Document:

Unassociated Document

    WARRANT

     

    
      	
              KEYON
                COMMUNICATIONS HOLDINGS, INC.

            
	
              No.
                1

            	 	
              ______
                Shares

            

    

     

    WARRANT
      TO PURCHASE COMMON STOCK

     

    VOID
      AFTER 5:30 P.M., EASTERN 

     

    TIME,
      ON THE EXPIRATION DATE

     

    THIS
      WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT
      BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT
      COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
      FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
      THEREFROM.

     

    FOR
      VALUE
      RECEIVED, KEYON COMMUNICATIONS HOLDINGS, INC., a Delaware corporation (the
      “Company”),
      hereby agrees to sell upon the terms and on the conditions hereinafter set
      forth, but no later than 5:30 p.m., Pacific Time, on the Expiration Date (as
      hereinafter defined), to [_______________________________], or registered
      assigns (the “Holder”),
      under
      the terms as hereinafter set forth, [__________________________________] fully
      paid and non-assessable shares of the Company’s common stock, par value $0.001
      per share (the “Warrant
      Shares”),
      at a
      purchase price equal to $[______] per share (the “Warrant
      Price”),
      pursuant to this warrant (this “Warrant”).
      The
      number of Warrant Shares to be so issued and the Warrant Price are subject
      to
      adjustment in certain events as hereinafter set forth. The term “Common
      Stock”
shall
      mean, when used herein, unless the context otherwise requires, the stock and
      other securities and property at the time receivable upon the exercise of this
      Warrant.

     

    1. Exercise
      of Warrant.

     

    (a) The
      Holder may exercise this Warrant according to its terms by surrendering this
      Warrant to the Company at the address set forth in Section 10, together with
      the
      form of exercise attached hereto duly executed by the Holder, accompanied by
      cash, certified check or bank draft in payment of the Warrant Price, in lawful
      money of the United States of America, for the number of Warrant Shares
      specified in such form of exercise, or as otherwise provided in this Warrant,
      prior to 5:30 p.m., Pacific Time, on February 7, 2013 (the “Expiration
      Date”).

     

    (b) In
      lieu
      of exercising this Warrant by payment of cash, this Warrant may also be
      exercised at such time by means of a “cashless exercise” in which the Holder
      shall be entitled to receive a certificate for the number of Warrant Shares
      equal to the quotient obtained by dividing [(A-B) (X)] by (A),
      where:

     

    
      	 	
              (A)
                = 

            	
              VWAP
                (as defined below) on the business day immediately preceding the
                date of
                such election;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (B)
                =

            	
              the
                Warrant Price of this Warrant, as adjusted; and

            

    

     

    
      	 	
              (X)
                = 

            	
              the
                number of Warrant Shares issuable upon exercise of this Warrant in
                accordance with the terms of this Warrant by means of a cash exercise
                rather than a cashless exercise.

            

    

     

    For
      purposes of this Warrant, “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
      (as defined below), the daily volume weighted average price of the Common Stock
      for the ten (10) trading days prior to 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 L.P. (based on a Trading Day from 9:30 a.m. New York
      City
      time to 4:02 p.m. New York City time); (b) if the OTC Bulletin Board is not
      a
      Trading Market, the volume weighted average price of the Common Stock for the
      ten (10) trading days prior to 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 Pink Sheets, LLC (or a similar organization or agency
      succeeding to its functions of reporting prices), the average bid price per
      share of the Common Stock so reported for the twenty (20) trading days prior
      to
      such date; or (d) in all other cases, the fair market value of a share of Common
      Stock as determined in good faith by the Company’s board of directors. For
      purposes of this Warrant, “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the American Stock Exchange, the Nasdaq
      Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
      the
      New York Stock Exchange or the OTC Bulletin Board.

     

    (c) This
      Warrant may be exercised in whole or in part so long as any exercise in part
      hereof would not involve the issuance of fractional shares of Common Stock.
      If
      exercised in part, the Company shall deliver to the Holder a new Warrant,
      identical in form, in the name of the Holder, evidencing the right to purchase
      the number of Warrant Shares as to which this Warrant has not been exercised,
      which new Warrant shall be signed by the Chairman, Chief Executive Officer,
      President or any Vice President of the Company. The term Warrant as used herein
      shall include any subsequent Warrant issued as provided herein.

     

    (d) No
      fractional shares or scrip representing fractional shares shall be issued upon
      the exercise of this Warrant. The Company shall pay cash in lieu of fractions
      with respect to the Warrants based upon the fair market value of such fractional
      shares of Common Stock (which shall be the closing price of such shares on
      the
      exchange or market on which the Common Stock is then traded) at the time of
      exercise of this Warrant.

     

    (e) In
      the
      event of any exercise of the rights represented by this Warrant, a certificate
      or certificates for the Warrant Shares so purchased, registered in the name
      of
      the Holder, shall be delivered to the Holder within a reasonable time after
      such
      rights shall have been so exercised. The person or entity in whose name any
      certificate for the Warrant Shares is issued upon exercise of the rights
      represented by this Warrant shall for all purposes be deemed to have become
      the
      holder of record of such shares immediately prior to the close of business
      on
      the date on which the Warrant was surrendered and payment of the Warrant Price
      and any applicable taxes was made, irrespective of the date of delivery of
      such
      certificate, except that, if the date of such surrender and payment is a date
      when the stock transfer books of the Company are closed, such person shall
      be
      deemed to have become the holder of such shares at the opening of business
      on
      the next succeeding date on which the stock transfer books are open. The Company
      shall pay any and all documentary stamp or similar issue or transfer taxes
      payable in respect of the issue or delivery of shares of Common Stock on
      exercise of this Warrant; provided,
      however,
      that
      the Company shall not be required to pay any tax that may be payable in respect
      of any issuance and delivery of Warrant Shares to any Person other than the
      Holder or with respect to any income tax due by the Holder with respect to
      any
      Warrant Shares. “Person”
shall
      mean any natural person, corporation, division of a corporation, partnership,
      limited liability company, trust, joint venture, association, company, estate,
      unincorporated organization or government or any agency or political subdivision
      thereof.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    2. Disposition
      of Warrant Shares and Warrant.

     

    (a) The
      Holder hereby acknowledges that this Warrant and any Warrant Shares purchased
      pursuant hereto are, as of the date hereof, not registered: (i) under the Act
      on
      the ground that the issuance of this Warrant is exempt from registration under
      Section 4(2) of the Act as not involving any public offering or (ii) under
      any
      applicable state securities law because the issuance of this Warrant does not
      involve any public offering; and that the Company’s reliance on the Section 4(2)
      exemption of the Act and under applicable state securities laws is predicated
      in
      part on the representations hereby made to the Company by the Holder that it
      is
      acquiring this Warrant and will acquire the Warrant Shares for investment for
      its own account, with no present intention of dividing its participation with
      others or reselling or otherwise distributing the same, subject, nevertheless,
      to any requirement of law that the disposition of its property shall at all
      times be within its control.

     

    The
      Holder hereby agrees that it will not sell or transfer all or any part of this
      Warrant and/or the Warrant Shares, except pursuant to an effective registration
      statement under the Act, unless and until it shall first have given notice
      to
      the Company describing such sale or transfer and furnished to the Company either
      (i) an opinion of counsel for the Company, which the Company shall obtain at
      its
      own expense, to the effect that the proposed sale or transfer may be made
      without registration under the Act and without registration or qualification
      under any state law, or (ii) an interpretative letter from the Securities and
      Exchange Commission to the effect that no
      enforcement action will be recommended if the proposed sale or transfer is
      made
      without registration under the Act.

     

    (b) If,
      at
      the time of issuance of the shares issuable upon exercise of this Warrant,
      no
      registration statement is in effect with respect to such shares under applicable
      provisions of the Act, the Company may at its election require that the Holder
      provide the Company with written reconfirmation of the Holder’s investment
      intent and that any stock certificate delivered to the Holder of a surrendered
      Warrant shall bear a legend reading substantially as follows:

     

    “THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
      DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
      SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER
      OF
      THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    In
      addition, so long as the foregoing legend may remain on any stock certificate
      delivered to the Holder, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby
      on
      its books and records and with those to whom it may delegate registrar and
      transfer functions.

     

    3. Forfeiture.
      The
      Holder is entitled to this Warrant as consideration for entering into that
      certain Commercial Guaranty on behalf of the Company on or about February 8,
      2008, pursuant to which the Holder agrees to guarantee full payment and
      satisfaction of certain loans made to the Company. In the event that the Holder
      materially breaches the Commercial Guaranty and such material breach remains
      uncured pursuant to the terms thereof, this Warrant shall be deemed to have
      been
      forfeited by Holder and this Warrant shall be null and void.

     

    4. Reservation
      of Shares.
      The
      Company hereby agrees that at all times there shall be reserved for issuance
      upon the exercise of this Warrant such number of shares of its Common Stock
      as
      shall be required for issuance upon exercise of this Warrant. The Company
      further agrees that all shares which may be issued upon the exercise of the
      rights represented by this Warrant will be duly authorized and will, upon
      issuance and against payment of the Warrant Price therefor, be validly issued,
      fully paid and non assessable, free from all taxes, liens, charges and
      preemptive rights with respect to the issuance thereof, other than taxes, if
      any, in respect of any transfer occurring contemporaneously with such issuance
      and other than transfer restrictions imposed by federal and state securities
      laws.

     

    5. Exchange,
      Transfer or Assignment of Warrant.
      This
      Warrant is exchangeable, without expense, at the option of the Holder, upon
      presentation and surrender hereof to the Company or at the office of its stock
      transfer agent, if any, for other Warrants of different denominations, entitling
      the Holder or Holders thereof to purchase in the aggregate the same number
      of
      shares of Common Stock purchasable hereunder. Upon surrender of this Warrant
      to
      the Company or at the office of its stock transfer agent, if any, with an
      appropriate instrument of assignment duly executed and funds sufficient to
      pay
      any transfer tax, the Company shall, without charge, execute and deliver a
      new
      Warrant in the name of the assignee named in such instrument of assignment and
      this Warrant shall promptly be canceled. This Warrant may be divided or combined
      with other Warrants that carry the same rights upon presentation hereof at
      the
      office of the Company or at the office of its stock transfer agent, if any,
      together with a written notice specifying the names and denominations in which
      new Warrants are to be issued and signed by the Holder hereof.

     

    6. Capital
      Adjustments.
      This
      Warrant is subject to the following further provisions:

     

    (a) If
      any
      recapitalization of the Company or reclassification of its Common Stock or
      any
      merger or consolidation of the Company into or with a Person, or the sale or
      transfer of all or substantially all of the Company’s assets or of any successor
      corporation’s assets to any Person (any such Person being included within the
      meaning of the term “successor corporation”) shall be effected, at any time
      while this Warrant remains outstanding and unexpired, then, as a condition
      of
      such recapitalization, reclassification, merger, consolidation, sale or
      transfer, lawful and adequate provision shall be made whereby the Holder of
      this
      Warrant thereafter shall have the right to receive upon the exercise hereof
      as
      provided in Section 1 and in lieu of the shares of Common Stock immediately
      theretofore issuable upon the exercise of this Warrant, such shares of capital
      stock, securities or other property as may be issued or payable with respect
      to
      or in exchange for a number of outstanding shares of Common Stock equal to
      the
      number of shares of Common Stock immediately theretofore issuable upon the
      exercise of this Warrant had such recapitalization, reclassification, merger,
      consolidation, sale or transfer not taken place, and in each such case, the
      terms of this Warrant shall be applicable to the shares of stock or other
      securities or property receivable upon the exercise of this Warrant after such
      consummation.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    (b) If
      the
      Company at any time while this Warrant remains outstanding and unexpired shall
      subdivide or combine its Common Stock, the number of Warrant Shares purchasable
      upon exercise of this Warrant and the Warrant Price shall be proportionately
      adjusted.

     

    (c) If
      the
      Company at any time while this Warrant is outstanding and unexpired shall issue
      or pay the holders of its Common Stock, or take a record of the holders of
      its
      Common Stock for the purpose of entitling them to receive, a dividend payable
      in, or other distribution of, Common Stock, then (i) the Warrant Price shall
      be
      adjusted in accordance with Section 5(e) and (ii) the number of Warrant Shares
      purchasable upon exercise of this Warrant shall be adjusted to the number of
      Warrant Shares that the Holder would have owned immediately following such
      action had this Warrant been exercised immediately prior thereto.

     

    (d) If
      the
      Company shall at any time after the date of issuance of this Warrant distribute
      to all holders of its Common Stock any shares of capital stock of the Company
      (other than Common Stock) or evidences of its indebtedness or assets (excluding
      cash dividends or distributions paid from retained earnings or current year’s or
      prior year’s earnings of the Company) or rights or warrants to subscribe for or
      purchase any of its securities (excluding those referred to in the immediately
      preceding paragraph) (any of the foregoing being hereinafter in this paragraph
      called the “Securities”),
      then
      in each such case, the Company shall reserve shares or other units of such
      Securities for distribution to the Holder upon exercise of this Warrant so
      that,
      in addition to the shares of the Common Stock to which such Holder is entitled,
      such Holder will receive upon such exercise the amount and kind of such
      Securities which such Holder would have received if the Holder had, immediately
      prior to the record date for the distribution of the Securities, exercised
      this
      Warrant.

     

    (e) Whenever
      the number of Warrant Shares purchasable upon exercise of this Warrant is
      adjusted, as herein provided, the Warrant Price payable upon the exercise of
      this Warrant shall be adjusted to that price determined by multiplying the
      Warrant Price immediately prior to such adjustment by a fraction (i) the
      numerator of which shall be the number of Warrant Shares purchasable upon
      exercise of this Warrant immediately prior to such adjustment, and (ii) the
      denominator of which shall be the number of Warrant Shares purchasable upon
      exercise of this Warrant immediately thereafter.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (f) The
      number of shares of Common Stock outstanding at any given time for purposes
      of
      the adjustments set forth in this Section 5 shall exclude any shares then
      directly or indirectly held in the treasury of the Company.

     

    (g) The
      Company shall not be required to make any adjustment pursuant to this Section
      5
      if the amount of such adjustment would be less than one percent (1%) of the
      Warrant Price in effect immediately before the event that would otherwise have
      given rise to such adjustment. In such case, however, any adjustment that would
      otherwise have been required to be made shall be made at the time of and
      together with the next subsequent adjustment which, together with any adjustment
      or adjustments so carried forward, shall amount to not less than one percent
      (1%) of the Warrant Price in effect immediately before the event giving rise
      to
      such next subsequent adjustment.

     

    (h) Following
      each computation or readjustment as provided in this Section 5, the new adjusted
      Warrant Price and number of Warrant Shares purchasable upon exercise of this
      Warrant shall remain in effect until a further computation or readjustment
      thereof is required.

     

    7. Registration
      Rights.
      

     

    (a) If,
      at
      any time during the 2 year period commencing on the date hereof, the Company
      proposes to file a resale registration statement under the Act with respect
      to
      an offering of equity securities or securities exercisable or exchangeable
      for,
      or convertible into, equity securities, by the Company solely for the account
      of
      stockholders of the Company, other than a registration statement (i) filed
      in
      connection with any employee stock option or other benefit plan, (ii) for an
      exchange offer or offering of securities solely to the Company’s existing
      stockholders, (iii) for an offering of debt that is convertible into equity
      securities of the Company or (iv) for a dividend reinvestment plan, then the
      Company shall (x) give written notice of such proposed filing to the Holder
      as
      soon as practicable but in no event less than twenty (20) days before the
      anticipated filing date, which notice shall describe the amount and type of
      securities to be included in such offering, the intended method(s) of
      distribution, and the name of the proposed managing underwriter or underwriters,
      if any, of the offering, and (y) subject to Section 6(b) below, offer to the
      Holder in such notice the opportunity to register the sale of such number of
      Warrant Shares (the “Registrable
      Securities”)
      as the
      Holder may request in writing within five (5) days following receipt of such
      notice (a “Resale
      Registration Statement”).
      Subject to Section 6(b) below, the Company shall cause such Registrable
      Securities to be included in such registration and shall use commercially
      reasonable efforts to cause the managing underwriter or underwriters of a
      proposed underwritten offering to permit the Registrable Securities requested
      to
      be included in a Resale Registration Statement, on the same terms and conditions
      as any similar securities of the Company to be sold by stockholders of the
      Company, and to permit the sale or other disposition of such Registrable
      Securities in accordance with the intended method(s) of distribution thereof.
      If
      the Holder proposes to distribute any Registrable Securities through a Resale
      Registration Statement that involves an underwriter or underwriters, the Holder
      shall enter into an underwriting agreement in customary form with the
      underwriter or underwriters selected for such Resale Registration Statement.
      

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    (b) Notwithstanding
      the foregoing, if (i) the managing underwriter of a proposed underwritten
      offering, (ii) a placement agent or (iii) the Company determines that the
      inclusion of all Registrable Securities requested to be included in a Resale
      Registration Statement would adversely affect such offering, the Company may,
      in
      its discretion, limit the number of Registrable Securities to be included in
      such offering. Furthermore, in the event the Company is advised by the
      Securities and Exchange Commission, or any applicable self-regulatory or state
      securities agency, that the inclusion of any Registrable Securities will
      prevent, preclude or materially delay the effectiveness of a registration
      statement filed, the Company may amend such registration statement to exclude
      the Registrable Securities without thereby incurring any liability to the
      Holder.

     

    8. Notice
      to Holder.

     

    (a) In
      case:

     

    (i) the
      Company shall take a record of the holders of its Common Stock (or other stock
      or securities at the time receivable upon the exercise of this Warrant) for
      the
      purpose of entitling them to receive any dividend (other than a cash dividend
      payable out of earned surplus of the Company) or other distribution, or any
      right to subscribe for or purchase any shares of stock of any class or any
      other
      securities, or to receive any other right;

     

    (ii) of
      any
      capital reorganization of the Company, any reclassification of the capital
      stock
      of the Company, any consolidation with or merger of the Company into another
      Person, or any conveyance of all or substantially all of the assets of the
      Company to another Person; or

     

    (iii) of
      any
      voluntary dissolution, liquidation or winding-up of the Company;

     

    then,
      and
      in each such case, the Company will mail or cause to be mailed to the Holder
      hereof at the time outstanding a notice specifying, as the case may be, (i)
      the
      date on which a record is to be taken for the purpose of such dividend,
      distribution or right, and stating the amount and character of such dividend,
      distribution or right, or (ii) the date on which such reorganization,
      reclassification, consolidation, merger, conveyance, dissolution, liquidation
      or
      winding-up is to take place, and the time, if any is to be fixed, as of which
      the holders of record of Common Stock (or such stock or securities at the time
      receivable upon the exercise of this Warrant) shall be entitled to exchange
      their shares of Common Stock (or such other stock or securities) for securities
      or other property deliverable upon such reorganization, reclassification,
      consolidation, merger, conveyance, dissolution, liquidation or winding-up.
      Such
      notice shall be mailed at least twenty (20) days prior to the record date
      therein specified, or if no record date shall have been specified therein,
      at
      least twenty (20) days prior to the date of such action, provided, however,
      failure to provide any such notice shall not affect the validity of such
      transaction.

     

    (b) Whenever
      any adjustment shall be made pursuant to Section 5 hereof, the Company shall
      promptly make a certificate signed by its Chairman, Chief Executive Officer,
      President, Vice President, Chief Financial Officer or Treasurer, setting forth
      in reasonable detail the event requiring the adjustment, the amount of the
      adjustment, the method by which such adjustment was calculated and the Warrant
      Price and number of Warrant Shares purchasable upon exercise of this Warrant
      after giving effect to such adjustment, and shall promptly cause copies of
      such
      certificate to be mailed (by first class mail, postage prepaid) to the Holder
      of
      this Warrant.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    9. Loss,
      Theft, Destruction or Mutilation.
      Upon
      receipt by the Company of evidence satisfactory to it, in the exercise of its
      reasonable discretion, of the ownership and the loss, theft, destruction or
      mutilation of this Warrant and, in the case of loss, theft or destruction,
      of
      indemnity reasonably satisfactory to the Company and, in the case of mutilation,
      upon surrender and cancellation hereof, the Company will execute and deliver
      in
      lieu hereof, without expense to the Holder, a new Warrant of like tenor dated
      the date hereof.

     

    10. Warrant
      Holder Not a Stockholder.
      The
      Holder of this Warrant, as such, shall not be entitled by reason of this Warrant
      to any rights whatsoever as a stockholder of the Company.

     

    11. Notices.
      Any
      notice required or contemplated by this Warrant shall be deemed to have been
      duly given if transmitted by registered or certified mail, return receipt
      requested, postage prepaid, or nationally recognized overnight delivery service,
      to the Company at its principal executive offices: 11742 Stonegate Circle,
      Omaha, Nebraska 68164, Attention: Chief Executive Officer, or to the Holder
      at
      the name and address set forth in the Warrant Register maintained by the
      Company.

     

    12. Choice
      of Law.
      THIS
      WARRANT IS ISSUED UNDER AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED
      IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEVADA, WITHOUT GIVING
      EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

     

    13. Jurisdiction
      and Venue.
      The
      Company and the Holder, by its acceptance hereof, hereby agree that any dispute
      which may arise between them arising out of or in connection with this Warrant
      shall be adjudicated before a court located in Las Vegas, Nevada, and they
      hereby submit to the exclusive jurisdiction of the federal and state courts
      of
      the State of Nevada located in Las Vegas with respect to any action or legal
      proceeding commenced by any party, and irrevocably waive any objection they
      now
      or hereafter may have respecting the venue of any such action or proceeding
      brought in such a court or respecting the fact that such court is an
      inconvenient forum, relating to or arising out of this Warrant or any acts
      or
      omissions relating to the sale of the securities hereunder, and consent to
      the
      service of process in any such action or legal proceeding by means of registered
      or certified mail, return receipt requested, postage prepaid, in care of the
      address set forth herein or such other address as either party shall furnish
      in
      writing to the other.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its
      behalf, in its corporate name and by its duly authorized officer, as of this
      7th
      day of February, 2008.

     

    
      	 	 	 
	 	KEYON COMMUNICATIONS HOLDINGS,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
              Jonathan Snyder
	 	Title:
              Chief Executive Officer

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    FORM
      OF
      EXERCISE

     

    (to
      be
      executed by the registered holder hereof)

     

    1. The
      undersigned hereby elects to purchase ________ Warrant Shares 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. Payment
      shall take the form of (check applicable box):

     

    [
      ] in
      lawful money of the United States; or

     

    [
      ] the
      cancellation of such number of Warrant Shares as is necessary, in accordance
      with the formula set forth in subsection 1(b), to exercise this Warrant with
      respect to the maximum number of Warrant Shares purchasable pursuant to the
      cashless exercise procedure set forth in subsection 1(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:

     

    _______________________________

     

    4. The
      Warrant Shares shall be delivered by physical delivery of a certificate
      to:

     

    _______________________________

     

    _______________________________

     

    _______________________________

     

    5. 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 or
      Person:_________________________________________________

    Signature
      of Authorized Signatory of Investing Entity:__________________________________

    Name
      of
      Authorized Signatory:
      ____________________________________________________

    Title
      of
      Authorized
      Signatory:_____________________________________________________

    Date:________________________________________________________________________CONFIDENTIAL
      TREATMENT REQUESTED

    WITH
      RESPECT TO CERTAIN PORTIONS HEREOF

    DENOTED
      WITH “***”

     

    Exhibit
      10.1

    

    EMPLOYMENT
      AGREEMENT

    

    This
      Employment Agreement (the “Agreement”), dated as of January 10, 2008 (“Agreement
      Date”), by and between Hudson Securities, Inc., a Delaware corporation
      (“Company”), having an address of 111 Town Square Place, 15th Floor, Jersey
      City, New Jersey 07310, and David Scialabba (the “Employee”), residing at
      210-B Sunset Road, Oyster Bay, New York 11771.

    

    WITNESSESTH:

    

    WHEREAS,
      the Company is a registered broker-dealer and member of the Financial Industry
      Regulatory Authority (“FINRA”) engaged in the business of market making,
      trading, institutional agency trading, investment banking and research; and
      

    

    WHEREAS,
      the Company wishes to employ the Employee and the Employee is willing to be
      so
      employed and to render services to the Company, all upon the terms and subject
      to the conditions contained herein;

    

    NOW
      THEREFORE, in consideration of the mutual covenants and agreements contained
      herein, and other good and valuable consideration, the receipt and sufficiency
      of which is acknowledged, the parties agree as follows:

    

    1. Employment. Subject
      to and upon the terms and conditions contained in this Agreement, the Company
      hereby agrees to employ Employee and Employee agrees to enter the employ of
      the
      Company, for the period set forth in Paragraph 2 hereof, to render the services
      to the Company, its affiliates and/or subsidiaries described in Paragraph 3
      hereof. 

    

    2. Term. Employee’s
      employment by the Company is at the will of either party. Employee’s term of
      employment (the “Agreement Term”) under this Agreement shall commence on a date
      no later than January 22, 2008 (such date, the “Commencement Date”) and shall
      continue until terminated by either party for any reason but subject to the
      terms and conditions set forth herein, but in no event will Employee render
      any
      services under this Agreement to the Company in any form whatsoever prior to
      the
      Commencement Date.

     

    3. Duties
      and Responsibilities of Parties. 

    

    (a) Employee
      shall be employed as the Company’s Senior Vice President (“SVP”) of
      Institutional Sales, as co-Head of the Institutional Sales Group with Vincent
      Pelosi and Dana Pascucci. It is agreed that Employee shall perform his services
      in the Company’s Jersey City, New Jersey offices, as well as in the offices of
      the Company’s affiliates and/or subsidiaries in New Jersey and New York and he
      will be responsible for
      institutional account coverage and,
      at
      the request of the Company, for managing institutional sales and sales trading,
      which duties, responsibilities and work location may only be changed by mutual
      written agreement of the parties. All existing and future institutional sales
      traders or other members of the Institutional Sales Group (each, a
“Subordinate”, and collectively, the “Subordinates”) employed by the Company
      will report to the co-Heads of the Institutional Sales Group, unless existing
      employees previously specified by written commitments of the firm are prohibited
      from doing so.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      CONFIDENTIAL
        TREATMENT REQUESTED

      WITH
        RESPECT TO CERTAIN PORTIONS HEREOF

      DENOTED
        WITH “***”

    

     

    (b) Employee
      shall report to the Chief Executive Officer of the Company or any other more
      senior executive officers appointed by the Board of Directors of the Company
      and
      agrees to abide by all bylaws and applicable policies of the Company promulgated
      from time to time by the Board of Directors of the Company.

    

    (c) The
      Company represents that it will continue to update its technological resources
      to maintain its current level of technology.

    

    (d) The
      Company represents that it has, and will maintain, the ability to trade in
      the
      overseas markets currently available to the firm. 

    

    (e) The
      Company agrees to implement the employment of a CSA agreement and soft dollar
      person with knowledge and expertise of regulatory and legal requirements
      applicable to the Institutional Sales Group business as necessitated by the
      business needs of the Institutional Sales Group as determined by the Company.
      

    

    (f) The
      Company agrees to use its best efforts to assist the Employee to begin the
      process of opening a New York branch office capable of supporting Employee’s
      business needs within six-months of the Commencement Date and will permit
      Employee the option to work from the New York branch office. If the Company
      has
      not substantially committed to opening a New York branch office within
      six-months of the Commencement Date, the Employee can notify the Company (in
      accordance with Notice procedures set forth in paragraph 15) of the resignation
      of his Employment for Good Reason under this Agreement, and if the work location
      situation is not cured by the Company within 30 days of Company’s receipt of his
      notice of resignation, Employee’s resignation will be deemed for “Good Reason”
(as defined under paragraph 5.2 (b)(v)) and the Company will also accelerate
      all
      Loan distributions (to the extent any Loan distributions have not already been
      distributed) and forgive the repayment of the Loan (as discussed in paragraph
      5.2 below). 

    

    4. Exclusive
      Services And Best Efforts. Employee
      shall devote all of his working time, attention, best efforts and ability during
      regular business hours exclusively to the service of the Company, its affiliates
      and subsidiaries during the term of this Agreement. Nothing shall preclude
      Employee from (i) engaging in charitable activities and community affairs or
      (ii) managing his personal investments and affairs; provided, however, that
      such
      activities do not materially interfere with the proper performance of his duties
      and responsibilities as an employee of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      CONFIDENTIAL
        TREATMENT REQUESTED

      WITH
        RESPECT TO CERTAIN PORTIONS HEREOF

      DENOTED
        WITH “***”

    

     

    5.1. Compensation
      and Expenses.
      

    

    (a) Subject
      to the limitations set forth in this Agreement, Company shall pay out to the
      Employee a commission that is *** of the “Net Commissions” generated by Employee
      (the “Employee’s Commission”). 

    

    (b) For
      purposes of this Agreement, the term “Net Commissions” shall mean gross
      commissions that are actually received by the Company and derived directly
      from
      the Employee’s total purchase and sale of securities from transactions on
      accounts that are covered by the Employee for the firm, less any and all
      expenses related to the fees incurred in connection with the purchase or sale
      transactions effectuated by Employee, and any associated trading system or
      other
      costs including,

    

    (i) all
      actual, third-party transaction costs including execution, brokerage fees,
      give-up, clearing and/or flip charges, and processing ticket
      charges;

    

    (ii) all
      applicable, direct internal transaction costs including execution, brokerage
      fees, give-up, clearing and/or flip charges, and processing ticket
      charges;

    

    (iii) all
      commission rebates relating to equity business payable to introducing brokers
      or
      account executives not employed by the Company, if any, which are approved
      by
      the Company;

    

    (iv) all
      bad
      debts of any Employee customer, including uncollectible
      commissions;

     

    (v)
       all
      errors relating to Employee’s customers’ business;

    

    (vi) reasonable
      travel, entertainment and meal expenses consistent with the policy determined
      by
      Company for such matters, so long as approved by Company management prior to
      reimbursement;

    

    (vii) expenses
      incurred directly by Employee related to recruitment, promotion or marketing
      by
      or of Employee, in each case as approved by Company management; 

    

    Solely
      for the purposes of this Section 5.1(b), the term “Employee” includes any person
      working for Employee or in the Institutional Sales Group.

    

    (c) Notwithstanding
      anything to the contrary contained herein, and for purposes of clarity, in
      no
      event shall Company be required to pay Employee’s Commission for those sales
      whose fees are not actually received by Company. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      CONFIDENTIAL
        TREATMENT REQUESTED

      WITH
        RESPECT TO CERTAIN PORTIONS HEREOF

      DENOTED
        WITH “***”

    (d) Upon
      his
      entering into this Agreement, the Company shall grant to Employee *** of
“restricted stock”. For so long as Employee shall remain in the employ of
      Company, the “restricted stock” shall vest equally on an annual basis over a
      four (4) year period (the “Vesting Period”) from the Commencement Date, and the
      initial *** shall begin to vest on the first anniversary of the Commencement
      Date. All vested stock is not forfeited by the Employee in the event his
      employment with the Company ends for any reason. In the event of a Change of
      Control, all previously unvested restricted stock granted by this Section 5.1(d)
      shall automatically vest with Employee, regardless of the date. For the purposes
      herein, “Change of Control” shall mean any of the following: (i) direct or
      indirect acquisition by any person (as the term “person” is used in Section
      13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of
      more
      than fifty percent (51%) of the voting capital stock of the Company, in a single
      or series of related transactions; (ii) the occurrence of a sale of all or
      substantially all of the assets of the Company to an entity which is not a
      direct or indirect subsidiary of the Company; (iii) the occurrence of a
      reorganization, merger, consolidation or similar transaction involving the
      Company, unless (A) the shareholders of the Company immediately prior to the
      consummation of any such transaction will initially own securities representing
      a majority of the voting power of the surviving or resulting corporation, and
      (B) the directors of the Company immediately prior to the consummation of such
      transaction will initially represent a majority of the directors of the
      surviving or resulting corporation; or (iv) any other event which is at any
      time
      irrevocably designated as "Change in Control" for purposes of this Agreement
      by
      resolution adopted by a majority of the directors of the Employer.

     

    (e)
       The
      Company will grant options for the purchase of common stock of the Company
      at an
      exercise price of *** to the Employee in the following amounts in the event
      Revenue earned by the Institutional Sales Group reaches in the aggregate certain
      milestones by December 31, 2008 (the “Milestone Date”). The options shall be in
      the same form and under the same terms as described under the Company’s Stock
      Option Plan. For the purpose of this Agreement, “Revenue” is defined as the
      total commissions earned by the Company on the purchase and sale of securities
      from transactions on accounts that are covered by the Institutional Sales Group
      for the firm. In addition, all stock grants under this section vest immediately
      upon the Milestone Date, and are not forfeited by the Employee in the event
      his
      employment with the Company ends for any reason after the Milestone Date.

    

      
        	
                Revenue
                  Milestone

              	 	
                Option
                  Grants

              
	
                ***

              	 	***
	 	 	 
	
                ***

              	 	
                ***

              
	 	 	 
	
                ***

              	 	***

      

    

    (f) Employee
      agrees that the Company may, at any time, demand and receive payment from the
      Employee for or deduct from any Employee’s Commission payable to Employee under
      this Agreement, any taxes, withholding payments, license fees, registration
      fees, ticket charges, bonding fees, or such other expenses, fees or costs
      payable or chargeable to the Employee which have been paid, accrued or otherwise
      incurred by the Company on behalf of the Employee in connection with the
      Employee’s duties under this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      CONFIDENTIAL
        TREATMENT REQUESTED

      WITH
        RESPECT TO CERTAIN PORTIONS HEREOF

      DENOTED
        WITH “***”

    (g). With
      respect to Subordinates, Subordinates shall be compensated by the Institutional
      Sales Group in an amount ***. 

     

    
      	 	
              5.2

            	
              Forgivable
                Loan.
                

            

    

    

    The
      Employee hereby acknowledges the future receipt of *** (the “Loan”) to be loaned
      to Employee by the Company after the execution of this Agreement. The Loan
      will
      be distributed to the Employee in five (5) equal installments of *** on the
      following dates in 2008: May 1, June 1, July 1, August 1 and September 1. The
      Loan shall accrue interest at the annual rate of *** from the date proceeds
      are
      received by Employee, up to and including the *** anniversary of the
      Commencement Date (the “Due Date”), and if payment of the Loan is accelerated
      during such period, the total amount due under the Loan plus interest shall
      be
      payable on a demand basis. The Loan will be distributed to the Employee on
      the above distribution dates and the Company cannot use as an excuse for its
      failure to distribute any installment the fact that it is the subject of any
      litigation or other event that may impact the business existence of the Company.
      In the event the Company fails to timely distribute a loan installment, the
      Employee can notify the Company (in accordance with Notice procedures set forth
      in paragraph 15) of the missed installment, and if Company does not cure by
      distributing the installment payment within 30 days of Company’s receipt of this
      notice, Employee can resign for “Good Reason” (as defined under paragraph
      5.2(b)(v)) and the Employee will be entitled to accelerate the outstanding
      loan
      installments and make a demand on the Company for the balance of the
      installments of the Loan, which Employee will be entitled to receive and be
      excused from paying back. In the event that the Employee is forced to expend
      legal or other fees in its effort to the collect the accelerated Loan amount
      due, the Company agrees that such costs shall be borne and payable exclusively
      by the Company in the event Employee prevails in such action, and that such
      costs shall begin to accrue interest at the rate of *** from the date Employee
      ceases to be in the employ of Company. 

    

    (a) 
      The Loan
      shall be evidenced by a Promissory Note executed and delivered on or after
      the
      date hereof, the form of which is annexed hereto as Exhibit “A”, and the terms
      of which incorporated herein by reference. 

    

    Employee
      agrees and acknowledges that the Company shall take out life insurance and
      disability policies upon the Employee, with the Company as sole beneficiary,
      in
      the amount of the Loan and shall keep such policies in force until the Loan
      is
      repaid in full. 

    

    (b) The
      Loan
      will be forgiven as follows: 

    

    i. In
      the
      event the Employee is employed as of the *** anniversary of the Commencement
      Date (the “*** Anniversary”), the Company will forgive *** of the Loan and the
      accrued interest on the forgiven debt. Once forgiven, the Company cannot seek
      repayment of the forgiven debt that is the subject of this paragraph.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      CONFIDENTIAL
        TREATMENT REQUESTED

      WITH
        RESPECT TO CERTAIN PORTIONS HEREOF

      DENOTED
        WITH “***”

       

    

    ii.In
      the
      event the Employee is employed as of the *** anniversary of the Commencement
      Date (the “*** Anniversary”), the Company will forgive the full balance of the
      Loan, including all accrued interest and will issue to the Employee a written
      release confirming the cancellation and forgiveness of the debt and the related
      documents attached as Exhibit A.

    

    iv. In
      the
      event that the Company terminates the Employee’s employment without “Good Cause”
(as defined herein) prior to the Due Date, the Company agrees to cancel and
      forgive the Loan and any accrued interest and as such the Employee is not
      obligated to repay the Loan and any accrued interest, and will issue to the
      Employee a written release confirming the cancellation and forgiveness of the
      debt and the related documents attached as Exhibit A. The termination of
      Employee’s employment will be deemed to have been for “Good Cause” as defined
      below in paragraph 13.

    

    v. In
      the
      event that the Employee terminates the Agreement with “Good Reason” (as defined
      herein) prior to the Due Date, the Company agrees to cancel and forgive the
      Loan
      and any accrued interest and as such the Employee is not obligated to repay
      the
      Loan and any accrued interest, and will issue to the Employee a written release
      confirming the cancellation and forgiveness of the debt and the related
      documents attached as Exhibit A. “Good Reason” is defined as any of the
      following events which are not cured by Company within thirty (30) days after
      receipt of written notice of termination from Employee based on: (1) a
      significant change in the nature or scope of Employees authorities, powers,
      functions or duties, or a reduction in compensation; (2) a determination by
      a
      court that there has occurred a material breach by the Company of any provision
      of this Agreement which is not remedied within 30 days after receipt by the
      Company of written notice from Employee; (3) a Change in Control as defined
      in
      Section 5.1(d); (4) Employee providing notice of resignation under paragraph
      3(f); or (5) Employee providing notice of resignation under paragraph 5.2 for
      failure to make a Loan installment payment.

    

    vi. Upon
      Employee’s termination of this Agreement other than for Good Reason prior to the
      *** Anniversary Date of the Commencement Date, the Loan, plus interest, shall
      become immediately due and payable. Upon Employee’s termination of this
      Agreement other than for Good Reason after the *** Anniversary but prior to
      the
      *** Anniversary (the Due Date), the remaining balance of the Loan in the amount
      not forgiven of *** plus interest shall become immediately due and payable,
      without further action from the Company on the date employment ceases. In the
      event that the Company is forced to expend legal or other fees in its effort
      to
      the collect the amount due and payable under the Loan and this paragraph 5.2(b),
      Employee agrees that such costs shall be borne and payable exclusively by
      Employee, and that such costs shall begin to accrue interest at the rate of
      ***
      from the date Employee ceases to be in the employ of Company. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      CONFIDENTIAL
        TREATMENT REQUESTED

      WITH
        RESPECT TO CERTAIN PORTIONS HEREOF

      DENOTED
        WITH “***”

    6. Business
      Expenses. Subject
      to 5.1(b), the Employee shall be reimbursed by the Company for those business
      expenses incurred by him, which are reasonable and necessary for the Employee
      to
      perform his duties under this Agreement, upon submission of such accounts and
      records as may reasonably be required by the policies established from time
      to
      time by the Company.

    

    7. Confidentiality.
      Employee shall keep confidential, except as the Company may otherwise consent
      in
      writing, and not disclose or make any use of except for the benefit of the
      Company and in no way harmful to the Company, at any time either during the
      term
      of this Agreement or thereafter, any trade secrets, knowledge, data,
      intellectual property or other information of the Company relating to the
      Company and its businesses, including,
      without limitation, information regarding cost of new accounts, customer lists,
      customer activity rates and other customer information, technology (hardware
      and
      software), discoveries, processes, algorithms, mask works, strategies,
products,
      processes, know how, technical data, designs, formulas, test data, business
      plans, marketing plans and advertising
      results
      or other
      subject matter pertaining to any business of the Company or any of its clients,
      customers, consultants, licensees or affiliates which Employee may produce,
      obtain or otherwise learn of during the course of Employee’s performance of
      services (collectively “Confidential
      Information”).
      Employee shall not deliver, reproduce, or in any way allow any such Confidential
      Information to be delivered to or used by any third parties without the specific
      direction or consent of a duly authorized representative of the Company, except
      in connection with the discharge of his duties thereunder. The terms of this
      paragraph shall survive termination of this Agreement. Notwithstanding anything
      to the contrary herein, Employee
      shall not have any obligation to keep confidential any information that: (a)
      is
      required by law or regulation to be disclosed by Employee,
      or (b)
      is required to be disclosed by Employee
      to
      any
      government agency or person to whom disclosure is required by judicial or
      administrative process or (c) any client information of clients that Employee
      has had contact while in the Employ of the Company, or (d) any client
      information or clients that Employee had contact with prior to becoming an
      Employee of the Company.

    

    7.1 Restriction
      During Employment.
      Employee agrees that at no time during his employment with the Company will
      Employee (i) in any way induce or attempt to induce any employee or registered
      representative of the Company (or of any affiliate of the Company) or any
      person, firm or corporation having any contract with the Company (or any
      affiliate of the Company), either to leave such employment or association with
      the Company or to breach or terminate its contract with the Company (or with
      any
      affiliate of the Company); (ii) in any way induce or attempt to induce any
      employee or registered representative of the Company (or any affiliate of the
      Company) or any person, firm or corporation having a contract with the Company
      (or any affiliate of the Company) to become employed by, associated with or
      enter into a contract or agreement with another stock brokerage firm or other
      entity; and (iii) in any way induce or attempt to induce any account, customer
      and client of the Company from terminating their relationship with the Company
      or becoming an account, customer and client of another stock brokerage or
      trading firm or similar entity.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      CONFIDENTIAL
        TREATMENT REQUESTED

      WITH
        RESPECT TO CERTAIN PORTIONS HEREOF

      DENOTED
        WITH “***”

    

     

    7.2 Restrictions
      After Employment. 

    

    (a) Employee
      agrees that for a period of one (1) year after the termination of its employment
      with the Company, the Employee will not induce or attempt to induce any employee
      or registered representative of the Company or any other person, firm or
      corporation having any contract or association with the Company either from
      leaving such employment or association with the Company or to breach or
      terminate his or its contract with the Company or in any way induce or attempt
      to induce any employee or registered representative of the Company (or any
      affiliate of the Company) or any person, firm or corporation having a contract
      with the Company (or any affiliate of the Company) to become employed by,
      associated with or enter into a contract or agreement with another stock
      brokerage or trading firm or other similar entity.

    

    (b) Employee
      agrees that for a period of thirty (30) days after the termination of his
      employment with the Company for whatever reason, the Employee will not engage,
      as an owner, partner, shareholder, officer, director, employee, consultant,
      advisor, agent or representative, in any business which competes with the
      Company or any of its affiliates in trading or executing in equity markets,
      including but not limited to equity-related products.

    

    8. Return
      of Confidential Material.
      Upon
      the completion or other termination of Employee’s services for the Company,
      Employee shall promptly surrender and deliver to the Company all records,
      materials, equipment, drawings, documents, notes and books and data of any
      nature pertaining to any invention, trade secret or Confidential Information
      of
      the Company or to Employee’s services, and Employee will not take with him any
      description containing or pertaining to any Confidential Information, knowledge
      or data of the Company which Employee may produce or obtain during the course
      of
      his services. The terms of this paragraph shall survive termination of this
      Agreement. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CONFIDENTIAL
      TREATMENT REQUESTED

    WITH
      RESPECT TO CERTAIN PORTIONS HEREOF

    DENOTED
      WITH “***”
 

    9. Other
      Obligations; Certain Representations.

    

    (a) Employee
      acknowledges that the Company from time to time may have agreements with other
      persons which impose obligations or restrictions on the Company made during
      the
      course of work there under or regarding the confidential nature of such work.
      Employee will be bound by all such obligations and restrictions and will take
      all action necessary to discharge the obligations of the Company there
      under.

    

    (b) All
      of
      Employee’s obligations under this Agreement shall be subject to any applicable
      agreements with, and policies issued by the Company to which Employee is
      subject, that are generally applicable to the five highest paid executives
      of
      the Company.

    

    (c) Employee
      represents that he has the legal capacity to enter into this Agreement, and
      has
      of the Commencement Date he is under no
      employment contract, non-competition agreement, or any other obligation that
      would violate or be in conflict with the terms and conditions of this Agreement
      or encumber his performance of duties assigned to him by the Company other
      than
      potential conflicts arising from Employee’s previous relationship with eTrade
      Financial, Inc., or any successor, assignee, or purchaser of any rights of
      eTrade Financial, Inc. (the “Former Employer”). Employee
      further
      represents and warrants that he has not signed or committed to any
      employment or consultant duties or other obligations that would divert his
      full
      attention or conflict with from the duties assigned to him by the
      Company.

    

    (d) Employee
      holds all licenses required by FINRA, all applicable self regulatory
      organizations, and all federal and state securities and other laws necessary
      to
      perform services to the Company as contemplated by this Agreement. All such
      licenses are in full force and effect, and Employee covenants to take such
      action as is necessary to maintain all such licenses in full force and effect
      during the term of this Agreement.

    

    (e) If
      during
      the first three-years of this Agreement while the Loan is still outstanding
      the
      Employee is enjoined from working for the Company by a court of law, the
      Employee agrees to: (i) return to work to the Company whenever the restraints
      lapse or are removed or (ii) at the Company’s sole discretion, continue to
      remain in the employ of the Company performing services not prevented from
      being
      provided by the Employee under the restraints. 

    

    (f) If
      the
      Employee is enjoined from working for the Company by a court of law and the
      Employee decides, in his sole discretion, not to return to work for the Company
      after the restraints lapse or are removed, in such event the Company may demand
      the Loan to be repaid by the Employee and the Employee agrees to repay the
      Loan,
      interest free, as follows: the Employee will be entitled to keep a prorated
      portion of the Loan for the period of time the Employee worked during the
      two-year period accrued through the latest month-end prior to the Employee’s
      last day of work and pay back the balance. For example, if the Employee last
      worked 45 days into the two-year period, the Employee would be entitled to
      keep
      two-months/24-months multiplied by *** of the Loan, or ***, and repay the
      balance of ***. For the avoidance of doubt, any time during which the Employee
      was restrained from working for the Company in the role of either SVP of
      Institutional Sales, Co-Head of the Institutional Sales Group, or in any role
      generally associated with such positions, and the Company elects not to have
      the
      Employee perform any other services for the Company, such time shall not be
      considered time worked for the previous equation herein. If the Employee refuses
      to tender said Loan repayment within 60 days of the demand from Company,
      Employee agrees to reimburse Company for any reasonable costs of collection
      of
      such debt, including reasonable attorneys’ fees and to pay interest on the debt
      at an annual rate of *** calculated from the date demand is made by the Company.
      Notwithstanding the foregoing, if the Employee reports to work after the
      restraints lapse and the Company refuses to continue Employee’s employment or
      re-employment, the Company cannot demand repayment of the Loan and the Employee
      is not obligated in any manner to pay back the Loan, and the Employee will
      also
      immediately vest in all “restricted stock” under Section 5.1(d). 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      CONFIDENTIAL
        TREATMENT REQUESTED

      WITH
        RESPECT TO CERTAIN PORTIONS HEREOF

      DENOTED
        WITH “***”

       

    

    (g) Adjustment
      for Injunction or Other Restraint.

    

    Each
      of
      the Company and Employee acknowledge that in the event the Employee may be
      enjoined or otherwise restrained from performing his duties as SVP of
      Institutional Sales and/or Co-Head of Institutional Sales for a certain time
      period (“Time of Restraint”). In such event, the Company may elect during such
      Time of Restraint, in its sole option, to either (i) request that Employee
      perform other duties for the Company, or (ii) perform no duties for the Company
      until such restraints lapse. Only in the event that the Company elects to have
      Employee perform no duties for the Company during the Time of Restraint, each
      of
      the *** Anniversary, *** Anniversary, Due Date and Milestone Date (collectively,
      the “Defined Dates”) as defined in this Agreement, as well as any other dates
      based upon any of the Defined Dates, shall be extended by an amount of time
      equal to the Time of Restraint. 

    

    10. Trade
      Secrets of Others.
      Employee will not enter into any agreement, either written or oral, which is
      in
      conflict with this Agreement.

    

    11. Employee
      Benefits. During
      the Agreement Term, the Company agrees to include Employee in its group medical
      and hospital plan. Employee understands and acknowledges that Employee will
      be
      responsible for monthly payments for such insurance at the rate commensurate
      with other employees of Company. Employee hereby authorizes the Company to
      deduct the fees accrued for the insurance provided to Employee under this
      paragraph on a monthly basis from the Employee’s share of net commissions prior
      to Company’s distribution of the same. Company reserves the right to (i) cancel
      Employee’s insurance in the event Employee’s share of net commissions is
      insufficient to cover the monthly insurance expense hereunder, or (ii) require
      Employee to make such monthly payments in lieu of Company’s deduction of the
      same from Employee’s share of net commissions. The Company may withhold from any
      benefits payable to the Employee all federal, state, local and other taxes
      and
      amounts as shall be permitted or required pursuant to law, rule or
      regulation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CONFIDENTIAL
      TREATMENT REQUESTED

    WITH
      RESPECT TO CERTAIN PORTIONS HEREOF

    DENOTED
      WITH “***”

     

    12. Death
      and Disability. 

    

    (a) The
      Agreement Term shall terminate on the date of Employee’s death, in which event
      the Employee’s Commission and reimbursable expenses and benefits, if any, owing
      to Employee through the date of Employee’s death shall be paid to his estate.
      Employee’s estate will not be entitled to any other compensation upon
      termination of this Agreement pursuant to this Paragraph 12(a). For purposes
      of
      clarity, and notwithstanding anything contrary herein, should the Employee’s
      death occur prior to the expiring of the Vesting Period set forth in paragraph
      5.1 (d) herein the Company shall have no obligation to continue to issue
      Employee’s estate stock, subsequent to the date of Employee’s death.
      Furthermore, should Employee’s death occur prior to the Due Date as set forth in
      paragraph 5.2 herein, the Company shall forgive and cancel the Loan and any
      accrued interest, and may not seek to recover the same as a collection from
      Employee’s estate.

    

    (b) If,
      during the Agreement Term, in the opinion of a duly licensed physician
      acceptable to the Employee and the Company, the Employee because of physical
      or
      mental illness or incapacity shall become substantially unable to perform the
      duties and services required of him under this Agreement for a period of thirty
      (30) or more consecutive days or an aggregate of thirty (30) days in any
      twelve-month period (the “Disability”), the Company may, upon at least thirty
      (30) days’ prior written notice (given at any time after the expiration of such
      period) to the Employee of its intentions to do so, terminate this Agreement
      as
      of such date as may be set forth in the notice. In case of such termination,
      the
      Employee shall be entitled to receive any remaining Employee’s Commission and
      reimbursable expenses and benefits, if any, owing to the Employee through the
      date of termination. Furthermore, should Employee’s disability occur prior to
      the Due Date as set forth in paragraph 5.2 herein, the Company shall forgive
      and
      cancel the Loan and any accrued interest, and may not seek to recover the same
      as a collection from Employee or his estate. Employee will not be entitled
      to
      any other compensation upon termination of this Agreement pursuant to this
      Paragraph 12(b) and the vesting of the restricted stock granted under 5.1(d)
      shall cease upon termination of this Agreement for Disability.

    

    13. Good
      Cause. 

    

    (a) As
      used
      herein, the term “Good Cause” shall mean: 

    

    (i) a
      material breach by Employee of the terms of this Agreement or the Company’s
      written policies delivered to him, including those with respect to insider
      trading and other trading activities, which material breach remains uncured
      after twenty (20) days following Employee’s receipt from Company of written
      notice specifying such breach or default;

    

    (ii) gross
      negligence or willful misconduct by Employee or the material breach of a
      fiduciary duty of Employee to the Company in the performance of his duties
      hereunder;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      CONFIDENTIAL
        TREATMENT REQUESTED

      WITH
        RESPECT TO CERTAIN PORTIONS HEREOF

      DENOTED
        WITH “***”

    

     

    (iii) the
      commission by Employee of an act of fraud, embezzlement or any other crime
      by
      Employee in the performance of his duties as an employee hereunder as determined
      by a court that has jurisdiction over such matters;

    

    (iv) conviction
      of Employee of a felony or any other crime that could materially interfere
      with
      the performance of Employee’s duties hereunder or material damages the
      reputation of the Company;

    

    (v) failure
      to hold and maintain in full force and effect during the term of this Agreement,
      all licenses required by FINRA, all applicable self regulatory organizations
      (“SRO”), and all federal and state securities and other laws necessary to
      perform services to the Company as contemplated by this Agreement. 

    

    (vi) except
      as
      may have been disclosed in writing to the Company, Employee’s failure to
      disclose to Company prior or existing customer complaints, arbitrations, legal
      proceedings, or regulatory, administrative, civil or criminal matters threatened
      or pending, or any other matter which may adversely affect the employment of
      the
      Employee by the Company, such as a violation of any rules promulgated by the
      NASD or another SRO, or any other reportable event that should be disclosed
      by
      Employee on Form U-4.. 

    

    (vii) failure
      to promptly notify the Company if (i) Employee becomes a party to any inquiry,
      investigation, litigation, legal proceeding or arbitration, (ii) any award
      or
      judgment is entered against Employee; (iii) Employee’s registration or license
      to sell securities is refused, suspended, threatened or revoked by the SEC,
      FINRA or any SRO; (iv) Employee becomes subject to a proceeding to effectuate
      the foregoing; (v) Employee is enjoined, temporarily or otherwise, from selling
      or dealing in securities; or (vi) Employee is arrested, summoned, arraigned,
      or
      indicted in connection with a criminal offense.

    

    (b) As
      used
      herein, the term “Good Cause” shall not
      mean any
      action or threatened action against either the Company or the Employee, or
      both,
      by the Former Employer of Employee to restrain or enjoin Employee’s employment
      with the Company or the Company’s business, in whole or in part.

    

    (c) Upon
      Employee’s termination for Good Cause prior to the *** Anniversary Date of this
      Agreement, the Loan, shall become immediate due and payable pursuant to the
      terms described in paragraph 5.2 hereunder. Upon Employee’s termination for Good
      Cause after the *** Anniversary but prior to the *** Anniversary, the remaining
      balance of the Loan in the amount not forgiven of *** plus interest shall become
      immediately due and payable, pursuant to the terms described in paragraph 5.2
      hereunder. In the event that the Company is forced to expend legal or other
      fees
      in its effort to the collect the amount due and payable under the Loan, Employee
      agrees that such costs shall be borne and payable exclusively by Employee,
      and
      that such costs shall begin to accrue interest at the rate of *** from the
      date
      Employee ceases to be in the employ of Company. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      CONFIDENTIAL
        TREATMENT REQUESTED

      WITH
        RESPECT TO CERTAIN PORTIONS HEREOF

      DENOTED
        WITH “***”

    

     

    14. Remedy. It
      is
      mutually understood and agreed that Employee’s services are special, unique,
      unusual, extraordinary and of an intellectual character giving them a peculiar
      value, the loss of which cannot be reasonably or adequately compensated in
      damages or in an action at law. Accordingly, in the event of any breach of
      this
      Agreement by Employee, the Company shall be entitled to equitable relief by
      way
      of injunction or otherwise in addition to damages the Company may be entitled
      to
      recover. In addition, the Company shall be entitled to reimbursement from
      Employee, upon request, of any and all reasonable attorneys’ fees and expenses
      incurred by it in enforcing any term or provision of this
      Agreement.

    

    15. Notices. All
      notices given hereunder shall be in writing and shall be deemed effectively
      given when mailed, if sent by registered or certified mail, return receipt
      requested, or overnight mail with proof of mailing, to Employee at his address
      set forth on the first page of this Agreement and to the Company at its address
      set forth on the first page of this Agreement, Attention: Marty
      Cunningham,
      with a
      copy to Bonnist & Cutro, LLP, 1199 Route 22, Suite 304, Mountainside, New
      Jersey 07092, Attention: James J. Cutro, Esq., or at such address as such party
      shall have designated by a notice given in accordance with this Paragraph
      15.

    

    16. Entire
      Agreement. This
      Agreement constitutes the entire understanding of the parties with respect
      to
      its subject matter and no change, alteration or modification hereof may be
      made
      except in writing signed by the parties hereto. Any prior or other agreements,
      promises, negotiations, understandings or representations not expressly set
      forth in this Agreement are of no force or effect.

    

    17. Severability. If
      any
      provision of this Agreement shall be unenforceable under any applicable law,
      then notwithstanding such unenforceability, the remainder of this Agreement
      shall continue in full force and effect.

    

    18. Amendments,
      Modifications, Waivers. No
      amendment, modification or waiver of any provisions of this Agreement shall
      be
      effective unless the same shall be in writing and signed by each of the parties
      hereto, and then such waiver or consent shall be effective only in specific
      instances and for the specific purpose for which given.

    

    19. Assignment. Neither
      this Agreement, nor any of Employee’s rights, powers, duties or obligations
      hereunder, may be assigned by Employee. This Agreement shall be binding upon
      and
      inure to the benefit of Employee and his heirs and legal representatives and
      the
      Company and its successors and assigns. Successors of the Company shall include,
      without limitation, any corporation or corporations acquiring, directly or
      indirectly, all or substantially all of the assets of the Company, whether
      by
      merger, acquisition, consolidation, purchase or otherwise, and such successor
      shall thereafter be deemed “the Company” for purposes hereof.

    

    20. Applicable
      Law. This
      Agreement shall be deemed to have been made, drafted, negotiated and the
      transactions contemplated hereby consummated and fully performed in the State
      of
      New York and shall be governed by and construed in accordance with the laws
      of
      the State of New York, without regard to the conflicts of law rules thereof.
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      CONFIDENTIAL
        TREATMENT REQUESTED

      WITH
        RESPECT TO CERTAIN PORTIONS HEREOF

      DENOTED
        WITH “***”

       

    

    21. Arbitration. 

    

    (a) The
      parties agree that any and all claims or disputes arising under this Agreement,
      as to which they may be adverse parties, will be resolved by arbitration before
      FINRA and that with respect to this Agreement, a party may seek injunctive
      relief and ancillary damages before FINRA. Each party irrevocably consents
      to
      subject matter and personal jurisdiction before FINRA. The parties shall
      restrict themselves to claims for compensatory damages and no claims shall
      be
      made by any party for punitive or similar damages. The parties agree that any
      award or decision by FINRA shall be final and binding upon the parties and
      a
      judgment may be entered in a court of competent jurisdiction upon such award
      or
      decision. The parties agree that the situs of any arbitration or legal
      proceedings hereunder shall be the City of New York, State of New
      York.

    

    (b) The
      parties agree that in the event that there is a threatened breach or breach
      of
      any of the covenants, agreements and representations contained in this
      Agreement, the Company will suffer immediate and irreparable harm and money
      damages and as a result thereof, the Company shall have the right to seek
      injunctive relief before FINRA or through the judicial process in addition
      to
      any and all rights and remedies at law or equity it may have. In any such action
      or proceeding, the Company shall be entitled to reimbursement for all legal
      fees
      it may incur. The parties further agree that the Company shall not be required
      to post any bond with regards to it seeking any equitable or legal relief
      hereunder.

    

    22. Full
      Understanding. Employee
      represents and agrees that he fully understands his right to discuss all aspects
      of this Agreement with his private attorney, that to the extent, if any that
      he
      desired, he availed himself of this right, that he has carefully read and fully
      understands all provisions of this Agreement, that he is competent to execute
      this Agreement, that his agreement to execute this Agreement has not been
      obtained by any duress and that he freely and voluntarily enters into it, and
      that he has read this document in its entirety and fully understands the
      meaning, intent and consequences of this document, which is that it constitutes
      and agreement of employment.

    

    23. Counterparts. This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original and all of which taken together shall constitute one and
      the
      same agreement.

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CONFIDENTIAL
      TREATMENT REQUESTED

    WITH
      RESPECT TO CERTAIN PORTIONS HEREOF

    DENOTED
      WITH “***”

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      above written.

    

    
      	 	 	 
	 	
              HUDSON
                SECURITIES, INC.

            
	 	 	 
	
            	By:  	/s/
              Martin Cunningham  
	 	
              
Name:
              Martin Cunningham
	 	Title:
              CEO

    
      	 	 	 
	 	
              EMPLOYEE
                

            
	 	 	 
	
            	
            	/s/
              David Scialabba
	 	
              
Name:
              David Scialabba

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    CONFIDENTIAL
      TREATMENT REQUESTED

    WITH
      RESPECT TO CERTAIN PORTIONS HEREOF

    DENOTED
      WITH “***”

     

    PROMISSORY
      NOTE

     

    David
      Scialabba.,
      an
      individual residing 210-B Sunset Road, Oyster Bay, New York 11771 (“Debtor”),
      promises to pay to Hudson
      Securities, Inc.,
      a
      Delaware corporation, having an address of 111 Town Square Place, 15th Floor,
      Jersey City, New Jersey 07310, hereinafter referred to as “Creditor”, the sum of
***,
      which
      represents a forgivable loan owed by the Debtor to the Creditor under the
      Employment Agreement between the Debtor and Creditor for the period January
      22,
      2008, through January 21, ***, and interest at the annual rate of *** (the
      “Loan”) in the event the Loan becomes due under the terms of the Employment
      Agreement, which is fully adopted and incorporated herein.

    

    Payment
      shall be made to the order of Creditor at the address of Creditor set forth
      above, or at such other place as Creditor or any subsequent holder of this
      Note
      may designate in the event under the terms of the Employment Agreement the
      Loan
      becomes due, as follows:

    

    1) It
      is the
      desire and intent of the parties that the terms, provisions, covenants and
      remedies contained in this Note shall be enforceable to the fullest extent
      permitted by law. If any term, provision, covenant or remedy of this Note shall,
      to any extent, be construed to be invalid or unenforceable in whole or in part,
      then such term, provision, covenant or remedy shall be construed in a manner
      so
      as to permit its enforceability under the applicable law to the fullest extent
      permitted by law. In any case, the remaining provisions of this Note or the
      application thereof, other than those to which they have been held invalid
      or
      unenforceable, shall remain in full force and effect. 

    

    2) Should
      any provision of this Note require interpretation or construction, it is agreed
      by the parties that the entity interpreting or construing this Note shall not
      apply a presumption that the provisions hereof shall be more strictly construed
      against one party by reason of the rule of construction that a document is
      to be
      construed more strictly against the party who prepared the Note, it being agreed
      that both parties (by their respective attorneys) have participated in the
      preparation of all the provisions of this Note.

    

    3) The
      laws
      of the State of New York govern this Note and the validity and performance
      thereof. 

    

    4) This
      Note
      and the Employment Agreement embodies the entire understanding between the
      parties hereto with respect to the subject matter hereof and may not be used
      as
      evidence of wrongdoing or as an admission of guilt by either party in any
      subsequent legal action.

    

    5) This
      Note
      may be changed, waived, discharged or terminated only by an instrument in
      writing signed by the party against whom enforcement of any change, waiver,
      discharge or termination is to be sought. No waiver of any term or provision
      of
      this Note will be deemed a waiver of any subsequent breach of such term or
      provision, or the breach of any other term or provision of this Note. Failure
      of
      any party to claim default of all or any part of this Note by the other party,
      or failure to enforce all or any of its rights hereunder, will not be construed
      as a waiver of any subsequent claims or rights or as novation or modification
      in
      any way of this Note.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      CONFIDENTIAL
        TREATMENT REQUESTED

      WITH
        RESPECT TO CERTAIN PORTIONS HEREOF

      DENOTED
        WITH “***”

    

     

    6) This
      Note
      and any rights herein granted are personal to Creditor, and any assignment
      (including a merger, sale of majority stock interest or transfer of control
      of
      Debtor) by Debtor, or other encumbrance, is void (or shall be deemed to be
      ineffective in transferring any rights pursuant to this Note) without Creditor’s
      prior written consent.

    

    7) Creditor
      has the right to assign the Note.

    

    8) Debtor
      and any other person who has obligations under this Note waives the rights
      of
      presentment and notice of dishonor. “Presentiment” means the right to require
      the Creditor to demand payment of amount due. “Notice of Dishonor” means the
      right to require the Creditor to give notice to other persons that amounts
      have
      not been paid.

    

    9) This
      Note
      is a uniform instrument with limited variations in some jurisdictions.

    

    10) The
      parties hereto all represent that they are duly authorized to enter into this
      Note.

     

    
      
        	 	 	 
	/s/
                David
                Scialabba	 	
              
	
                
                  
By:
                  David Scialabba

              	 	
              
	 	 	 
	
                Dated:
                  January 14,
                  2008

              	 	
                Notary   
                  /s/
                  Farisha W.
                  Mohammed

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