Document:

Exhibit 4.1

     

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      dated as of May 18, 2007, by and among Offline Consulting, Inc., a Delaware
      corporation (the “Company”),
      and
      the purchasers identified on the signature pages hereto (each, including its
      successors and assigns, a “Purchaser”
and
      collectively the “Purchasers”).

     

    WHEREAS,
      subject to the terms and conditions set forth in this Agreement and pursuant
      to
      Section 4(2) of the Securities Act (as defined below), and Rule 506 promulgated
      thereunder, the Company desires to issue and sell to each Purchaser, and each
      Purchaser, severally and not jointly, desires to purchase on the Closing Date
      from the Company in the aggregate, $1,500,000 of Units, each of which consists
      of (i) Series A Preferred Stock (the “Preferred
      Stock”),
      (ii)
      Class A warrants (the “A
      Warrants”)
      to
      purchase shares of common stock, par value $0.0001 per share (the “Common
      Stock”),
      (iii)
      Class J warrants (the “J
      Warrants”)
      to
      purchase shares of Common Stock, and (iii) Class B warrants (the “B
      Warrants”)
      to
      purchase shares of Common Stock.

     

    NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
      and for other good and valuable consideration the receipt and adequacy of which
      are hereby acknowledged, the Company and each Purchaser agree as
      follows:

     

     

    ARTICLE
      I

    DEFINITIONS

     

    1.1 Definitions.
      In
      addition to the terms defined elsewhere in this Agreement, the following terms
      have the meanings indicated in this Section 1.1: 

     

    “Action”
shall
      have the meaning ascribed to such term in Section 3.1(j).

     

    “Actual
      Minimum”
means,
      as of any date, the maximum aggregate number of shares of Common Stock then
      issued or potentially issuable in the future pursuant to the Transaction
      Documents, including any Underlying Shares issuable upon conversion or exercise
      in full of all shares of Preferred Stock and Warrants.

     

    “Affiliate”
means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person, as such
      terms are used in and construed under Rule 144 under the Securities Act. With
      respect to a Purchaser, any investment fund or managed account that is managed
      on a discretionary basis by the same investment manager as such Purchaser will
      be deemed to be an Affiliate of such Purchaser.

     

    “Closing”
means
      the closing of the purchase and sale of the Securities pursuant to Section
      2.1.

     

    “Closing
      Date”
means
      the Trading Day when all of the Transaction Documents have been executed and
      delivered by the applicable parties thereto, and all conditions precedent to
      (i)
      each Purchaser’s obligations to pay the Subscription Amount have been satisfied
      or waived (ii) and the Company’s obligations to deliver the Securities have been
      satisfied or waived.

     

    “Commission”
means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
means
      the common stock of the Company, par value $0.0001 per share, and any securities
      into which such common stock shall hereinafter been reclassified
      into.

     

    “Common
      Stock Equivalents”
means
      any securities of the Company or the Subsidiaries which would entitle the holder
      thereof to acquire at any time Common Stock, including without limitation,
      any
      debt, preferred stock, rights, options, warrants or other instrument that is
      at
      any time convertible into or exchangeable for, or otherwise entitles the holder
      thereof to receive, Common Stock.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Company
      Counsel”
means
      Sichenzia Ross Friedman Ference LLP, with offices located at 61 Broadway, 32nd
      Floor, New York, New York 10006. 

     

    “Disclosure
      Schedules”
means
      the Disclosure Schedules of the Company delivered concurrently
      herewith.

     

    “Effective
      Date”
means
      the date that the Registration Statement is first declared effective by the
      Commission.

     

    “Escrow
      Agreement”
means
      the Escrow Agreement, dated the date hereof, among the Company, each Purchaser
      and Sichenzia Ross Friedman Ference LLP, as escrow agent.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    “Exempt
      Issuance”
the
      issuance of (a) shares of Common Stock or options to employees, officers,
      consultants or directors of the Company pursuant to any stock or option plan
      duly adopted by a majority of the non-employee members of the Board of Directors
      of the Corporation or a majority of the members of a committee of non-employee
      directors established for such purpose [so long as such issuances in the
      aggregate do not exceed ten percent (10)% of the issued and outstanding shares
      of Common Stock as of the Original Issue Date], (b) securities upon the exercise
      of or conversion of any securities issued hereunder, convertible securities,
      options or warrants issued and outstanding on the date of the Purchase
      Agreement, provided that such securities have not been amended since the date
      of
      the Purchase Agreement to increase the number of such securities or to decrease
      the exercise or conversion price of any such securities, (c) securities issued
      in connection with acquisitions or (d) securities issued as equity enhancements
      in connection with standard non-convertible debt transactions. 

     

    “GAAP”
shall
      have the meaning ascribed to such term in Section 3.1(h).

     

    “Liens”
means
      a
      lien, charge, security interest, encumbrance, right of first refusal, preemptive
      right or other restriction.

     

    “Losses”
means
      any and all losses, claims, damages, liabilities, settlement costs and expenses,
      including without limitation costs of preparation and reasonable attorneys'
      fees.

     

    “Material
      Adverse Effect”
shall
      have the meaning assigned to such term in Section 3.1(b).

     

    “Material
      Permits”
shall
      have the meaning ascribed to such term in Section 3.1(m).

     

    “Person”
means
      an individual or corporation, partnership, trust, incorporated or unincorporated
      association, joint venture, limited liability company, joint stock company,
      government (or an agency or subdivision thereof) or other entity of any
      kind.

     

    “Proceeding”
means
      an action, claim, suit, investigation or proceeding (including, without
      limitation, an investigation or partial proceeding, such as a deposition),
      whether commenced or threatened.

     

    “Registration
      Rights Agreement”
means
      the Registration Rights Agreement, dated the date hereof, among the Company
      and
      each Purchaser, in the form of Exhibit
      A.

     

    “Registration
      Statement”
means
      a
      registration statement meeting the requirements set forth in the Registration
      Rights Agreement and covering the resale by the Purchasers of the Underlying
      Shares.

     

    “Required
      Approvals”
shall
      have the meaning ascribed to such term in Section 3.1(e).

     

    “Rule
      144”
means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same effect as
      such
      Rule.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “SEC
      Reports”
shall
      have the meaning ascribed to such term in Section 3.1(h).

     

    “Securities”
means
      the Units, the shares of Preferred Stock, the Warrants and the Underlying
      Shares.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended.

     

    “Shareholder
      Approval”
means
      such approval as may be required by the applicable rules and regulations of
      the
      Trading Market (or any successor entity) from the shareholders of the Company
      with respect to the transactions contemplated by the Transaction Documents,
      including the issuance of all of the Underlying Shares and shares of Common
      Stock issuable upon exercise of the Warrants in excess of 19.9% of the Company’s
      issued and outstanding Common Stock on the Closing Date.

    

    “Short
      Sales”
shall
      include, without limitation, all “short sales” as defined in Rule 3b-3 of the
      Exchange Act. 

     

    “Subscription
      Amount”
shall
      mean, as to each Purchaser, the amount to be paid for the shares of Preferred
      Stock and the Warrants purchased hereunder as specified below such Purchaser's
      name on the signature page of this Agreement, in United States
      Dollars.

     

    “Subsidiary”
means
      any subsidiary of the Company that is required to be listed in Schedule
      3.1(a).

     

    “Trading
      Day”
means
      any day during which the Trading Market shall be open for business.

     

    “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: OTC Bulletin Board, the American Stock
      Exchange, the New York Stock Exchange, the Nasdaq Global Select Market, Nasdaq
      Global Market or the Nasdaq Capital Market.

     

    “Transaction
      Documents”
means
      this Agreement, the shares of Preferred Stock, the Warrants, the Registration
      Rights Agreement and any other documents or agreements executed in connection
      with the transactions contemplated hereunder.

     

    “Underlying
      Shares”
means
      the shares of Common Stock issuable upon conversion of the Preferred Stock
      and
      upon exercise of the Warrants.

     

    “Units”
means
      the Units offered hereby, each of which consists of shares of Preferred Stock,
      A
      Warrants, J Warrants and B Warrants.

     

    “VWAP”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
      the daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the Trading Market on which the Common Stock
      is
      then listed or quoted as reported by Bloomberg Financial L.P. (based on a
      Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b) if
      the Common Stock is not then listed or quoted on a Trading Market and if prices
      for the Common Stock are then quoted on the OTC Bulletin Board, the volume
      weighted average price of the Common Stock for such date (or the nearest
      preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then
      listed or quoted on the OTC Bulletin Board and if prices for the Common Stock
      are then reported in the “Pink Sheets” published by the National Quotation
      Bureau Incorporated (or a similar organization or agency succeeding to its
      functions of reporting prices), the most recent bid price per share of the
      Common Stock so reported; or (d) in all other cases, the fair market value
      of a share of Common Stock as determined by an independent appraiser selected
      in
      good faith by the Purchasers and reasonably acceptable to the
      Company.

     

    “Warrants”
means,
      collectively, the (i) A Warrant in the form of Exhibits
      B
      delivered to the Purchasers at the Closing in accordance with Section 2.2
      hereof, which warrants shall be exercisable immediately upon issuance for a
      term
      of five years at $9.46 per share, (ii) J Warrant in the form of Exhibits
      C
      delivered to the Purchasers at the Closing in accordance with Section 2.2
      hereof, which warrants shall be exercisable immediately upon issuance for a
      term
      of twelve months following the Effectiveness Date (as defined in the
      Registration Rights Agreement) at $10.44 per share, and (iii) B Warrant in
      the
      form of Exhibits
      D
      delivered to the Purchasers at the Closing in accordance with Section 2.2
      hereof, which warrants shall be exercisable immediately upon issuance for a
      term
      of five years at $10.44 per share.

     

    “Warrant
      Shares”
means
      the shares of Common Stock issuable upon exercise of the Warrants.

     

    
      
        -34-

        

        

        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    ARTICLE
      II

    PURCHASE
      AND SALE

     

    2.1 Closing.
      On the
      Closing Date, each Purchaser shall purchase from the Company, severally and
      not
      jointly with the other Purchasers, and the Company shall issue and sell to
      each
      Purchaser Units consisting of (a) shares of Preferred Stock with a stated value
      equal to such Purchaser’s Subscription Amount (the aggregate principal amount of
      the shares of Preferred Stock sold hereunder shall be $1,500,000), (b) A Warrant
      to purchase an aggregate of 158,562 shares of Common Stock, (c) J Warrant to
      purchase an aggregate of 158,562
      shares of Common Stock and (d) B Warrant to purchase an aggregate of 158,562
      shares of Common Stock. Upon satisfaction of the conditions set forth in Section
      2.2, the Closing shall occur at the offices of Sichenzia Ross Friedman Ference
      LLP, 61 Broadway, 32nd
      Floor,
      New York, New York 10006 or such other location as the parties shall mutually
      agree.

     

    2.2 Conditions
      to Closing.
      The
      Closing is subject to the satisfaction or waiver by the party to be benefited
      thereby of the following conditions:

     

    (a) At
      or
      before the Closing, the Company shall have delivered or caused to be delivered
      to each Purchaser the following:

     

    (i) this
      Agreement duly executed by the Company;

     

    (ii)  the
      shares of Preferred Stock; 

     

    (iii)  A
      Warrants registered in the name of such Purchaser to purchase an aggregate
      of
      158,562 shares of Common Stock;

     

    (iv)  J
      Warrants registered in the name of such Purchaser to purchase an aggregate
      of
      158,562 shares of Common Stock;

     

    (v)  B
      Warrants registered in the name of such Purchaser to purchase an aggregate
      of
      158,562 shares of Common Stock;

     

    (vi)  a
      legal
      opinion of Company Counsel, in the form of Exhibit
      E
      attached
      hereto, addressed to each Purchaser; 

     

    (vii)  the
      Registration Rights Agreement duly executed by the Company; 

     

    (viii)  the
      Escrow Agreement duly executed by the Company;

     

    (ix) a
      certificate, signed by the Secretary of the Company, attaching (i) the charter
      and By-Laws of the Company, and (ii) resolutions passed by its Board of
      Directors to authorize the transactions contemplated hereby and by the other
      Transaction Documents, and certifying that such documents are true and complete
      copies of the originals and that such resolutions have not been amended or
      superseded, it being understood that such Purchaser may rely on such certificate
      as a representation and warranty of the Company made herein;
      and

     

    (x) a
      certificate, signed by the Chief Executive Officer of the Company, certifying
      that the conditions specified in this Section have been fulfilled as of the
      Closing, it being understood that such Purchaser may rely on such certificate
      as
      though it were a representation and warranty of the Company made
      herein.

    

    (b) At
      or
      before the Closing, the Company shall have satisfied the following conditions
      (any or all of which may be waived in whole or in part by the
      Purchasers):

     

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

     

    (ii) Trading
      in the Company’s Common Stock shall not have been suspended by the Commission or
      the OTC Bulletin Board (except for any suspension of trading of limited duration
      agreed to by the Company, which suspension shall be terminated prior to the
      Closing), and, at any time prior to the Closing Date, trading in securities
      generally as reported by Bloomberg Financial Markets (“Bloomberg”)
      shall
      not have been suspended or limited, or minimum prices shall not have been
      established on securities whose trades are reported by Bloomberg, or on the
      New
      York Stock Exchange, nor shall a banking moratorium have been declared either
      by
      the United States or New York State authorities, nor shall there have occurred
      any material outbreak or escalation of hostilities or other national or
      international calamity or crisis of such magnitude in its effect on, or any
      material adverse change in any financial market which, in each case, in the
      judgment of such Purchaser, makes it impracticable or inadvisable to purchase
      the Units.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

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

    

    (iv) The
      merger transaction with Kesselring Corporation shall have been
      consummated.

    

    (v)  The
      Company shall have reserved from its duly authorized
      capital stock no less than 100% of the aggregate number of shares of Common
      Stock needed to comply with Section 3(d) of the Warrants.

    

    (c) At
      or
      before the Closing, each Purchaser shall have delivered or caused to be
      delivered to the Company the following:

     

    
      	(i)  	
              this
                Agreement duly executed by such
                Purchaser;

            

    

     

    (ii) the
      Escrow Agreement duly executed by such Purchaser; 

     

    (iii) such
      Purchaser’s Subscription Amount by wire transfer to the escrow account;
      and

     

    (iv) the
      Registration Rights Agreement duly executed by such Purchaser, including
      questionnaire.

     

    (d) All
      representations and warranties of the other party contained herein shall remain
      true and correct as of the Closing Date and all covenants of the other party
      shall have been performed if due prior to such date.

     

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1 Representations
      and Warranties of the Company.
      Except
      as set forth under the corresponding section of the Disclosure Schedules which
      Disclosure Schedules shall be deemed a part hereof, the Company hereby makes
      the
      representations and warranties set forth below to each Purchaser:

     

    (a)  Subsidiaries.
      All of
      the direct and indirect subsidiaries of the Company are set forth on
Schedule
      3.1(a).
      The
      Company owns, directly or indirectly, all of the capital stock or other equity
      interests of each Subsidiary free and clear of any Liens, and all the issued
      and
      outstanding shares of capital stock of each Subsidiary are validly issued and
      are fully paid, non-assessable and free of preemptive and similar rights to
      subscribe for or purchase securities. If the Company has no subsidiaries, then
      references in the Transaction Documents to the Subsidiaries will be
      disregarded.

     

    (b)  Organization
      and Qualification.
      Each of
      the Company and the Subsidiaries is an entity duly incorporated or otherwise
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation or organization (as applicable), with the
      requisite power and authority to own and use its properties and assets and
      to
      carry on its business as currently conducted. Neither the Company nor any
      Subsidiary is in violation or default of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents. Each of the Company and the Subsidiaries is duly qualified
      to
      conduct business and is in good standing as a foreign corporation or other
      entity in each jurisdiction in which the nature of the business conducted or
      property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, could not
      have or reasonably be expected to result in (i) a material adverse effect on
      the
      legality, validity or enforceability of any Transaction Document, (ii) a
      material adverse effect on the results of operations, assets, business, or
      financial condition of the Company and the Subsidiaries, taken as a whole,
      or
      (iii) a material adverse effect on the Company’s ability to perform in any
      material respect on a timely basis its obligations under any Transaction
      Document (any of (i), (ii) or (iii), a “Material
      Adverse Effect”)
      and no
      Proceeding has been instituted in any such jurisdiction revoking, limiting
      or
      curtailing or seeking to revoke, limit or curtail such power and authority
      or
      qualification.

     

    (c)  Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by each of the Transaction Documents
      and otherwise to carry out its obligations hereunder or thereunder. The
      execution and delivery of each of the Transaction Documents by the Company
      and
      the consummation by it of the transactions contemplated hereby or thereby have
      been duly authorized by all necessary action on the part of the Company and
      no
      further consent or action is required by the Company other than Required
      Approvals. Each of the Transaction Documents has been (or upon delivery will
      be)
      duly executed by the Company and, when delivered in accordance with the terms
      hereof, will constitute the valid and binding obligation of the Company
      enforceable against the Company in accordance with its terms, subject to
      applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
      moratorium and similar laws affecting creditors’ rights and remedies generally
      and general principles of equity. Neither the Company nor any Subsidiary is
      in
      violation of any of the provisions of its respective certificate or articles
      of
      incorporation, by-laws or other organizational or charter documents except
      where
      such violation could not, individually or in the aggregate, constitute a
      Material Adverse Effect.

     

    (d)  No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company,
      the issuance and sale of the Securities and the consummation by the Company
      of
      the other transactions contemplated thereby do not and will not (i) conflict
      with or violate any provision of the Company’s or any Subsidiary’s certificate
      or articles of incorporation, bylaws or other organizational or charter
      documents, or (ii) conflict with, or constitute a default (or an event that
      with
      notice or lapse of time or both would become a default) under, result in the
      creation of any Lien upon any of the properties or assets of the Company or
      any
      Subsidiary, or give to others any rights of termination, amendment, acceleration
      or cancellation (with or without notice, lapse of time or both) of, any
      agreement, credit facility, debt or other instrument (evidencing a Company
      or
      Subsidiary debt or otherwise) or other understanding to which the Company or
      any
      Subsidiary is a party or by which any property or asset of the Company or any
      Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
      conflict with or result in a violation of any law, rule, regulation, order,
      judgment, injunction, decree or other restriction of any court or governmental
      authority to which the Company or a Subsidiary is subject (including federal
      and
      state securities laws and regulations), or by which any property or asset of
      the
      Company or a Subsidiary is bound or affected, or (iv) conflict with or violate
      the terms of any agreement by which the Company or any Subsidiary is bound
      or to
      which any property or asset of the Company or any Subsidiary is bound or
      affected; except in the case of each of clauses (ii) and (iii), such as could
      not have or reasonably be expected to result in a Material Adverse
      Effect.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (e)  Filings,
      Consents and Approvals.
      Neither
      the Company nor any Subsidiary is required to obtain any consent, waiver,
      authorization or order of, give any notice to, or make any filing or
      registration with, any court or other federal, state, local or other
      governmental authority or other Person in connection with the execution,
      delivery and performance by the Company of the Transaction Documents, other
      than
      (i) the filings required under Section 4.9, (ii) the filing with the Commission
      of the Registration Statement, (iii) the application(s) to each applicable
      Trading Market for the listing of the Underlying Shares for trading thereon
      in
      the time and manner required thereby, (iv) the filing with the Commission of
      a
      Form D pursuant to Commission Regulation D, and (v) applicable Blue Sky filings
      (collectively, the “Required
      Approvals”).

     

    (f)  Issuance
      of the Securities.
      The
      Securities are duly authorized and, when issued and paid for in accordance
      with
      the applicable Transaction Documents, will be duly and validly issued, fully
      paid and nonassessable, free and clear of all Liens. The Company has reserved
      from its duly authorized capital stock a number of shares of Common Stock for
      issuance of the Underlying Shares at least equal to the Actual Minimum on the
      date hereof.

     

    (g)  Capitalization.
      The
      capitalization of the Company consist of 700,000,000 shares of Common Stock,
      of
      which 1,720,201 shares are issued and outstanding. No Person has any right
      of
      first refusal, preemptive right, right of participation, or any similar right
      to
      participate in the transactions contemplated by the Transaction Documents.
      Except as a result of the purchase and sale of the Securities and as set forth
      on Schedule
      3.1(g),
      there
      are no outstanding options, warrants, script rights to subscribe to, calls
      or
      commitments of any character whatsoever relating to, or securities, rights
      or
      obligations convertible into or exchangeable for, or giving any Person any
      right
      to subscribe for or acquire, any shares of Common Stock, or contracts,
      commitments, understandings or arrangements by which the Company or any
      Subsidiary is or may become bound to issue additional shares of Common Stock,
      of
      Common Stock Equivalents. Except as set forth on Schedule
      3.1(g)
      (in each
      case an “Exempt Adjustment”), the issuance and sale of the Securities will not
      obligate the Company to issue shares of Common Stock or other securities to
      any
      Person (other than the Purchasers) and will not result in a right of any holder
      of Company securities to adjust the exercise, conversion, exchange or reset
      price under such securities. All of the outstanding shares of capital stock
      of
      the Company are validly issued, fully paid and nonassessable, have been issued
      in compliance with all federal and state securities laws, and none of such
      outstanding shares was issued in violation of any preemptive rights or similar
      rights to subscribe for or purchase securities. No further approval or
      authorization of any stockholder, the Board of Directors of the Company or
      others is required for the issuance and sale of the shares of the Preferred
      Stock. There are no stockholders agreements, voting agreements or other similar
      agreements with respect to the Company’s capital stock to which the Company is a
      party or, to the knowledge of the Company, between or among any of the Company’s
      stockholders.

     

    (h)  SEC
      Reports; Financial Statements.
      Since
      April 11, 2006, the Company has filed all reports required to be filed by it
      under the Securities Act and the Exchange Act, including pursuant to Section
      13(a) or 15(d) thereof, (the foregoing materials, including the exhibits
      thereto, being collectively referred to herein as the “SEC
      Reports”)
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension. As
      of
      their respective dates, the SEC Reports complied in all material respects with
      the requirements of the Securities Act and the Exchange Act and the rules and
      regulations of the Commission promulgated thereunder, and none of the SEC
      Reports, when filed, contained any untrue statement of a material fact or
      omitted to state a material fact required to be stated therein or necessary
      in
      order to make the statements therein, in light of the circumstances under which
      they were made, not misleading. The financial statements of the Company included
      in the SEC Reports comply in all material respects with applicable accounting
      requirements and the rules and regulations of the Commission with respect
      thereto as in effect at the time of filing. Such financial statements have
      been
      prepared in accordance with United States generally accepted accounting
      principles applied on a consistent basis during the periods involved
      (“GAAP”),
      except as may be otherwise specified in such financial statements or the notes
      thereto and except that unaudited financial statements may not contain all
      footnotes required by GAAP, and fairly present in all material respects the
      financial position of the Company and its consolidated subsidiaries as of and
      for the dates thereof and the results of operations and cash flows for the
      periods then ended, subject, in the case of unaudited statements, to normal,
      immaterial, year-end audit adjustments.

     

    (i)  Material
      Changes.
      Since
      the date of the Form 8-K filed with the Securities and Exchange Commission
      describing the acquisition of Kesselring Corporation, (i) there has been no
      event, occurrence or development that has had or that could reasonably be
      expected to result in a Material Adverse Effect, (ii) the Company has not
      incurred any liabilities (contingent or otherwise) other than (A) trade payables
      and accrued expenses incurred in the ordinary course of business consistent
      with
      past practice and (B) liabilities not required to be reflected in the Company's
      financial statements pursuant to GAAP, (iii) the Company has not altered its
      method of accounting, (iv) the Company has not declared or made any dividend
      or
      distribution of cash or other property to its stockholders or purchased,
      redeemed or made any agreements to purchase or redeem any shares of its capital
      stock and (v) the Company has not issued any equity securities to any officer,
      director or Affiliate, except pursuant to existing Company stock option plans.
      

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (j)  Litigation.
      There
      is no action, suit, inquiry, notice of violation, proceeding or investigation
      pending or, to the knowledge of the Company, threatened against or affecting
      the
      Company, any Subsidiary or any of their respective properties before or by
      any
      court, arbitrator, governmental or administrative agency or regulatory authority
      (federal, state, county, local or foreign) (collectively, an “Action”)
      which
      (i) adversely affects or challenges the legality, validity or enforceability
      of
      any of the Transaction Documents or the Securities or (ii) could, if there
      were
      an unfavorable decision, have or reasonably be expected to result in a Material
      Adverse Effect. Neither the Company nor any Subsidiary, nor any director or
      officer thereof, is or has been the subject of any Action involving a claim
      of
      violation of or liability under federal or state securities laws or a claim
      of
      breach of fiduciary duty. There has not been, and to the knowledge of the
      Company, there is not pending or contemplated, any investigation by the
      Commission involving the Company or any current or former director or officer
      of
      the Company. 

     

    (k)  Labor
      Relations.
      No
      material labor dispute exists or, to the knowledge of the Company, is imminent
      with respect to any of the employees of the Company, which could reasonably
      be
      expected to result in a Material Adverse Effect.

     

    (l)  Compliance.
      Neither
      the Company nor any Subsidiary (i) is in default under or in violation of (and
      no event has occurred that has not been waived that, with notice or lapse of
      time or both, would result in a default by the Company or any Subsidiary under),
      nor has the Company or any Subsidiary received notice of a claim that it is
      in
      default under or that it is in violation of, any indenture, loan or credit
      agreement or any other agreement or instrument to which it is a party or by
      which it or any of its properties is bound (whether or not such default or
      violation has been waived), (ii) is in violation of any order of any court,
      arbitrator or governmental body, or (iii) is or has been in violation of any
      statute, rule or regulation of any governmental authority, including without
      limitation all foreign, federal, state and local laws applicable to its business
      except in each case as could not have a Material Adverse Effect. 

     

    (m)  Regulatory
      Permits.
      The
      Company and the Subsidiaries possess all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign regulatory
      authorities necessary to conduct their respective businesses, except where
      the
      failure to possess such permits could not, individually or in the aggregate,
      have or reasonably be expected to result in a Material Adverse Effect
      (“Material
      Permits”),
      and
      neither the Company nor any Subsidiary has received any notice of proceedings
      relating to the revocation or modification of any Material Permit.

     

    (n)  Title
      to Assets.
      Except
      as set forth on Schedule
      3(n),
      the
      Company and the Subsidiaries have good and marketable title in fee simple to
      all
      real property owned by them that is material to the business of the Company
      and
      the Subsidiaries and good and marketable title in all personal property owned
      by
      them that is material to the business of the Company and the Subsidiaries,
      in
      each case free and clear of all Liens, except for Liens as do not materially
      affect the value of such property and do not materially interfere with the
      use
      made and proposed to be made of such property by the Company and the
      Subsidiaries, Liens for the payment of federal, state or other taxes, the
      payment of which is neither delinquent nor subject to penalties. Any real
      property and facilities held under lease by the Company and the Subsidiaries
      are
      held by them under valid, subsisting and enforceable leases of which the Company
      and the Subsidiaries are in compliance.

     

    (o)  Patents
      and Trademarks.
      The
      Company and the Subsidiaries have, or have rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      copyrights, licenses and other similar rights that are necessary or material
      for
      use in connection with their respective businesses and which the failure to
      so
      have could have a Material Adverse Effect (collectively, the “Intellectual
      Property Rights”).
      Neither the Company nor any Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or any Subsidiary violates
      or
      infringes upon the rights of any Person. To the knowledge of the Company, all
      such Intellectual Property Rights are enforceable and there is no existing
      infringement by another Person of any of the Intellectual Property Rights of
      others.

     

    (p)  Insurance.
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses in which the Company and the Subsidiaries are
      engaged. To the best of Company’s knowledge, such insurance contracts and
      policies are accurate and complete. Neither the Company nor any Subsidiary
      has
      any reason to believe that it will not be able to renew its existing insurance
      coverage as and when such coverage expires or to obtain similar coverage from
      similar insurers as may be necessary to continue its business without a
      significant increase in cost.

     

    (q)  Transactions
      With Affiliates and Employees.
      None of
      the officers or directors of the Company and, to the knowledge of the Company,
      none of the employees of the Company is presently a party to any transaction
      with the Company or any Subsidiary (other than for services as employees,
      officers and directors), including any contract, agreement or other arrangement
      providing for the furnishing of services to or by, providing for rental of
      real
      or personal property to or from, or otherwise requiring payments to or from
      any
      officer, director or such employee or, to the knowledge of the Company, any
      entity in which any officer, director, or any such employee has a substantial
      interest or is an officer, director, trustee or partner, in each case in excess
      of $60,000 other than (i) for payment of salary or consulting fees for services
      rendered, (ii) reimbursement for expenses incurred on behalf of the Company
      and
      (iii) for other employee benefits, including stock option agreements under
      any
      stock option plan of the Company.

     

    (r)  Internal
      Accounting Controls.
      The
      Company and the Subsidiaries maintain a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are executed
      in
      accordance with management's general or specific authorizations, (ii)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with GAAP and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management's general
      or
      specific authorization, and (iv) the recorded accountability for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (s)  Certain
      Fees.
      No
      brokerage or finder’s fees or commissions are or will be payable by the Company
      to any broker, financial advisor or consultant, finder, placement agent,
      investment banker, bank or other Person with respect to the transactions
      contemplated by this Agreement. Except as set forth on Schedule
      3.1(s),
      the
      Purchasers shall have no obligation with respect to any fees or with respect
      to
      any claims made by or on behalf of other Persons for fees of a type contemplated
      in this Section that may be due in connection with the transactions contemplated
      by this Agreement.

     

    (t)  Private
      Placement.
      Assuming the accuracy of the Purchaser’s representations and warranties set
      forth in Section 3.2, no registration under the Securities Act is required
      for
      the offer and sale of the Securities by the Company to the Purchasers as
      contemplated hereby.

     

    (u)  Registration
      Rights.
      Except
      as set forth on Schedule 3.1(u), no Person has any right to cause the Company
      to
      effect the registration under the Securities Act of any securities of the
      Company. 

     

    (v)  No
      Integrated Offering.
      Neither
      the Company, nor any of its Affiliates, nor any Person acting on its or their
      behalf has, directly or indirectly, made any offers or sales of any security
      or
      solicited any offers to buy any security, under circumstances that would cause
      this offering of the Securities to be integrated with prior offerings by the
      Company for purposes of the Securities Act or which could violate any applicable
      shareholder approval provisions, including, without limitation, under the rules
      and regulations of the Trading Market. The Company does not have any
      registration statement pending before the Commission or currently under the
      Commission’s review and since August
      1,
      2006, the Company has not offered or sold any of its equity securities or debt
      securities convertible into shares of Common Stock.

     

    (w)  Indebtedness.
      The
      Company has no knowledge of any facts or circumstances which lead it to believe
      that it will file for reorganization or liquidation under the bankruptcy or
      reorganization laws of any jurisdiction within one year from the Closing Date.
      For the purposes of this Agreement, “Indebtedness”
shall
      mean (a) any liabilities for borrowed money or amounts owed in excess of
      $250,000 (other than trade accounts payable incurred in the ordinary course
      of
      business), (b) all guaranties, endorsements and other contingent obligations
      in
      respect of Indebtedness of others, whether or not the same are or should be
      reflected in the Company's balance sheet (or the notes thereto), except
      guaranties by endorsement of negotiable instruments for deposit or collection
      or
      similar transactions in the ordinary course of business; and (c) the present
      value of any lease payments
      in excess of $250,000 due under leases required to be capitalized in accordance
      with GAAP. Neither
      the Company nor any Subsidiary is in default with respect to any
      Indebtedness.

     

    (x)  Tax
      Status.
      Except
      as set forth on Schedule
      3(x),
      the
      Company and each of its Subsidiaries has made or filed all federal, state and
      foreign income and all other tax returns, reports and declarations required
      by
      any jurisdiction to which it is subject (unless and only to the extent that
      the
      Company and each of its Subsidiaries has set aside on its books provisions
      reasonably adequate for the payment of all unpaid and unreported taxes) and
      has
      paid all taxes and other governmental assessments and charges that are material
      in amount, shown or determined to be due on such returns, reports and
      declarations, except those being contested in good faith and has set aside
      on
      its books provisions reasonably adequate for the payment of all taxes for
      periods subsequent to the periods to which such returns, reports or declarations
      apply. There are no unpaid taxes in any material amount claimed to be due by
      the
      taxing authority of any jurisdiction, and the officers of the Company know
      of no
      basis for any such claim. The Company has not executed a waiver with respect
      to
      the statute of limitations relating to the assessment or collection of any
      foreign, federal, statue or local tax. None of the Company’s tax returns is
      presently being audited by any taxing authority. 

     

    (y)  No
      General Solicitation or Advertising in Regard to this
      Transaction.
      Neither
      the Company nor any of its directors or officers (i) has conducted or will
      conduct any general solicitation (as that term is used in Rule 502(c) of
      Regulation D) or general advertising with respect to the sale of the shares
      of
      Preferred Stock or the Warrants.

     

    (z)  Foreign
      Corrupt Practices.
      Neither
      the Company, nor to the knowledge of the Company, any agent or other person
      acting on behalf of the Company, has (i) directly or indirectly, used any
      corrupt funds for unlawful contributions, gifts, entertainment or other unlawful
      expenses related to foreign or domestic political activity, (ii) made any
      unlawful payment to foreign or domestic government officials or employees or
      to
      any foreign or domestic political parties or campaigns from corporate funds,
      (iii) failed to disclose fully any contribution made by the Company (or made
      by
      any person acting on its behalf of which the Company is aware) which is in
      violation of law, or (iv) violated in any material respect any provision of
      the
      Foreign Corrupt Practices Act of 1977, as amended

     

    (aa)  Acknowledgment
      Regarding Purchasers’ Purchase of Securities.
      The
      Company acknowledges and agrees that the Purchasers are acting solely in the
      capacity of arm’s length purchasers with respect to this Agreement and the
      transactions contemplated hereby. The Company further acknowledges that no
      Purchaser is acting as a financial advisor or fiduciary of the Company (or
      in
      any similar capacity) with respect to this Agreement and the transactions
      contemplated hereby and any statement made by any Purchaser or any of their
      respective representatives or agents in connection with this Agreement and
      the
      transactions contemplated hereby is not advice or a recommendation and is merely
      incidental to the Purchasers’ purchase of the Securities. The Company further
      represents to each Purchaser that the Company’s decision to enter into this
      Agreement has been based solely on the independent evaluation of the Company
      and
      its representatives.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (bb)  Accountants.
      The
      Company’s accountants are set forth on Schedule
      3.1(bb)
      of the
      Disclosure Schedule. To the Company’s knowledge, such accountants, who the
      Company expects will express their opinion with respect to the financial
      statements to be included in the Company’s Annual Report on Form 10-KSB for the
      year ending September 30, 2007, are a registered public accounting firm as
      required by the Securities Act.

     

    (cc)  No
      Disagreements with Accountants and Lawyers.
      There
      are no disagreements of any kind presently existing, or reasonably anticipated
      by the Company to arise, between the accountants and lawyers formerly or
      presently engaged by the Company and the Company is current with respect to
      any
      fees owed to its accountants and lawyers.

     

    (dd)  Lock
      Up.
      As of
      the date of this Agreement, the parties identified on Schedule
      3.1(dd)
      will
      enter into a lock up agreement in the form attached hereto as Exhibit
      F.

    

    (ee)  Sarbanes-Oxley
      Act.
      The
      Company is in compliance with the applicable provisions of the Sarbanes-Oxley
      Act of 2002 (the “Sarbanes-Oxley
      Act”),
      and
      the rules and regulations promulgated thereunder, that are effective, and
      intends to comply with other applicable provisions of the Sarbanes-Oxley Act,
      and the rules and regulations promulgated thereunder, upon the effectiveness
      of
      such provisions.

    

    (ff)  DTC
      Status.
      The
      Company’s transfer agent is a participant in and the Common Stock is eligible
      for transfer pursuant to the Depository Trust Company Automated Securities
      Transfer Program. The name, address, telephone number, fax number, contact
      person and email address of the Company’s transfer agent is set forth on
Schedule
      3.1(ff)
      hereto.

    

    (gg)  Investor
      Relations Firm.
      Within
      60 days of this Agreement, the Company has hired an investor relations firm
      and
      has purchased a third party independent research report.

    

    3.2 Representations
      and Warranties of the Purchasers.
      Each
      Purchaser hereby, for itself and for no other Purchaser, represents and warrants
      as of the date hereof and as of the Closing Date to the Company as
      follows:

     

    (a) Organization;
      Authority.
      Such
      Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its organization with full right,
      corporate or partnership power and authority to enter into and to consummate
      the
      transactions contemplated by the Transaction Documents and otherwise to carry
      out its obligations thereunder. The execution, delivery and performance by
      such
      Purchaser of the transactions contemplated by this Agreement have been duly
      authorized by all necessary corporate or similar action on the part of such
      Purchaser. Each Transaction Document to which it is a party has been duly
      executed by such Purchaser, and when delivered by such Purchaser in accordance
      with the terms hereof, will constitute the valid and legally binding obligation
      of such Purchaser, enforceable against it in accordance with its terms, except
      (i) as limited by general equitable principles and applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally, (ii) as limited by laws
      relating to the availability of specific performance, injunctive relief or
      other
      equitable remedies and (iii) insofar as indemnification and contribution
      provisions may be limited by applicable law.

     

    (b) No
      View to Distribute.
      Such
      Purchaser understands that the Securities are “restricted securities” and have
      not been registered under the Securities Act or any applicable state securities
      law and is acquiring the Securities as principal for its own account and not
      with a view to or for distributing or reselling such Securities or any part
      thereof, has no present intention of distributing any of such Securities and
      has
      no arrangement or understanding with any other persons regarding the
      distribution of such Securities (this representation and warranty not limiting
      such Purchaser’s right to sell the Securities pursuant to the Registration
      Statement or otherwise in compliance with applicable federal and state
      securities laws). Such Purchaser is acquiring the Securities hereunder in the
      ordinary course of its business. Such Purchaser does not have any agreement
      or
      understanding, directly or indirectly, with any Person to distribute any of
      the
      Securities.

     

    (c) Purchaser
      Status.
      At the
      time such Purchaser was offered the Securities, it was, and at the date hereof
      it is, and on each date on which it exercises any Warrants, it will be either:
      (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
      (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional
      buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is
      not required to be registered as a broker-dealer under Section 15 of the
      Exchange Act.

     

    (d) Experience
      of Such Purchaser.
      Such
      Purchaser, either alone or together with its representatives, has such
      knowledge, sophistication and experience in business and financial matters
      so as
      to be capable of evaluating the merits and risks of the prospective investment
      in the Securities, and has so evaluated the merits and risks of such investment.
      Such Purchaser is able to bear the economic risk of an investment in the
      Securities and, at the present time, is able to afford a complete loss of such
      investment.

     

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

     

    The
      Company acknowledges and agrees that each Purchaser does not make or has not
      made any representations or warranties with respect to the transactions
      contemplated hereby other than those specifically set forth in this Section
      3.2.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IV

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1 Transfer
      Restrictions.

     

    (a) The
      Securities may only be disposed of in compliance with state and federal
      securities laws. In connection with any transfer of Securities other than
      pursuant to an effective registration statement or Rule 144, to the Company
      or
      to an Affiliate of a Purchaser or in connection with a pledge as contemplated
      in
      Section 4.1(b), the Company may require the transferor thereof to provide to
      the
      Company an opinion of counsel selected by the transferor and reasonably
      acceptable to the Company, the form and substance of which opinion and shall
      be
      reasonably satisfactory to the Company, to the effect that such transfer does
      not require registration of such transferred Securities under the Securities
      Act. As a condition of transfer, any such transferee shall agree in writing
      to
      be bound by the terms of this Agreement and shall have the rights of a Purchaser
      under this Agreement and the Registration Rights Agreement.

     

    (b) Each
      Purchaser agrees to the imprinting, so long as is required by this Section
      4.1(b), of the following legend on any certificate evidencing Securities:

     

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

     

    The
      Company acknowledges and agrees that a Purchaser may from time to time pledge
      pursuant to a bona fide margin agreement with a registered broker-dealer or
      grant a security interest in some or all of the Securities to a financial
      institution that is an “accredited investor” as defined in Rule 501(a) under the
      Securities Act and who agrees to be bound by the provisions of this Agreement
      and the Registration Rights Agreement and, if required under the terms of such
      arrangement, such Purchaser may transfer pledged or secured Securities to the
      pledgees or secured parties. Such a pledge or transfer would not be subject
      to
      approval of the Company and no legal opinion of legal counsel of the pledgee,
      secured party or pledgor shall be required in connection therewith. Further,
      no
      notice shall be required of such pledge. At the appropriate Purchaser’s expense,
      the Company will execute and deliver such reasonable documentation as a pledgee
      or secured party of Securities may reasonably request in connection with a
      pledge or transfer of the Securities, including, if the Securities are subject
      to registration pursuant to the Registration Rights Agreement, the preparation
      and filing of any required prospectus supplement under Rule 424(b)(3) under
      the
      Securities Act or other applicable provision of the Securities Act to
      appropriately amend the list of Selling Stockholders thereunder.

     

    (c) The
      Company shall cause its counsel to issue a legal opinion to the Company’s
      transfer agent promptly after the Effective Date if required by the Company’s
      transfer agent to effect the removal of the legend hereunder, provided that
      the
      removal of such legend is consistent with applicable securities laws. If all
      or
      any portion of the shares of Preferred Stock or Warrant is converted or
      exercised (as applicable) at a time when there is an effective registration
      statement to cover the resale of the Underlying Shares, or if such Underlying
      Shares may be sold under Rule 144 or if such legend is not otherwise required
      under applicable requirements of the Securities Act (including judicial
      interpretations thereof) then such Underlying Shares shall be issued free of
      all
      legends upon delivery, in the case of a sale under Rule 144, of the customary
      Rule 144 documentation. The Company agrees that following the Effective Date
      or
      at such time as such legend is no longer required under this Section 4.1(c),
      it
      will, no later than three Trading Days following the delivery by a Purchaser
      to
      the Company or the Company's transfer agent of a certificate representing
      Securities issued with a restrictive legend (such date, the “Legend
      Removal Date”),
      deliver or cause to be delivered to such Purchaser a certificate representing
      such Underlying Shares that is free from all restrictive and other legends.
      The
      Company may not make any notation on its records or give instructions to any
      transfer agent of the Company that enlarge the restrictions on transfer set
      forth in this Section. Certificates for Securities subject to legend removal
      hereunder shall be transmitted by the transfer agent of the Company to the
      Purchasers by crediting the account of the Purchaser’s prime broker with the
      Depository Trust Company System. 

    

    (d) In
      addition to such Purchaser’s other available remedies, the Company shall pay to
      a Purchaser, in cash or, at the option of the Company, in shares of Common
      Stock, as partial liquidated damages and not as a penalty, for each $2,500
      of
      Underlying Shares (based on the VWAP on the date such Securities are submitted
      to the Company’s transfer agent) delivered for removal of the restrictive legend
      and subject to this Section 4.1(c), $10 per Trading Day (increasing to $20
      per
      Trading Day five (5) Trading Days after such damages have begun to accrue)
      for
      each Trading Day after the Legend Removal Date until such certificate is
      delivered. Nothing herein shall limit such Purchaser’s right to pursue actual
      damages for the Company’s failure to deliver certificates representing any
      Securities as required by the Transaction Documents, and such Purchaser shall
      have the right to pursue all remedies available to it at law or in equity
      including, without limitation, a decree of specific performance and/or
      injunctive relief.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (e) 
      Each
      Purchaser, severally and not jointly with the other Purchasers, agrees that
      the
      removal of the restrictive legend from certificates representing Securities
      as
      set forth in this Section 4.1 is predicated upon the Company’s reliance that the
      Purchaser will sell any Securities pursuant to either the registration
      requirements of the Securities Act, including any applicable prospectus delivery
      requirements, or an exemption therefrom.

    

    4.2 Furnishing
      of Information.
      As long
      as any Purchaser owns Securities, the Company covenants to timely file (or
      obtain extensions in respect thereof and file within the applicable grace
      period) all reports required to be filed by the Company after the date hereof
      pursuant to the Exchange Act. Upon the request of any Purchaser, the Company
      shall deliver to such Purchaser a written certification of a duly authorized
      officer as to whether it has complied with the preceding sentence. As long
      as
      any Purchaser owns Securities, if the Company is not required to file reports
      pursuant to such laws, it will prepare and furnish to each Purchaser and make
      publicly available in accordance with Rule 144(c) such information as is
      required for each Purchaser to sell the Securities under Rule 144. The Company
      further covenants that it will take such further action as any holder of
      Securities may reasonably request, all to the extent required from time to
      time
      to enable such Person to sell such Securities without registration under the
      Securities Act within the limitation of the exemptions provided by Rule
      144.

     

    4.3 Integration.
      The
      Company shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Securities in a
      manner that would require the registration under the Securities Act of the
      sale
      of the Securities to the Purchasers or that would be integrated with the offer
      or sale of the Securities for purposes of the rules and regulations of any
      Trading Market such that it would require shareholder approval prior to the
      closing of such other transaction unless shareholder approval is obtained before
      the closing of such subsequent transaction.

     

    4.4 Use
      of
      Proceeds.
      The
      proceeds from the sale of the Securities shall be used as set forth on
Schedule
      4.4
      and not
      to redeem any Common Stock or securities convertible, exercisable or
      exchangeable into Common Stock or to settle any outstanding
      litigation.

     

    4.5 Indemnification
      of Purchasers.
      Subject
      to the provisions of this Section 4.5, the Company will indemnify and hold
      the
      Purchasers and their directors, officers, shareholders, partners, employees
      and
      agents (each, a “Purchaser
      Party”)
      harmless from any and all losses, liabilities, obligations, claims,
      contingencies, damages, costs and expenses, including all judgments, amounts
      paid in settlements, court costs and reasonable attorneys’ fees and costs of
      investigation that any such Purchaser Party may suffer or incur as a result
      of
      or relating to (a) any breach of any of the representations, warranties,
      covenants or agreements made by the Company in this Agreement or in the other
      Transaction Documents or (b) any action instituted against a Purchaser, or
      any
      of them or their respective Affiliates, by any stockholder of the Company who
      is
      not an Affiliate of such Purchaser, with respect to any of the transactions
      contemplated by the Transaction Documents (unless such action is based upon
      a
      breach of such Purchaser’s representation, warranties or covenants under the
      Transaction Documents or any agreements or understandings such Purchaser may
      have with any such stockholder or any violations by the Purchaser of state
      or
      federal securities laws or any conduct by such Purchaser which constitutes
      fraud, gross negligence, willful misconduct or malfeasance). If any action
      shall
      be brought against any Purchaser Party in respect of which indemnity may be
      sought pursuant to this Agreement, such Purchaser Party shall promptly notify
      the Company in writing, and the Company shall have the right to assume the
      defense thereof with counsel of its own choosing. Any Purchaser Party shall
      have
      the right to employ separate counsel in any such action and participate in
      the
      defense thereof, but the fees and expenses of such counsel shall be at the
      expense of such Purchaser Party except to the extent that (i) the employment
      thereof has been specifically authorized by the Company in writing, (ii) the
      Company has failed after a reasonable period of time to assume such defense
      and
      to employ counsel or (iii) in such action there is, in the reasonable opinion
      of
      such separate counsel, a material conflict on any material issue between the
      position of the Company and the position of such Purchaser Party. The Company
      will not be liable to any Purchaser Party under this Agreement (i) for any
      settlement by an Purchaser Party effected without the Company’s prior written
      consent, which shall not be unreasonably withheld or delayed; or (ii) to the
      extent, but only to the extent that a loss, claim, damage or liability is
      attributable to any Purchaser Party’s breach of any of the representations,
      warranties, covenants or agreements made by the Purchasers in this Agreement
      or
      in the other Transaction Documents.

     

    4.6 Reservation
      and Listing of Securities.

     

    (a) The
      Company shall maintain a reserve from its duly authorized shares of Common
      Stock
      for issuance pursuant to the Transaction Documents in such amount as may be
      required to fulfill its obligations in full under the Transaction Documents.
      

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (b) If,
      on
      any date, the number of authorized but unissued (and otherwise unreserved)
      shares of Common Stock is less than 130% of (i) the Actual Minimum on such
      date, minus (ii) the number of shares of Common Stock previously issued pursuant
      to the Transaction Documents, then the Board of Directors of the Company shall
      use commercially reasonable efforts to amend the Company's certificate or
      articles of incorporation to increase the number of authorized but unissued
      shares of Common Stock to at least the Actual Minimum at such time (minus the
      number of shares of Common Stock previously issued pursuant to the Transaction
      Documents), as soon as possible and in any event not later than the 75th day
      after such date; provided that the Company will not be required at any time
      to
      authorize a number of shares of Common Stock greater than the maximum remaining
      number of shares of Common Stock that could possibly be issued after such time
      pursuant to the Transaction Documents.

     

    (c) The
      Company shall: (i) in the time and manner required by the Trading Market,
      prepare and file with such Trading Market an additional shares listing
      application covering a number of shares of Common Stock at least equal to the
      Actual Minimum on the date of such application, (ii) take all steps necessary
      to
      cause such shares of Common Stock to be approved for listing on the Trading
      Market as soon as possible thereafter, (iii) provide to each Purchaser evidence
      of such listing, and (iv) use reasonable efforts to maintain the listing of
      such
      Common Stock on such Trading Market or another Trading Market. In addition,
      the
      Company shall hold a special meeting of shareholders (which may also be at
      the
      annual meeting of shareholders) at the earliest practical date, for the purpose
      of obtaining Shareholder Approval, with the recommendation of the Company’s
      Board of Directors that such proposal be approved, and the Company shall solicit
      proxies from its shareholders in connection therewith in the same manner as
      all
      other management proposals in such proxy statement and all management-appointed
      proxyholders shall vote their proxies in favor of such proposal.

     

    4.7 Conversion
      and Exercise Procedures.
      The
      form of Election to Purchase included in the Warrants and the forms of
      Conversion Notice included in the shares of Preferred Stock set forth the
      totality of the procedures required in order to exercise the Warrants or convert
      the shares of Preferred Stock. No additional legal opinion or other information
      or instructions shall be necessary to enable each Purchaser to exercise their
      Warrants or convert their shares of Preferred Stock. The Company shall honor
      exercises of the Warrants and conversions of the shares of Preferred Stock
      and
      shall deliver Underlying Shares in accordance with the terms, conditions and
      time periods set forth in the Transaction Documents. The Company acknowledges
      that the issuance of the Securities may result in dilution of the outstanding
      shares of Common Stock, which dilution may be substantial under certain market
      conditions. The Company further acknowledges that its obligations under the
      Transaction Documents, including its obligation to issue the Underlying Shares
      pursuant to the Transaction Documents, are unconditional and absolute and not
      subject to any right of set off, counterclaim, delay or reduction, regardless
      of
      the effect of any such dilution or any claim the Company may have against any
      Purchaser and regardless of the dilutive effect that such issuance may have
      on
      the ownership of the other stockholders of the Company.

     

    4.8 Equal
      Treatment of Purchasers.
      No
      consideration shall be offered or paid to any person to amend or consent to
      a
      waiver or modification of any provision of any of the Transaction Documents
      unless the same consideration is also offered to all of the parties to the
      Transaction Documents. For clarification purposes, this provision constitutes
      a
      separate right granted to each Purchaser by the Company and negotiated
      separately by each Purchaser, and is intended to treat for the Company the
      Purchasers as a class and shall not in any way be construed as the Purchasers
      acting in concert or as a group with respect to the purchase, disposition or
      voting of Securities or otherwise.

     

    4.9 Participation
      in Future Financing.
      From
      the date hereof until 12 months after the Effective Date, upon any financing
      by
      the Company of its Common Stock or Common Stock Equivalents (a “Subsequent
      Financing”),
      each
      Purchaser shall have the right to participate in such Subsequent Financing.
      At
      least 5 Trading Days prior to the closing of the Subsequent Financing, the
      Company shall deliver to each Purchaser a written notice of its intention to
      effect a Subsequent Financing (“Pre-Notice”),
      which
      Pre-Notice shall ask such Purchaser if it wants to review the details of such
      financing (such additional notice, a “Subsequent
      Financing Notice”).
      Upon
      the request of a Purchaser, and only upon a request by such Purchaser, for
      a
      Subsequent Financing Notice, the Company shall promptly, but no later than
      1
      Trading Day after such request, deliver a Subsequent Financing Notice to such
      Purchaser. The Subsequent Financing Notice shall describe in reasonable detail
      the proposed terms of such Subsequent Financing, the amount of proceeds intended
      to be raised thereunder, the Person with whom such Subsequent Financing is
      proposed to be effected, and attached to which shall be a term sheet or similar
      document relating thereto. If by 6:30 p.m. (New York City time) on the
      10th
      Trading
      Day after all of the Purchasers have received the Pre-Notice, notifications
      of
      the Purchasers of their willingness to participate in the Subsequent Financing
      (or to cause their designees to provide) is, in the aggregate, less than the
      total amount of the Subsequent Financing, then the Company may effect the
      remaining portion of such Subsequent Financing on the terms and to the Persons
      set forth in the Subsequent Financing Notice. If the Company receives no notice
      from a Purchaser as of such 10th
      Trading
      Day, such Purchaser shall be deemed to have notified the Company that it does
      not elect to participate. The Company must provide the Purchasers with a second
      Subsequent Financing Notice, and the Purchasers will again have the right of
      participation set forth above in this Section 4.9, if the Subsequent Financing
      subject to the initial Subsequent Financing Notice is not consummated for any
      reason on the terms set forth in such Subsequent Financing Notice within 30
      Trading Days after the date of the initial Subsequent Financing Notice. In
      the
      event the Company receives responses to Subsequent Financing Notices from
      Purchasers seeking to purchase more than the aggregate amount of the Subsequent
      Financing, each such Purchaser shall have the right to purchase their Pro Rata
      Portion (as defined below) of the Subsequent Financing. “Pro
      Rata Portion”
is
      the
      ratio of (x) the Subscription Amount of a participating Purchaser and (y) the
      sum of the aggregate Subscription Amount of all participating Purchasers.
      Notwithstanding the foregoing, this Section 4.9 shall not apply in respect
      of an
      Exempt Issuance. The Purchasers are granted the registration rights under the
      Registration Rights Agreement in relation to securities issued in a Subsequent
      Financing. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    4.10 Disclosure
      of Transaction.
      The
      Company shall issue a press release describing the material terms of the
      transactions contemplated hereby (the “Press
      Release”)
      as
      soon as practicable after the Closing but in no event later than 9:00 A.M.
      Eastern Time on the first Trading Day following the Closing. The Company shall
      also file with the Commission a Current Report on Form 8-K (the “Form
      8-K”)
      describing the material terms of the transactions contemplated hereby (and
      attaching as exhibits thereto this Agreement, the Registration Rights Agreement,
      the Certificate of Designation, the Lock-Up Agreement, the Securities Escrow
      Agreement, the form of each series of Warrant and the Press Release) as soon
      as
      practicable following the Closing Date but in no event more than one (1) Trading
      Day following the Closing Date, which Press Release and Form 8-K shall be
      subject to prior review and comment by the Purchasers.

    

    4.11 Disclosure
      of Material Information.
      The
      Company covenants and agrees that neither it nor any other person acting on
      its
      behalf has provided or will provide any Purchaser or its agents or counsel
      with
      any information that the Company believes constitutes material non-public
      information (other than with respect to the transactions contemplated by this
      Agreement), unless prior thereto such Purchaser shall have executed a written
      agreement regarding the confidentiality and use of such information.  The
      Company understands and confirms that each Purchaser shall be relying on the
      foregoing representations in effecting transactions in securities of the
      Company.

     

    4.12 Variable
      Rate Transaction.
      For
      a
      period of two (2) years following the
      Closing Date, the Company shall be
      prohibited from effecting or entering into an agreement to effect any Subsequent
      Financing involving a “Variable
      Rate Transaction”
without
      the prior written consent of the holders of 75% of the Preferred Shares then
      outstanding. The term “Variable
      Rate Transaction”
shall
      mean a transaction in which the Company issues or sells (i) any debt or equity
      securities that are convertible into, exchangeable or exercisable for, or
      include the right to receive additional shares of Common Stock either (A) at
      a
      conversion, exercise or exchange rate or other price that is based upon and/or
      varies with the trading prices of or quotations for the shares of Common Stock
      at any time after the initial issuance of such debt or equity securities, or
      (B)
      with a conversion, exercise or exchange price that is subject to being reset
      at
      some future date after the initial issuance of such debt or equity security
      or
      upon the occurrence of specified or contingent events directly or indirectly
      related to the business of the Company or the market for the Common Stock or
      (ii) enters into any agreement, including, but not limited to, an equity line
      of
      credit, whereby the Company may sell securities at a future determined
      price.

     

     

    ARTICLE
      V

    MISCELLANEOUS

     

    5.1 Fees
      and Expenses.
      

     

    (a) Except
      as
      otherwise set forth in this Agreement, each party shall pay the fees and
      expenses of its advisers, counsel, accountants and other experts, if any, and
      all other expenses incurred by such party incident to the negotiation,
      preparation, execution, delivery and performance of this Agreement.
      Notwithstanding the foregoing, Company
      will pay for all costs incurred by the Purchasers for legal and due diligence
      relating to this transaction regardless of whether it is successfully completed
      which shall not exceed $30,000 and $25,000, respectively. The
      Company shall pay all stamp and other taxes and duties levied in connection
      with
      the sale of the Securities as well as any expenses in connection with UCC
      searches and filings
      Company
      will pay for all costs incurred by the investor for legal and due diligence
      as
      it relates to this offering regardless of whether this Offering is successfully
      completed. 

     

    (b) All
      fees
      and reimbursements due hereunder will be payable on the Closing Date out of
      funds held pursuant to the Escrow Agreement. 

    

     

    5.2 Entire
      Agreement.
      The
      Transaction Documents, together with the exhibits and schedules thereto, contain
      the entire understanding of the parties with respect to the subject matter
      hereof and supersede all prior agreements and understandings, oral or written,
      with respect to such matters, which the parties acknowledge have been merged
      into such documents, exhibits and schedules.

     

    5.3 Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of (a) the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified on the signature
      page prior to 5:30 p.m. (New York City time) on a Trading Day and an electronic
      confirmation of delivery is received by the sender, (b) the next Trading Day
      after the date of transmission, if such notice or communication is delivered
      via
      facsimile at the facsimile number specified in this Section on a day that is
      not
      a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day,
      (c) three Trading Days following the date of mailing, if sent by U.S. nationally
      recognized overnight courier service, or (d) upon actual receipt by the party
      to
      whom such notice is required to be given. The addresses for such notices and
      communications are those set forth on the signature pages hereof, or such other
      address as may be designated in writing hereafter, in the same manner, by such
      Person.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    5.4 Amendments;
      Waivers.
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed, in the case of an amendment, by the Company and each
      Purchaser or, in the case of a waiver, by the party against whom enforcement
      of
      any such waiver is sought. No waiver of any default with respect to any
      provision, condition or requirement of this Agreement shall be deemed to be
      a
      continuing waiver in the future or a waiver of any subsequent default or a
      waiver of any other provision, condition or requirement hereof, nor shall any
      delay or omission of either party to exercise any right hereunder in any manner
      impair the exercise of any such right.

     

    5.5 Headings.
      The
      headings herein are for convenience only, do not constitute a art of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof. The language used in this Agreement will be deemed to be the language
      chosen by the parties to express their mutual intent, and no rules of strict
      construction will be applied against any party.

     

    5.6 Successors
      and Assigns

     

    .
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns. The Company may not assign this
      Agreement or any rights or obligations hereunder without the prior written
      consent of each Purchaser. Any Purchaser may assign any or all of its rights
      under this Agreement to any Person to whom such Purchaser assigns or transfers
      any Securities, provided such transferee agrees in writing to be bound, with
      respect to the transferred Securities, by the provisions hereof that apply
      to
      the “Purchasers”.

     

    5.7 No
      Third-Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      successors and permitted assigns and is not for the benefit of, nor may any
      provision hereof be enforced by, any other Person, except as otherwise set
      forth
      in Section 4.9.

     

    5.8 Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of the Transaction Documents shall be governed by and construed and enforced
      in
      accordance with the internal laws of the State of New York, without regard
      to
      the principles of conflicts of law thereof. Each party agrees that all legal
      proceedings concerning the interpretations, enforcement and defense of the
      transactions contemplated by this Agreement and any other Transaction Documents
      (whether brought against a party hereto or its respective affiliates, directors,
      officers, shareholders, employees or agents) shall be commenced exclusively
      in
      the state and federal courts sitting in the City of New York. Each party hereby
      irrevocably submits to the exclusive jurisdiction of the state and federal
      courts sitting in the City of New York, borough of Manhattan for the
      adjudication of any dispute hereunder or in connection herewith or with any
      transaction contemplated hereby or discussed herein (including with respect
      to
      the enforcement of any of the Transaction Documents), and hereby irrevocably
      waives, and agrees not to assert in any suit, action or proceeding, any claim
      that it is not personally subject to the jurisdiction of any such court, that
      such suit, action or proceeding is improper or inconvenient venue for such
      proceeding. Each party hereby irrevocably waives personal service of process
      and
      consents to process being served in any such suit, action or proceeding by
      mailing a copy thereof via registered or certified mail or overnight delivery
      (with evidence of delivery) to such party at the address in effect for notices
      to it under this Agreement and agrees that such service shall constitute good
      and sufficient service of process and notice thereof. Nothing contained herein
      shall be deemed to limit in any way any right to serve process in any manner
      permitted by law. The parties hereby waive all rights to a trial by jury. If
      either party shall commence an action or proceeding to enforce any provisions
      of
      the Transaction Documents, then the prevailing party in such action or
      proceeding shall be reimbursed by the other party for its attorneys’ fees and
      other costs and expenses incurred with the investigation, preparation and
      prosecution of such action or proceeding.

     

    5.9 Survival.
      The
      representations and warranties contained herein shall survive the Closing and
      the delivery, exercise and/or conversion of the Securities, as
      applicable.

     

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

     

    5.11 Severability.
      If any
      provision of this Agreement is held to be invalid or unenforceable in any
      respect, the validity and enforceability of the remaining terms and provisions
      of this Agreement shall not in any way be affected or impaired thereby and
      the
      parties will attempt to agree upon a valid and enforceable provision that is
      a
      reasonable substitute therefor, and upon so agreeing, shall incorporate such
      substitute provision in this Agreement.

     

    5.12 Rescission
      and Withdrawal Right.
      Notwithstanding anything to the contrary contained in (and without limiting
      any
      similar provisions of) the Transaction Documents, whenever any Purchaser
      exercises a right, election, demand or option under a Transaction Document
      and
      the Company does not timely perform its related obligations within the periods
      therein provided, then such Purchaser may rescind or withdraw, in its sole
      discretion from time to time upon written notice to the Company, any relevant
      notice, demand or election in whole or in part without prejudice to its future
      actions and rights; provided,
      however,
      in the
      case of a rescission of a conversion of the shares of Preferred Stock or
      exercise of the Warrant, the Purchaser shall be required to return any shares
      of
      Common Stock subject to such conversion or exercise notice.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    5.13 Replacement
      of Securities.
      If any
      certificate or instrument evidencing any Securities is mutilated, lost, stolen
      or destroyed, the Company shall issue or cause to be issued in exchange and
      substitution for and upon cancellation thereof, or in lieu of and substitution
      therefor, a new certificate or instrument, but only upon receipt of evidence
      reasonably satisfactory to the Company of such loss, theft or destruction and
      customary and reasonable indemnity, if requested. The applicants for a new
      certificate or instrument under such circumstances shall also pay any reasonable
      third-party costs associated with the issuance of such replacement
      Securities.

     

    5.14 Remedies.
      In
      addition to being entitled to exercise all rights provided herein or granted
      by
      law, including recovery of damages, each of each Purchaser and the Company
      will
      be entitled to specific performance under the Transaction Documents. The parties
      agree that monetary damages may not be adequate compensation for any loss
      incurred by reason of any breach of obligations described in the foregoing
      sentence and hereby agrees to waive in any action for specific performance
      of
      any such obligation the defense that a remedy at law would be
      adequate.

     

    5.15 Payment
      Set Aside.
      To the
      extent that the Company makes a payment or payments to any Purchaser pursuant
      to
      any Transaction Document or a Purchaser enforces or exercises its rights
      thereunder, and such payment or payments or the proceeds of such enforcement
      or
      exercise or any part thereof are subsequently invalidated, declared to be
      fraudulent or preferential, set aside, recovered from, disgorged by or are
      required to be refunded, repaid or otherwise restored to the Company, a trustee,
      receiver or any other person under any law (including, without limitation,
      any
      bankruptcy law, state or federal law, common law or equitable cause of action),
      then to the extent of any such restoration the obligation or part thereof
      originally intended to be satisfied shall be revived and continued in full
      force
      and effect as if such payment had not been made or such enforcement or setoff
      had not occurred.

     

    5.16 Independent
      Nature of Purchasers’ Obligations and Rights.
      The
      obligations of each Purchaser under any Transaction Document are several and
      not
      joint with the obligations of any other Purchaser, and no Purchaser shall be
      responsible in any way for the performance of the obligations of any other
      Purchaser under any Transaction Document. Nothing contained herein or in any
      Transaction Document, and no action taken by any Purchaser pursuant thereto,
      shall be deemed to constitute the Purchasers as a partnership, an association,
      a
      joint venture or any other kind of entity, or create a presumption that the
      Purchasers are in any way acting in concert or as a group with respect to such
      obligations or the transactions contemplated by the Transaction Document. Each
      Purchaser shall be entitled to independently protect and enforce its rights,
      including without limitation, the rights arising out of this Agreement or out
      of
      the other Transaction Documents, and it shall not be necessary for any other
      Purchaser to be joined as an additional party in any proceeding for such
      purpose. Each Purchaser has been represented by its own separate legal counsel
      in their review and negotiation of the Transaction Documents. The Company has
      elected to provide all Purchasers with the same terms and Transaction Documents
      for the convenience of the Company and not because it was required or requested
      to do so by the Purchasers.

     

    5.17 Liquidated
      Damages.
      The
      Company’s obligations to pay any partial liquidated damages or other amounts
      owing under the Transaction Documents is a continuing obligation of the Company
      and shall not terminate until all unpaid partial liquidated damages and other
      amounts have been paid notwithstanding the fact that the instrument or security
      pursuant to which such partial liquidated damages or other amounts are due
      and
      payable shall have been canceled.

     

    5.18 Construction.
      The
      parties agree that each of them and/or their respective counsel has reviewed
      and
      had an opportunity to revise the Transaction Documents and, therefore, the
      normal rule of construction to the effect that any ambiguities are to be
      resolved against the drafting party shall not be employed in the interpretation
      of the Transaction Documents or any amendments hereto.

    

     

    [SIGNATURE
      PAGE FOLLOWS]

    
      
        -34-

        

        

        
        

      

      
        15

        
          

        

      

      
        
        

      

    

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

     

    
      	
              OFFLINE
                CONSULTING, INC.

            	
              Address
                for Notice:

            
	
              By:/s/
                Kenneth Craig

              Name:
                Kenneth Craig

              Title:
                CEO 

            	
              2208
                58th
                Avenue East

              Bradenton,
                Florida 34203

               

              T
                941-371-0440

              F
                941-379-1922

            
	
              With
                a copy to (which shall not constitute notice):

               

              Sichenzia
                Ross Friedman Ference LLP

              61
                Broadway, 32nd
                Floor

              New
                York, New York 10006

              Attention:
                Stephen Fleming, Esq.

              T
                212-930-9700

              F
                212-930-9725

            	 

    

    

    

    

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGE FOR PURCHASER FOLLOWS]

     

    
      
         

        

        

        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    [PURCHASER
      SIGNATURE PAGES TO OFFLINE CONSULTING, INC.

    SECURITIES
      PURCHASE AGREEMENT]

    

    

    

    IN
      WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
      to be duly executed by their respective authorized signatories as of the date
      first indicated above.

     

     

    Name
      of
      Purchaser: VISION
      OPPORTUNITY MASTER FUND LTD.

    

    Signature
      of Authorized Signatory of Purchaser:
      /s/Adam
      Benowitz

    

    Name
      of
      Authorized Signatory: ______________________________________

    

    Title
      of
      Authorized Signatory: Portfolio Manager

    

    Email
      Address of Authorized Signatory: ________________________________

    

    Address
      for Notice of Investing Entity:

    

    

    

    

    Address
      for Delivery of Securities for Investing Entity (if not same as
      above):

    

    

    

    

    

    Subscription
      Amount: $____________

    

    Shares
      of
      Preferred Stock: __________

    

    Warrant
      Shares: _________________

    

    

    

    EIN
      Number: 

    

    
      
         

        

        

        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    Exhibits

    

    

    A Form
      of
      Registration Rights Agreement

    

    B Form
      of A
      Warrant

    

    C Form
      of J
      Warrant

    

    D Form
      of B
      Warrant

    

    E Form
      of
      Lock-Up Agreement

    

    F Form
      of
      Legal Opinion

    

    

    
      
         

        

        

        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    Schedules

    

    Section
      3.1(a) - Subsidiaries

    

    Kesselring
      Corporation

    Kesselring
      Restoration Corporation

    Kesselring
      Coastal Construction

    King
      Brothers Woodworking, Inc.

    King
      Brothers Door and Hardware, Inc.

    1st
      Aluminum
      Corporation

    

    

    Section
      3.1(g) - Capitalization

    

    The
      Company is authorized capital stock 700,000,000 shares of common stock, par
      value, $0.0001 and 20,000,000 shares of preferred stock. The Company presently
      has 1,711,643 shares of common stock and no shares of Preferred Stock
      outstanding.

    

    The
      Company has a commitment to issue the following securities:

    

    
      	·  	
              The
                Company issued a common stock purchase warrant to purchase 93,938
                shares
                of common stock at an exercise price of $9.46 per share for a term
                of five
                years to Cypress Advisors LLC.

            

    

    
      	·  	
              The
                Company issued a common stock purchase warrant to Laura Camisa to
                purchase
                10,265 shares of common stock at an exercise price of $7.21 per
                share.

            

    

    
      	·  	
              The
                Company issued an option to an employee to purchase 2,053 shares
                of common
                stock at $9.74 per share. 

            

    

    
      	·  	
              The
                Company is required to issue 8,558 to a law firm for legal
                services.

            

    

    

    Section
      3.1(n) - Title to Assets

    

    None

    

    Section
      3.1(s) - Certain Fees

    

    In
      connection with this offering, the Company will be paying Cypress Advisors
      a
      placement fee of 10% of the gross proceeds in cash. In addition, Cypress
      Advisors is entitled to receive such number of warrants as set forth under
      Schedule 3.1(g).

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    Section
      3.1(u) - Registration Rights

    

    Pursuant
      to the terms of our agreement with Cypress Advisors, we are obligated to include
      the shares underlying the warrants if we file a registration statement.

    

    
      	
              Name

            	
              Shares

            
	
              Allie
                Hueter

            	
              4,619

            
	
              Anthony
                Heaton

            	
              8,212

            
	
              Bill
                Wheelock

            	
              4,106

            
	
              Colin
                Lewin

            	
              7,185

            
	
              Lawrence
                D Wilder

            	
              2,053

            
	
              Nikki
                O' Sullivan

            	
              115,763

            
	
              Rod
                Braido

            	
              1,540

            
	
              William
                Van Oostrum

            	
              8,417

            
	
              Kenneth
                Schmidt

            	
              2,053

            
	
              H
                Leroy Duckworth

            	
              1,026

            
	
              Mark
                Herber

            	
              513

            
	
              Gary
                Farris

            	
              2,955

            
	
              Todd
                Faith

            	
              2,163

            
	
              Candace
                Broadfoot

            	
              513

            
	
              Blake
                Erickson

            	
              513

            
	
              Charles
                & Susan Ley

            	
              1,026

            
	
              Todd
                Case

            	
              513

            

    

    

    Section
      3.1(x) - Taxes

    

    NONE

    

    Section
      3.1(bb) - Accountants

    

    Lougheed
      & Company LLC

    

    Section
      3.1(dd) - Lock-Up

    

    Ken
      Craig

    Don
      Craig

    Cliff
      Wildes

    Laura
      Camisa

    Virgil
      Sandifer

    Ted
      Sparling

    Lois
      and
      Curtis King

    Gary
      and
      Margaret King

    

    3.1(ff)
      Transfer Agent

    

    Manhattan
      Stock Transfer

    

    Section
      4.4 - Use of Proceeds

    

    

    
      	
              Acquisitions
                and related costs

            	 	
              (775,000)

            	 
	
              Funding
                advisory fees and related costs

            	 	 	 	 	 	
              (360,000

            	
              )

            
	
              Working
                capital and accounting integration

            	 	 	 	 	 	
              (365,000

            	
              )

            
	 	 	 	 	 	 	 	 
	
              Total
                Use of Proceeds

            	 	
              (1,500,000

            	
              )

            

    

    

    

    

    

    
20Unassociated Document

    

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

     

    

    CLASS
      A COMMON STOCK PURCHASE WARRANT

    

    To
      Purchase 158,562 Shares of Common Stock of

     

    OFFLINE
      CONSULTING, INC.

     

    Dated:
      May 18, 2007                      Warrant
      No. A-07-01

    

     

    THIS
      COMMON STOCK PURCHASE WARRANT (the “Warrant”)
      certifies that, for value received, VISION
      OPPORTUNITY MASTER FUND LTD.
      (the
“Holder”),
      is
      entitled, upon the terms and subject to the limitations on exercise and the
      conditions hereinafter set forth, at any time on or after the date hereof (the
      “Initial
      Exercise Date”)
      and on
      or prior to the close of business on the five year anniversary of the Initial
      Exercise Date (the “Termination
      Date”)
      but
      not thereafter, to subscribe for and purchase from Offline Consulting, Inc.,
      a
      Delaware corporation (the “Company”),
      up to
      one hundred fifty eight thousand five hundred sixty two shares (the
“Warrant
      Shares”)
      of
      Common Stock, $.0001 par value per share, of the Company (the “Common
      Stock”).
      The
      purchase price of one share of Common Stock under this Warrant shall be equal
      to
      the Exercise Price, as defined in Section 2(b). 

     

    Section
      1. Definitions.
      Capitalized terms used and not otherwise defined herein shall have the meanings
      set forth in that certain Securities Purchase Agreement (the “Purchase
      Agreement”),
      dated
      May 18, 2007, among the Company and the purchasers signatory
      thereto.

     

    Section
      2. Exercise.

     

    a)  Exercise
      of Warrant.
      Exercise of the purchase rights represented by this Warrant may be made, in
      whole or in part, at any time or times on or after the Initial Exercise Date
      and
      on or before the Termination Date by delivery to the Company of a duly executed
      facsimile copy of the Notice of Exercise Form annexed hereto (or such other
      office or agency of the Company as it may designate by notice in writing to
      the
      registered Holder at the address of such Holder appearing on the books of the
      Company). 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    b)  Exercise
      Price.
      The
      exercise price of the Common Stock under this Warrant shall be $9.46, subject
      to
      adjustment hereunder (the “Exercise
      Price”).
      Within 3 Trading Days of the date said Notice of Exercise is delivered to the
      Company (the “Conversion
      Date”)
      and
      the Company shall have received payment of the aggregate Exercise Price of
      the
      shares thereby purchased by (i) wire transfer or cashier’s check drawn on a
      United States bank, (ii) by “cashless exercise in accordance with the provisions
      of subsection (c) of this Section 2, but only when a registration statement
      under the Securities Act providing for the resale of the Warrant Shares is
      not
      then in effect, or (iii) by a combination of the foregoing methods of payment
      selected by the Holder of this Warrant, the Company shall deliver certificates
      for the Warrant Shares so purchased dated the date of such exercise.
The
      Holder shall deliver this original Warrant, or an indemnification reasonably
      acceptable to the Company undertaking with respect to such Warrant in the case
      of its loss, theft or destruction, at such time that this Warrant is fully
      exercised. With respect to partial exercises of this Warrant, the Company and
      the Holder shall keep written records of the number of Warrant Shares exercised
      as of each date of exercise. In the event of any dispute or discrepancy, the
      records of the Holder shall be controlling and determinative in the absence
      of
      manifest error.

     

    c)  Cashless
      Exercise.
      Notwithstanding any provision herein to the contrary and commencing two (2)
      years following the Initial Exercise Date if (i) the Per Share Market Value
      (as
      defined in Section 3(d) hereof) of one share of Common Stock is greater than
      the
      Exercise Price (at the date of calculation as set forth below) and (ii) a
      registration statement under the Securities Act providing for the resale of
      the
      Warrant Shares (A) has not been declared effective by the Commission by the
      date
      such registration statement is required to be effective pursuant to the
      Registration Rights Agreement, or (B) is not effective at the time of exercise
      of this Warrant, in lieu of exercising this Warrant by payment of cash, the
      Holder may exercise this Warrant by a cashless exercise and shall receive the
      number of shares of Common Stock equal to an amount (as determined below) by
      surrender of this Warrant at the principal office of the Company together with
      the properly endorsed Notice of Exercise in which event the Company shall issue
      to the Holder a number of shares of Common Stock computed using the following
      formula:

     

    

    X
      = Y -
(A)(Y)

      
      B

    

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

    

    
      	 	
              Y
                =

            	
              
              

            

    

    

    
      	 	
              A
                =

            	
              the
                Exercise Price. 

            

    

    

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

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    d)  Exercise
      Limitations;
      Holder’s
      Restrictions.
      The
      Holder shall not be entitled to exercise on a Conversion Date that number of
      shares of Common Stock which would be in excess of the sum of (i) the number
      of
      shares of common stock beneficially owned by the Holder and any Person, as
      such
      term is used in and construed under Rule 144 under the Securities Act, that,
      directly or indirectly through one or more intermediaries, controls or is
      controlled by or is under common control with the Holder (collectively,
“Affiliates”) immediately prior to an exercise, and (ii) the number of shares of
      Common Stock issuable upon the exercise of this Warrant with respect to which
      the determination of this provision is being made, which would result in
      beneficial ownership by the Holder and its Affiliates of more than 9.99% of
      the
      outstanding shares of Common Stock of the Company immediately following an
      exercise. For the purposes of the provision to the immediately preceding
      sentence, beneficial ownership shall be determined in accordance with Section
      13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3
      thereunder. Subject to the foregoing, the Holder shall not be limited to
      aggregate exercises of only 9.99% and aggregate exercises by the Holder may
      exceed 9.99% as the Holder may void the exercise limitation described in this
      Section 2(d) upon and effective after 61 days prior written notice to the
      Company. The Holder may allocate which of the equity of the Company deemed
      beneficially owned by the Holder shall be included in the 9.99% amount described
      above and which shall be allocated to the excess above 9.99%.

     

    e)  Mechanics
      of Exercise.
      

     

    i.  Authorization
      of Warrant Shares.
      The
      Company covenants that all Warrant Shares which may be issued upon the exercise
      of the purchase rights represented by this Warrant will, upon exercise of the
      purchase rights represented by this Warrant, be duly authorized, validly issued,
      fully paid and nonassessable and free from all taxes, liens and charges in
      respect of the issue thereof (other than taxes in respect of any transfer
      occurring contemporaneously with such issue and
      liens
      imposed upon such shares as a result of Holder’s actions).
      

     

    ii.  Delivery
      of Certificates Upon Exercise.
      Certificates for shares purchased hereunder shall be transmitted by the transfer
      agent of the Company to the Holder by crediting the account of the Holder’s
      prime broker with the Depository Trust Company through its Deposit Withdrawal
      Agent Commission (“DWAC”)
      system
      if the Company is a participant in such system, and otherwise by physical
      delivery to the address specified by the Holder in the Notice of Exercise within
      3 Trading Days from the delivery to the Company of the Notice of Exercise Form,
      surrender of this Warrant and payment of the aggregate Exercise Price as set
      forth above (“Warrant
      Share Delivery Date”).
      This
      Warrant shall be deemed to have been exercised on the date the Exercise Price
      is
      received by the Company. The Warrant Shares shall be deemed to have been issued,
      and Holder or any other person so designated to be named therein shall be deemed
      to have become a holder of record of such shares for all purposes, as of the
      date the Warrant has been exercised by payment to the Company of the Exercise
      Price and all taxes required to be paid by the Holder, if any, pursuant to
      Section 2(e)(vii) prior to the issuance of such shares, have been paid.

     

    iii.  Delivery
      of New Warrants Upon Exercise.
      If this
      Warrant shall have been exercised in part, the Company shall, at the time of
      delivery of the certificate or certificates representing Warrant Shares, deliver
      to Holder a new Warrant evidencing the rights of Holder to purchase the
      unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
      in all other respects be identical with this Warrant.

     

    iv.  Rescission
      Rights.
      If the
      Company fails to cause its transfer agent to transmit to the Holder a
      certificate or certificates representing the Warrant Shares pursuant to this
      Section 2(e)(iv) by the Warrant Share Delivery Date, then the Holder will have
      the right to rescind such exercise.

     

    v.  Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.
      In
      addition to any other rights available to the Holder, if the Company fails
      to
      cause its transfer agent to transmit to the Holder a certificate or certificates
      representing the Warrant Shares pursuant to an exercise on or before the Warrant
      Share Delivery Date, and if after such date the Holder is required by its broker
      to purchase (in an open market transaction or otherwise) shares of Common Stock
      to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
      the Holder anticipated receiving upon such exercise (a “Buy-In”),
      then
      the Company shall (1) pay in cash to the Holder the amount by which (x) the
      Holder’s total purchase price (including brokerage commissions, if any) for the
      shares of Common Stock so purchased exceeds (y) the amount obtained by
      multiplying (A) the number of Warrant Shares that the Company was required
      to
      deliver to the Holder in connection with the exercise at issue times (B) the
      price at which the sell order giving rise to such purchase obligation was
      executed, and (2) at the option of the Holder, either reinstate the portion
      of
      the Warrant and equivalent number of Warrant Shares for which such exercise
      was
      not honored or deliver to the Holder the number of shares of Common Stock that
      would have been issued had the Company timely complied with its exercise and
      delivery obligations hereunder. For example, if the Holder purchases Common
      Stock having a total purchase price of $11,000 to cover a Buy-In with respect
      to
      an attempted exercise of shares of Common Stock with an aggregate sale price
      giving rise to such purchase obligation of $10,000, under clause (1) of the
      immediately preceding sentence the Company shall be required to pay the Holder
      $1,000. The Holder shall provide the Company written notice indicating the
      amounts payable to the Holder in respect of the Buy-In, together with applicable
      confirmations and other evidence reasonably requested by the Company. Nothing
      herein shall limit a Holder’s right to pursue any other remedies available to it
      hereunder, at law or in equity including, without limitation, a decree of
      specific performance and/or injunctive relief with respect to the Company’s
      failure to timely deliver certificates representing shares of Common Stock
      upon
      exercise of the Warrant as required pursuant to the terms hereof.

     

    vi.  No
      Fractional Shares or Scrip.
      No
      fractional shares or scrip representing fractional shares shall be issued upon
      the exercise of this Warrant. As to any fraction of a share which Holder would
      otherwise be entitled to purchase upon such exercise, the Company shall pay
      a
      cash adjustment in respect of such final fraction in an amount equal to such
      fraction multiplied by the Exercise Price.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    vii.  Charges,
      Taxes and Expenses.
      Issuance of certificates for Warrant Shares shall be made without charge to
      the
      Holder for any issue or transfer tax or other incidental expense in respect
      of
      the issuance of such certificate, all of which taxes and expenses shall be
      paid
      by the Company, and such certificates shall be issued in the name of the Holder
      or in such name or names as may be directed by the Holder; provided,
      however,
      that in
      the event certificates for Warrant Shares are to be issued in a name other
      than
      the name of the Holder, this Warrant when surrendered for exercise shall be
      accompanied by the Assignment Form attached hereto duly executed by the Holder;
      and the Company may require, as a condition thereto, the payment of a sum
      sufficient to reimburse it for any transfer tax incidental thereto.

     

    viii.  Closing
      of Books.
      The
      Company will not close its stockholder books or records in any manner which
      prevents the timely exercise of this Warrant, pursuant to the terms
      hereof.

     

    Section
      3. Certain Adjustments.

     

    a)  Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding: (A) pays a stock
      dividend or otherwise make a distribution or distributions on shares of its
      Common Stock or any other equity or equity equivalent securities payable in
      shares of Common Stock (which, for avoidance of doubt, shall not include any
      shares of Common Stock issued by the Company pursuant to this Warrant), (B)
      subdivides outstanding shares of Common Stock into a larger number of shares,
      (C) combines (including by way of reverse stock split) outstanding shares of
      Common Stock into a smaller number of shares, or (D) issues by reclassification
      of shares of the Common Stock any shares of capital stock of the Company, then
      in each case the Exercise Price shall be multiplied by a fraction of which
      the
      numerator shall be the number of shares of Common Stock (excluding treasury
      shares, if any) outstanding immediately before such event and of which the
      denominator shall be the number of shares of Common Stock outstanding
      immediately after such event and the number of shares issuable upon exercise
      of
      this Warrant shall be proportionately adjusted. Any adjustment made pursuant
      to
      this Section 3(a) shall become effective immediately after the record date
      for
      the determination of stockholders entitled to receive such dividend or
      distribution and shall become effective immediately after the effective date
      in
      the case of a subdivision, combination or re-classification.

     

    b)  Subsequent
      Equity Sales.
      If the
      Company or any Subsidiary thereof, as applicable, at any time while this Warrant
      is outstanding, shall offer, sell, grant any option to purchase or offer, sell
      or grant any right to reprice its securities, or otherwise dispose of or issue
      (or announce any offer, sale, grant or any option to purchase or other
      disposition) any Common Stock or Common Stock Equivalents entitling any Person
      to acquire shares of Common Stock, at an effective price per share less than
      the
      then Exercise Price (such lower price, the “Base
      Share Price”
and
      such issuances collectively, a “Dilutive
      Issuance”),
      as
      adjusted hereunder (if the holder of the Common Stock or Common Stock
      Equivalents so issued shall at any time, whether by operation of purchase price
      adjustments, reset provisions, floating conversion, exercise or exchange prices
      or otherwise, or due to warrants, options or rights per share which is issued
      in
      connection with such issuance, be entitled to receive shares of Common Stock
      at
      an effective price per share which is less than the Exercise Price, such
      issuance shall be deemed to have occurred for less than the Exercise Price
      on
      such date of the Dilutive Issuance), then, the Exercise Price shall be reduced
      and only reduced to equal the Base Share Price and the number of Warrant Shares
      issuable hereunder shall be increased such that the aggregate Exercise Price
      payable hereunder, after taking into account the decrease in the Exercise Price,
      shall be equal to the aggregate Exercise Price prior to such adjustment. Such
      adjustment shall be made whenever such Common Stock or Common Stock Equivalents
      are issued. Notwithstanding the foregoing, no adjustments shall be made, paid
      or
      issued under this Section 3(b) in respect of an Exempt Issuance. The Company
      shall notify the Holder in writing, no later than the Trading Day following
      the
      issuance of any Common Stock or Common Stock Equivalents subject to this
      section, indicating therein the applicable issuance price, or of applicable
      reset price, exchange price, conversion price and other pricing terms (such
      notice the “Dilutive
      Issuance Notice”).
      For
      purposes of clarification, whether or not the Company provides a Dilutive
      Issuance Notice pursuant to this Section 3(b), upon the occurrence of any
      Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
      entitled to receive a number of Warrant Shares based upon the Base Share Price
      regardless of whether the Holder accurately refers to the Base Share Price
      in
      the Notice of Exercise. 

     

    c)  Pro
      Rata Distributions.
      If the
      Company, at any time prior to the Termination Date, shall distribute to all
      holders of Common Stock (and not to Holders of the Warrants) evidences of its
      indebtedness or assets (including cash and cash dividends) or rights or warrants
      to subscribe for or purchase any security other than the Common Stock (which
      shall be subject to Section 3(b)), then in each such case the Exercise Price
      shall be adjusted by multiplying the Exercise Price in effect immediately prior
      to the record date fixed for determination of stockholders entitled to receive
      such distribution by a fraction of which the denominator shall be the Closing
      Price determined as of the record date mentioned above, and of which the
      numerator shall be such Closing Price on such record date less the then per
      share fair market value at such record date of the portion of such assets or
      evidence of indebtedness so distributed applicable to one outstanding share
      of
      the Common Stock as determined by the Board of Directors in good faith. In
      either case the adjustments shall be described in a statement provided to the
      Holder of the portion of assets or evidences of indebtedness so distributed
      or
      such subscription rights applicable to one share of Common Stock. Such
      adjustment shall be made whenever any such distribution is made and shall become
      effective immediately after the record date mentioned above.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    d)  Recapitalization,
      Reorganization, Reclassification, Consolidation, Merger or Sale.

     

    (i)
      In
      case the Company after the Initial Exercise Date shall do any of the following
      (each, a "Triggering
      Event"):
      (a)
      consolidate or merge with or into any other Person and the Company shall not
      be
      the continuing or surviving corporation of such consolidation or merger, or
      (b)
      permit any other Person to consolidate with or merge into the Company and the
      Company shall be the continuing or surviving Person but, in connection with
      such
      consolidation or merger, any shares of Capital Stock of the Company shall be
      changed into or exchanged for Securities of any other Person or cash or any
      other property, or (c) transfer all or substantially all of its properties
      or
      assets to any other Person, or (d) effect a capital reorganization or
      reclassification of its Capital Stock, then, and in the case of each such
      Triggering Event, proper provision shall be made to the Exercise Price and
      the
      number of Warrant Shares that may be purchased upon exercise of this Warrant
      so
      that, upon the basis and the terms and in the manner provided in this Warrant,
      the Holder of this Warrant shall be entitled upon the exercise hereof at any
      time after the consummation of such Triggering Event, to the extent this Warrant
      is not exercised prior to such Triggering Event, to receive at the Exercise
      Price in effect at the time immediately prior to the consummation of such
      Triggering Event, in lieu of the Common Stock issuable upon such exercise of
      this Warrant prior to such Triggering Event, the Securities, cash and property
      to which such Holder would have been entitled upon the consummation of such
      Triggering Event if such Holder had exercised the rights represented by this
      Warrant immediately prior thereto (including the right of a shareholder to
      elect
      the type of consideration it will receive upon a Triggering Event), subject
      to
      adjustments (subsequent to such corporate action) as nearly equivalent as
      possible to the adjustments provided for elsewhere in this Section 3, and the
      Exercise Price shall be adjusted to equal the product of (A) the closing price
      of the common stock of the continuing or surviving corporation as a result
      of
      such Triggering Event as of the date immediately preceding the date of the
      consummation of such Triggering Event multiplied by (B) the quotient of (i)
      the
      Exercise Price divided by (ii) the Per Share Market Value of the Common Stock
      as
      of the date immediately preceding the Initial Exercise Date; provided,
      however,
      the
      Holder at its option may elect to receive an amount in registered shares of
      Common Stock or, if no registered shares of Common Stock are available to be
      issued to the Holder, in unregistered shares of Common Stock, equal to the
      value
      of this Warrant calculated in accordance with the Black-Scholes formula with
      a
      Black-Scholes volatility of 90%; provided,
      further,
      that if
      the Company issues registered shares of Common Stock, the value of such shares
      shall be based on the fair market value of such shares on the date immediately
      preceding the Triggering Event, and if the Company issues unregistered shares
      of
      Common Stock (x) the Company certifies to the Holder that the Company does
      not
      have a sufficient number of registered shares of Common Stock available to
      issue
      to the Holder, (y) the Company has not had a failed registration statement
      within the six months preceding the Triggering Event, and (z) the value of
      such
      unregistered shares shall be based on a 20% discount to the closing bid price
      on
      the date immediately preceding the Triggering Event. Immediately upon the
      occurrence of a Triggering Event, the Company shall notify the Holder in writing
      of such Triggering Event and provide the calculations in determining the number
      of Warrant Shares issuable upon exercise of the new warrant and the adjusted
      Exercise Price. Upon the Holder’s request, the continuing or surviving
      corporation as a result of such Triggering Event shall issue to the Holder
      a new
      warrant of like tenor evidencing the right to purchase the adjusted number
      of
      Warrant Shares and the adjusted Exercise Price pursuant to the terms and
      provisions of this Section 3(d)(i). Notwithstanding the foregoing to the
      contrary, this Section 3(d)(i) shall only apply if the surviving entity pursuant
      to any such Triggering Event is a company that has a class of equity securities
      registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board. In the event that the
      surviving entity pursuant to any such Triggering Event is not a public company
      that is
      registered pursuant to the Securities Exchange Act of 1934, as amended, or
      its
      common stock is not listed or quoted on a national securities exchange, national
      automated quotation system or the OTC Bulletin Board, then the Holder shall
      have
      the right to demand that the Company pay to the Holder an amount in cash equal
      to the value of this Warrant calculated in accordance with the Black-Scholes
      formula.

    

    (ii) In
      the
      event that the Holder has elected not to exercise this Warrant prior to the
      consummation of a Triggering Event and has also elected not to receive an amount
      in cash equal to the value of this Warrant calculated in accordance with the
      Black-Scholes formula pursuant to the provisions of Section 4(a)(i) above,
      so
      long as the surviving entity pursuant to any Triggering Event is a company
      that
      has a class of equity securities registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board,
      the
      surviving entity and/or each Person (other than the Company) which may be
      required to deliver any Securities, cash or property upon the exercise of this
      Warrant as provided herein shall assume, by written instrument delivered to,
      and
      reasonably satisfactory to, the Holder of this Warrant, (A) the obligations
      of
      the Company under this Warrant (and if the Company shall survive the
      consummation of such Triggering Event, such assumption shall be in addition
      to,
      and shall not release the Company from, any continuing obligations of the
      Company under this Warrant) and (B) the obligation to deliver to such Holder
      such Securities, cash or property as, in accordance with the foregoing
      provisions of this subsection (a), such Holder shall be entitled to receive,
      and
      the surviving entity and/or each such Person shall have similarly delivered
      to
      such Holder an opinion of counsel for the surviving entity and/or each such
      Person, which counsel shall be reasonably satisfactory to such Holder, or in
      the
      alternative, a written acknowledgement executed by the President or Chief
      Financial Officer of the Company, stating that this Warrant shall thereafter
      continue in full force and effect and the terms hereof (including, without
      limitation, all of the provisions of this subsection (a)) shall be applicable
      to
      the Securities, cash or property which the surviving entity and/or each such
      Person may be required to deliver upon any exercise of this Warrant or the
      exercise of any rights pursuant hereto.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (iii) For
      purposes of this Warrant: 

     

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

     

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

    

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

    

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

     

    e)  Calculations.
      All
      calculations under this Section 3 shall be made to the nearest cent or the
      nearest 1/100th of a share, as the case may be. For purposes of this Section
      3,
      the number of shares of Common Stock deemed to be issued and outstanding as
      of a
      given date shall be the sum of the number of shares of Common Stock (excluding
      treasury shares, if any) issued and outstanding.

     

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

     

    g)  Notice
      to Holders.
      

     

    i.  Adjustment
      to Exercise Price.
      Whenever the Exercise Price is adjusted pursuant to this Section 3, the Company
      shall promptly mail to each Holder a notice setting forth the Exercise Price
      after such adjustment and setting forth a brief statement of the facts requiring
      such adjustment. If the Company issues a variable rate security, despite the
      prohibition thereon in the Purchase Agreement, the Company shall be deemed
      to
      have issued Common Stock or Common Stock Equivalents at the lowest possible
      conversion or exercise price at which such securities may be converted or
      exercised in the case of a Variable Rate Transaction (as defined in the Purchase
      Agreement). Any dispute between the Company and the Holder of this Warrant
      with
      respect to the matters set forth in such certificate may at the option of the
      Holder of this Warrant be submitted to a national or regional accounting firm
      reasonably acceptable to the Company and the Holder, provided
      that the
      Company shall have ten (10) days after receipt of notice from such Holder of
      its
      selection of such firm to object thereto, in which case such Holder shall select
      another such firm and the Company shall have no such right of objection. The
      firm selected by the Holder of this Warrant as provided in the preceding
      sentence shall be instructed to deliver a written opinion as to such matters
      to
      the Company and such Holder within thirty (30) days after submission to it
      of
      such dispute. Such opinion shall be final and binding on the parties hereto.
      The
      costs and expenses of the initial accounting firm shall be paid equally by
      the
      Company and the Holder and, in the case of an objection by the Company, the
      costs and expenses of the subsequent accounting firm shall be paid in full
      by
      the Company.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    ii.  Notice
      to Allow Exercise by Holder.
      If (A)
      the Company shall declare a dividend (or any other distribution) on the Common
      Stock; (B) the Company shall declare a special nonrecurring cash dividend on
      or
      a redemption of the Common Stock; (C) the Company shall authorize the granting
      to all holders of the Common Stock rights or warrants to subscribe for or
      purchase any shares of capital stock of any class or of any rights; (D) the
      approval of any stockholders of the Company shall be required in connection
      with
      any reclassification of the Common Stock, any consolidation or merger to which
      the Company is a party, any sale or transfer of all or substantially all of
      the
      assets of the Company, of any compulsory share exchange whereby the Common
      Stock
      is converted into other securities, cash or property; (E) the Company shall
      authorize the voluntary or involuntary dissolution, liquidation or winding
      up of
      the affairs of the Company; then, in each case, the Company shall cause to
      be
      mailed to the Holder at its last address as it shall appear upon the Warrant
      Register of the Company, at least 20 calendar days prior to the applicable
      record or effective date hereinafter specified, a notice stating (x) the date
      on
      which a record is to be taken for the purpose of such dividend, distribution,
      redemption, rights or warrants, or if a record is not to be taken, the date
      as
      of which the holders of the Common Stock of record to be entitled to such
      dividend, distributions, redemption, rights or warrants are to be determined
      or
      (y) the date on which such reclassification, consolidation, merger, sale,
      transfer or share exchange is expected to become effective or close, and the
      date as of which it is expected that holders of the Common Stock of record
      shall
      be entitled to exchange their shares of the Common Stock for securities, cash
      or
      other property deliverable upon such reclassification, consolidation, merger,
      sale, transfer or share exchange; provided,
      that
      the failure to mail such notice or any defect therein or in the mailing thereof
      shall not affect the validity of the corporate action required to be specified
      in such notice. The Holder is entitled to exercise this Warrant during the
      20-day period commencing on the date of such notice to the effective date of
      the
      event triggering such notice.

     

    Section
      4. Transfer
      of Warrant.

     

    a)  Transferability.
      Subject
      to compliance with any applicable securities laws and the conditions set forth
      in Sections 5(a) and 4(d) hereof and to the provisions of Section 4.1 of the
      Purchase Agreement, this Warrant and all rights hereunder are transferable,
      in
      whole or in part, upon surrender of this Warrant at the principal office of
      the
      Company, together with a written assignment of this Warrant substantially in
      the
      form attached hereto duly executed by the Holder or its agent or attorney and
      funds sufficient to pay any transfer taxes payable upon the making of such
      transfer. Upon such surrender and, if required, such payment, the Company shall
      execute and deliver a new Warrant or Warrants in the name of the assignee or
      assignees and in the denomination or denominations specified in such instrument
      of assignment, and shall issue to the assignor a new Warrant evidencing the
      portion of this Warrant not so assigned, and this Warrant shall promptly be
      cancelled. A Warrant, if properly assigned, may be exercised by a new holder
      for
      the purchase of Warrant Shares without having a new Warrant issued.

     

    b)  New
      Warrants.
      This
      Warrant may be divided or combined with other Warrants upon presentation hereof
      at the aforesaid office of the Company, together with a written notice
      specifying the names and denominations in which new Warrants are to be issued,
      signed by the Holder or its agent or attorney. Subject to compliance with
      Section 4(a), as to any transfer which may be involved in such division or
      combination, the Company shall execute and deliver a new Warrant or Warrants
      in
      exchange for the Warrant or Warrants to be divided or combined in accordance
      with such notice.

     

    c)  Warrant
      Register.
      The
      Company shall register this Warrant, upon records to be maintained by the
      Company for that purpose (the “Warrant
      Register”),
      in
      the name of the record Holder hereof from time to time. The Company may deem
      and
      treat the registered Holder of this Warrant as the absolute owner hereof for
      the
      purpose of any exercise hereof or any distribution to the Holder, and for all
      other purposes, absent actual notice to the contrary.

     

    d)  Transfer
      Restrictions.
      If,
      at the
time
      of
      the surrender of this Warrant in connection with any transfer of this Warrant,
      the transfer of this Warrant shall not be registered pursuant to an effective
      registration
      statement under the Securities Act
      and
under
      applicable state securities or blue sky laws, the Company may require, as a
      condition of allowing such transfer (i) that the Holder or transferee of this
      Warrant, as the case may be, furnish to the Company a written opinion of counsel
      (which opinion shall be in form, substance and scope customary for opinions
      of
      counsel in comparable transactions) to the effect that such transfer may be
      made
      without
      registration under
      the
      Securities Act and under applicable state securities or blue sky laws, (ii)
      that
      the holder or transferee execute and deliver to the Company an investment letter
      in form and substance acceptable to the Company and (iii) that the transferee
      be
      an “accredited
      investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
      promulgated under the Securities Act or a qualified institutional buyer as
      defined in Rule 144A(a) under the Securities Act.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    Section
      5. Miscellaneous.

     

    a)  Title
      to Warrant.
      Prior
      to the Termination Date and subject to compliance with applicable laws and
      Section 4 of this Warrant, this Warrant and all rights hereunder are
      transferable, in whole or in part, at the office or agency of the Company by
      the
      Holder in person or by duly authorized attorney, upon surrender of this Warrant
      together with the Assignment Form annexed hereto properly endorsed. The
      transferee shall sign an investment letter in form and substance reasonably
      satisfactory to the Company.

     

    b)  No
      Rights as Shareholder Until Exercise.
      This
      Warrant does not entitle the Holder to any voting rights or other rights as
      a
      shareholder of the Company prior to the exercise hereof. Upon the surrender
      of
      this Warrant and the payment of the aggregate Exercise Price, the Warrant Shares
      so purchased shall be and be deemed to be issued to such Holder as the record
      owner of such shares as of the close of business on the date of such
      payment.

     

    c)  Loss,
      Theft, Destruction or Mutilation of Warrant.
      The
      Company covenants that upon receipt by the Company of evidence reasonably
      satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
      or any stock certificate relating to the Warrant Shares, and in case of loss,
      theft or destruction, of indemnity or security reasonably satisfactory to it
      (which, in the case of the Warrant, shall not include the posting of any bond),
      and upon surrender and cancellation of such Warrant or stock certificate, if
      mutilated, the Company will make and deliver a new Warrant or stock certificate
      of like tenor and dated as of such cancellation, in lieu of such Warrant or
      stock certificate.

     

    d)  Saturdays,
      Sundays, Holidays, etc.
      If the
      last or appointed day for the taking of any action or the expiration of any
      right required or granted herein shall be a Saturday, Sunday or a legal holiday,
      then such action may be taken or such right may be exercised on the next
      succeeding day not a Saturday, Sunday or legal holiday.

     

    e)  Authorized
      Shares.
      

     

    The
      Company covenants that during the period the Warrant is outstanding, it will
      reserve from its authorized and unissued Common Stock a sufficient number of
      shares to provide for the issuance of the Warrant Shares upon the exercise
      of
      any purchase rights under this Warrant. The Company further covenants that
      its
      issuance of this Warrant shall constitute full authority to its officers who
      are
      charged with the duty of executing stock certificates to execute and issue
      the
      necessary certificates for the Warrant Shares upon the exercise of the purchase
      rights under this Warrant. The Company will take all such reasonable action
      as
      may be necessary to assure that such Warrant Shares may be issued as provided
      herein without violation of any applicable law or regulation, or of any
      requirements of the Trading Market upon which the Common Stock may be listed.
      

     

    Except
      and to the extent as waived or consented to by the Holder, the Company shall
      not
      by any action, including, without limitation, amend its certificate of
      incorporation or through any reorganization, transfer of assets, consolidation,
      merger, dissolution, issue or sale of securities or any other voluntary action,
      avoid or seek to avoid the observance or performance of any of the terms of
      this
      Warrant, but will at all times in good faith assist in the carrying out of
      all
      such terms and in the taking of all such actions as may be necessary or
      appropriate to protect the rights of Holder as set forth in this Warrant against
      impairment. Without limiting the generality of the foregoing, the Company will
      (a) not increase the par value of any Warrant Shares above the amount payable
      therefor upon such exercise immediately prior to such increase in par value,
      (b)
      take all such action as may be necessary or appropriate in order that the
      Company may validly and legally issue fully paid and nonassessable Warrant
      Shares upon the exercise of this Warrant, and (c) use commercially reasonable
      efforts to obtain all such authorizations, exemptions or consents from any
      public regulatory body having jurisdiction thereof as may be necessary to enable
      the Company to perform its obligations under this Warrant.

     

    Before
      taking any action which would result in an adjustment in the number of Warrant
      Shares for which this Warrant is exercisable or in the Exercise Price, the
      Company shall obtain all such authorizations or exemptions thereof, or consents
      thereto, as may be necessary from any public regulatory body or bodies having
      jurisdiction thereof.

     

    f)  Jurisdiction.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be determined in accordance with the provisions of the
      Purchase Agreement.

     

    g)  Restrictions.
      The
      Holder acknowledges that the Warrant Shares acquired upon the exercise of this
      Warrant, if not registered, will have restrictions upon resale imposed by state
      and federal securities laws.

     

    h)  Nonwaiver
      and Expenses.
      No
      course of dealing or any delay or failure to exercise any right hereunder on
      the
      part of Holder shall operate as a waiver of such right or otherwise prejudice
      Holder’s rights, powers or remedies, notwithstanding the fact that all rights
      hereunder terminate on the Termination Date. If the Company willfully and
      knowingly fails to comply with any provision of this Warrant, which results
      in
      any material damages to the Holder, the Company shall pay to Holder such amounts
      as shall be sufficient to cover any costs and expenses including, but not
      limited to, reasonable attorneys’ fees, including those of appellate
      proceedings, incurred by Holder in collecting any amounts due pursuant hereto
      or
      in otherwise enforcing any of its rights, powers or remedies
      hereunder.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    i)  Notices.
      Any
      notice, request or other document required or permitted to be given or delivered
      to the Holder by the Company shall be delivered in accordance with the notice
      provisions of the Purchase Agreement.

     

    j)  Limitation
      of Liability.
      No
      provision hereof, in the absence of any affirmative action by Holder to exercise
      this Warrant or purchase Warrant Shares, and no enumeration herein of the rights
      or privileges of Holder, shall give rise to any liability of Holder for the
      purchase price of any Common Stock or as a stockholder of the Company, whether
      such liability is asserted by the Company or by creditors of the
      Company.

     

    k)  Remedies.
      Holder,
      in addition to being entitled to exercise all rights granted by law, including
      recovery of damages, will be entitled to specific performance of its rights
      under this Warrant. The Company agrees that monetary damages would not be
      adequate compensation for any loss incurred by reason of a breach by it of
      the
      provisions of this Warrant and hereby agrees to waive the defense in any action
      for specific performance that a remedy at law would be adequate.

     

    l)  Successors
      and Assigns.
      Subject
      to applicable securities laws, this Warrant and the rights and obligations
      evidenced hereby shall inure to the benefit of and be binding upon the
      successors of the Company and the successors and permitted assigns of Holder.
      The provisions of this Warrant are intended to be for the benefit of all Holders
      from time to time of this Warrant and shall be enforceable by any such Holder
      or
      holder of Warrant Shares.

     

    m)  Amendment.
      This
      Warrant may be modified or amended or the provisions hereof waived with the
      written consent of the Company and the Holder.

     

    n)  Severability.
      Wherever possible, each provision of this Warrant shall be interpreted in such
      manner as to be effective and valid under applicable law, but if any provision
      of this Warrant shall be prohibited by or invalid under applicable law, such
      provision shall be ineffective to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provisions or the remaining
      provisions of this Warrant.

     

    o)  Headings.
      The
      headings used in this Warrant are for the convenience of reference only and
      shall not, for any purpose, be deemed a part of this Warrant.

     

    p)  Equal
      Treatment of Holders.
      No
      consideration shall be offered or paid to any person to amend or consent to
      a
      waiver or modification of any provision of this Warrant unless the same
      consideration is also offered to all holders of the Warrants. For clarification
      purposes, this provision constitutes a separate right granted to each Holder
      by
      the Company and negotiated separately by each Holder, and is intended to treat
      for the Company the Holders as a class and shall not in any way be construed
      as
      the Holders acting in concert or as a group with respect to the purchase,
      disposition or voting of the Securities or otherwise.

     

    ********************

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
      officer thereunto duly authorized.

     

    

    
      	
              OFFLINE
                CONSULTING, INC.

               

            
	
              By:
                /s/Kenneth Craig

              Name:
                Kenneth Craig

              Title:
                CEO

            

    

    

     

    

    
      
        
        

         

      

      
        10

        
          

        

      

      
         

        
        

      

    

     

    NOTICE
      OF EXERCISE

    

    TO: OFFLINE
      CONSULTING, INC.

    

    (1)  The
      undersigned hereby elects to purchase ________ Warrant Shares of the Company
      pursuant to the terms of the attached Warrant (only if exercised in full),
      and
      tenders herewith payment of the exercise price in full, together with all
      applicable transfer taxes, if any.

     

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

     

    Cash
      Exercise_______ 

     

    Cashless
      Exercise_______

     

    If
      the
      Holder has elected a Cash Exercise, the Holder shall pay the sum of $________
      by
      certified or official bank check (or via wire transfer) to the Company in
      accordance with the terms of the Warrant. Payment shall take the form of lawful
      money of the United States.

     

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

     

    X
      = Y -
(A)(Y)

    B

    

    Where: 

    

    The
      number of shares of Common Stock to be issued to the Holder
      __________________(“X”).

    

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

    

    The
      Exercise Price ______________ (“A”). 

    

    The
      Per
      Share Market Value of one shares of Common Stock _______________________
      (“B”).

    

     

    (3)  Please
      issue a certificate or certificates representing said Warrant Shares in the
      name
      of the undersigned or in such other name as is specified below:

     

    _______________________________

     

    

    The
      Warrant Shares shall be delivered to the following:

    

    _______________________________

     

    _______________________________

     

    _______________________________

    

    (4)
      Accredited
      Investor.
      The
      undersigned is an “accredited investor” as defined in Regulation D promulgated
      under the Securities Act of 1933, as amended.

    

    [SIGNATURE
      OF HOLDER]

     

    Name
      of
      Investing Entity:
      ________________________________________________________________________

    Signature
      of Authorized Signatory of Investing Entity:
      _________________________________________________

    Name
      of
      Authorized Signatory:
      ___________________________________________________________________

    Title
      of
      Authorized Signatory:
      ____________________________________________________________________

    Date:
      ________________________________________________________________________________________

    

     

    
      
        

         

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    ASSIGNMENT
      FORM

    

    (To
      assign the foregoing warrant, execute

    this
      form
      and supply required information. 

    Do
      not
      use this form to exercise the warrant.)

    

    

    

    FOR
      VALUE
      RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
      assigned to

     

    

    _______________________________________________
      whose address is

    

    _______________________________________________________________.

    

    

    

    _______________________________________________________________

    

    Dated:
      ______________, _______

    

    

    Holder’s
      Signature: _____________________________

    

    Holder’s
      Address: _____________________________

     

    _____________________________

    

    

    

    Signature
      Guaranteed: ___________________________________________

    

    

    NOTE:
      The
      signature to this Assignment Form must correspond with the name as it appears
      on
      the face of the Warrant, without alteration or enlargement or any change
      whatsoever, and must be guaranteed by a bank or trust company. Officers of
      corporations and those acting in a fiduciary or other representative capacity
      should file proper evidence of authority to assign the foregoing
      Warrant.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}]]