment in respect of such fractional
                interest in an amount in cash (computed to the nearest cent) equal
                to the
                Closing Price multiplied by the fractional interest to the nearest
                1/100th of a
                percent that otherwise would have been issued in payment of such
                dividend. On
                each Dividend Payment Date, all dividends that shall have accrued
                on each share
                of Series B Convertible Preferred Stock outstanding on such Dividend
                Payment
                Date shall accumulate and be deemed to become "due" whether or not
                there shall
                be funds legally available for payment thereof. Dividends paid on
                shares of
                Series B Convertible Preferred Stock in an amount less than the total
                amount of
                such dividends at the time accumulated and payable on such shares
                shall be
                allocated pro rata on a share-by-share basis among all such shares
                at the time
                outstanding.

              2

              

              
              

               

            

             

            (d) Unless
              full cumulative dividends on the Series B Convertible Preferred Stock
              have been
              paid, or declared and sums set aside for the payment thereof, dividends,
              other
              than in Common Stock or other securities of a class or series of stock
              of the
              Corporation the terms of which do not expressly provide that it ranks
              senior to
              or on a parity with the Series B Convertible Preferred Stock as to
              dividend
              distributions and distributions upon the liquidation, winding-up and
              dissolution
              of the Corporation (collectively, “Junior Securities”), may not be paid, or
              declared and sums set aside for payment thereof, and other distributions
              may not
              be made upon the Common Stock or other Junior Securities.

             

            (e) “Closing
              Price” for any day, means: (i) the last reported sales price regular way of
              the
              Common Stock on such
              day on
              the principal securities exchange on which the Common Stock is then
              listed or
              admitted to trading or on Nasdaq, as applicable, (ii) if no sale takes
              place on
              such day on any such securities exchange or system, the average of
              the closing
              bid and asked prices, regular way, on such day for the Common Stock
              as
              officially quoted on any such securities exchange or system, (iii)
              if
              on such day such shares of Common Stock are not
              then
              listed or admitted to trading on any securities exchange or system,
              the last
              reported sale price, regular way, on such day for the Common Stock
in
              the
              domestic over-the-counter market as reported by the National Quotation
              Bureau,
              Incorporated, or any other successor organization,
              (iv) if
              no sale takes place on such day,
              the
              average of the high and low bid price of the Common Stock on such day
              in the
              domestic over-the-counter market as reported by the National Quotation
              Bureau,
              Incorporated, or any other successor organization, or
              (v) if
              no bid and asked prices are reported for the Common Stock by the National
              Quotation Bureau, Incorporated or any other successor organization
              for such day,
              the average of the high and low bid and asked price of any of the market
              makers
              for the Common Stock as reported in the “pink sheets” by the Pink Sheets
              LLC.
              If at
              any time such shares of Common Stock are not listed on any domestic
              exchange or
              quoted in the NASDAQ System or the domestic over-the-counter market
              or reported
              in the "pink sheets," the Closing Price shall be the fair market value
              thereof
              determined by the Board of Directors of the Corporation in good faith.
              “Trading
              Day” means a day on which the securities exchange, association, or quotation
              system on which shares of Common Stock are listed for trading shall
              be open for
              business or, if the shares of Common Stock shall not be listed on such
              exchange,
              association, or quotation system for such day, a day with respect to
              which
              trades in the United States domestic over-the-counter market shall
              be reported.
              Any reference to "distribution" contained in this Section 2 shall not
              be deemed
              to include any distribution made in connection with any liquidation,
              winding-up
              or dissolution of the Corporation, as to which Section 3 shall
              apply.

             

            3. Liquidation
              Rights. In
              the
              event of any liquidation, dissolution or winding up of the Corporation,
              whether
              voluntary or involuntary, the funds and assets of the Corporation that
              may be
              legally distributed to the Corporation's stockholders (the "Available
              Funds and
              Assets"), shall be distributed to stockholders in the following
              manner:

             

            (a) Liquidation
              Preference.
              Subject
              to the rights of holders of any series of preferred stock which by
              its terms is
              senior to the Series B Preferred Stock with respect to liquidation,
              the holders
              of each share of Series B Preferred Stock then outstanding shall be
              entitled to
              be paid, out of the Available Funds and Assets, and prior and in preference
              to
              any payment or distribution (or any setting apart of any payment or
              distribution) of any Available Funds and Assets on any Junior Securities,
              an
              amount per share equal to the Original Issue Price of the Series B
              Preferred
              Stock plus
              all
              accrued but unpaid dividends; provided,
              however,
              that in
              the event that the Available Funds and Assets are insufficient to permit
              each
              holder of Series B Preferred Stock to receive an amount per share equal
              to the
              Original Issue Price of the Series B Preferred Stock, then, and in
              that event,
              the amount so distributable shall be distributed among the holders
              of the Series
              B Preferred Stock, pro rata, based on the number of shares of Series
              B Preferred
              Stock held by each; and further,
              provided,
              that
              any such payments or distributions shall be made on parity with any
              payments or
              distributions made to the holders of any other series of preferred
              stock which
              by its terms is pari
              passu with
              the
              Series B Preferred Stock. 

            3

            

            
            

            

            (b) Non-Cash
              Consideration.
              If any
              assets of the Corporation distributed to stockholders in connection
              with any
              liquidation, dissolution, or winding up of the Corporation are other
              than cash,
              then the value of such assets shall be their fair market value as reasonably
              determined by the Board in good faith, except that
              any
              securities to be distributed to stockholders in a liquidation, dissolution,
              or
              winding up of the Corporation shall be valued as follows:

            

            (1) The
              method of valuation of securities not subject to investment letter
              or other
              similar restrictions on free marketability shall be as follows:

            

            (i) if
              the
              securities are then traded on a national securities exchange or the
              NASDAQ
              National Market System (or a similar national quotation system), then
              the value
              shall be deemed to be the average of the closing prices of the securities
              on
              such exchange or system over the 30-day period ending three (3) days
              prior to
              the distribution;

            

            (ii)
               if
              actively traded over-the-counter, then the value shall be deemed to
              be the
              average of the closing bid prices over the 30-day period ending three
              (3) days
              prior to the closing of such merger, consolidation or sale; and

            

            (iii) if
              there
              is no active public market, then the value shall be the fair market
              value
              thereof, as determined in good faith by the Board.

            

            (2) The
              method of valuation of securities subject to investment letter or other
              restrictions on free marketability shall be to make an appropriate
              discount from
              the market value determined as above in Section 3(b)(1)(i), (ii) or
              (iii) to
              reflect the approximate fair market value thereof, as reasonably determined
              in
              good faith by the Board.

             

            4. Voting
              Rights. Each
              holder of Series B Preferred Stock shall be entitled to vote together
              with the
              Common Stock and all other series and classes of stock permitted to
              vote with
              the Common Stock on all matters submitted to a vote of the holders
              of the Common
              Stock (including election of directors) in accordance with the provisions
              of
              this Section 4, except with respect to matters in respect of which
              one or more
              other classes of Preferred Stock or Common Stock is entitled to vote
              as a
              separate class under the Colorado Business Corporation Act or the provisions
              of
              this Certificate. Each holder of Series B Preferred Stock shall be
              entitled to
              notice of any stockholders’ meeting in accordance with the bylaws of the
              Corporation at the same time and in the same manner as notice is given
              to all
              other stockholders entitled to vote at such meetings. For each vote
              in which
              holders of Series B Preferred Stock are entitled to participate, the
              holder of
              each share of Series B Preferred Stock shall be entitled to that number
              of votes
              per share to which such holder would have been entitled had such share
              of Series
              B Preferred Stock then been converted into shares of Common Stock pursuant
              to
              the provisions of Section 5 hereof, at the record date for the determination
              of
              those holders entitled to vote on such matters or, if no such record
              date is
              established, at the date such vote is taken or any written consent
              of
              stockholders is solicited. 

            4

            

            
            

             

          

           

          5. Conversion.

           

          (a) Subject
            to the provisions of this Section 5, each share of Series B Preferred
            Stock
            shall be convertible into that number of fully paid and nonassessable
            shares of
            Common Stock determined by dividing the Original Issue Price by the Conversion
            Price in effect on the date of the conversion. 

          

          (b) The
            Conversion Price and the number of shares of stock or other securities
            or
            property into which the Series B Preferred Stock is convertible are subject
            to
            adjustment from time to time as follows:

           

          (1) Reorganization,
            Merger or Sale of Assets.
            If at
            any time while the Series B Preferred Stock is outstanding there shall
            be (i) a
            reorganization (other than a combination, reclassification, exchange
            or
            subdivision of shares otherwise provided for herein), (ii) a merger or
            consolidation with or into another corporation in which the Corporation
            is not
            the surviving entity, or a reverse triangular merger in which the Corporation
            is
            the surviving entity but the shares of the Corporation’s capital stock
            outstanding immediately prior to the merger are converted by virtue of
            the
            merger into other property, whether in the form of securities, cash or
            otherwise, or (iii) a sale or transfer of the Corporation’s properties and
            assets as, or substantially as, an entirety to any other person, then,
            as a part
            of such reorganization, merger, consolidation, sale or transfer, lawful
            provision shall be made so that a holder of Series B Preferred Stock
            shall
            thereafter be entitled to receive upon conversion of the Series B Preferred
            Stock the number of shares of stock or other securities or property of
            the
            successor corporation resulting from such reorganization, merger, consolidation,
            sale or transfer that a holder of the shares deliverable upon conversion
            of the
            Series B Preferred Stock would have been entitled to receive in such
            reorganization, consolidation, merger, sale or transfer if the Series
            B
            Preferred Stock had been converted immediately before such reorganization,
            merger, consolidation, sale or transfer, all subject to further adjustment
            as
            provided in this Section 5. The foregoing provisions of this Section
            5(b)(1)
            shall similarly apply to successive reorganizations, consolidations,
            mergers,
            sales and transfers and to the stock or securities of any other corporation
            that
            are at the time receivable upon the conversion of the Series B Preferred
            Stock.
            If the per-share consideration payable to the Corporation for shares
            in
            connection with any such transaction is in a form other than cash or
            marketable
            securities, then the value of such consideration shall be determined
            in good
            faith by the Board. In all events, appropriate adjustment (as determined
            in good
            faith by the Board) shall be made in the application of the provisions
            of the
            Series B Preferred Stock with respect to the rights and interests of
            the
            Corporation after the transaction, to the end that the provisions of
            the Series
            B Preferred Stock shall be applicable after that event, as near as reasonably
            may be, in relation to any shares or other property deliverable after
            that event
            upon conversion of the Series B Preferred Stock.

           

          (2) Reclassification.
            If the
            Corporation, at any time while the Series B Preferred Stock, or any portion
            thereof, remains outstanding, by reclassification of securities or otherwise,
            shall change any of the securities as to which conversion rights under
            the
            Series B Preferred Stock exist into the same or a different number of
            securities
            of any other class or classes, the Series B Preferred Stock shall thereafter
            represent the right to acquire such number and kind of securities as
            would have
            been issuable as the result of such change with respect to the securities
            that
            were subject to the conversion rights under the Series B Preferred Stock
            immediately prior to such reclassification or other change and number
            of shares
            received upon such conversion shall be appropriately adjusted, all subject
            to
            further adjustment as provided in this Section 5.

          5

          

          
          

           

        

         

        (3) Split,
          Subdivision or Combination of Shares.
          If the
          Corporation at any time while the Series B Preferred Stock, or any portion
          thereof, remains outstanding shall split, subdivide or combine the securities
          as
          to which conversion rights under the Series B Preferred Stock exist, into
          a
          different number of securities of the same class, the Conversion Price
          shall be
          proportionately decreased in the case of a split or subdivision or
          proportionately increased in the case of a combination.

         

        (4) Adjustments
          for Dividends in Stock or Other Securities or Property.
          If
          while the Series B Preferred Stock, or any portion hereof, remains outstanding
          the holders of the securities as to which conversion rights under the Series
          B
          Preferred Stock exist at the time shall have received, or, on or after
          the
          record date fixed for the determination of eligible stockholders, shall
          have
          become entitled to receive, without payment therefor, other or additional
          stock
          or other securities or property (other than cash) of the Corporation by
          way of
          dividend, then and in each case, the Series B Preferred Stock shall represent
          the right to acquire upon conversion, in addition to the number of shares
          of the
          security receivable upon conversion of the Series B Preferred Stock, and
          without
          payment of any additional consideration therefor, the amount of such other
          or
          additional stock or other securities or property (other than cash) of the
          Corporation that such holder would hold on the date of such conversion
          had it
          been the holder of record of the security receivable upon conversion of
          the
          Series B Preferred Stock on the date hereof and had thereafter, during
          the
          period from the date hereof to and including the date of such conversion,
          retained such shares and/or all other additional stock, other securities
          or
          property as aforesaid during such period, giving effect to all adjustments
          called for during such period by the provisions of this Section 5.

         

        (c)
          Each
          share of Series B Convertible Preferred Stock outstanding on the Mandatory
          Conversion Date (as defined herein) shall automatically and without any
          action
          on the part of the holder thereof, convert into that number of fully paid
          and
          nonassessable shares of Common Stock determined by dividing the Original
          Issue
          Price by the Conversion Price in effect at the time of conversion. The
          term
          "Mandatory Conversion Date" is the date, if any, on which (i) the average
          of the
          Closing Prices of the Corporation’s Common Stock over 20 consecutive trading
          days equals or exceeds $0.75 per share; and (ii) the shares of Common Stock
          issuable upon conversion of the Series B Preferred Stock are either subject
          to an effective registration statement permitting the public resale of
          such
          shares under the Securities Act of 1933, as amended (the “Act”),
          or
          transferable pursuant to Rule 144(k) promulgated under the Act. On the
          Mandatory
          Conversion Date, the outstanding shares of Series B Convertible Preferred
          Stock
          shall be converted automatically without any further action by the holders
          of
          such shares and whether or not the certificates representing such shares
          are
          surrendered to the Corporation or its transfer agent; provided,
          however,
          that
          the Corporation shall not be obligated to issue certificates evidencing
          the
          shares of Common Stock issuable upon conversion of any shares of Series
          B
          Convertible Preferred Stock unless certificates evidencing such shares
          of Series
          B Convertible Preferred Stock are either delivered to the Corporation or
          the
          holder notifies the Corporation that such certificates have been lost,
          stolen,
          or destroyed, and executes an agreement satisfactory to the Corporation
          to
          indemnify the Corporation from any loss incurred by it in connection therewith.
          Upon the occurrence of the automatic conversion of the Series B Convertible
          Preferred Stock pursuant to this Section 5(c), the holders of the Series
          B
          Convertible Preferred Stock shall surrender the certificates representing
          the
          Series B Convertible Preferred Stock for which the Mandatory Conversion
          Date has
          occurred to the Corporation and the Corporation shall deliver the shares
          of
          Common Stock issuable upon such conversion as soon as practicable following
          the
          holder's delivery of the applicable certificates for the Series B Convertible
          Preferred Stock within three (3) business days following the date on which
          the
          Corporation receives the applicable certificates for the Series B Convertible
          Preferred Stock from the holder. 

        6

        

        
        

        

        6. Reports
          as to Adjustments.
          Whenever the Conversion Price or the kind of securities or other property
          into
          which each share of Series B Preferred Stock is convertible is adjusted
          as
          provided in Section 5 hereof, the Corporation shall promptly mail to the
          holders
          of record of the outstanding shares of Series B Preferred Stock at their
          respective addresses as the same shall appear in the Corporation's stock
          records
          a notice stating that the Conversion Price has been adjusted and setting
          forth
          the new Conversion Price (or describing the new securities, cash or other
          property into which each share of Series B Preferred Stock is convertible
          as a
          result of such adjustment), a brief statement of the facts requiring such
          adjustment and the computation thereof, and when such adjustment became
          effective.

         

        7. No
          Re-issuance of Preferred Stock.
          No
          share or shares of Series B Preferred Stock acquired by the Corporation
          by
          reason of redemption, purchase, conversion or otherwise shall be reissued,
          and
          all such shares shall be canceled, retired and eliminated from the shares
          which
          the Corporation shall be authorized to issue.

        

        SECOND:
          That
          such determination of the designation, preferences and the relative,
          participating, optional or other rights, and the qualifications, limitations
          or
          restrictions thereof, relating to the Series B Preferred Stock, was duly
          made by
          the Board of Directors pursuant to the provisions of the Articles of
          Incorporation of the Corporation, and in accordance with the provisions
          of
          Section 7-106-102 of the Colorado Business Corporation Act.

        

        IN
          WITNESS WHEREOF, the
          Corporation has caused this Designation to be executed this ______ day
          of April,
          2006.

         

        
          	 	 	 
	 	STELLAR
                  TECHNOLOGIES, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	

            

                  Name:
                    Mark Sampson 

                  Title:
                    President

                

        

            

        7

        

        
        

      

      
      

      Exhibit
        B

      

      WARRANT
        NO.: 2006 UNIT- [_________] 

      

      FORM
        OF WARRANT TO PURCHASE COMMON STOCK

      OF
        STELLAR TECHNOLOGIES, INC.

      

      THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT
        OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
        REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT,
        AND
        WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
        TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO
        THE
        ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES
        ACT OF
        1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
        SECURITIES LAWS.

      

  This
    WARRANT (“Warrant”) is to verify that, FOR VALUE RECEIVED, [_____________________________]
    (“Holder”)
    is entitled to purchase, subject to the terms and conditions hereof, from
    STELLAR TECHNOLOGIES, INC., a Colorado corporation (the “Company”),
    [_____________]
    shares of common stock, $.001 par value per share, of the Company (the “Common
    Stock”), at any time during the period commencing at 9:00 a.m., Eastern
    Standard Time on the date hereof (the “Commencement Date”) and
    ending at 5:00 p.m. Eastern Standard Time on the third (3rd)
    anniversary of the Commencement Date (the “Termination Date”),
    at an exercise price (the “Exercise Price”) of $.40 per share
    of Common Stock. The number of shares of Common Stock purchasable upon exercise
    of this Warrant and the Exercise Price per share shall be subject to adjustment
    from time to time upon the occurrence of certain events as set forth below.

       

      The
        shares of Common Stock or any other shares or other units of stock or other
        securities or property, or any combination thereof, then receivable upon
        exercise of this Warrant, as adjusted from time to time, are sometimes referred
        to hereinafter as “Exercise Shares.” The exercise price per share as from time
        to time in effect is referred to hereinafter as the “Exercise
        Price.”

       

      1. Exercise
        of Warrant; Issuance of Exercise Shares.

      

      (a) Exercise
        of Warrant.
        Subject
        to the terms hereof, the purchase rights represented by this Warrant are
        exercisable by the Holder in whole or in part, at any time, or from time
        to
        time, by the surrender of this Warrant and the Notice of Exercise annexed
        hereto
        duly completed and executed on behalf of the Holder, at the office of the
        Company (or such other office or agency of the Company as it may designate
        by
        notice in writing to the Holder at the address of the Holder appearing on
        the
        books of the Company) accompanied by payment of the Exercise Price in full
        either: (i) in cash or by bank or certified check for the Exercise Shares
        with
        respect to which this Warrant is exercised; (ii) by delivery to the Company
        of
        shares of the Company's Common Stock having a Fair Market Value (as defined
        below) equal to the aggregate Exercise Price of the Exercise Shares being
        purchased that Holder is the record and beneficial owner of and that have
        been
        held by the Holder for at least six (6) months; (iii) provided that the sale
        of
        the Exercise Shares are covered by an effective registration statement, by
        delivering to the Company a Notice of Exercise together with an irrevocable
        direction to a broker-dealer registered under the Securities Exchange Act
        of
        1934, as amended (the “Exchange Act”), to sell a sufficient portion of the
        Exercise Shares and deliver the sales proceeds directly to the Company to
        pay
        the Exercise Price; or (iv) by any combination of the procedures set forth
        in
        subsections (i), (ii) and (iii) of this Section 1(a). For the purposes of
        this
        Section 1(a), “Fair Market Value” shall be an amount equal to the average of the
        Current Market Value (as defined below) for the ten (10) days preceding the
        Company’s receipt of the duly executed Notice of Exercise form attached hereto
        as Appendix
        A.
        

      

      
      

      

      In
        the
        event that this Warrant shall be duly exercised in part prior to the Termination
        Date, the Company shall issue a new Warrant or Warrants of like tenor evidencing
        the rights of the Holder thereof to purchase the balance of the Exercise
        Shares
        purchasable under the Warrant so surrendered that shall not have been
        purchased.

       

      (b) Issuance
        of Exercise Shares: Delivery of Warrant Certificate.
        The
        Company shall, within ten (10) business days or as soon thereafter as is
        practicable of the exercise of this Warrant, issue in the name of and cause
        to
        be delivered to the Holder one or more certificates representing the Exercise
        Shares to which the Holder shall be entitled upon such exercise under the
        terms
        hereof. Such certificate or certificates shall be deemed to have been issued
        and
        the Holder shall be deemed to have become the record holder of the Exercise
        Shares as of the date of the due exercise of this Warrant.

       

      (c) Exercise
        Shares Fully Paid and Non-assessable.
        The
        Company agrees and covenants that all Exercise Shares issuable upon the due
        exercise of the Warrant represented by this Warrant certificate (“Warrant
        Certificate”) will, upon issuance and payment therefor in accordance with the
        terms hereof, be duly authorized, validly issued, fully paid and non-assessable
        and free and clear of all taxes (other than taxes which, pursuant to Section
        2
        hereof, the Company shall not be obligated to pay) or liens, charges, and
        security interests created by the Company with respect to the issuance
        thereof.

       

      (d) Reservation
        of Exercise Shares.
        The
        Company covenants that during the term that this Warrant is exercisable,
        the
        Company will reserve from its authorized and unissued Common Stock a sufficient
        number of shares to provide for the issuance of the Exercise Shares upon
        the
        exercise of this Warrant, and from time to time will take all steps necessary
        to
        amend its certificate of incorporation to provide sufficient reserves of
        shares
        of Common Stock issuable upon the exercise of the Warrant.

       

      (e) Fractional
        Shares.
        The
        Company shall not be required to issue fractional shares of capital stock
        upon
        the exercise of this Warrant or to deliver Warrant Certificates that evidence
        fractional shares of capital stock. In the event that any fraction of an
        Exercise Share would, except for the provisions of this subsection (e), be
        issuable upon the exercise of this Warrant, the Company shall pay to the
        Holder
        exercising the Warrant an amount in cash equal to such fraction multiplied
        by
        the Current Market Value of the Exercise Share on the last business day prior
        to
        the date on which this Warrant is exercised. For purposes of this subsection
        (e), the “Current Market Value” for any day shall be determined as
        follows:

      2

      

      
      

       

      (i) if
        the
        Exercise Shares are traded in the over-the-counter market and not on any
        national securities exchange and not on the NASDAQ National Market System
        or
        NASDAQ Small Cap Market (together, the “NASDAQ Reporting System”), the average
        of the mean between the last bid and asked prices per share, as reported
        by the
        National Quotation Bureau, Inc., or an equivalent generally accepted reporting
        service, or if not so reported, the average of the closing bid and asked
        prices
        for an Exercise Share as furnished to the Company by any member of the National
        Association of Securities Dealers, Inc., selected by the Company for that
        purpose; or

       

      (ii) if
        the
        Exercise Shares are listed or traded on a national securities exchange or
        the
        NASDAQ Reporting System, the closing price on the principal national securities
        exchange on which they are so listed or traded, on the NASDAQ Reporting System,
        as the case may be, on the last business day prior to the date of the exercise
        of this Warrant. The closing price referred to in this clause (ii) shall
        be the
        last reported sales price or, in case no such reported sale takes place on
        such
        day, the average of the reported closing bid and asked prices, in either
        case on
        the national securities exchange on which the Exercise Shares are then listed
        or
        in the NASDAQ Reporting System; or

       

      (iii) if
        no
        such closing price or closing bid and asked prices are available, as determined
        in any reasonable manner as may be prescribed by the Board of Directors of
        the
        Company.

       

      2. Payment
        of Taxes.
        

      

      (a) Stamp
        Taxes.
        The
        Company will pay all documentary stamp taxes, if any, attributable to the
        initial issuance of Exercise Shares upon the exercise of this Warrant; provided,
        however, that the Company shall not be required to pay any tax or taxes which
        may be payable in respect of any transfer involved in the issue of any Warrant
        Certificates or any certificates for Exercise Shares in a name other than
        that
        of the Holder of a Warrant Certificate surrendered upon the exercise of a
        Warrant, and the Company shall not be required to issue or deliver such
        certificates unless or until the person or persons requesting the issuance
        thereof shall have paid to the Company the amount of such tax or shall have
        established to the satisfaction of the Company that such tax has been
        paid.

      

      (b) Withholding.
        The
        Holder shall pay to the Company, or make arrangements satisfactory to the
        Company regarding payment of, any federal, state, local and/or payroll taxes
        of
        any kind required by law to be withheld with respect to the grant of this
        Warrant or the issuance of the Exercise Shares. The Company may, to the extent
        permitted by law, deduct any such taxes from any payment of any kind otherwise
        due to the Holder whether or not pursuant to this Warrant. The Holder may
        elect,
        with the consent of the Company, to have such tax withholding obligation
        satisfied, in whole or in part, by: (i) authorizing the Company to withhold
        from
        the Exercise Shares a number of shares of Common Stock having an aggregate
        Fair
        Market Value that would satisfy the minimum withholding amount due, or (ii)
        delivering to the Company a number of shares of Common Stock of which the
        Holder
        is the record and beneficial owner and that have been held by the Holder
        for at
        least six (6) months with an aggregate Fair Market Value that would satisfy
        the
        minimum withholding amount due. The Company may require that any fractional
        share amount be settled in cash. For the purposes of this Section 2, Fair
        Market
        Value shall be determined as of the date on which the amount of tax to be
        withheld is determined.

      3

      

      
      

       

      3. Mutilated
        or Missing Warrant Certificates.
        In case
        any Warrant shall be mutilated, lost, stolen or destroyed, the Company may
        in
        its discretion issue, in exchange and substitution for and upon cancellation
        of
        the mutilated Warrant, or in lieu of and in substitution for the Warrant
        lost,
        stolen or destroyed, a new Warrant or Warrants of like tenor and in the same
        aggregate denomination, but only (i) in the case of loss, theft or destruction,
        upon receipt of evidence satisfactory to the Company of such loss, theft
        or
        destruction of such Warrant and indemnity or bond, if requested, also
        satisfactory to them and (ii) in the case of mutilation, upon surrender of
        the
        mutilated Warrant. Applicants for such substitute Warrants shall also comply
        with such other reasonable regulations and pay such other reasonable charges
        as
        the Company or its counsel may prescribe.

      

      4. Rights
        of Holder.
        The
        Holder shall not, by virtue of anything contained in this Warrant or otherwise,
        be entitled to any right whatsoever, either in law or equity, of a stockholder
        of the Company, including without limitation, the right to receive dividends
        or
        to vote or to consent or to receive notice as a shareholder in respect of
        the
        meetings of shareholders or the election of directors of the Company or any
        other matter.

      

      5. Registration
        of Transfers and Exchanges.
        The
        Warrant shall be transferable, subject to the provisions of Section 7 hereof,
        only upon the books of the Company, if any, to be maintained by it for that
        purpose, upon surrender of the Warrant Certificate to the Company at its
        principal office accompanied (if so required by the Company) by a written
        instrument or instruments of transfer in form satisfactory to the Company
        and
        duly executed by the Holder thereof or by the duly appointed legal
        representative thereof or by a duly authorized attorney and upon payment
        of any
        necessary transfer tax or other governmental charge imposed upon such transfer.
        In all cases of transfer by an attorney, the original letter of attorney,
        duly
        approved, or an official copy thereof, duly certified, shall be deposited
        and
        remain with the Company. In case of transfer by executors, administrators,
        guardians or other legal representatives, duly authenticated evidence of
        their
        authority shall be produced, and may be required to be deposited and remain
        with
        the Company in its discretion. Upon any such registration of transfer, a
        new
        Warrant shall be issued to the transferee named in such instrument of transfer,
        and the surrendered Warrant shall be canceled by the Company.

      

      Any
        Warrant may be exchanged, at the option of the Holder thereof and without
        change, when surrendered to the Company at its principal office, or at the
        office of its transfer agent, if any, for another Warrant or other Warrants
        of
        like tenor and representing in the aggregate the right to purchase from the
        Company a like number and kind of Exercise Shares as the Warrant surrendered
        for
        exchange or transfer, and the Warrant so surrendered shall be canceled by
        the
        Company or transfer agent, as the case may be.

       

      6. Adjustment
        of Exercise Shares and Exercise Price.
        The
        Exercise Price and the number and kind of Exercise Shares purchasable upon
        the
        exercise of this Warrant shall be subject to adjustment from time to time
        upon
        the happening of certain events as hereinafter provided. The Exercise Price
        in
        effect at any time and the number and kind of securities purchasable upon
        exercise of each Warrant shall be subject to adjustment as
        follows:

      4

      

      
      

      

  (a) In
    case of any consolidation or merger of the Company with another corporation
    (other than a merger with another corporation in which the Company is the
    surviving corporation and which does not result in any reclassification or
    change — other than a change in par value, or from par value to no par
    value, or from no par value to par value, or as a result of a subdivision
    or combination — of outstanding Common Stock issuable upon such exercise),
    the rights of the Holder of this Warrant shall be adjusted in the manner described
    below:

       

      (i) In
        the
        event that the Company is the surviving corporation or is merged into a wholly
        owned subsidiary for the purpose of incorporating the Company in a different
        jurisdiction, this Warrant shall, without payment of additional consideration
        therefor, be deemed modified so as to provide that the Holder of this Warrant,
        upon the exercise thereof, shall procure, in lieu of each share of Common
        Stock
        theretofore issuable upon such exercise, the kind and amount of shares of
        stock,
        other securities, money and property receivable upon such reclassification,
        change, consolidation or merger by the holder of each share of Common Stock,
        had
        exercise of this Warrant occurred immediately prior to such reclassification,
        change, consolidation or merger. This Warrant (as adjusted) shall be deemed
        to
        provide for further adjustments that shall be as nearly equivalent as may
        be
        practicable to the adjustments provided for in this Section 6. The provisions
        of
        this clause (i) shall similarly apply to successive reclassifications, changes,
        consolidations and mergers.

       

      (ii) In
        the
        event that the Company is not the surviving corporation (except in the case
        of a
        merger of the Company into a wholly owned subsidiary for the purpose of
        incorporating the Company in a different jurisdiction), Holder shall be given
        at
        least fifteen (15) days prior written notice of such transaction and shall
        be
        permitted to exercise this Warrant, to the extent it is exercisable as of
        the
        date of such notice, during this fifteen (15) day period. Upon expiration
        of
        such fifteen (15) day period, this Warrant and all of Holder's rights hereunder
        shall terminate.

       

      (b)
        If
        the Company, at any time while this Warrant, or any portion thereof, remains
        outstanding and unexpired, by reclassification of securities or otherwise,
        shall
        change any of the securities as to which purchase rights under this Warrant
        exist into the same or a different number of securities of any other class
        or
        classes, this Warrant shall thereafter represent the right to acquire such
        number and kind of securities as would have been issuable as the result of
        such
        change with respect to the securities that were subject to the purchase rights
        under this Warrant immediately prior to such reclassification or other change
        and the Exercise Price therefor shall be appropriately adjusted, all subject
        to
        further adjustment as provided in this Section 6.

       

      (c) In
        case
        the Company shall (i) pay a dividend or make a distribution on its shares
        of
        Common Stock in shares of Common Stock, (ii) subdivide or classify its
        outstanding Common Stock into a greater number of shares, or (iii) combine
        or
        reclassify its outstanding Common Stock into a smaller number of shares,
        the
        Exercise Price in effect at the time of the record date for such dividend
        or
        distribution or of the effective date of such subdivision, combination or
        reclassification, shall be proportionally adjusted so that the Holder of
        this
        Warrant exercised after such date shall be entitled to receive the aggregate
        number and kind of shares that, if this Warrant had been exercised by such
        Holder immediately prior to such date, he would have owned upon such exercise
        and been entitled to receive upon such dividend, subdivision, combination
        or
        reclassification. For example, if the Company declares a 2 for 1 stock dividend
        or stock split and the Exercise Price immediately prior to such event was
        $2.00
        per share, the adjusted Exercise Price immediately after such event would
        be
        $1.00 per share. Such adjustment shall be made successively whenever any
        event
        listed above shall occur. Whenever the Exercise Price payable upon exercise
        of
        each Warrant is adjusted pursuant to this subsection (c), the number of Exercise
        Shares purchasable upon exercise of this Warrant shall simultaneously be
        adjusted by multiplying the number of Exercise Shares initially issuable
        upon
        exercise of this Warrant by the Exercise Price in effect on the date hereof
        and
        dividing the product so obtained by the Exercise Price, as adjusted.

      5

      

      
      

       

      (d) In
        the
        event that at any time, as a result of an adjustment made pursuant to subsection
        (a), (b) or (c) above, the Holder of this Warrant thereafter shall become
        entitled to receive any Exercise Shares of the Company, other than Common
        Stock,
        thereafter the number of such other shares so receivable upon exercise of
        this
        Warrant shall be subject to adjustment from time to time in a manner and
        on
        terms as nearly equivalent as practicable to the provisions with respect
        to the
        Common Stock contained in subsections (a), (b) or (c) above.

       

      (e) Irrespective
        of any adjustments in the Exercise Price or the number or kind of Exercise
        Shares purchasable upon exercise of this Warrant, Warrants theretofore or
        thereafter issued may continue to express the same price and number and kind
        of
        shares as are stated in the similar Warrants initially issuable pursuant
        to this
        Warrant.

       

      (f)
         Whenever
        the Exercise Price shall be adjusted as required by the provisions of the
        foregoing Section 6, the Company shall forthwith file in the custody of its
        Secretary or an Assistant Secretary at its principal office and with its
        stock
        transfer agent, if any, an officer's certificate showing the adjusted Exercise
        Price determined as herein provided, setting forth in reasonable detail the
        facts requiring such adjustment, including a statement of the number of
        additional shares of Common Stock, if any, and such other facts as shall
        be
        necessary to show the reason for and the manner of computing such adjustment.
        Each such officer's certificate shall be made available at all reasonable
        times
        for inspection by the holder and the Company shall, forthwith after each
        such
        adjustment, mail a copy by certified mail of such certificate to the
        Holder.

       

      (g) All
        calculations under this Section 6 shall be made to the nearest cent or to
        the
        nearest one one-hundredth (1/100th) of a share, as the case may be.

       

      7. Investment
        Intent, Exercise Restrictions and Transfer Restrictions.
        

       

      (a) Neither
        this Warrant nor any Exercise Share may be offered for sale or sold, or
        otherwise transferred or sold in any transaction which would constitute a
        sale
        thereof within the meaning of the Securities Act of 1933, as amended (the
        "1933
        Act"), unless (i) such security has been registered for sale under the 1933
        Act
        and registered or qualified under applicable state securities laws relating
        to
        the offer and sale of securities, or (ii) exemptions from the registration
        requirements of the 1933 Act and the registration or qualification requirements
        of all such state securities laws are available and the Company shall have
        received an opinion of counsel satisfactory to the Company that the proposed
        sale or other disposition of such securities may be effected without
        registration under the 1933 Act and would not result in any violation of
        any
        applicable state securities laws relating to the registration or qualification
        of securities for sale, such counsel and such opinion to be satisfactory
        to the
        Company.

      6

      

      
      

       

      The
        Holder agrees to indemnify and hold harmless the Company against any loss,
        damage, claim or liability arising from the disposition of this Warrant or
        any
        Exercise Share held by such holder or any interest therein in violation of
        the
        provisions of this Section 7.

       

      (b) The
        certificates evidencing any Exercise Shares issued upon the exercise of this
        Warrant shall have endorsed thereon (except to the extent that the restrictions
        described in any such legend are no longer applicable) the following legend,
        appropriate notations thereof will be made in the Company's stock transfer
        books, and
        stop
        transfer instructions reflecting these restrictions on transfer will be placed
        with the transfer agent of the Exercise Shares.

       

      THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT
        OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
        REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT,
        AND
        WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
        TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO
        THE
        ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES
        ACT OF
        1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
        SECURITIES LAWS.

      

       

      8. Indemnification.
        Holder
        agrees to indemnify, defend and hold harmless the Company and its respective
        affiliates and agents from and against any and all demands, claims, actions
        or
        causes of action, judgments, assessments, losses, liabilities, damages or
        penalties and reasonable attorneys' fees and related disbursements incurred
        by
        the Company that arise out of or result from a breach of any representations,
        warranties, covenants or agreements made by Holder herein, and Holder agrees
        that in the event of any breach of any representations, warranties, covenants
        or
        agreements made by Holder herein, the Company may, at its option, forthwith
        rescind the issuance of this Warrant to Holder.

       

      9. Registration
        Rights.
        The
        Holder shall be entitled to the rights and subject to the obligations set
        forth
        in Section 6 of that certain Securities Purchase Agreement dated on or about
        the
        date hereof 
        by and
        between the Company and the Holder. 

       

      10. Notices.
        All
        notices or other communications under this Warrant shall be in writing and
        shall
        be deemed to have been given on the day of delivery if delivered by hand,
        on the
        fifth day after deposit in the mail if mailed by certified mail, postage
        prepaid, return receipt requested, or on the next business day after mailing
        if
        sent by a nationally recognized overnight courier such as federal express,
        addressed as follows:

      7

      

      
      

      

      If
        to
        the Company:

      

      Stellar
        Technologies, Inc.

      7935
        Airport Pulling Road

      Suite
        210

      Naples,
        FL 34109

      Attention:
        Chief Executive Officer

      

      with
        a
        copy to:

       

      Fox
        Rothschild LLP

      997
        Lenox
        Drive, Building 3

      Lawrenceville,
        NJ 08646

      Attention:
        Vincent A. Vietti, Esquire

      

      and
        to
        the Holder at the address of the Holder appearing on the books of the Company
        or
        the Company's transfer agent, if any.

      

      Either
        of
        the Company or the Holder may from time to time change the address to which
        notices to it are to be mailed hereunder by notice in accordance with the
        provisions of this Section 10.

       

      11. Supplements
        and Amendments.
        The
        Company may from time to time supplement or amend this Warrant without the
        approval of any holders of Warrants in order to cure any ambiguity or to
        correct
        or supplement any provision contained herein which may be defective or
        inconsistent with any other provision, or to make any other provisions in
        regard
        to matters or questions herein arising hereunder which the Company may deem
        necessary or desirable and which shall not materially adversely affect the
        interests of the Holder.

      

      12. Successors
        and Assigns.
        This
        Warrant shall inure to the benefit of and be binding on the respective
        successors, assigns and legal representatives of the Holder and the
        Company.

      

      13. Severability.
        If for
        any reason any provision, paragraph or terms of this Warrant is held to be
        invalid or unenforceable, all other valid provisions herein shall remain
        in full
        force and effect and all terms, provisions and paragraphs of this Warrant
        shall
        be deemed to be severable.

      

      14. Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of Florida, without regard to the laws that might otherwise govern
        under
        applicable principles of conflicts of laws thereof, except to the extent
        that
        the General Corporation Law of the State of Colorado shall apply to the internal
        corporate governance of the Company.

      8

      

      
      

      

      15. Headings.
        Section
        and subsection headings used herein are included herein for convenience of
        reference only and shall not affect the construction of this Warrant nor
        constitute a part of this Warrant for any other purpose.

      

      IN
        WITNESS WHEREOF, the Company has caused these presents to be duly executed
        as of
        the ___ day of ______________, 2006.

       

      
        	 	 	 
	 	STELLAR
                TECHNOLOGIES, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	

          

                Name:

                Title:

              

      

       

	  9

      

      
      

      APPENDIX
        A

      NOTICE
        OF EXERCISE

      

      
        	To:	
                Stellar
                  Technologies, Inc.

              

      

      7935
        Airport Pulling Road

      Suite
        210

      Naples,
        FL 34109

       

      Attention:
        Chief Executive Officer

      

      (1) The
        undersigned hereby elects to purchase ____________ shares of Common Stock
        of
        Stellar Technologies, Inc., a Colorado corporation, pursuant to the terms
        of the
        attached Warrant, and tenders herewith payment of the Exercise Price for
        such
        shares in full in accordance with the terms of the Warrant in the following
        manner (please check one or more of the following choices):

       

      
        	
              		
                In
                  cash;

              

      

       

      
        	
              		
                Cashless
                  exercise through a broker; or

              

      

       

      
        	
              		
                Delivery
                  of previously owned shares of Common
                  Stock.

              

      

       

      (2) In
        exercising this Warrant, the undersigned hereby confirms and acknowledges
        that
        the shares of Common Stock to be issued upon conversion hereof are being
        acquired solely for the account of the undersigned, not as a nominee for
        any
        other party, and for investment purposes only (unless such shares are subject
        to
        resale pursuant to an effective prospectus), and that the undersigned will
        not
        offer, sell or otherwise dispose of any such shares of Common Stock except
        under
        circumstances that will not result in a violation of the Securities Act of
        1933,
        as amended, or any state securities laws. 

       

      (3) Terms
        not
        otherwise defined in this Notice of Exercise shall have the meanings ascribed
        to
        such terms in the attached Warrant

       

      (4) Please
        issue a certificate or certificates representing said shares of Common Stock
        in
        the name of the undersigned.

       

      
        	 	 	 
	 	 	HOLDER
	 	 	 
	 	 	 
	
                

            

                

          (Date)

              	 	
                

            

                

                (Signature)

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