Document:

Unassociated Document

    ESCROW
      AGREEMENT

     

    ESCROW
      AGREEMENT (the “Escrow
      Agreement”)
      made
      as of the 27th day of July, 2006, by and among IGIA, Inc., a Delaware
      corporation
      (the
“Company”),
      the
      Purchasers listed on Schedule A attached hereto (each a “Purchaser”
and
      collectively, the “Purchasers”)
      and
      Owen Naccarato, Esquire (the “Escrow
      Agent”).

     

    W
      I T N E
      S S E T H:

     

    WHEREAS,
      the Company desires to raise capital in order to finance the growth of its
      business operations and for other general corporate purposes;

     

    WHEREAS,
      the Company and the Purchasers have agreed that, in order to raise capital,
      the
      Company shall issue and sell to the Purchasers debentures (the “Debentures”),
      convertible into shares of the Company’s common stock, par value $.001 per share
      (the “Common
      Stock”),
      and
      Warrants to purchase shares of Common Stock (the “Warrants”) for an aggregate
      purchase price of $500,000;

     

    WHEREAS,
      the Company has entered into a Securities Purchase Agreement dated as of July
      27, 2006 (the “Purchase
      Agreement”)
      with
      the Purchasers; 

     

    WHEREAS,
      the parties have agreed that all funds shall be paid into escrow for the benefit
      of the Company and the Escrow Agent has agreed to receive, hold and pay such
      funds, upon the terms and subject to the conditions hereinafter set
      forth.

     

    NOW,
      THEREFORE, in consideration of the mutual covenants herein contained, and for
      other good and valuable consideration, the receipt and legal sufficiency of
      which is hereby acknowledged, the parties to this Escrow Agreement hereby agree
      as follows: 

     

    1. Defined
      Terms.
      Capitalized terms used and not otherwise defined herein shall have the meanings
      respectively assigned to them in the Purchase Agreement.

     

    2. Escrow
      of Funds.
      On or
      prior to the Closing Date, the following shall occur: the Purchasers shall
      remit
      by wire transfer $395,000 of the Purchase Price to the Escrow Agent pursuant
      to
      this Escrow Agreement (the “Escrow
      Amount”).
      The
      Escrow Agent shall hold the Escrow Amount only in accordance with the terms
      and
      conditions of this Escrow Agreement.

     

    3. Investment
      of Funds.
      The
      Escrow Agent shall invest the monies in the Escrow Amount in an interest bearing
      bank account with, or certificates of deposit or time deposits with, maturities
      of no more than thirty (30) days issued by, a domestic commercial bank or such
      other bank or other financial institution as it normally holds such
      funds.

     

    4. Release
      of Funds.
      The
      Escrow Agent shall release the Escrow Amount in accordance with the disbursement
      instructions on
      Schedule B attached hereto.

     

    5. Further
      Assurances.
      The
      Company and the Purchasers agree to do such further acts and to execute and
      deliver such statements, assignments, agreements, instruments and other
      documents as the Escrow Agent from time to time reasonably may request in
      connection with the administration, maintenance, enforcement or adjudication
      of
      this Escrow Agreement in order (a) to give the Escrow Agent confirmation
      and assurance of the Escrow Agent’s rights, powers, privileges, remedies and
      interests under this Escrow Agreement and applicable law, (b) to better
      enable the Escrow Agent to exercise any such right, power, privilege, remedy
      or
      interest, or (c) to otherwise effectuate the purpose and the terms and
      provisions of this Escrow Agreement, each in such form and substance as may
      be
      reasonably acceptable to the Escrow Agent.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6. Conflicting
      Demands.
      If
      conflicting or adverse claims or demands are made or notices served upon the
      Escrow Agent with respect to the escrow provided for herein, the Company and
      the
      Purchasers agree that the Escrow Agent shall refuse to comply with any such
      claim or demand and withhold and stop all further performance of this escrow
      so
      long as such disagreement shall continue. In so doing, the Escrow Agent shall
      not be or become liable for damages, losses, costs, expenses or interest to
      any
      or any other person for its failure to comply with such conflicting or adverse
      demands. The Escrow Agent shall be entitled to continue to so refrain and refuse
      to so act until such conflicting claims or demands shall have been finally
      determined by a court or arbitrator of competent jurisdiction or shall have
      been
      settled by agreement of the parties to such controversy, in which case the
      Escrow Agent shall be notified thereof in a notice signed by such parties.
      The
      Escrow Agent may also elect to commence an interpleader or other action for
      declaratory judgment for the purpose of having the respective rights of the
      claimants adjudicated, and may deposit with the court all funds held hereunder
      pursuant to this Escrow Agreement; and if it so commences and deposits, the
      Escrow Agent shall be relieved and discharged from any further duties and
      obligations under this Escrow Agreement.

     

    7. Disputes.
      Each of
      the parties hereto hereby covenants and agrees that the Federal or state courts
      located in the Borough of Manhattan, State of New York shall have jurisdiction
      over any dispute with the Escrow Agent or relating to this Escrow
      Agreement.

     

    8. Expenses
      of the Escrow Agent.
      The
      Company agrees to pay any and all out-of-pocket costs and expenses incurred
      by
      the Escrow Agent in connection with all waivers, releases, discharges,
      satisfactions, modifications and amendments of this Escrow Agreement, the
      administration and holding of the Escrow Amount and the investment of such
      funds, and the enforcement, protection and adjudication of the Escrow Agent’s
      rights hereunder by the Escrow Agent, including, without limitation, the
      out-of-pocket disbursements of the Escrow Agent itself and expenses and costs
      of
      other attorneys it may retain, if any. The Company shall be liable to the Escrow
      Agent for any expenses payable by the Escrow Agent.

     

    9. Reliance
      on Documents and Experts.
      The
      Escrow Agent shall be entitled to rely upon any notice, consent, certificate,
      affidavit, statement, paper, document, writing or communication (which to the
      extent permitted hereunder may be by telegram, cable, telex, telecopier, or
      telephone) reasonably believed by it to be genuine and to have been signed,
      sent
      or made by the proper person or persons, and upon opinions and advice of legal
      counsel (including itself or counsel for any party hereto), independent public
      accountants and other experts selected by the Escrow Agent and mutually
      acceptable to each of the Company and the Purchasers. The Escrow Agent shall
      not
      be responsible to review the Certificate other than to confirm that it has
      been
      signed or to determine the clearance of checks received for the Escrow
      Amount.

     

    10. Status
      of the Escrow Agent, Etc.
      The
      Escrow Agent is acting under this Escrow Agreement as a stakeholder only. No
      term or provision of this Escrow Agreement is intended to create, nor shall
      any
      such term or provision be deemed to have created, any joint venture, partnership
      or attorney-client relationship between or among the Escrow Agent and the
      Company or the Purchasers. This Escrow Agreement shall not be deemed to prohibit
      or in any way restrict the Escrow Agent’s representation of the Company, who may
      be advised by the Escrow Agent on any and all matters pertaining to this Escrow
      Agreement. To the extent the Purchasers have been represented by the Escrow
      Agent, the Purchasers hereby waive any conflict of interest and irrevocably
      authorize and direct the Escrow Agent to carry out the terms and provisions
      of
      this Escrow Agreement fairly as to all parties, without regard to any such
      representation and irrespective of the impact upon the Purchasers. The Escrow
      Agent’s only duties are those expressly set forth in this Escrow Agreement, and
      each of the Company and the Purchasers authorize the Escrow Agent to perform
      those duties in accordance with its usual practices in holding funds of its
      own
      or those of other escrows. The Escrow Agent may exercise or otherwise enforce
      any of its rights, powers, privileges, remedies and interests under this Escrow
      Agreement and applicable law or perform any of its duties under this Escrow
      Agreement by or through its partners, employees, attorneys, agents or
      designees.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    11. Exculpation.
      The
      Escrow Agent and its designees, and their respective partners, employees,
      attorneys and agents, shall not incur any liability whatsoever for the
      investment or disposition of funds or the taking of any other action in
      accordance with the terms and provisions of this Escrow Agreement, for any
      mistake or error in judgment, for compliance with any applicable law or any
      attachment, order or other directive of any court or other authority
      (irrespective of any conflicting term or provision of this Escrow Agreement),
      or
      for any act or omission of any other person selected with reasonable care and
      engaged by the Escrow Agent in connection with this Escrow Agreement (other
      than
      for such Escrow Agent’s or such person’s own acts or omissions breaching a duty
      owed to the claimant under this Escrow Agreement and amounting to gross
      negligence or willful misconduct as finally determined pursuant to applicable
      law by a governmental authority having jurisdiction); and each of the Company
      and the Purchasers hereby waive any and all claims and actions whatsoever
      against the Escrow Agent and its designees, and their respective partners,
      employees, attorneys and agents, arising out of or related directly or
      indirectly to any and all of the foregoing acts, omissions and circumstances.
      Furthermore, the Escrow Agent and its designees, and their respective partners,
      employees, attorneys and agents, shall not incur any liability (other than
      for a
      person’s own acts or omissions breaching a duty owed to the claimant under this
      Escrow Agreement and amounting to willful misconduct as finally determined
      pursuant to applicable law by a governmental authority having jurisdiction)
      for
      other acts and omissions arising out of or related directly or indirectly to
      this Escrow Agreement or the Escrow Amount; and each of the Company and the
      Purchasers hereby expressly waive any and all claims and actions (other than
      those attributable to a person’s own acts or omissions breaching a duty owed to
      the claimant and amounting to gross negligence or willful misconduct as finally
      determined pursuant to applicable law by a governmental authority having
      jurisdiction) against the Escrow Agent and its designees, and their respective
      partners, employees, attorneys and agents, arising out of or related directly
      or
      indirectly to any and all of the foregoing acts, omissions and circumstances.
      The Escrow Agent’s designees excludes the Purchasers for purposes
      hereof.

     

    12. Indemnification.
      The
      Escrow Agent and its designees (excluding the Purchasers), and their respective
      partners, employees, attorneys and agents, shall be indemnified, reimbursed,
      held harmless and, at the request of the Escrow Agent, defended, by the Company
      from and against any and all claims, liabilities, losses and expenses
      (including, without limitation, the reasonable disbursements, expenses and
      fees
      of their respective attorneys) that may be imposed upon, incurred by, or
      asserted against any of them, arising out of or related directly or indirectly
      to this Escrow Agreement or the Escrow Amount, except such as are occasioned
      by
      the indemnified person’s own acts and omissions breaching a duty owed to the
      claimant under this Escrow Agreement and amounting to willful misconduct as
      finally determined pursuant to applicable law by a governmental authority having
      jurisdiction.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    13. Notices.
      Any
      notice, request, demand or other communication permitted or required to be
      given
      hereunder shall be in writing, shall be sent by one of the following means
      to
      the addressee at the address set forth below (or at such other address as shall
      be designated hereunder by notice to the other parties and persons receiving
      copies, effective upon actual receipt) and shall be deemed conclusively to
      have
      been given: (a) on the first business day following the day timely
      deposited with Federal Express (or other equivalent national overnight courier)
      or United States Express Mail, with the cost of delivery prepaid; (b) on the
      fifth business day following the day duly sent by certified or registered United
      States mail, postage prepaid and return receipt requested; or (c) when otherwise
      actually delivered to the addressee.  

     

    
      	
              If
                to the Company:

            	
              Igia,
                Inc.

              521
                5th
                Avenue, 20th
                Floor

              New
                York, NY 10175

              Attention:
                President

              Telephone: (212)
                575-0500

              Facsimile:   
                (212)
                354-6380

            
	 	 
	
              with
                a copy to:

            	
              Sichenzia
                Ross Friedman Ference LLP

              1065
                Avenue of the Americas

              New
                York, NY 10018

              Attention:
                Gregory Sichenzia, Esq.

              Telephone:
                (212) 930-9700

              Facsimile:   
                (212) 930-9725

            
	 	 
	
              If
                to any Purchaser:

            	
              At
                the address of such Purchaser set forth on the signature pages to
                the
                Purchase Agreement, with copies to such Purchaser’s counsel as set forth
                in the Purchase Agreement.

            
	 	 
	
              If
                to the Escrow Agent:

            	
              Owen
                Naccarato, Esq.

              Naccarato
                & Associates

              18430
                Von Karman Ave., Suite 430

              Irvine,
                CA 92612

              Telephone:
                (949) 851-9261

              Facsimile:   
                (949) 851-9262

            

    

     

    14. Section
      and Other Headings.
      The
      section and other headings contained in this Escrow Agreement are for
      convenience only, shall not be deemed a part of this Escrow Agreement and shall
      not affect the meaning or interpretation of this Escrow Agreement.

     

    15. Governing
      Law.
      This
      Escrow Agreement shall be governed by, and construed and enforced in accordance
      with, the laws of the State of New York, without regard to principles of
      conflicts of law. Each of the Company and the Purchasers (i) hereby irrevocably
      submit to the jurisdiction of the United States District Court sitting in the
      Southern District of New York for the purposes of any suit, action or proceeding
      arising out of or relating to this Agreement or the Purchase Agreement and
      (ii)
      hereby waive, and agree not to assert in any such suit, action or proceeding,
      any claim that it is not personally subject to the jurisdiction of such court,
      that the suit, action or proceeding is brought in an inconvenient forum or
      that
      the venue of the suit, action or proceeding is improper. Each of the Company
      and
      the Purchasers consent to process being served in any such suit, action or
      proceeding by mailing a copy thereof 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 in this
      Section 15 shall affect or limit any right to serve process in any other manner
      permitted by law.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    16. Counterparts.
      This
      Escrow Agreement may be executed by the parties hereto in separate counterparts,
      each of which when so executed and delivered shall be an original but all such
      counterparts shall together constitute one and the same agreement.

     

    17. Resignation
      of Escrow Agent.
      The
      Escrow Agent may, at any time, at its option, elect to resign its duties as
      Escrow Agent under this Escrow Agreement by providing notice thereof to each
      of
      the Company and the Purchasers. In such event, the Escrow Agent shall deposit
      the Escrow Amount with a successor independent escrow agent to be appointed
      by
      (a) the Company and the Purchasers within thirty (30) days following the receipt
      of notice of resignation from the Escrow Agent, or (b) the Escrow Agent if
      the
      Company and the Purchasers shall have not agreed on a successor escrow agent
      within the aforesaid 30-day period, upon which appointment and delivery of
      the
      Escrow Amount the Escrow Agent shall be released of and from all liability
      under
      this Escrow Agreement.

     

    18. Successors
      and Assigns; Assignment.
      Whenever in this Escrow Agreement reference is made to any party, such reference
      shall be deemed to include the successors, assigns and legal representatives
      of
      such party, and, without limiting the generality of the foregoing, all
      representations, warranties, covenants and other agreements made by or on behalf
      of each of the Company and the Purchasers in this Escrow Agreement shall inure
      to the benefit of any successor escrow agent hereunder; provided,
      however,
      that
      nothing herein shall be deemed to authorize or permit the Company or the
      Purchasers to assign any of its rights or obligations hereunder to any other
      person (whether or not an affiliate of the Company or the Purchasers) without
      the written consent of each of the other parties nor to authorize or permit
      the
      Escrow Agent to assign any of its duties or obligations hereunder except as
      provided in Section 17 hereof.

     

    19. No
      Third Party Rights.
      The
      representations, warranties and other terms and provisions of this Escrow
      Agreement are for the exclusive benefit of the parties hereto, and no other
      person, including the creditors of the Company or the Purchasers, shall have
      any
      right or claim against any party by reason of any of those terms and provisions
      or be entitled to enforce any of those terms and provisions against any
      party.

     

    20. No
      Waiver by Action, Etc.
      Any
      waiver or consent respecting any representation, warranty, covenant or other
      term or provision of this Escrow Agreement shall be effective only in the
      specific instance and for the specific purpose for which given and shall not
      be
      deemed, regardless of frequency given, to be a further or continuing waiver
      or
      consent. The failure or delay of a party at any time or times to require
      performance of, or to exercise its rights with respect to, any representation,
      warranty, covenant or other term or provision of this Escrow Agreement in no
      manner (except as otherwise expressly provided herein) shall affect its right
      at
      a later time to enforce any such term or provision. No notice to or demand
      on
      either the Company or the Purchasers in any case shall entitle such party to
      any
      other or further notice or demand in the same, similar or other circumstances.
      All rights, powers, privileges, remedies and interests of the parties under
      this
      Escrow Agreement are cumulative and not alternatives, and they are in addition
      to and shall not limit (except as otherwise expressly provided herein) any
      other
      right, power, privilege, remedy or interest of the parties under this Escrow
      Agreement or applicable law.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    21. Modification,
      Amendment, Etc.
      Each
      and every modification and amendment of this Escrow Agreement shall be in
      writing and signed by all of the parties hereto, and each and every waiver
      of,
      or consent to any departure from, any covenant, representation, warranty or
      other provision of this Escrow Agreement shall be in writing and signed by
      the
      party granting such waiver or consent.

     

    22. Entire
      Agreement.
      This
      Escrow Agreement contains the entire agreement of the parties with respect
      to
      the matters contained herein and supersedes all prior representations,
      agreements and understandings, oral or otherwise, among the parties with respect
      to the matters contained herein.

     

     

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement on
      the
      date first written above. 

     

    
      	 	
              IGIA,
                Inc.

            
	 	 
	 	
              By:
                /s/ Avi
                Sivan                                                              
                

            
	 	
                   
                Name: Avi Sivan

                   
                Chief Executive Officer

            
	 	 
	 	 
	 	
              By:
                /s/ Owen
                Naccarato                                                   
                

            
	 	
                   
                Owen Naccarato, Esq., as escrow agent

            
	 	 
	 	 
	
               

            	
              AJW
                PARTNERS, LLC

            
	 	
              By:
                SMS Group, LLC

            
	 	 
	 	 
	 	
              By:
                /s/ Corey S.
                Ribotsky                                                  

            
	 	
                   
                Corey S. Ribotsky

                   
                Manager

            
	 	 
	 	 
	 	
              AJW
                OFFSHORE, LTD.

              By:
                First Street Manager II, LLC

               

               

              
                By:
                  /s/ Corey S.
                  Ribotsky                                                  

              

                   
                Corey S. Ribotsky

                   
                Manager

            
	 	
              AJW
                QUALIFIED PARTNERS, LLC

              By:
                AJW Manager, LLC

               

               

              
                By:
                  /s/ Corey S.
                  Ribotsky                                                  

              

              Corey
                S. Ribotsky

              Manager

            
	 	
              NEW
                MILLENNIUM CAPITAL PARTNERS II, LLC

              By:
                First Street Manager II, LLC

               

               

              
                By:
                  /s/ Corey S.
                  Ribotsky                                                  

              

                   
                Corey S. Ribotsky

                   
                Manager

            

    

    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    

    

     

    SCHEDULE
      A

    

    

    

    Purchasers:

    

    
      	·  	
              AJW
                Partners, LLC

            

    

    
      	·  	
              AJW
                Offshore, Ltd.

            

    

    
      	·  	
              AJW
                Qualified Partners, LLC

            

    

    
      	·  	
              New
                Millennium Capital Partners II, LLC

            

    

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      B

    On
      August 15, 2006

    

    1.  $88,750.00
      to Igia, Inc. in accordance with the wire transfer instructions attached as
      Exhibit
      A
      hereto;
      and

     

    2.  $10,000.00
      to Sichenzia Ross Friedman & Ference LLP in accordance with the wire
      transfer instructions attached as Exhibit
      B
      hereto
      (which represents $5,000 for the second of three payments for services provided
      in connection with the Purchase Agreement and $5,000 for general monthly
      corporate representation).

    

    On
      September 15, 2006

    

    3.  $88,750.00
      to Igia, Inc. in accordance with the wire transfer instructions attached as
      Exhibit
      A
      hereto;
      and

     

    4.  $10,000.00
      to Sichenzia Ross Friedman & Ference LLP in accordance with the wire
      transfer instructions attached as Exhibit
      B
      hereto
      (which represents $5,000 for the third of three payments for services provided
      in connection with the Purchase Agreement and $5,000 for general monthly
      corporate representation).

    

    On
      October 15, 2006

    

    5.  $93,750.00
      to Igia, Inc. in accordance with the wire transfer instructions attached as
      Exhibit
      A
      hereto;
      and

     

    6.  $5,000.00
      to Sichenzia Ross Friedman & Ference LLP in accordance with the wire
      transfer instructions attached as Exhibit
      B
      hereto
      (which represents $5,000 for general monthly corporate
      representation).

    

    On
      November 15, 2006

    

    7.  $93,750.00
      to Igia, Inc. in accordance with the wire transfer instructions attached as
      Exhibit
      A
      hereto;
      and

     

    8.  $5,000.00
      to Sichenzia Ross Friedman & Ference LLP in accordance with the wire
      transfer instructions attached as Exhibit
      B
      hereto
      (which represents $5,000 for general monthly corporate
      representation).

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

      Exhibit
        A

       

      Company:      IGIA,
        Inc.

      

      Account
        Name:        *

      

      Account
        Number:    *

      

      Bank:                         
        Bank
        of
        America

      

      ABA:                         
        021000322

      

      Branch
        Address:      335
        Madison Avenue, New York, NY 10017

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

       

      Exhibit
        B

       

       

      Bank:   HSBC
        Bank
        USA

      

      Branch
        Address:      950
        Third
        Avenue, New York, New York 10022

      

      Account
        Name:       *

      

      Account
        No.:            
*

      

      ABA
        No.:                   
021001088THIS
      WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
      BEEN
      REGIS-TERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS OTHERWISE
      SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF JANUARY
      5,
      2007, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED
      OR
      ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRA-TION STATEMENT FOR SUCH
      SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND
      SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT
      REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE
      144
      OR REGULATION S UNDER SUCH ACT.

    

    Right
      to
      Purchase 120,000 Shares of Common Stock, par value $.00001 per
      share

    

    STOCK
      PURCHASE WARRANT

    

    THIS
      CERTIFIES THAT,
      for
      value received, NEW MILLENNIUM CAPITAL PARTNERS II, LLC or its registered
      assigns, is entitled to purchase from The Jackson Rivers Company, a Florida
      corporation (the “Company”), at any time or from time to time during the period
      specified in Paragraph 2 hereof, 120,000 fully paid and nonassessable
      shares of the Company’s Common Stock, par value $.00001 per share (the “Common
      Stock”), at an exercise price per share equal to $.0007 (the “Exercise Price”).
      The term “Warrant Shares,” as used herein, refers to the shares of Common Stock
      purchasable hereunder. The Warrant Shares and the Exercise Price are subject
      to
      adjustment as provided in Paragraph 4 hereof. The term “Warrants” means this
      Warrant and the other warrants issued pursuant to that certain Securities
      Purchase Agreement, dated January 5, 2007, by and among the Company and the
      Buyers listed on the execution page thereof (the “Securities Purchase
      Agreement”). 

    

    This
      Warrant is subject to the following terms, provisions, and conditions:

    

    1. Manner
      of Exercise; Issuance of Certificates; Payment for Shares. Subject
      to the provisions hereof, this Warrant may be exercised by the holder hereof,
      in
      whole or in part, by the surrender of this Warrant, together with a completed
      exercise agreement in the form attached hereto (the “Exercise Agreement”), to
      the Company during normal business hours on any business day at the Company’s
      principal executive offices (or such other office or agency of the Company
      as it
      may designate by notice to the holder hereof), and upon (i) payment to the
      Company in cash, by certified or offi-cial bank check or by wire transfer for
      the account of the Company of the Exercise Price for the Warrant Shares
      specified in the Exercise Agreement or (ii) if the resale of the Warrant Shares
      by the holder is not then registered pursuant to an effective registration
      statement under the Securities Act of 1933, as amended (the “Securities Act”),
      delivery to the Company of a written notice of an election to effect a “Cashless
      Exercise” (as defined in Section 11(c) below) for the Warrant Shares specified
      in the Exercise Agreement. The Warrant Shares so purchased shall be deemed
      to be
      issued to the holder hereof or such holder’s designee, as the record owner of
      such shares, as of the close of business on the date on which this Warrant
      shall
      have been surrendered, the completed Exercise Agreement shall have been
      deliv-ered, and payment shall have been made for such shares as set forth above.
      Certifi-cates for the Warrant Shares so purchased, representing the aggregate
      number of shares specified in the Exercise Agreement, shall be delivered to
      the
      holder hereof within a reasonable time, not exceeding five (5) business days,
      after this Warrant shall have been so exercised. The certificates so delivered
      shall be in such denominations as may be requested by the holder hereof and
      shall be registered in the name of such holder or such other name as shall
      be
      designated by such holder. If this Warrant shall have been exercised only in
      part, then, unless this Warrant has expired, the Company shall, at its expense,
      at the time of delivery of such certificates, deliver to the holder a new
      Warrant representing the number of shares with respect to which this Warrant
      shall not then have been exercised. In addition to all other available remedies
      at law or in equity, if the Company fails to deliver certificates for the
      Warrant Shares within five (5) business days after this Warrant is exercised,
      then the Company shall pay to the holder in cash a penalty (the “Penalty”) equal
      to 2% of the number of Warrant Shares that the holder is entitled to multiplied
      by the Market Price (as hereinafter defined) for each day that the Company
      fails
      to deliver certificates for the Warrant Shares. For example, if the holder
      is
      entitled to 100,000 Warrant Shares and the Market Price is $2.00, then the
      Company shall pay to the holder $4,000 for each day that the Company fails
      to
      deliver certificates for the Warrant Shares. The Penalty shall be paid to the
      holder by the fifth day of the month following the month in which it has
      accrued.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    Notwithstanding
      anything in this Warrant to the contrary, in no event shall the holder of this
      Warrant be entitled to exercise a number of Warrants (or portions thereof)
      in
      excess of the number of Warrants (or portions thereof) upon exercise of which
      the sum of (i) the number of shares of Common Stock beneficially owned by the
      holder and its affiliates (other than shares of Common Stock which may be deemed
      beneficially owned through the ownership of the unexercised Warrants and the
      unexercised or unconverted portion of any other securities of the Company
      (including the Notes (as defined in the Securities Purchase Agreement)) subject
      to a limitation on conversion or exercise analogous to the limitation contained
      herein) and (ii) the number of shares of Common Stock issuable upon exercise
      of
      the Warrants (or portions thereof) with respect to which the determination
      described herein is being made, would result in beneficial ownership by the
      holder and its affiliates of more than 4.9% of the outstanding shares of Common
      Stock. For purposes of 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-G thereunder, except as otherwise
      provided in clause (i) of the preceding sentence. Notwithstanding anything
      to
      the contrary contained herein, the limitation on exercise of this Warrant set
      forth herein may not be amended without (i) the written consent of the holder
      hereof and the Company and (ii) the approval of a majority of shareholders
      of
      the Company.

    

    2. Period
      of Exercise. This
      Warrant is exercisable at any time or from time to time on or after the date
      on
      which this Warrant is issued and delivered pursuant to the terms of the
      Securities Purchase Agreement and before 6:00 p.m., New York, New York time
      on
      the seventh (7th)
      anniversary of the date of issuance (the “Exercise Period”).

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    3. Certain
      Agreements of the Company. The
      Company hereby covenants and agrees as follows:

    

    (a) Shares
      to be Fully Paid.
      All
      Warrant Shares will, upon issuance in accordance with the terms of this Warrant,
      be validly issued, fully paid, and nonassessable and free from all taxes, liens,
      and charges with respect to the issue thereof.

    

    (b) Reservation
      of Shares.
      During
      the Exercise Period, the Company shall at all times have authorized, and
      reserved for the purpose of issuance upon exercise of this Warrant, a
      suf-ficient number of shares of Common Stock to provide for the exercise of
      this
      Warrant.

    

    (c) Listing.
      The
      Company shall promptly secure the listing of the shares of Common Stock issuable
      upon exercise of the Warrant upon each national securities exchange or automated
      quotation system, if any, upon which shares of Common Stock are then listed
      (subject to official notice of issuance upon exercise of this Warrant) and
      shall
      maintain, so long as any other shares of Common Stock shall be so listed, such
      listing of all shares of Common Stock from time to time issuable upon the
      exercise of this Warrant; and the Company shall so list on each national
      securities exchange or automated quotation system, as the case may be, and
      shall
      maintain such listing of, any other shares of capital stock of the Company
      issuable upon the exercise of this Warrant if and so long as any shares of
      the
      same class shall be listed on such national securities exchange or automated
      quotation system.

    

    (d) Certain
      Actions Prohibited.
      The
      Company will not, by amendment of its charter or through any re-organi-zation,
      transfer of assets, consolidation, mer-ger, 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 to be observed or performed by it hereunder,
      but will at all times in good faith assist in the carrying out of all the
      provisions of this Warrant and in the taking of all such action as may
      reasonably be requested by the holder of this Warrant in order to protect the
      exercise privilege of the holder of this Warrant against dilu-tion or other
      impairment, consistent with the tenor and purpose of this Warrant. Without
      limiting the general-ity of the foregoing, the Company (i) will not increase
      the
      par value of any shares of Common Stock receivable upon the exercise of this
      Warrant above the Exercise Price then in effect, and (ii) will take all such
      actions as may be necessary or appropriate in order that the Company may validly
      and legally issue fully paid and nonassessable shares of Common Stock upon
      the
      exercise of this Warrant.

    

    (e) Successors
      and Assigns.
      This
      Warrant will be binding upon any entity succeeding to the Company by merger,
      consolidation, or acquisition of all or sub-stantially all the Company’s
      assets.

    

    4. Antidilution
      Provisions. During
      the Exercise Period, the Exercise Price and the number of Warrant Shares shall
      be subject to adjustment from time to time as provided in this Paragraph
      4.

    

    In
      the
      event that any adjustment of the Exercise Price as required herein results
      in a
      fraction of a cent, such Exercise Price shall be rounded up to the nearest
      cent.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    (a) Adjustment
      of Exercise Price and Number of Shares upon Issuance of Common
      Stock.
      Except
      as otherwise provided in Paragraphs 4(c) and 4(e) hereof, if and whenever on
      or
      after the date of issuance of this Warrant, the Company issues or sells, or
      in
      accordance with Paragraph 4(b) hereof is deemed to have issued or sold, any
      shares of Common Stock for no consideration or for a consideration per share
      (before deduction of reasonable expenses or commissions or underwriting
      discounts or allowances in connection therewith) less than the Exercise Price
      on
      the date of issuance (a “Dilutive Issuance”), then immediately upon the Dilutive
      Issuance, the Exercise Price will be reduced to a price determined by
      multiplying the Exercise Price in effect immediately prior to the Dilutive
      Issuance by a fraction, (i) the numerator of which is an amount equal to the
      sum
      of (x) the number of shares of Common Stock actually outstanding immediately
      prior to the Dilutive Issuance, plus (y) the quotient of the aggregate
      consideration, calculated as set forth in Paragraph 4(b) hereof, received by
      the
      Company upon such Dilutive Issuance divided by the Market Price in effect
      immediately prior to the Dilutive Issuance, and (ii) the denominator of which
      is
      the total number of shares of Common Stock Deemed Outstanding (as defined below)
      immediately after the Dilutive Issuance. 

    

    (b) Effect
      on Exercise Price of Certain Events.
      For
      purposes of determining the adjusted Exercise Price under Paragraph 4(a) hereof,
      the following will be applicable:

    

    (i) Issuance
      of Rights or Options.
      If the
      Company in any manner issues or grants any warrants, rights or options, whether
      or not immediately exercisable, to subscribe for or to purchase Common Stock
      or
      other securities convertible into or exchangeable for Common Stock (“Convertible
      Securities”) (such warrants, rights and options to purchase Common Stock or
      Convertible Securities are hereinafter referred to as “Options”) and the price
      per share for which Common Stock is issuable upon the exercise of such Options
      is less than the Exercise Price on the date of issuance or grant of such
      Options, then the maximum total number of shares of Common Stock issuable upon
      the exercise of all such Options will, as of the date of the issuance or grant
      of such Options, be deemed to be outstanding and to have been issued and sold
      by
      the Company for such price per share. For purposes of the preceding sentence,
      the “price per share for which Common Stock is issuable upon the exercise of
      such Options” is determined by dividing (i) the total amount, if any, received
      or receivable by the Company as consideration for the issuance or granting
      of
      all such Options, plus the minimum aggregate amount of additional consideration,
      if any, payable to the Company upon the exercise of all such Options, plus,
      in
      the case of Convertible Securities issuable upon the exercise of such Options,
      the minimum aggregate amount of additional consideration payable upon the
      conversion or exchange thereof at the time such Convertible Securities first
      become convertible or exchangeable, by (ii) the maximum total number of shares
      of Common Stock issuable upon the exercise of all such Options (assuming full
      conversion of Convertible Securities, if applicable). No further adjustment
      to
      the Exercise Price will be made upon the actual issuance of such Common Stock
      upon the exercise of such Options or upon the conversion or exchange of
      Convertible Securities issuable upon exercise of such Options.

    

    (ii) Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any Convertible Securities, whether or
      not
      immediately convertible (other than where the same are issuable upon the
      exercise of Options) and the price per share for which Common Stock is issuable
      upon such conversion or exchange is less than the Exercise Price on the date
      of
      issuance, then the maximum total number of shares of Common Stock issuable
      upon
      the conversion or exchange of all such Convertible Securities will, as of the
      date of the issuance of such Convertible Securities, be deemed to be outstanding
      and to have been issued and sold by the Company for such price per share. For
      the purposes of the preceding sentence, the “price per share for which Common
      Stock is issuable upon such conversion or exchange” is determined by dividing
      (i) the total amount, if any, received or receivable by the Company as
      consideration for the issuance or sale of all such Convertible Securities,
      plus
      the minimum aggregate amount of additional consideration, if any, payable to
      the
      Company upon the conversion or exchange thereof at the time such Convertible
      Securities first become convertible or exchangeable, by (ii) the maximum total
      number of shares of Common Stock issuable upon the conversion or exchange of
      all
      such Convertible Securities. No further adjustment to the Exercise Price will
      be
      made upon the actual issuance of such Common Stock upon conversion or exchange
      of such Convertible Securities.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    (iii) Change
      in Option Price or Conversion Rate.
      If there
      is a change at any time in (i) the amount of additional consideration payable
      to
      the Company upon the exercise of any Options; (ii) the amount of additional
      consideration, if any, payable to the Company upon the conversion or exchange
      of
      any Convertible Securities; or (iii) the rate at which any Convertible
      Securities are convertible into or exchangeable for Common Stock (other than
      under or by reason of provisions designed to protect against dilution), the
      Exercise Price in effect at the time of such change will be readjusted to the
      Exercise Price which would have been in effect at such time had such Options
      or
      Convertible Securities still outstanding provided for such changed additional
      consideration or changed conversion rate, as the case may be, at the time
      initially granted, issued or sold.

    

    (iv) Treatment
      of Expired Options and Unexercised Convertible
      Securities.
      If, in
      any case, the total number of shares of Common Stock issuable upon exercise
      of
      any Option or upon conversion or exchange of any Convertible Securities is
      not,
      in fact, issued and the rights to exercise such Option or to convert or exchange
      such Convertible Securities shall have expired or terminated, the Exercise
      Price
      then in effect will be readjusted to the Exercise Price which would have been
      in
      effect at the time of such expiration or termination had such Option or
      Convertible Securities, to the extent outstanding immediately prior to such
      expiration or termination (other than in respect of the actual number of shares
      of Common Stock issued upon exercise or conversion thereof), never been
      issued.

    

    (v) Calculation
      of Consideration Received.
      If any
      Common Stock, Options or Convertible Securities are issued, granted or sold
      for
      cash, the consideration received therefor for purposes of this Warrant will
      be
      the amount received by the Company therefor, before deduction of reasonable
      commissions, underwriting discounts or allowances or other reasonable expenses
      paid or incurred by the Company in connection with such issuance, grant or
      sale.
      In case any Common Stock, Options or Convertible Securities are issued or sold
      for a consideration part or all of which shall be other than cash, the amount
      of
      the consideration other than cash received by the Company will be the fair
      value
      of such consideration, except where such consideration consists of securities,
      in which case the amount of consideration received by the Company will be the
      Market Price thereof as of the date of receipt. In case any Common Stock,
      Options or Convertible Securities are issued in connection with any acquisition,
      merger or consolidation in which the Company is the surviving corporation,
      the
      amount of consideration therefor will be deemed to be the fair value of such
      portion of the net assets and business of the non-surviving corporation as
      is
      attributable to such Common Stock, Options or Convertible Securities, as the
      case may be. The fair value of any consideration other than cash or securities
      will be determined in good faith by the Board of Directors of the
      Company.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    (vi) Exceptions
      to Adjustment of Exercise Price.
      No
      adjustment to the Exercise Price will be made (i) upon the exercise of any
      warrants, options or convertible securities granted, issued and outstanding
      on
      the date of issuance of this Warrant; (ii) upon the grant or exercise of any
      stock or options which may hereafter be granted or exercised under any employee
      benefit plan, stock option plan or restricted stock plan of the Company now
      existing or to be implemented in the future, so long as the issuance of such
      stock or options is approved by a majority of the independent members of the
      Board of Directors of the Company or a majority of the members of a committee
      of
      independent directors established for such purpose; or (iii) upon the exercise
      of the Warrants or conversion of the Notes issued under the Securities Purchase
      Agreement.

    

    (c) Subdivision
      or Combination of Common Stock.
      If the
      Company at any time subdivides (by any stock split, stock dividend,
      recapitalization, reorganization, reclassification or otherwise) the shares
      of
      Common Stock acquirable hereunder into a greater number of shares, then, after
      the date of record for effecting such subdivision, the Exercise Price in effect
      immediately prior to such subdivision will be proportionately reduced. If the
      Company at any time combines (by reverse stock split, recapitalization,
      reorganization, reclassification or otherwise) the shares of Common Stock
      acquirable hereunder into a smaller number of shares, then, after the date
      of
      record for effecting such combination, the Exercise Price in effect immediately
      prior to such combination will be proportionately increased.

    

    (d) Adjustment
      in Number of Shares.
      Upon
      each adjustment of the Exercise Price pursuant to the provisions of this
      Paragraph 4, the number of shares of Common Stock issuable upon exercise of
      this
      Warrant shall be adjusted by multiplying a number equal to the Exercise Price
      in
      effect immediately prior to such adjustment by the number of shares of Common
      Stock issuable upon exercise of this Warrant immediately prior to such
      adjustment and dividing the product so obtained by the adjusted Exercise
      Price.

    

    (e) Consolidation,
      Merger or Sale.
      In case
      of any consolidation of the Company with, or merger of the Company into any
      other corporation, or in case of any sale or conveyance of all or substantially
      all of the assets of the Company other than in connection with a plan of
      complete liquidation of the Company, then as a condition of such consolidation,
      merger or sale or conveyance, adequate provision will be made whereby the holder
      of this Warrant will have the right to acquire and receive upon exercise of
      this
      Warrant in lieu of the shares of Common Stock immediately theretofore acquirable
      upon the exercise of this Warrant, such shares of stock, securities or assets
      as
      may be issued or payable with respect to or in exchange for the number of shares
      of Common Stock immediately theretofore acquirable and receivable upon exercise
      of this Warrant had such consolidation, merger or sale or conveyance not taken
      place. In any such case, the Company will make appropriate provision to insure
      that the provisions of this Paragraph 4 hereof will thereafter be applicable
      as
      nearly as may be in relation to any shares of stock or securities thereafter
      deliverable upon the exercise of this Warrant. The Company will not effect
      any
      consolidation, merger or sale or conveyance unless prior to the consummation
      thereof, the successor corporation (if other than the Company) assumes by
      written instrument the obligations under this Paragraph 4 and the obligations
      to
      deliver to the holder of this Warrant such shares of stock, securities or assets
      as, in accordance with the foregoing provisions, the holder may be entitled
      to
      acquire.

    

    (f) Distribution
      of Assets.
      In case
      the Company shall declare or make any distribution of its assets (including
      cash) to holders of Common Stock as a partial liquidating dividend, by way
      of
      return of capital or otherwise, then, after the date of record for determining
      shareholders entitled to such distribution, but prior to the date of
      distribution, the holder of this Warrant shall be entitled upon exercise of
      this
      Warrant for the purchase of any or all of the shares of Common Stock subject
      hereto, to receive the amount of such assets which would have been payable
      to
      the holder had such holder been the holder of such shares of Common Stock on
      the
      record date for the determination of shareholders entitled to such
      distribution.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    (g) Notice
      of Adjustment.
      Upon the
      occurrence of any event which requires any adjustment of the Exercise Price,
      then, and in each such case, the Company shall give notice thereof to the holder
      of this Warrant, which notice shall state the Exercise Price resulting from
      such
      adjustment and the increase or decrease in the number of Warrant Shares
      purchasable at such price upon exercise, setting forth in reasonable detail
      the
      method of calculation and the facts upon which such calculation is based. Such
      calculation shall be certified by the Chief Financial Officer of the
      Company.

    

    (h) Minimum
      Adjustment of Exercise Price.
      No
      adjustment of the Exercise Price shall be made in an amount of less than 1%
      of
      the Exercise Price in effect at the time such adjustment is otherwise required
      to be made, but any such lesser adjustment shall be carried forward and shall
      be
      made at the time and together with the next subsequent adjustment which,
      together with any adjustments so carried forward, shall amount to not less
      than
      1% of such Exercise Price.

    

    (i) No
      Fractional Shares.
      No
      fractional shares of Common Stock are to be issued upon the exercise of this
      Warrant, but the Company shall pay a cash adjustment in respect of any
      fractional share which would otherwise be issuable in an amount equal to the
      same fraction of the Market Price of a share of Common Stock on the date of
      such
      exercise.

    

    (j) Other
      Notices.
      In case
      at any time:

    

    (i) the
      Company shall declare any dividend upon the Common Stock payable in shares
      of
      stock of any class or make any other distribution (including dividends or
      distributions payable in cash out of retained earnings) to the holders of the
      Common Stock;

    

    (ii) the
      Company shall offer for subscription pro rata to the holders of the Common
      Stock
      any additional shares of stock of any class or other rights;

    

    (iii) there
      shall be any capital reorganiza-tion of the Company, or reclassification of
      the
      Common Stock, or consolidation or merger of the Company with or into, or sale
      of
      all or substan-tially all its assets to, another corporation or entity;
      or

    

    (iv) there
      shall be a voluntary or involun-tary dissolution, liquidation or winding up
      of
      the Company;

    

    then,
      in
      each such case, the Company shall give to the holder of this Warrant (a) notice
      of the date on which the books of the Company shall close or a record shall
      be
      taken for determining the holders of Common Stock entitled to receive any such
      divi-dend, distribution, or subscription rights or for determining the holders
      of Common Stock entitled to vote in respect of any such reorganization,
      reclassification, consolidation, merger, sale, dissolution, liquidation or
      winding-up and (b) in the case of any such reorganization, reclassification,
      consolidation, merger, sale, dissolution, liquidation or winding-up, notice
      of
      the date (or, if not then known, a reasonable approximation thereof by the
      Company) when the same shall take place. Such notice shall also specify the
      date
      on which the holders of Common Stock shall be entitled to receive such dividend,
      distribution, or subscription rights or to exchange their Common Stock for
      stock
      or other securities or property deliverable upon such reorganization,
      re-classification, consolidation, merger, sale, dissolution, liquidation, or
      winding-up, as the case may be. Such notice shall be given at least 30 days
      prior to the record date or the date on which the Company’s books are closed in
      respect thereto. Failure to give any such notice or any defect therein shall
      not
      affect the validity of the proceedings referred to in clauses (i), (ii), (iii)
      and (iv) above.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    (k) Certain
      Events.
      If any
      event occurs of the type contemplated by the adjustment provisions of this
      Paragraph 4 but not expressly provided for by such provisions, the Company
      will
      give notice of such event as provided in Paragraph 4(g) hereof, and the
      Company’s Board of Directors will make an appropriate adjustment in the Exercise
      Price and the number of shares of Common Stock acquirable upon exercise of
      this
      Warrant so that the rights of the holder shall be neither enhanced nor
      diminished by such event.

    

    (l) Certain
      Definitions. 

    

    (i) “Common
      Stock Deemed Outstanding”
      shall
      mean the number of shares of Common Stock actually outstanding (not including
      shares of Common Stock held in the treasury of the Company), plus (x) pursuant
      to Paragraph 4(b)(i) hereof, the maximum total number of shares of Common Stock
      issuable upon the exercise of Options, as of the date of such issuance or grant
      of such Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the
      maximum total number of shares of Common Stock issuable upon conversion or
      exchange of Convertible Securities, as of the date of issuance of such
      Convertible Securities, if any. 

    

    (ii) “Market
      Price,”
      as of
      any date, (i) means the average of the last reported sale prices for the shares
      of Common Stock on the OTCBB for the five (5) Trading Days immediately preceding
      such date as reported by Bloomberg, or (ii) if the OTCBB is not the principal
      trading market for the shares of Common Stock, the average of the last reported
      sale prices on the principal trading market for the Common Stock during the
      same
      period as reported by Bloomberg, or (iii) if market value cannot be calculated
      as of such date on any of the foregoing bases, the Market Price shall be the
      fair market value as reasonably determined in good faith by (a) the Board of
      Directors of the Company or, at the option of a majority-in-interest of the
      holders of the outstanding Warrants by (b) an independent investment bank of
      nationally recognized standing in the valuation of businesses similar to the
      business of the corporation. The manner of determining the Market Price of
      the
      Common Stock set forth in the foregoing definition shall apply with respect
      to
      any other security in respect of which a determination as to market value must
      be made hereunder.

    

    (iii) “Common
      Stock,”
      for
      purposes of this Paragraph 4, includes the Common Stock, par value $.00001
      per
      share, and any additional class of stock of the Company having no preference
      as
      to dividends or distributions on liquidation, provided that the shares
      purchasable pursuant to this Warrant shall include only shares of Common Stock,
      par value $.00001 per share, in respect of which this Warrant is exercisable,
      or
      shares resulting from any subdivision or combination of such Common Stock,
      or in
      the case of any reorganization, reclassification, consolidation, merger, or
      sale
      of the character referred to in Paragraph 4(e) hereof, the stock or other
      securities or property provided for in such Paragraph.

    

    5. Issue
      Tax. The
      issuance of certificates for Warrant Shares upon the exercise of this Warrant
      shall be made without charge to the holder of this Warrant or such shares for
      any issuance tax or other costs in respect thereof, provided that the Company
      shall not be required to pay any tax which may be payable in respect of any
      transfer involved in the issuance and delivery of any certificate in a name
      other than the holder of this Warrant.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    6. No
      Rights or Liabilities as a Shareholder. This
      Warrant shall not entitle the holder hereof to any voting rights or other rights
      as a shareholder of the Company. No provision of this Warrant, in the absence
      of
      affirmative action by the holder hereof to purchase Warrant Shares, and no
      mere
      enumeration herein of the rights or privileges of the holder hereof, shall
      give
      rise to any liability of such holder for the Exercise Price or as a shareholder
      of the Company, whether such liability is asserted by the Company or by
      creditors of the Company.

    

    7. Transfer,
      Exchange, and Replacement of Warrant.

    

    (a) Restriction
      on Transfer.
      This
      Warrant and the rights granted to the holder hereof are transferable, in whole
      or in part, upon surrender of this Warrant, together with a properly executed
      assignment in the form attached hereto, at the office or agency of the Company
      referred to in Paragraph 7(e) below, pro-vided, however, that any transfer
      or assignment shall be subject to the conditions set forth in Paragraph 7(f)
      hereof and to the applicable provisions of the Securities Purchase Agreement.
      Until due presentment for registration of transfer on the books of the Company,
      the Company may treat the registered holder hereof as the owner and holder
      hereof for all purposes, and the Company shall not be affected by any notice
      to
      the con-trary. Notwithstanding anything to the contrary contained herein, the
      registration rights described in Paragraph 8 are assignable only in accordance
      with the provisions of that certain Registration Rights Agreement, dated January
      5, 2007, by and among the Company and the other signatories thereto (the
“Registration Rights Agreement”).

    

    (b) Warrant
      Exchangeable for Different Denomina-tions.
      This
      Warrant is exchange-able, upon the surrender hereof by the holder hereof at
      the
      office or agency of the Company referred to in Paragraph 7(e) below, for new
      Warrants of like tenor representing in the aggregate the right to purchase
      the
      number of shares of Common Stock which may be purchased hereunder, each of
      such
      new Warrants to represent the right to purchase such number of shares as shall
      be designated by the holder hereof at the time of such surrender.

    

    (c) Replacement
      of Warrant.
      Upon
      receipt of evi-dence reasonably satisfactory to the Company of the loss, theft,
      destruction, or mutilation of this Warrant and, in the case of any such loss,
      theft, or destruc-tion, upon delivery of an indemnity agreement reason-ably
      satisfactory in form and amount to the Company, or, in the case of any such
      mutilation, upon surrender and cancellation of this Warrant, the Company, at
      its
      expense, will execute and deliver, in lieu thereof, a new Warrant of like
      tenor.

    

    (d) Cancellation;
      Payment of Expenses.
      Upon the
      surrender of this Warrant in connection with any trans-fer, exchange, or
      replacement as provided in this Paragraph 7, this Warrant shall be promptly
      canceled by the Company. The Company shall pay all taxes (other than securities
      transfer taxes) and all other expenses (other than legal expenses, if any,
      incurred by the holder or transferees) and charges payable in connection with
      the preparation, execution, and delivery of Warrants pursuant to this Paragraph
      7.

    

    (e) Register.
      The
      Company shall maintain, at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to the holder hereof),
      a
      register for this Warrant, in which the Company shall record the name and
      address of the person in whose name this Warrant has been issued, as well as
      the
      name and address of each transferee and each prior owner of this
      Warrant.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

    

    (f) Exercise
      or Transfer Without Registration.
      If, at
      the time of the surrender of this Warrant in connection with any exercise,
      transfer, or exchange of this Warrant, this Warrant (or, in the case of any
      exercise, the Warrant Shares issuable hereunder), shall not be registered under
      the Securities Act of 1933, as amended (the “Securities Act”) and under
      applicable state securities or blue sky laws, the Company may require, as a
      condition of allowing such exercise, transfer, or exchange, (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 and counsel are acceptable to the
      Company, to the effect that such exercise, transfer, or exchange may be made
      without registration under said 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)
      promulgated under the Securities Act; provided that no such opinion, letter
      or
      status as an “accredited investor” shall be required in connection with a
      transfer pursuant to Rule 144 under the Securities Act. The first holder of
      this
      Warrant, by taking and holding the same, represents to the Company that such
      holder is acquiring this Warrant for investment and not with a view to the
      distribution thereof. 

    

    8. Registration
      Rights. The
      initial holder of this Warrant (and certain assignees thereof) is entitled
      to
      the benefit of such registration rights in respect of the Warrant Shares as
      are
      set forth in Section 2 of the Registration Rights Agreement.

    

    9. Notices.
      All
      notices, requests, and other communications required or permitted to be given
      or
      delivered hereunder to the holder of this Warrant shall be in writing, and
      shall
      be personally delivered, or shall be sent by certified or registered mail or
      by
      recognized overnight mail courier, postage prepaid and addressed, to such holder
      at the address shown for such holder on the books of the Company, or at such
      other address as shall have been furnished to the Company by notice from such
      holder. All notices, requests, and other communications required or permitted
      to
      be given or delivered hereunder to the Company shall be in writing, and shall
      be
      personally delivered, or shall be sent by certified or registered mail or by
      recognized overnight mail courier, postage prepaid and addressed, to the office
      of the Company at 550 Greens Parkway, Suite 230, Houston, TX 77067, Attention:
      Chief Executive Officer, or at such other address as shall have been furnished
      to the holder of this Warrant by notice from the Company. Any such notice,
      request, or other communication may be sent by facsimile, but shall in such
      case
      be subsequently confirmed by a writing personally delivered or sent by certified
      or registered mail or by recognized overnight mail courier as provided above.
      All notices, requests, and other communications shall be deemed to have been
      given either at the time of the receipt thereof by the person entitled to
      re-ceive such notice at the address of such person for purposes of this
      Paragraph 9, or, if mailed by registered or certified mail or with a recognized
      overnight mail courier upon deposit with the United States Post Office or such
      overnight mail courier, if postage is prepaid and the mailing is properly
      addressed, as the case may be.

    

    10. Governing
      Law. THIS
      WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
      LAWS
      OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
      ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
      LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
      UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO
      ANY
      DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO IN CONNECTION
      HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES
      IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
      SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS
      UPON
      A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
      SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN
      SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
      BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH
      SUIT
      OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
      BY
      SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
      PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR
      ALL
      FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY
      IN CONNECTION WITH SUCH DISPUTE.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    11. Miscellaneous.

    

    (a) Amendments.
      This
      Warrant and any provision hereof may only be amended by an instrument in writing
      signed by the Company and the holder hereof.

    

    (b) Descriptive
      Headings.
      The
      descriptive headings of the several paragraphs of this Warrant are in-serted
      for
      purposes of reference only, and shall not affect the meaning or construction
      of
      any of the provisions hereof.

     

    (c) Cashless
      Exercise.
      Notwithstanding anything to the contrary contained in this Warrant, if the
      resale of the Warrant Shares by the holder is not then registered pursuant
      to an
      effective registration statement under the Securities Act, this Warrant may
      be
      exercised by presentation and surrender of this Warrant to the Company at its
      principal executive offices with a written notice of the holder’s intention to
      effect a cashless exercise, including a calculation of the number of shares
      of
      Common Stock to be issued upon such exercise in accordance with the terms hereof
      (a “Cashless Exercise”). In the event of a Cashless Exercise, in lieu of paying
      the Exercise Price in cash, the holder shall surrender this Warrant for that
      number of shares of Common Stock determined by multiplying the number of Warrant
      Shares to which it would otherwise be entitled by a fraction, the numerator
      of
      which shall be the difference between the then current Market Price per share
      of
      the Common Stock and the Exercise Price, and the denominator of which shall
      be
      the then current Market Price per share of Common Stock. For example, if the
      holder is exercising 100,000 Warrants with a per Warrant exercise price of
      $0.75
      per share through a cashless exercise when the Common Stock’s current Market
      Price per share is $2.00 per share, then upon such Cashless Exercise the holder
      will receive 62,500 shares of Common Stock.

    

    (d) Remedies.
      The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the holder, by vitiating the intent and purpose of the
      transaction contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for a breach of its obligations under this Warrant will be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of the provisions of this Warrant, that the holder shall be entitled,
      in
      addition to all other available remedies at law or in equity, and in addition
      to
      the penalties assessable herein, to an injunction or injunctions restraining,
      preventing or curing any breach of this Warrant and to enforce specifically
      the
      terms and provisions thereof, without the necessity of showing economic loss
      and
      without any bond or other security being required.

     

    
 

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

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

     

    
      	 	 	 
	 	THE
              JACKSON RIVERS
              COMPANY
	 
 	 
 	 
 
	 	By:  	 
	 	Jeffrey Flannery
	 	Chief Executive Officer

    

    

    Dated
      as
      of January 5, 2007

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    FORM
      OF EXERCISE AGREEMENT

    

    

    Dated:
      ________ __, 200_

    

    

    To: ______________________

    

    

    The
      undersigned, pursuant to the provisions set forth in the within Warrant, hereby
      agrees to purchase ________ shares of Common Stock covered by such Warrant,
      and
      makes pay-ment herewith in full therefor at the price per share provided by
      such
      Warrant in cash or by certified or official bank check in the amount of, or,
      if
      the resale of such Common Stock by the undersigned is not currently registered
      pursuant to an effective registration statement under the Securities Act of
      1933, as amended, by surrender of securities issued by the Company (including
      a
      portion of the Warrant) having a market value (in the case of a portion of
      this
      Warrant, determined in accordance with Section 11(c) of the Warrant) equal
      to
      $_________. Please issue a certificate or certifi-cates for such shares of
      Common Stock in the name of and pay any cash for any fractional share
      to:

     

    
 

    
      	 	 	Name: 	 
	 	 	 	 
	 	 	Signature: 	 
	 	 	Address: 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	Note: 	The above signature should correspond
              exactly
              with the name on the face of the within Warrant, if
              applicable. 

    

    

    

    and,
      if
      said number of shares of Common Stock shall not be all the shares purchasable
      under the within Warrant, a new Warrant is to be issued in the name of said
      undersigned covering the balance of the shares purchasable thereunder less
      any
      frac-tion of a share paid in cash.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    FORM
      OF ASSIGNMENT

    

    

    FOR
      VALUE RECEIVED,
      the
      undersigned hereby sells, assigns, and transfers all the rights of the
      undersigned under the within Warrant, with respect to the number of shares
      of
      Common Stock covered thereby set forth hereinbelow, to:

    

    
      	
              Name of Assignee 

            	
              Address 

            	
              No
                of Shares 

            
	 	 	 
	 	 	 

    

    

    

    ,
      and
      hereby irrevocably constitutes and appoints ___________________________________
      as agent and attorney-in-fact to trans-fer said Warrant on the books of the
      within-named corporation, with full power of substitution in the
      premises.

    

    

    Dated: ________
      __, 200_

    
 

    
      	In
              the
              presence of: 	 	 	 
	 	 	Name: 	 
	 	 	 	 
	 	 	Signature: 	 
	 	 	Title
              of Signing Officer or Agent (if any):
	 	 	 	 
	 	 	Address: 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	Note: 	
              The
                above signature should correspond exactly with the name on the face
                of the
                within Warrant, if applicable.

            

    

     

    
      
        
        

      

      
        14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]