Document:

THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE (i) NOT BEEN REGISTERED UNDER
        THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE,
        AND
        (ii) BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY. THESE SECURITIES MAY NOT
        BE
        SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
        THEREFROM UNDER SAID ACT OR LAWS.

      

      THE
        TUBE MEDIA CORP.

      

      WARRANT
        TO PURCHASE __________ SHARES OF COMMON STOCK

      

      

      

      April
        21,
        2006                                                                  Warrant
        No. ____

      

       

      For
        value
        received, The Tube Media Corp., a Delaware corporation (the “Company”),
        hereby certifies that ______________, or its registered
        transferees, successors or assigns (each person or entity holding all or
        part of
        this Warrant being referred to as a “Holder”),
        is
        the registered holder of a warrant (the “Warrant”)
        to
        subscribe for and purchase ______________________ shares (as adjusted pursuant
        to Section
        3
        hereof,
        the “Warrant
        Shares”)
        of the
        fully paid and nonassessable common stock, par value $0.0001 per share (the
        “Common
        Stock”),
        of
        the Company, at a purchase price per share initially equal to $2.25 (the
        “Warrant
        Price”)
        on or
        before, 5:00 P.M., Eastern Time, on April 21, 2011 (the “Expiration
        Date”),
        subject
        to the provisions and upon the terms and conditions hereinafter set forth.
        As
        used in this Warrant, the term “Business
        Day”
means
        any
        day
        other than a Saturday or Sunday on which commercial banks located in New
        York,
        New York are open for the general transaction of business.

      

      This
        Warrant is one of a number of Warrants (collectively, the “Warrants”)
        being
        issued pursuant that certain Purchase Agreement (the “Purchase
        Agreement”;
        capitalized terms used but not defined herein shall have the respective meanings
        ascribed thereto in the Purchase Agreement), dated as of April 21, 2006,
        by and
        among the Company and the Investors party thereto.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      Section
        1.  Exercise.

      

      (a) Method
        of Exercise; Payment; Issuance of New Warrant.

      

      (i) Subject
        to the provisions hereof, the Holder may exercise this Warrant, in whole
        or in
        part and from time to time, by the surrender of this Warrant (with the Notice
        of
        Exercise attached hereto as Appendix
        A
        duly
        executed) at the principal office of the Company, or such other office or
        agency
        of the Company as it may reasonably designate by written notice to the Holder,
        during normal business hours on any Business Day, and the payment by the
        Holder
        by cash, certified check payable to the Company or wire transfer of immediately
        available funds to an account designated to the exercising Holder by the
        Company
        of an amount equal to the then applicable Warrant Price multiplied by the
        number
        of Warrant Shares then being purchased, or in the event of a cashless exercise
        pursuant to Section
        1(b)
        below,
        with the Net Issue Election Notice attached hereto as Appendix
        B
        duly
        executed and completed. On the date on which the Holder shall have satisfied
        in
        full the Holder’s obligations set forth herein regarding an exercise of this
        Warrant (provided such date is prior to the Expiration Date), the Holder
        (or
        such other person or persons as directed by the Holder, subject to compliance
        with applicable securities laws) shall be treated for all purposes as the
        holder
        of record of such Warrant Shares as of the close of business on such
        date.

      

      (ii) In
        the
        event of any exercise of the rights represented by this Warrant, (X) provided
        the Transfer Agent is participating in the DTC's Fast Automated Securities
        Transfer Program and such shares are registered pursuant to the Act, the
        Company
        shall credit such aggregate number of shares of Common Stock to which the
        Holder
        shall be entitled to the Holder's or its designee's balance account with
        DTC
        through its Deposit Withdrawal Agent Commission system or (Y) if the Company’s
        transfer agent is not participating in the DTC Fast Automated Securities
        Transfer Program, the Company shall deliver certificates for the whole number
        of
        shares of Common Stock so purchased to the Holder (or such other person or
        persons as directed by the Holder,
        subject
        to compliance with applicable securities laws)
        as
        promptly as is reasonably practicable (but not later than three (3) trading
        days) after such exercise at the Company’s expense, and, unless this Warrant has
        been fully exercised, a new Warrant representing the whole number of Warrant
        Shares, if any, with respect to which this Warrant shall not then have been
        exercised shall also be issued to the Holder as soon as reasonably practicable
        thereafter (but not later than three (3) Business Days) after such
        exercise.  

      

      (b) Cashless
        Right to Convert Warrant into Common Stock.
        In
        addition to and without limiting the rights of the Holder hereof under the
        terms
        of this Warrant, the
        Holder
        may elect to receive, without the payment by the Holder of the Warrant Price,
        Warrant Shares equal to the value of this Warrant or any portion hereof by
        the
        surrender of this Warrant (or such portion of this Warrant being so exercised)
        together with the Net Issue Election Notice annexed hereto as Appendix
        B
        duly
        executed and completed, at the office of the Company, or such other office
        or
        agency of the Company as it may reasonably designate by written notice to
        the
        Holder, during normal business hours on any Business Day. Thereupon, the
        Company
        shall issue to the Holder such number of fully paid, validly issued and
        nonassessable Warrant Shares,
        as
        is
        computed using the following formula:

      

      X=
        Y(A-B)

      A

      

      where 

      

      X
        = the
        number of shares of Common Stock to be issued to the Holder (or
        such
        other person or persons as directed by the Holder,
        subject
        to compliance with all applicable laws)
        upon
        such
        exercise of the rights under this Section
        1(b)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      Y
        = the
        total
        number of shares of Common Stock covered by this Warrant which the Holder
        has
        surrendered for cashless exercise

      

      A
        = the
“Fair
        Market Value” of one share of Common Stock on the date that the Holder delivers
        the Net Issue Election Notice to the Company as provided herein

      

      B
        = the
        Warrant Price in effect under this Warrant on the date that the Holder delivers
        the Net Issue Election Notice to the Company as provided herein

      

      The
        “Fair
        Market Value”
of
        a
        share of Common Stock as of a particular date (the “Valuation
        Date”)
        shall
        mean the following:

      

      (i) if
        the
        Common Stock is then listed on a national securities exchange, the average
        closing sale price of one share of Common Stock on such exchange over the
        ten (10) trading days ending on the last trading day prior to the Valuation
        Date; provided that if such stock has not traded in the ten (10)
        consecutive trading days prior to the Valuation Date, the Fair Market Value
        shall be the average closing price of one share of Common Stock in the most
        recent ten (10) trading days during which the Common Stock has traded prior
        to the Valuation Date;

      

      (ii) if
        the
        Common Stock is then included in The Nasdaq Stock Market, Inc. (“Nasdaq”),
        the
        average closing sale price of one share of Common Stock on Nasdaq over the
        ten (10) trading days ending on the last trading day prior to the Valuation
        Date or, if no closing sale price is available for any of such ten (10)
        trading days, the closing sale price for such day shall be determined as
        the
        average of the high bid and the low ask price quoted on Nasdaq as of the
        end of
        such tenth (10th)
        trading
        day; provided that if the Common Stock has not traded in the ten (10)
        consecutive trading days prior to the Valuation Date, the Fair Market Value
        shall be the average closing price of one share of Common Stock in the most
        recent ten (10) trading days during which the Common Stock has traded prior
        to the Valuation Date;

      

      (iii) If
        the
        Common Stock is then included in the Over-the-Counter Bulletin Board, the
        average closing sale price of one share of Common Stock on the Over-the-Counter
        Bulletin Board over the ten (10) trading days ending on the last trading
        day prior to the Valuation Date or, if no closing sale price is available
        for
        any of such ten (10) trading days, the closing sale price for such day
        shall be determined as the average of the high bid and the low ask price
        quoted
        on the Over-the-Counter Bulletin Board as of the end of such tenth
        (10th)
        trading
        day; provided that if the Common Stock has not traded in the ten (10)
        consecutive trading days prior to the Valuation Date, the Fair Market Value
        shall be the average closing price of one share of Common Stock in the most
        recent ten (10) trading days during which the Common Stock has traded prior
        to the Valuation Date;

      

      (iv) if
        the
        Common Stock is then included in the “pink sheets”, the average closing sale
        price of one share of Common Stock on the “pink sheets” over the ten (10)
        trading days ending on the last trading day prior to the Valuation Date or,
        if
        no closing sale price is available for any of such ten (10) trading days,
        the closing sale price for such day shall be determined as the average of
        the
        high bid and the low ask price quoted on the “pink sheets” as of the end of such
        tenth (10th)
        trading
        day; provided that if the Common Stock has not traded in the ten (10)
        consecutive trading days prior to the Valuation Date, the Fair Market Value
        shall be the average closing price of one share of Common Stock in the most
        recent ten (10) trading days during which the Common Stock has traded prior
        to the Valuation Date; or

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (v) if
        the
        Common Stock is not then listed on a national securities exchange or quoted
        on
        Nasdaq or the Over-the-Counter Bulletin Board or the “pink sheets”, the Fair
        Market Value of one share of Common Stock as of the Valuation Date shall
        be
        determined in good faith by mutual agreement of the Board of Directors of
        the
        Company (the “Board”)
        and
        the Holder; provided that if, in such case, the Board and the Holder are
        unable
        to agree as to the Fair Market Value of a share of Common Stock, such Fair
        Market Value shall be determined by an investment banker of national reputation
        selected by the Company and reasonably acceptable to the Holder, the fees
        and
        expenses of which shall be borne by the Company. 

      

      (c) Company's
        Failure to Timely Deliver Securities.
        If the
        Company shall fail for any reason or for no reason to issue to the Holder
        within
        three (3) trading days of receipt of the Notice of Exercise, a certificate
        for
        the number of shares of Common Stock to which the Holder is entitled and
        register such shares of Common Stock on the Company's share register or to
        credit the Holder's balance account with DTC for such number of shares of
        Common
        Stock to which the Holder is entitled upon the Holder's exercise of this
        Warrant, then, in addition to all other remedies available to the Holder,
        the
        Company shall pay in cash to the Holder on each day after such third trading
        day
        that the issuance of such shares of Common Stock is not timely effected an
        amount equal to 2.0% of the product of (A) the number of shares of Common
        Stock
        not issued to the Holder on a timely basis and to which the Holder is entitled
        and (B) the Fair Market Value of the shares of Common Stock on the trading
        day
        immediately preceding the last possible date which the Company could have
        issued
        such shares of Common Stock to the Holder without violating Section 1(a)(ii).
        In
        addition to the foregoing, if within three (3) trading days after the Company's
        receipt of the facsimile copy of a Notice of Exercise the Company shall fail
        to
        issue and deliver a certificate to the Holder and register such shares of
        Common
        Stock on the Company's share register or credit the Holder's balance account
        with DTC for the number of shares of Common Stock to which the Holder is
        entitled upon the Holder's exercise hereunder, and if on or after such trading
        day the Holder purchases (in an open market transaction or otherwise) shares
        of
        Common Stock to deliver in satisfaction of a sale by the Holder of shares
        of
        Common Stock issuable upon such exercise that the Holder anticipated receiving
        from the Company (a “Buy-In”),
        then
        the Company shall, within three (3) trading days after the Holder's request
        and
        in the Holder's discretion, either (i) pay cash to the Holder in an amount
        equal
        to the Holder's total purchase price (including brokerage commissions, if
        any)
        for the shares of Common Stock so purchased (the “Buy-In
        Price”),
        at
        which point the Company's obligation to deliver such certificate (and to
        issue
        such shares of Common Stock) shall terminate, or (ii) promptly honor its
        obligation to deliver to the Holder a certificate or certificates representing
        such shares of Common Stock and pay cash to the Holder in an amount equal
        to the
        excess (if any) of the Buy-In Price over the product of (A) such number of
        shares of Common Stock, times (B) the Fair Market Value of the shares of
        Common
        Stock on the date of exercise.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      Section
        2.  Reservation
        of Shares; Stock Fully Paid; Listing.
        The
        Company shall keep reserved a sufficient number of shares of the authorized
        and
        unissued shares of Common Stock to provide for the exercise of the rights
        of
        purchase represented by this Warrant in compliance with its terms. All Warrant
        Shares issued upon exercise of this Warrant shall be, at the time of delivery
        of
        the certificates for such Warrant Shares upon payment in full of the Warrant
        Price therefor in accordance with the terms of this Warrant (or proper exercise
        of the cashless exercise rights contained in Section
        1(b)
        hereof),
        duly authorized, validly issued, fully paid and non-assessable shares of
        Common
        Stock of the Company. The Company shall during all times prior to the Expiration
        Date when the shares of Common Stock issuable upon the exercise of this Warrant
        are authorized for listing or quotation on any national securities exchange,
        Nasdaq or the Over-the-Counter Bulletin Board or the “pink sheets”, as the case
        may be, keep the shares of Common Stock issuable upon the exercise of this
        Warrant authorized for listing or quotation on such national securities
        exchange, Nasdaq or the Over-the-Counter Bulletin Board or the “pink sheets”, as
        the case may be. The Company shall not take any action which results in any
        adjustment of the number of Warrant Shares hereunder if the total number
        of
        shares of Common Stock issued and issuable after such action upon exercise
        of
        this Warrant would exceed the total number of shares of Common Stock then
        authorized by the Company’s Certificate of Incorporation.

      

      Section
        3.  Adjustments
        and Distributions.
        The
        number and kind of securities purchasable upon the exercise of this Warrant
        and
        the Warrant Price shall be subject to adjustment from time to time upon the
        occurrence of certain events, as follows:

      

      (a) If
        the
        Company shall at any time or from time to time while this Warrant is
        outstanding, pay a dividend or make a distribution on its Common Stock in
        shares
        of Common Stock, subdivide its outstanding shares of Common Stock into a
        greater
        number of shares or combine its outstanding shares of Common Stock into a
        smaller number of shares, then the number of Warrant Shares purchasable upon
        exercise of this Warrant and the Warrant Price in effect immediately prior
        to
        the date upon which such change shall become effective shall be proportionally
        adjusted by the Company so that the Holder thereafter exercising this Warrant
        shall be entitled to receive the number of shares of Common Stock or other
        capital stock which the Holder would have received if this Warrant had been
        exercised immediately prior to such event upon payment of a Warrant Price
        that
        has been proportionally adjusted to reflect such event. Such adjustments
        shall
        be made successively whenever any event listed above shall
        occur.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (b) If
        any
        recapitalization, reclassification or reorganization of the capital stock
        of the
        Company (other than a change in par value or a subdivision or combination
        as
        provided for in Section
        3(a)
        above)
        shall be effected in such a manner (including, without limitation, in connection
        with a consolidation or merger in which the Company is the continuing
        corporation), that holders of Common Stock shall be entitled to receive stock,
        securities, or other assets or property (a “Reorganization”),
        then,
        as a condition of such Reorganization, lawful and adequate provisions shall
        be
        made by the Company whereby the Holder hereof shall thereafter have the right
        to
        purchase and receive (in lieu of the shares of the Common Stock of the Company
        immediately theretofore purchasable and receivable upon the exercise of the
        rights represented hereby) such shares of stock, securities or other assets
        or
        property as may be issued or payable with respect to or in exchange for a
        number
        of outstanding shares of such Common Stock equal to the number of shares
        of such
        Common Stock immediately theretofore purchasable and receivable upon the
        exercise of the rights represented hereby. In the event of any Reorganization,
        appropriate provision shall be made by the Company with respect to the rights
        and interests of the Holder of this Warrant to the end that the provisions
        hereof (including, without limitation, provisions for adjustments of the
        Warrant
        Price and of the number of Warrant Shares) shall thereafter be applicable,
        in
        relation to any shares of stock, securities or assets thereafter deliverable
        upon the exercise hereof. The provisions of this Section
        3(b)
        shall
        similarly apply to successive Reorganizations. . Notwithstanding the foregoing,
        in the event of a Reorganization, at the request of the Holder delivered
        before
        the ninetieth (90th)
        day
        after such Reorganization, the Company (or the successor entity) shall purchase
        this Warrant from the Holder by paying to the Holder, within five (5) Business
        Days after such request (or, if later, on the effective date of the
        Reorganization), cash in an amount equal to the value of the remaining
        unexercised portion of this Warrant on the date of such Reorganization, which
        value shall be determined by use of the Black-Scholes option pricing
        model.

      

      (c) If
        any
        consolidation or merger of the Company with another entity in which the Company
        is not the survivor, or sale, transfer or other disposition of all or
        substantially all of the Company’s assets to another entity shall be effected,
        then, as a condition of such consolidation, merger, sale, transfer or other
        disposition, lawful and adequate provision shall be made whereby the Holder
        shall thereafter have the right to purchase and receive upon the basis and
        upon
        the terms and conditions herein specified and in lieu of the Warrant Shares
        immediately theretofore issuable upon exercise of this Warrant, such shares
        of
        stock, securities or assets as would have been issuable or payable with respect
        to or in exchange for a number of Warrant Shares equal to the number of Warrant
        Shares immediately theretofore issuable upon exercise of this Warrant, had
        such
        consolidation, merger, sale, transfer or other disposition not taken place,
        and
        in any such case appropriate provision shall be made with respect to the
        rights
        and interests of the Holder to the end that the provisions hereof (including,
        without limitation, provision for adjustment of the Warrant Price and of
        the
        number of Warrant Shares) shall thereafter be applicable, as nearly equivalent
        as may be practicable, in relation to any shares of stock, securities or
        properties thereafter deliverable upon the exercise thereof. The Company
        shall
        not effect any such consolidation, merger, sale, transfer or other disposition
        unless prior to or simultaneously with the consummation thereof the successor
        entity (if other than the Company) resulting from such consolidation or merger,
        or the entity purchasing or otherwise acquiring such assets or other appropriate
        entity shall assume the obligation to deliver to the Holder such shares of
        stock, securities or assets as, in accordance with the foregoing provisions,
        such Holder may be entitled to purchase, and the other obligations under
        this
        Warrant. The provisions of this Section
        3(c)
        shall
        similarly apply to successive consolidations, mergers, sales, transfers or
        other
        dispositions.

      

      (d) In
        case
        the Company shall fix a payment date for the making of a distribution to
        all
        holders of Common Stock of evidences of indebtedness or assets (other than
        dividends or distributions referred to in Section
        3(a)
        hereof),
        or subscription rights or warrants, the Warrant Price to be in effect after
        such
        payment date shall be determined by multiplying the Warrant Price in effect
        immediately prior to such payment date by a fraction, the numerator of which
        shall be the total number of shares of Common Stock outstanding multiplied
        by
        the Fair Market Value per share of Common Stock immediately prior to such
        payment date, less the fair market value (as determined by the Board in good
        faith) of said assets or evidences of indebtedness so distributed, or of
        such
        subscription rights or warrants, and the denominator of which shall be the
        total
        number of shares of Common Stock outstanding multiplied by such Fair Market
        Value per share of Common Stock immediately prior to such payment date. Such
        adjustment shall be made successively whenever such a payment date is
        fixed.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (i) In
        the
        event that any dividend or distribution for which this Section 3(d)
        would
        require an adjustment is not so paid or made, the Warrant Price shall be
        adjusted to be the Warrant Price which would then be in effect if such dividend
        or distribution had not been declared.

      

      (ii) In
        the
        event that the Company implements a new shareholder rights plan, such rights
        plan shall provide that upon exercise of this Warrant the Holder will receive,
        in addition to the Common Stock issuable upon such exercise, the rights issued
        under such rights plan (as if the Holder had exercised this Warrant prior
        to
        implementing the rights plan and notwithstanding the occurrence of an event
        causing such rights to separate from the Common Stock at or prior to the
        time of
        exercise). Any distribution of rights or warrants pursuant to a shareholder
        rights plan complying with the requirements set forth in the immediately
        preceding sentence of this paragraph shall not constitute a distribution
        of
        rights or warrants for the purposes of this Section
        3(d).

      

      (e) For
        the
        term of this Warrant, in addition to the provisions contained above, the
        Warrant
        Price shall be subject to adjustment as provided below. An adjustment to
        the
        Warrant Price shall become effective immediately after the payment date in
        the
        case of each dividend or distribution and immediately after the effective
        date
        of each other event which requires an adjustment. No adjustment to the Warrant
        Price shall be made in an amount less than $0.01, but any such lesser amount
        shall be carried forward and shall be given effect in the next Warrant Price
        adjustment, if any.

      

      (f) In
        the
        event that, as a result of an adjustment made pursuant to this Section
        3,
        the
        Holder shall become entitled to receive any shares of capital stock of the
        Company other than shares of Common Stock, the number of such other shares
        so
        receivable upon exercise of this Warrant shall be subject thereafter to
        adjustment from time to time in a manner and on terms as nearly equivalent
        as
        practicable to the provisions with respect to the Warrant Shares contained
        in
        this Warrant.

      

      (g) Except
        as
        provided in Section
        3(h)
        hereof,
        if and whenever the Company shall issue or sell, or is, in accordance with
        any
        of Sections
        3(g)(i) through 3(g)(v)
        hereof,
        deemed to have issued or sold, any shares of Common Stock for a consideration
        per share less than the Warrant Price in effect immediately prior to the
        time of
        such issue or sale, then and in each such case (a “Trigger
        Issuance”)
        the
        then-existing Warrant Price shall be reduced, as of the close of business
        on the
        effective date of the Trigger Issuance, to a Warrant Price equal to the lowest
        price per share at which any share of Common Stock was issued or sold or
        deemed
        to be issued or sold in such Trigger Issuance. Upon each adjustment in the
        Warrant Price pursuant to this Section
        3(g),
        the
        number of Warrant Shares purchasable hereunder shall be adjusted, to the
        nearest
        whole share, to the product obtained by multiplying the number of Warrant
        Shares
        purchasable immediately prior to such adjustment by a fraction, (i) the
        numerator of which shall be the Warrant Price immediately prior to such
        adjustment, and (ii) the denominator of which shall be the Warrant Price
        immediately thereafter.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      For
        purposes of this subsection (g), “Additional
        Shares of Common Stock”
shall
        mean all shares of Common Stock issued by the Company or deemed to be issued
        pursuant to this Section
        3(g),
        other
        than Excluded Issuances (as defined in Section
        3(h)
        hereof).

      

      For
        purposes of this Section
        3(g),
        the
        following Sections
        3(g)(i) to 3(g)(v)
        shall
        also be applicable (subject, in each such case, to the provisions of
Section
        3(h)
        hereof):

      

      (i) Issuance
        of Options or Convertible Securities.
        In case
        at any time after the date hereof the Company shall in any manner grant,
        issue
        or sell any stock or security convertible into or exchangeable for Common
        Stock
        (“Convertible
        Securities”)
        or any
        warrants or other rights to subscribe for or to purchase, or any options
        for the
        purchase of, Common Stock or any Convertible Securities (such warrants, rights
        or options being called “Options”),
        whether or not the right to convert, exchange or exercise any such Convertible
        Securities or such Options are immediately exercisable, and the price per
        share
        for which Common Stock is issuable upon the conversion or exchange of such
        Convertible Securities or upon the exercise of such Options (determined by
        dividing (i) the sum of (x) the total amount, if any, received or receivable
        by
        the Company as consideration for the issue or sale of such Convertible
        Securities or the granting of such Options, plus (y) the aggregate amount
        of
        additional consideration, if any, payable to the Company upon the conversion
        or
        exchange of all such Convertible Securities or the exercise of all such Options,
        plus (z), in the case of such Options to purchase Convertible Securities,
        the
        aggregate amount of additional consideration, if any, payable upon the
        conversion or exchange of such Convertible Securities, by (ii) the maximum
        number of shares of Common Stock issuable upon the conversion or exchange
        of all
        such Convertible Securities, or upon the exercise of such Options, or upon
        the
        conversion or exchange of all such Convertible Securities issuable upon the
        exercise of such Options), shall be less than the Warrant Price in effect
        immediately prior to the time of the issue or sale of such Convertible
        Securities or the granting of such Options, then the total number of shares
        of
        Common Stock issuable upon the conversion or exchange of such Convertible
        Securities, or the exercise of such Options, or upon the conversion or exchange
        of the maximum amount of such Convertible Securities issuable upon the exercise
        of such Options shall be deemed to have been issued for such price per share
        as
        of the date of the issuance or sale of such Convertible Securities or the
        granting of such Options (including Options to purchase Convertible Securities)
        and thereafter shall be deemed to be outstanding for purposes of adjusting
        the
        Warrant Price. Except as otherwise provided in Section
        3(g)(ii),
        no
        additional adjustment of the Warrant Price shall be made upon the actual
        issue
        of such Common Stock upon conversion or exchange of such Convertible Securities
        or upon exercise of such Options.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (ii) Change
        in Option Price or Conversion Rate.
        Upon
        the happening of any of the following events, namely, if (A) the purchase
        price
        provided for in any Option referred to in Section
        3(g)(i)
        hereof,
        (B) the additional consideration, if any, payable upon the conversion or
        exchange of any Convertible Securities referred to in Section
        3(g)(i),
        or (C)
        the rate at which Convertible Securities referred to in Section
        3(g)(i)
        are
        convertible into or exchangeable for Common Stock shall increase or decrease
        at
        any time (including, but not limited to, changes under or by reason of
        provisions designed to protect against dilution), the Warrant Price in effect
        at
        the time of such event shall forthwith be readjusted to the Warrant Price
        which
        would have been in effect at such time had such Options or Convertible
        Securities still outstanding provided for such changed purchase price,
        additional consideration or conversion rate, as the case may be, at the time
        initially granted, issued or sold, but only if as a result of such adjustment
        the Warrant Price then in effect hereunder is thereby reduced. 

      

      (iii) Consideration
        for Stock.
        In case
        any shares of Common Stock, Options or Convertible Securities shall be issued
        or
        sold for cash, the consideration received therefor shall be deemed to be
        the
        amount received by the Company therefor, without deduction therefrom of any
        expenses incurred or any underwriting commissions or concessions paid or
        allowed
        by the Company in connection therewith. In case any shares of Common Stock,
        Options or Convertible Securities shall be issued or sold for a consideration
        other than cash or for a consideration including cash and such other
        consideration, the amount of the consideration other than cash received by
        the
        Company shall be deemed to be the fair value of such consideration as determined
        in good faith by the Board, after deduction of any expenses incurred or any
        underwriting commissions or concessions paid or allowed by the Company in
        connection therewith. 

      

      (iv) Record
        Date.
        In case
        the Company shall take a record of the holders of its Common Stock for the
        purpose of entitling them (A) to receive a dividend or other distribution
        payable in Common Stock, Options or Convertible Securities or (B) to subscribe
        for or purchase Common Stock, Options or Convertible Securities, then such
        record date shall be deemed to be the date of the issue or sale of the shares
        of
        Common Stock deemed to have been issued or sold upon the declaration of such
        dividend or the making of such other distribution or the date of the granting
        of
        such right of subscription or purchase, as the case may be. If the Company
        shall
        have taken a record of the holders of its Common Stock for the purpose of
        entitling them to receive a dividend or distribution or subscription or purchase
        rights and shall, thereafter and before the distribution to stockholders
        thereof, legally abandon its plan to pay or deliver such dividend, distribution,
        subscription or purchase rights, then thereafter no adjustment shall be required
        by reason of the taking of such record and any such adjustment previously
        made
        in respect thereof shall be automatically rescinded and annulled.

      

      (v) Treasury
        Shares.
        The
        number of shares of Common Stock outstanding at any given time shall not
        include
        shares owned or held by or for the account of the Company or any of its
        wholly-owned subsidiaries, and the disposition of any such shares (other
        than
        the cancellation or retirement thereof) shall be considered an issue or sale
        of
        Common Stock for the purpose of this Section
        3(g).

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (h) Excluded
        Issuances.
        Anything herein to the contrary notwithstanding, the Company shall not be
        required to make any adjustment of the Warrant Price in the case of
        (i) issuances of Common Stock upon grant or exercise of Options which may
        hereafter be granted or exercised under the Company’s 2004 Stock Option and
        Stock Incentive Plan or any equity incentive or stock option plan adopted
        by the
        stockholders of the Company; (ii) issuances of shares of Common Stock
        arising from any of the existing obligations set forth on Schedule
        A
        attached
        hereto; (iii) issuances of securities to distributors of the Company’s products;
        (iv) issuances of securities pursuant to any subsequent agreement between
        the
        Investors (as defined in the Purchase Agreement) and the Company; (v) issuances
        of securities as consideration for a merger or consolidation with (provided,
        that, the stockholders of the Company possessing the power to elect a majority
        of the Board of Directors of the Company prior to such merger or consolidation
        continue to possess such power with respect to such surviving entity following
        the merger or consolidation), or purchase of assets from, a non-Affiliated
        third
        party or in connection with any strategic partnership or joint venture with
        a
        non-Affiliated third party with the Company (the primary purpose of any such
        action is not to raise equity capital); (vi) issuances of shares of Common
        Stock
        in the ordinary course of business as payment for services rendered (and
        not for
        cash) to the Company so long as the aggregate amount of all such issuances
        do
        not exceed ten percent (10%) of the total number of shares of Common Stock
        outstanding as of the date of issuance of this Warrant; (vii) shares of Common
        Stock issued or issuable upon the conversion or exercise of Options or
        Convertible Securities outstanding on the date hereof, provided such securities
        are not amended after the date hereof; (viii) securities issued pursuant
        to the
        Purchase Agreement and securities issued upon the exercise or conversion
        of
        those securities; or (ix) shares of Common Stock issued or issuable by
        reason of a dividend, stock split or other distribution payable pro rata
        to all
        holders of Common Stock (but only to the extent that such a dividend, split
        or
        distribution results in an adjustment in the Warrant Price and the number
        of
        Warrant Shares pursuant to the other provisions of this Warrant)(collectively,
        “Excluded
        Issuances”).

      

      (i) Notice
        of Adjustments.
        With
        each adjustment pursuant to this Section
        3,
        the
        Company shall deliver a certificate signed by its chief financial or executive
        officer 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 the number of Warrant Shares purchasable
        hereunder after giving effect to such adjustment, which shall be mailed by
        first
        class mail, postage prepaid to the Holder.

      

      Section
        4.  Transfer
        Taxes.
        The
        Company will pay any documentary stamp taxes attributable to the initial
        issuance of Warrant Shares issuable upon the exercise of the Warrant;
provided,
        however,
        that
        the Company shall not be required to pay any tax or taxes which may be payable
        in respect of any transfer involved in the issuance or delivery of any
        certificates for Warrant Shares in a name other than that of the registered
        holder of this Warrant in respect of which such shares are issued, and in
        such
        case, the Company shall not be required to issue or deliver any certificate
        for
        Warrant Shares or any Warrant until the person requesting the same has paid
        to
        the Company the amount of such tax or has established to the Company’s
        reasonable satisfaction that such tax has been paid.

      

      Section
        5.  Mutilated
        or Missing Warrants.
        In case
        this Warrant shall be mutilated, lost, stolen, or destroyed, the Company
        shall
        issue in exchange and substitution of and upon cancellation of the mutilated
        Warrant, or in lieu of and substitution for the Warrant lost, stolen or
        destroyed, a new Warrant of like tenor and for the purchase of a like number
        of
        Warrant Shares, but only upon receipt of evidence reasonably satisfactory
        to the
        Company of such loss, theft or destruction of the Warrant, and with respect
        to a
        lost, stolen or destroyed Warrant, reasonable indemnity or bond with respect
        thereto, if requested by the Company.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      Section
        6.  Fractional
        Shares.
        No
        fractional shares of Common Stock shall be issued in connection with any
        exercise or cashless exercise hereunder, and in lieu of any such fractional
        shares the Company shall make a cash payment therefor to the Holder (or such
        other person or persons as directed by the Holder, subject to compliance
        with
        all applicable laws) based on the Fair Market Value of a share of Common
        Stock
        on the date of exercise or cashless exercise of this Warrant.

      

      Section
        7.  Compliance
        with Securities Act and Legends. The
        Holder, by acceptance hereof, agrees that it will not offer, sell or otherwise
        dispose of this Warrant, or any shares of Common Stock to be issued upon
        exercise hereof except under circumstances which will not result in a violation
        of the Securities Act of 1933, as amended, or the rules and regulations
        promulgated thereunder, as amended (the “Act”),
        or
        any state’s securities laws. All shares of Common Stock issued upon exercise of
        this Warrant (unless registered under the Act) shall be stamped or imprinted
        with a legend as follows:

      

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE (i) NOT BEEN REGISTERED UNDER
        THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE,
        AND
        (ii) BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY. THESE SECURITIES MAY NOT
        BE
        SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
        THEREFROM UNDER SAID ACT OR LAWS.

       

      Section
        8.  Rights
        as a Stockholder.
        Except
        as expressly provided in this Warrant, no Holder, as such, shall be entitled
        to
        vote or receive dividends or be deemed the holder of Common Stock or any
        other
        securities of the Company which may at any time be issuable on the exercise
        hereof for any purpose, nor shall anything contained herein be construed
        to
        confer upon the Holder, as such, any of the rights of a stockholder of the
        Company or any right to vote for the election of the directors or upon any
        matter submitted to stockholders at any meeting thereof, or to receive notice
        of
        meetings, or to receive dividends or subscription rights or otherwise, until
        this Warrant shall have been exercised and the Warrant Shares purchasable
        upon
        the exercise hereof shall have become deliverable, as provided
        herein.

      

      Section
        9.  Modification
        and Waiver.
        This
        Warrant and any provision hereof may be changed, waived, discharged or
        terminated only by an instrument in writing signed by the Company and the
        then
        current Holder, and such change, waiver, discharge or termination shall be
        binding on any future Holder.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      Section
        10.  Notices.
        Unless
        otherwise specifically provided herein, all communications under this Warrant
        shall be in writing and shall be deemed to have been duly given (a) on the
        date
        personally delivered to the party to whom notice is to be given, (b) on the
        day
        of transmission if sent by facsimile transmission to, in the case of the
        registered Holder, the facsimile number shown on the books of the Company
        and,
        in the case of the Company, the facsimile number set forth in Section 9.4
        of the
        Purchase Agreement and provided that the sending party receives confirmation
        of
        the completion of such transmission, (c) on the Business Day after submitted
        for
        next day delivery to Federal Express or similar overnight courier which utilizes
        a written form of receipt, or (d) on the fifth day after mailing, if mailed
        to
        the party to whom notice is to be given, by first class mail, registered
        or
        certified, postage prepaid, and properly addressed, return receipt requested,
        to
        the registered Holder at its address as shown on the books of the Company
        or to
        the Company at the address indicated in Section 9.4 of the Purchase Agreement.
        Any party hereto may change its address for purposes of this Section
        10
        by
        giving the other party written notice of the new address in the manner set
        forth
        herein.

      

      Section
        11.  Descriptive
        Headings.
        The
        descriptive headings contained in this Warrant are inserted for convenience
        only
        and do not constitute a part of this Warrant.

      

      Section
        12.  Governing
        Law.
        The
        validity, interpretation and performance of this Warrant shall be governed
        by,
        and construed in accordance with, the laws of the State of New York applicable
        to contracts made and to be performed entirely within such State, regardless
        of
        the law that might be applied under principles of conflicts of law. The Company
        and, by accepting this Warrant, the Holder, each irrevocably submits to the
        exclusive jurisdiction of the courts of the State of New York located in
        New
        York County and the United States District Court for the Southern District
        of
        New York for the purpose of any suit, action, proceeding or judgment relating
        to
        or arising out of this Warrant and the transactions contemplated hereby.
        Service
        of process in connection with any such suit, action or proceeding may be
        served
        on each party hereto anywhere in the world by the same methods as are specified
        for the giving of notices under this Warrant. The Company and, by accepting
        this
        Warrant, the Holder, each irrevocably consents to the jurisdiction of any
        such
        court in any such suit, action or proceeding and to the laying of venue in
        such
        court. The Company and, by accepting this Warrant, the Holder, each irrevocably
        waives any objection to the laying of venue of any such suit, action or
        proceeding brought in such courts and irrevocably waives any claim that any
        such
        suit, action or proceeding brought in any such court has been brought in
        an
        inconvenient forum. EACH
        OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY
        RIGHT
        TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT
        AND
        REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
        WAIVER.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      Section
        13. Limitations
        on Exercise.
        Notwithstanding anything to the contrary contained herein, the number of
        Warrant
        Shares that may be acquired by the Holder upon any exercise of this Warrant
        (or
        otherwise in respect hereof) shall be limited to the extent necessary to
        insure
        that, following such exercise (or other issuance), the total number of shares
        of
        Common Stock then beneficially owned by such Holder and its Affiliates and
        any
        other Persons whose beneficial ownership of Common Stock would be aggregated
        with the Holder’s for purposes of Section 13(d) of the 1934 Act, does not exceed
        4.99% (the “Maximum
        Percentage”)
        of the
        total number of issued and outstanding shares of Common Stock (including
        for
        such purpose the shares of Common Stock issuable upon such exercise). For
        such
        purposes, beneficial ownership shall be determined in accordance with Section
        13(d) of the 1934 Act and the rules and regulations promulgated thereunder.
        Each
        delivery of an Exercise Notice hereunder will constitute a representation
        by the
        Holder that it has evaluated the limitation set forth in this Section and
        determined that issuance of the full number of Warrant Shares requested in
        such
        Exercise Notice is permitted under this Section. The Company’s obligation to
        issue shares of Common Stock in excess of the limitation referred to in this
        Section shall be suspended (and, except as provided below, shall not terminate
        or expire notwithstanding any contrary provisions hereof) until such time,
        if
        any, as such shares of Common Stock may be issued in compliance with such
        limitation; provided, that, if, as of 5:00 p.m., New York City time, on the
        Expiration Date, the Company has not received written notice that the shares
        of
        Common Stock may be issued in compliance with such limitation, the Company’s
        obligation to issue such shares shall terminate. This provision shall not
        restrict the number of shares of Common Stock which a Holder may receive
        or
        beneficially own in order to determine the amount of securities or other
        consideration that such Holder may receive in the event of a transaction
        contemplated in Sections
        3(b) or (c)
        of this
        Warrant. By written notice to the Company, the Holder may (i) waive the
        provisions of this Section but any such waiver will not be effective until
        the
        61st
        day
        after such notice is delivered to the Company, nor will any such waiver effect
        any other Holder of the Warrants and (ii) increase or decrease the Maximum
        Percentage to any other percentage not in excess of 9.99% specified in such
        notice; provided that (A) any such increase will not be effective until the
        sixty-first (61st)
        day
        after such notice is delivered to the Company, and (B) any such increase
        or
        decrease will apply only to the Holder and not to any other holder of the
        Warrants.

      

      Section
        14.  Acceptance.
        Receipt
        and execution of this Warrant by the Holder hereof shall constitute acceptance
        of and agreement to the foregoing terms and conditions.

      

      Section
        15.  Identity
        of Transfer Agent.
        The
        Transfer Agent for the Common Stock is Computershares Transfer Company. Upon
        the
        appointment of any subsequent transfer agent for the Common Stock or other
        shares of the Company’s capital stock issuable upon the exercise of the rights
        of purchase represented by this Warrant, the Company will mail to the Holder
        a
        statement setting forth the name and address of such transfer
        agent.

      

      Section
        16. Registration
        Rights.
        The
        initial Holder is entitled to the benefit of certain registration rights
        with
        respect to the shares of Common Stock issuable upon the exercise of this
        Warrant
        as provided in the Registration Rights Agreement, and any subsequent Holder
        may
        be entitled to such rights..

      

      Section
        17.  No
        Impairment of Rights.
        The
        Company will not, by amendment of its Certificate of Incorporation or through
        any other voluntary action, avoid or seek to avoid the observance or performance
        of any of the terms of this Warrant, but will at all times in good faith
        assist
        in the carrying out of all such terms and in the taking of all such action
        as
        may be necessary or appropriate in order to protect the rights of the holder
        of
        this Warrant against material impairment.

      

      Section
        18.  Transferability.
        Subject
        to compliance with applicable federal and state securities laws, this Warrant
        may be transferred by the Holder with respect to any or all of the Warrant
        Shares then purchasable hereunder. Upon surrender of this Warrant to the
        Company, together with a properly endorsed notice of transfer, for transfer
        of
        this Warrant in its entirety by the Holder, the Company shall issue a new
        warrant of the same denomination to the designated transferee. Upon surrender
        of
        this Warrant to the Company, together with a properly endorsed notice of
        transfer, by the Holder for transfer with respect to a portion of the Warrant
        Shares then purchasable hereunder, the Company shall issue a new warrant
        to the
        designated transferee, in such denomination as shall be requested by the
        Holder
        hereof, and shall issue to such Holder a new warrant covering the number
        of
        Warrant Shares in respect of which this Warrant shall not have been
        transferred.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      IN
        WITNESS WHEREOF, the Company has caused this Warrant to be executed on its
        behalf by one of its officers thereunto duly authorized.

       

      
        	 	 	 
	 	THE
                TUBE MEDIA CORP.
	 
 	 
 	 
 
	 	By:  	 
	 	
                

              
	 	Name
	 	Title 

      

      
 

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      APPENDIX
        A

      

      NOTICE
        OF EXERCISE

      

      

      

      To: THE
        TUBE
        MEDIA CORP.

      

      1. The
        undersigned hereby irrevocably elects to purchase [_____] shares of Common
        Stock
        of The Tube Media Corp. pursuant to the terms of the attached Warrant, and
        tenders herewith payment of the purchase price of such shares in full, by
        [cash,
        certified check/wire transfer, or surrender of the originally executed
        Warrant]
        [select the applicable method of payment].

      

      2. Please
        issue a certificate or certificates representing said shares in the name
        of the
        undersigned or in such other name or names as are specified below:

      

      ______________________________

      ______________________________

      (Name)

      

      ______________________________

      (Address)

      

      _________________________
        (Signature)

      __________________(Date)

      

      3. Please
        issue a new Warrant of equivalent form and tenor for the unexercised portion
        of
        the attached Warrant in the name of the undersigned or in such other name
        as is
        specified below:

      

      ______________________________________

      

      Date:
        __________________________________

      

      (Warrantholder)
        _________________________

      

      Name:
        (Print) ___________________________

      

      By:____________________________________

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      APPENDIX
        B

      

      Net
        Issue Election Notice

      

      

      To:
        The
        Tube Media Corp.

      

      Date:[_________________________]

      

      

      The
        undersigned hereby elects under Section
        1(b)
        of this
        Warrant to surrender the right to purchase [____________] shares of Common
        Stock
        pursuant to this Warrant and hereby requests the issuance of [_____________]
        shares of Common Stock. The certificate(s) for the shares issuable upon such
        net
        issue election shall be issued in the name of the undersigned or as otherwise
        indicated below.

      

      

      _________________________________________

      Signature

      

      _________________________________________

      Name
        for
        Registration

      

      _________________________________________

      Mailing
        AddressPURCHASE
      AGREEMENT

     

    THIS
      PURCHASE AGREEMENT (“Agreement”) is made as of the 21st day of April, 2006 by
      and among The Tube Media Corp, a Delaware corporation (the “Company”), and the
      Investors set forth on the signature pages affixed hereto (each an “Investor”
and collectively the “Investors”). 

    

    Recitals

    

    A. The
      Company and the Investors are executing and delivering this Agreement in
      reliance upon the exemption from securities registration afforded by the
      provisions of Regulation D (“Regulation D”), as promulgated by the U.S.
      Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
      as amended; and

    

    B. The
      Investors wish to purchase from the Company, and the Company wishes to sell
      and
      issue to the Investors, upon the terms and conditions stated in this Agreement,
      (i) Two Million Four Hundred Fifty Thousand Dollars ($2,450,000) in aggregate
      principal amount of the Company’s Convertible Notes in the form attached hereto
      as Exhibit
      A
      (the
“Notes”), which notes are convertible into shares of the Company’s Common Stock,
      par value $0.0001 per share (together with any securities into which such shares
      may be reclassified the “Common Stock”), at a conversion price of $2.25 per
      share (subject to adjustment), and shall be secured by the Stock Pledge
      Agreement (as defined below) and (ii) warrants to purchase an aggregate of
      1,088,886 shares of Common Stock (subject to adjustment) at an exercise price
      of
      $2.25 per share (subject to adjustment) in the form attached hereto as
Exhibit
      B
      (the
“Warrants”); and

    

    C. Contemporaneous
      with the sale of the Notes and the Warrants, the parties hereto will execute
      and
      deliver a Registration Rights Agreement, in the form attached hereto as Exhibit
      D (the “Registration Rights Agreement”), pursuant to which the Company will
      agree to provide certain registration rights under the Securities Act of 1933,
      as amended, and the rules and regulations promulgated thereunder, and applicable
      state securities laws.

    

    In
      consideration of the mutual promises made herein and for other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto agree as follows:

    

    1. Definitions.
      In
      addition to those terms defined above and elsewhere in this Agreement, for
      the
      purposes of this Agreement, the following terms shall have the meanings set
      forth below:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Affiliate”
means,
      with respect to any Person, any other Person which directly or indirectly
      through one or more intermediaries Controls, is Controlled by, or is under
      common Control with, such Person.

    

    “Business
      Day”
means
      a
      day, other than a Saturday or Sunday, on which banks in New York City are open
      for the general transaction of business.

     

    “Company’s
      Knowledge”
means
      the actual knowledge of the executive officers (as defined in Rule 405 under
      the
      1933 Act) of the Company, after due inquiry.

    

    “Confidential
      Information”
means
      trade secrets, confidential information and know-how (including but not limited
      to ideas, formulae, compositions, processes, procedures and techniques, research
      and development information, computer program code, performance specifications,
      support documentation, drawings, specifications, designs, business and marketing
      plans, and customer and supplier lists and related information).

    

    “Control”
      (including the terms “controlling”, “controlled by” or “under common control
      with”) means the possession, direct or indirect, of the power to direct or cause
      the direction of the management and policies of a Person, whether through the
      ownership of voting securities, by contract or otherwise.

    

    “Conversion
      Shares”
means
      the shares of Common Stock issuable (i) upon conversion of the Notes by the
      holders thereof or (ii) at the Company’s option in accordance with the terms of
      the Notes, in satisfaction of monthly principal payments due and owing under
      the
      Notes.

    

    “Escrow
      Agreement”
means
      the Escrow Agreement, dated as of even date hereof, by and among the Company,
      Nite Capital, L.P., on behalf of the Investors, and the escrow agent party
      thereto.

    

    “Intellectual
      Property”
means
      all of the following: (i) patents, patent applications, patent disclosures
      and
      inventions (whether or not patentable and whether or not reduced to practice);
      (ii) trademarks, service marks, trade dress, trade names, corporate names,
      logos, slogans and Internet domain names, together with all goodwill associated
      with each of the foregoing; (iii) copyrights and copyrightable works; (iv)
      registrations, applications and renewals for any of the foregoing; and (v)
      proprietary computer software (including but not limited to data, data bases
      and
      documentation).

    

    “Interest
      Shares”
means
      the shares of Common Stock issuable, at the Company’s option in accordance with
      the terms of the Notes, in satisfaction of the quarterly interest payments
      due
      and owing under the Notes.

    

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (i) the assets, liabilities, results of operations,
      condition (financial or otherwise), business, or prospects of the Company and
      its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform
      its obligations under the Transaction Documents.

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    “Person”
means
      an individual, corporation, partnership, limited liability company, trust,
      business trust, association, joint stock company, joint venture, sole
      proprietorship, unincorporated organization, governmental authority or any
      other
      form of entity not specifically listed herein.

    

    “Purchase
      Price”
means
      Two Million Four Hundred Fifty Thousand Dollars ($2,450,000).

    

    “Registration
      Statement”
has
      the
      meaning set forth in the Registration Rights Agreement.

    

    “Securities”
means
      the Notes, the Conversion Shares, the Interest Shares, the Warrants and the
      Warrant Shares.

     

    “Stock
      Pledge Agreement”
means
      that certain Stock Pledge Agreement, in the form attached hereto as Exhibit
      C,
      by and
      among Nite Capital, L.P., as collateral agent for the Investors, and David
      Levy.

    

    “Subsidiary”
of
      any
      Person means another Person, an amount of the voting securities, other voting
      ownership or voting partnership interests of which is sufficient to elect at
      least a majority of its Board of Directors or other governing body (or, if
      there
      are no such voting interests, 50% or more of the equity interests of which)
      is
      owned directly or indirectly by such first Person.

    

    “Transaction
      Documents”
means
      this Agreement, the Notes, the Warrants, the Registration Rights Agreement
      and
      the Stock Pledge Agreement.

    

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

    

    “1933
      Act”
means
      the Securities Act of 1933, as amended, or any successor statute, and the rules
      and regulations promulgated thereunder.

    

    “1934
      Act”
means
      the Securities Exchange Act of 1934, as amended, or any successor statute,
      and
      the rules and regulations promulgated thereunder.

    

    2. Purchase
      and Sale of the Notes and Warrants.
      Subject
      to the terms and conditions of this Agreement, on the Closing Date (as defined
      in Section 3 below), each of the Investors shall severally, and not jointly,
      purchase, and the Company shall sell and issue to the Investors, the Notes
      and
      Warrants in the respective amounts set forth opposite the Investors’ names on
      the signature pages hereto in exchange for the Purchase Price as specified
      in
      Section 3 below.

    

    3. Closing.
      Upon
      confirmation that the other conditions to closing specified herein have been
      satisfied or duly waived by the Investors, the Company shall deliver to Blank
      Rome LLP, in trust, the Notes and the Warrants, registered in such name or
      names
      as the Investors may designate, with instructions that such Notes and Warrants
      are to be held for release to the Investors only upon payment in full of the
      Purchase Price to the Company by all the Investors. Upon such receipt by Blank
      Rome LLP of the Notes and the Warrants, each Investor shall promptly, but no
      more than one Business Day thereafter, cause a wire transfer in same day funds
      to be sent to the account of the Company as instructed in writing by the
      Company, in an amount representing such Investor’s pro rata portion of the
      Purchase Price as set forth on the signature pages to this Agreement. On the
      date (the “Closing Date”) the Company receives the Purchase Price, the Notes and
      the Warrants shall be released to the Investors (the “Closing”). The Closing of
      the purchase and sale of the Notes and the Warrants shall take place at the
      offices of Lowenstein Sandler PC, 1251 Avenue of the Americas, 18th Floor,
      New
      York, New York 10020, or at such other location and on such other date as the
      Company and the Investors shall mutually agree.

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    4. Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to the Investors that, except as set
      forth in the schedules delivered herewith (collectively, the “Disclosure
      Schedules”):

    

    4.
      1 Organization,
      Good Standing and Qualification.
      Each of
      the Company and its Subsidiaries is a corporation duly organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      incorporation and has all requisite corporate power and authority to carry
      on
      its business as now conducted and to own its properties. Each of the Company
      and
      its Subsidiaries is duly qualified to do business as a foreign corporation
      and
      is in good standing in each jurisdiction in which the conduct of its business
      or
      its ownership or leasing of property makes such qualification or leasing
      necessary unless the failure to so qualify has not had and could not reasonably
      be expected to have a Material Adverse Effect. The Company’s Subsidiaries are
      listed on Schedule
      4.1
      hereto.

    

    4.2 Authorization.
      The
      Company has full power and authority and has taken all requisite action on
      the
      part of the Company, its officers, directors and stockholders necessary for
      (i)
      the authorization, execution and delivery of the Transaction Documents, (ii)
      the
      authorization of the performance of all obligations of the Company hereunder
      or
      thereunder, and (iii) the authorization, issuance (or reservation for issuance)
      and delivery of the Securities.
      The
      Transaction Documents constitute the legal, valid and binding obligations of
      the
      Company, enforceable against the Company in accordance with their terms, subject
      to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
      and
      similar laws of general applicability, relating to or affecting creditors’
rights generally.

    

    4.3 Capitalization.
      Schedule
      4.3
      sets
      forth (a) the authorized capital stock of the Company on the date hereof; (b)
      the number of shares of capital stock issued and outstanding; (c) the number
      of
      shares of capital stock issuable pursuant to the Company’s stock plans; and (d)
      the number of shares of capital stock issuable and reserved for issuance
      pursuant to securities (other than the Notes and the Warrants) exercisable
      for,
      or convertible into or exchangeable for any shares of capital stock of the
      Company. All of the issued and outstanding shares of the Company’s capital stock
      have been duly authorized and validly issued and are fully paid, nonassessable
      and free of pre-emptive rights and were issued in full compliance with
      applicable state and federal securities law and any rights of third parties.
      Except as described on Schedule
      4.3,
      all of
      the issued and outstanding shares of capital stock of each Subsidiary have
      been
      duly authorized and validly issued and are fully paid, nonassessable and free
      of
      pre-emptive rights, were issued in full compliance with applicable state and
      federal securities law and any rights of third parties and are owned by the
      Company, beneficially and of record, subject to no lien, encumbrance or other
      adverse claim. Except as described on Schedule
      4.3,
      no
      Person is entitled to pre-emptive or similar statutory or contractual rights
      with respect to any securities of the Company. Except as described on
Schedule
      4.3,
      there
      are no outstanding warrants, options, convertible securities or other rights,
      agreements or arrangements of any character under which the Company or any
      of
      its Subsidiaries is or may be obligated to issue any equity securities of any
      kind and except as contemplated by this Agreement, neither the Company nor
      any
      of its Subsidiaries is currently in negotiations for the issuance of any equity
      securities of any kind. Except as described on Schedule
      4.3
      and
      except for the Registration Rights Agreement, there are no voting agreements,
      buy-sell agreements, option or right of first purchase agreements or other
      agreements of any kind among the Company and any of the securityholders of
      the
      Company relating to the securities of the Company held by them. Except as
      described on Schedule
      4.3
      and
      except as provided in the Registration Rights Agreement, no Person has the
      right
      to require the Company to register any securities of the Company under the
      1933
      Act, whether on a demand basis or in connection with the registration of
      securities of the Company for its own account or for the account of any other
      Person.

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    Except
      as
      described on Schedule
      4.3,
      the
      issuance and sale of the Securities hereunder will not obligate the Company
      to
      issue shares of Common Stock or other securities to any other Person (other
      than
      the Investors) and will not result in the adjustment of the exercise,
      conversion, exchange or reset price of any outstanding security.

    

    Except
      as
      described on Schedule
      4.3,
      the
      Company does not have outstanding stockholder purchase rights or “poison pill”
or any similar arrangement in effect giving any Person the right to purchase
      any
      equity interest in the Company upon the occurrence of certain
      events.

    

    4.4 Valid
      Issuance.
      The
      Securities have been duly and validly authorized and, when issued (i) in
      accordance with the terms of the Notes, the Conversion Shares and/or the
      Interest Shares, and (ii) upon due exercise of the Warrants, the Warrant Shares,
      in each case, will be validly issued, fully paid and nonassessable, and shall
      be
      free and clear of all encumbrances and restrictions (other than those created
      by
      the Investors), except for restrictions on transfer set forth in the Transaction
      Documents or imposed by applicable securities laws. The Company has reserved
      a
      sufficient number of shares of Common Stock for issuance in accordance with
      the
      terms of the Notes (whether upon conversion of the Notes by the holders thereof
      or upon issuance by the Company, at its election, in satisfaction of the monthly
      principal or quarterly interest payments) and/or the exercise of the Warrants,
      in each case, free and clear of all encumbrances and restrictions, except for
      restrictions on transfer set forth in the Transaction Documents or imposed
      by
      applicable securities laws and except for those created by the
      Investors.

    

    4.5 Consents.
      The
      execution, delivery and performance by the Company of the Transaction Documents
      and the offer, issuance and sale of the Securities require no consent of, action
      by or in respect of, or filing with, any Person, governmental body, agency,
      or
      official other than filings that have been made pursuant to applicable state
      securities laws and post-sale filings pursuant to applicable state and federal
      securities laws which the Company undertakes to file within the applicable
      time
      periods. Subject to the accuracy of the representations and warranties of each
      Investor set forth in Section 5 hereof, the Company has taken all action
      necessary to exempt (i) the issuance and sale of the Securities, (ii) the
      issuance of the Warrant Shares upon due exercise of the Warrants, (iii) the
      issuance of the Conversion Shares and the Interest Shares in accordance with
      the
      terms of the Notes, and (iv) the other transactions contemplated by the
      Transaction Documents from the provisions of any stockholder rights plan or
      other “poison pill” arrangement, any anti-takeover, business combination or
      control share law or statute binding on the Company or to which the Company
      or
      any of its assets and properties may be subject and any provision of the
      Company’s Certificate of Incorporation or Bylaws that is or could reasonably be
      expected to become applicable to the Investors as a result of the transactions
      contemplated hereby, including without limitation, the issuance of the
      Securities and the ownership, disposition or voting of the Securities by the
      Investors or the exercise of any right granted to the Investors pursuant to
      this
      Agreement or the other Transaction Documents.

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    4.6 Delivery
      of SEC Filings; Business.
      The
      Company has made available to the Investors through the EDGAR system, true
      and
      complete copies of the Company’s most recent Annual Report on Form 10-KSB for
      the fiscal year ended December 31, 2004 (the “10-KSB”), and all other reports
      filed by the Company pursuant to the 1934 Act since the filing of the 10-KSB
      and
      prior to the date hereof (collectively, the “SEC Filings”). The SEC Filings are
      the only filings required of the Company pursuant to the 1934 Act for such
      period. The Company and its Subsidiaries are engaged in all material respects
      only in the business described in the SEC Filings and the SEC Filings contain
      a
      complete and accurate description in all material respects of the business
      of
      the Company and its Subsidiaries, taken as a whole.

    

    4.7 Use
      of
      Proceeds.
      The net
      proceeds of the sale of the Notes and the Warrants hereunder shall be used
      by
      the Company for working capital and general corporate purposes; provided,
      however, the net proceeds shall not be used to repay any borrowed money
      indebtedness of the Company or any of its Subsidiaries, except for (i) the
      repayment of the bridge notes referenced on Schedule
      4.8
      in the
      aggregate principal amount of Eight Hundred Thousand Dollars ($800,000) and
      (ii)
      the repayment of borrowed money indebtedness to non-Affiliated third parties
      in
      an amount not to exceed Seventy Five Thousand Dollars ($75,000) per fiscal
      quarter. 

    

    4.8 No
      Material Adverse Change.
      Since
      December 31, 2004, except as identified and described in the SEC Filings or
      as
      described on Schedule
      4.8,
      there
      has not been:

    

    (i) any
      change in the consolidated assets, liabilities, financial condition or operating
      results of the Company from that reflected in the financial statements included
      in the Company’s Quarterly Report on Form 10-QSB for the quarter ended September
      30, 2005, except for changes in the ordinary course of business which have
      not
      had and could not reasonably be expected to have a Material Adverse Effect,
      individually or in the aggregate;

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    (ii) any
      declaration or payment of any dividend, or any authorization or payment of
      any
      distribution, on any of the capital stock of the Company, or any redemption
      or
      repurchase of any securities of the Company;

    

    (iii) any
      material damage, destruction or loss, whether or not covered by insurance to
      any
      assets or properties of the Company or its Subsidiaries;

    

    (iv) any
      waiver, not in the ordinary course of business, by the Company or any Subsidiary
      of a material right or of a material debt owed to it;

    

    (v) any
      satisfaction or discharge of any lien, claim or encumbrance or payment of any
      obligation by the Company or a Subsidiary, except in the ordinary course of
      business and which is not material to the assets, properties, financial
      condition, operating results or business of the Company and its Subsidiaries
      taken as a whole (as such business is presently conducted and as it is proposed
      to be conducted);

    

    (vi) any
      change or amendment to the Company's Certificate of Incorporation or Bylaws,
      or
      material change to any material contract or arrangement by which the Company
      or
      any Subsidiary is bound or to which any of their respective assets or properties
      is subject;

    

    (vii) any
      material labor difficulties or labor union organizing activities with respect
      to
      employees of the Company or any Subsidiary;

    

    (viii) any
      material transaction entered into by the Company or a Subsidiary other than
      in
      the ordinary course of business; 

    

    (ix) the
      loss
      of the services of any key employee, or material change in the composition
      or
      duties of the senior management of the Company or any Subsidiary;

    

    (x) the
      loss
      or threatened loss of any customer which has had or could reasonably be expected
      to have a Material Adverse Effect; or

    

    (xi) any
      other
      event or condition of any character that has had or could reasonably be expected
      to have a Material Adverse Effect.

    

    4.9 SEC
      Filings.
      At the
      time of filing thereof, and except as may be disclosed in the SEC Filings,
      the
      SEC Filings complied as to form in all material respects with the requirements
      of the 1934 Act and did not contain any untrue statement of a material fact
      or
      omit to state any material fact necessary in order to make the statements made
      therein, in the light of the circumstances under which they were made, not
      misleading.

    

    4.10 No
      Conflict, Breach, Violation or Default.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the issuance and sale of the Securities will not conflict with or result
      in
      a breach or violation of any of the terms and provisions of, or constitute
      a
      default under (i) the Company’s Certificate of Incorporation or the Company’s
      Bylaws, both as in effect on the date hereof (true and complete copies of which
      have been made available to the Investors through the EDGAR system), or (ii)(a)
      any statute, rule, regulation or order of any governmental agency or body or
      any
      court, domestic or foreign, having jurisdiction over the Company, any Subsidiary
      or any of their respective assets or properties, or (b) any agreement or
      instrument to which the Company or any Subsidiary is a party or by which the
      Company or a Subsidiary is bound or to which any of their respective assets
      or
      properties is subject.

    

    
      
        
        

      

      
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    4.11 Tax
      Matters.
      The
      Company and each Subsidiary has timely prepared and filed all tax returns
      required to have been filed by the Company or such Subsidiary with all
      appropriate governmental agencies and timely paid all taxes shown thereon or
      otherwise owed by it. The charges, accruals and reserves on the books of the
      Company in respect of taxes for all fiscal periods are adequate in all material
      respects, and there are no material unpaid assessments against the Company
      or
      any Subsidiary nor, to the Company’s Knowledge, any basis for the assessment of
      any additional taxes, penalties or interest for any fiscal period or audits
      by
      any federal, state or local taxing authority except for any assessment which
      is
      not material to the Company and its Subsidiaries, taken as a whole. All taxes
      and other assessments and levies that the Company or any Subsidiary is required
      to withhold or to collect for payment have been duly withheld and collected
      and
      paid to the proper governmental entity or third party when due. There are no
      tax
      liens or claims pending or, to the Company’s Knowledge, threatened against the
      Company or any Subsidiary or any of their respective assets or property. Except
      as described on Schedule
      4.11,
      there
      are no outstanding tax sharing agreements or other such arrangements between
      the
      Company and any Subsidiary or other corporation or entity.

    

    4.12 Title
      to Properties.
      Except
      as disclosed in the SEC Filings, the Company and each Subsidiary has good and
      marketable title to all real properties and all other properties and assets
      owned by it, in each case free from liens, encumbrances and defects that would
      materially affect the value thereof or materially interfere with the use made
      or
      currently planned to be made thereof by them; and except as disclosed in the
      SEC
      Filings, the Company and each Subsidiary holds any leased real or personal
      property under valid and enforceable leases with no exceptions that would
      materially interfere with the use made or currently planned to be made thereof
      by them.

    

    4.13 Certificates,
      Authorities and Permits.
      The
      Company and each Subsidiary possess adequate certificates, authorities or
      permits issued by appropriate governmental agencies or bodies necessary to
      conduct the business now operated by it, and neither the Company nor any
      Subsidiary has received any notice of proceedings relating to the revocation
      or
      modification of any such certificate, authority or permit that, if determined
      adversely to the Company or such Subsidiary, could reasonably be expected to
      have a Material Adverse Effect, individually or in the aggregate.

    

    4.14 Labor
      Matters.

     

    (a) Except
      as
      set forth on Schedule
      4.14,
      neither
      the Company nor any Subsidiary is a party to or bound by any collective
      bargaining agreements or other agreements with labor organizations. Neither
      the
      Company nor any Subsidiary has violated in any material respect any laws,
      regulations, orders or contract terms, affecting the collective bargaining
      rights of employees, labor organizations or any laws, regulations or orders
      affecting employment discrimination, equal opportunity employment, or employees’
health, safety, welfare, wages and hours.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    (b) (i)
      There
      are no labor disputes existing, or to the Company's Knowledge, threatened,
      involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts
      or any other disruptions of or by the Company's or any Subsidiary’s employees,
      (ii) there are no unfair labor practices or petitions for election pending
      or,
      to the Company's Knowledge, threatened before the National Labor Relations
      Board
      or any other federal, state or local labor commission relating to the Company's
      or any Subsidiary’s employees, (iii) no demand for recognition or certification
      heretofore made by any labor organization or group of employees is pending
      with
      respect to the Company or any Subsidiary and (iv) to the Company's Knowledge,
      each of the Company and its Subsidiaries enjoy good labor and employee relations
      with their respective employees and labor organizations.

     

    (c) Each
      of
      the Company and each Subsidiary is, and at all times has been, in compliance
      in
      all material respects with all applicable laws respecting employment (including
      laws relating to classification of employees and independent contractors) and
      employment practices, terms and conditions of employment, wages and hours,
      and
      immigration and naturalization. There are no claims pending against the Company
      or any Subsidiary before the Equal Employment Opportunity Commission or any
      other administrative body or in any court asserting any violation of Title
      VII
      of the Civil Rights Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C.
      §§ 1981 or 1983 or any other federal, state or local Law, statute or ordinance
      barring discrimination in employment.

     

    (d) Except
      as
      disclosed in the SEC Filings or as described on Schedule
      4.14,
      neither
      the Company nor any Subsidiary is a party to, or bound by, any employment or
      other contract or agreement that contains any severance, termination pay or
      change of control liability or obligation, including, without limitation, any
      “excess parachute payment,” as defined in Section 2806(b) of the Internal
      Revenue Code.

    

    (e) Except
      as
      specified in Schedule
      4.14,
      each of
      the employees of the Company and its Subsidiaries is a Person who is either
      a
      United States citizen or a permanent resident entitled to work in the United
      States. To the Company's Knowledge, neither the Company nor any Subsidiary
      has
      any liability for the improper classification by the Company or any Subsidiaries
      of its employees as independent contractors or leased employees prior to the
      Closing.

    

    4.15 Intellectual
      Property.

    

    (a) All
      Intellectual Property of the Company and its Subsidiaries is currently in
      compliance with all legal requirements (including timely filings, proofs and
      payments of fees) and is valid and enforceable. No Intellectual Property of
      the
      Company or its Subsidiaries which is necessary for the conduct of Company’s and
      each of its Subsidiaries’ respective businesses as currently conducted or as
      currently proposed to be conducted has been or is now involved in any
      cancellation, dispute or litigation, and, to the Company’s Knowledge, no such
      action is threatened. No patent of the Company or its Subsidiaries has been
      or
      is now involved in any interference, reissue, re-examination or opposition
      proceeding.

    

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    (b) All
      of
      the licenses and sublicenses and consent, royalty or other agreements concerning
      Intellectual Property which are necessary for the conduct of the Company’s and
      each of its Subsidiaries’ respective businesses as currently conducted or as
      currently proposed to be conducted to which the Company or any Subsidiary is
      a
      party or by which any of their assets are bound (other than  generally
      commercially available, non-custom, off-the-shelf software application programs
      having a retail acquisition price of less than $10,000 per license)
      (collectively, “License Agreements”) are valid and binding obligations of the
      Company or its Subsidiaries that are parties thereto and, to the Company’s
      Knowledge, the other parties thereto, enforceable in accordance with their
      terms, except to the extent that enforcement thereof may be limited by
      bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
      other similar laws affecting the enforcement of creditors’ rights generally, and
      there exists no event or condition which will result in a material violation
      or
      breach of or constitute (with or without due notice or lapse of time or both)
      a
      default by the Company or any of its Subsidiaries under any such License
      Agreement.

    

    (c) The
      Company and its Subsidiaries own or have the valid right to use all of the
      Intellectual Property that is necessary for the conduct of the Company’s and
      each of its Subsidiaries’ respective businesses as currently conducted or as
      currently proposed to be conducted and for the ownership, maintenance and
      operation of the Company’s and its Subsidiaries’ properties and assets, free and
      clear of all liens, encumbrances, adverse claims or obligations to license
      all
      such owned Intellectual Property and Confidential Information, other than
      licenses entered into in the ordinary course of the Company’s and its
      Subsidiaries’ businesses. The Company and its Subsidiaries have a valid and
      enforceable right to use all third party Intellectual Property and Confidential
      Information used or held for use in the respective businesses of the Company
      and
      its Subsidiaries.

    

    (d) The
      conduct of the Company’s and its Subsidiaries’ businesses as currently conducted
      does not infringe or otherwise impair or conflict with (collectively,
“Infringe”) any Intellectual Property rights of any third party or any
      confidentiality obligation owed to a third party, and, to the Company’s
      Knowledge, the Intellectual Property and Confidential Information of the Company
      and its Subsidiaries which are necessary for the conduct of Company’s and each
      of its Subsidiaries’ respective businesses as currently conducted or as
      currently proposed to be conducted are not being Infringed by any third party.
      There is no litigation or order pending or outstanding or, to the Company’s
      Knowledge, threatened or imminent, that seeks to limit or challenge or that
      concerns the ownership, use, validity or enforceability of any Intellectual
      Property or Confidential Information of the Company and its Subsidiaries and
      the
      Company’s and its Subsidiaries’ use of any Intellectual Property or Confidential
      Information owned by a third party, and, to the Company’s Knowledge, there is no
      valid basis for the same.

    

    (e) The
      consummation of the transactions contemplated hereby and by the other
      Transaction Documents will not result in the alteration, loss, impairment of
      or
      restriction on the Company’s or any of its Subsidiaries’ ownership or right to
      use any of the Intellectual Property or Confidential Information which is
      necessary for the conduct of Company’s and each of its Subsidiaries’ respective
      businesses as currently conducted or as currently proposed to be
      conducted.

    

    
      
        
        

      

      
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    (f) The
      Company and its Subsidiaries have taken reasonable steps to protect the
      Company’s and its Subsidiaries’ rights in their Intellectual Property and
      Confidential Information. Each employee, consultant and contractor who has
      had
      access to Confidential Information which is necessary for the conduct of
      Company’s and each of its Subsidiaries’ respective businesses as currently
      conducted or as currently proposed to be conducted has executed an agreement
      to
      maintain the confidentiality of such Confidential Information and has executed
      appropriate agreements that are substantially consistent with the Company’s
      standard forms thereof. Except under confidentiality obligations, there has
      been
      no material disclosure of any of the Company’s or its Subsidiaries’ Confidential
      Information to any third party.

    

    4.16 Environmental
      Matters.
      Neither
      the Company nor any Subsidiary is in violation of any statute, rule, regulation,
      decision or order of any governmental agency or body or any court, domestic
      or
      foreign, relating to the use, disposal or release of hazardous or toxic
      substances or relating to the protection or restoration of the environment
      or
      human exposure to hazardous or toxic substances (collectively, “Environmental
      Laws”), owns or operates any real property contaminated with any substance that
      is subject to any Environmental Laws, is liable for any off-site disposal or
      contamination pursuant to any Environmental Laws, or is subject to any claim
      relating to any Environmental Laws, which violation, contamination, liability
      or
      claim has had or could reasonably be expected to have a Material Adverse Effect,
      individually or in the aggregate; and there is no pending or, to the Company’s
      Knowledge, threatened investigation that might lead to such a
      claim.

    

    4.17 Litigation.
      Except
      as described on Schedule
      4.17,
      there
      are no pending actions, suits or proceedings against or affecting the Company,
      its Subsidiaries or any of its or their properties; and to the Company’s
      Knowledge, no such actions, suits or proceedings are threatened or
      contemplated.

    

    4.18 Financial
      Statements.
      The
      financial statements included in each SEC Filing present fairly, in all material
      respects, the consolidated financial position of the Company as of the dates
      shown and its consolidated results of operations and cash flows for the periods
      shown, and such financial statements have been prepared in conformity with
      United States generally accepted accounting principles applied on a consistent
      basis (“GAAP”) (except as may be disclosed therein or in the notes thereto, and,
      in the case of quarterly financial statements, as permitted by Form 10-QSB
      under
      the 1934 Act). Except as set forth in the financial statements of the Company
      included in the SEC Filings filed prior to the date hereof or as described
      on
Schedule
      4.18,
      neither
      the Company nor any of its Subsidiaries has incurred any liabilities, contingent
      or otherwise, except those incurred in the ordinary course of business,
      consistent (as to amount and nature) with past practices since the date of
      such
      financial statements, none of which, individually or in the aggregate, have
      had
      or could reasonably be expected to have a Material Adverse Effect.

    

    
      
        
        

      

      
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    4.19 Insurance
      Coverage.
      The
      Company and each Subsidiary maintains in full force and effect insurance
      coverage that is customary for comparably situated companies for the business
      being conducted and properties owned or leased by the Company and each
      Subsidiary, and the Company reasonably believes such insurance coverage to
      be
      adequate against all liabilities, claims and risks against which it is customary
      for comparably situated companies to insure.

    

    4.20 Listing.
      The
      Common Stock is quoted on the Over the Counter Bulletin Board (the “OTCBB”). The
      Company has not received any oral or written notice that its Common Stock is
      not
      eligible nor will become ineligible for quotation on the OTCBB nor that its
      Common Stock does not meet all requirements for the continuation of such
      quotation, and the Company satisfies, and as of the Closing Date the Company
      will satisfy, all the requirements for the continued quotation of its common
      stock on the OTCBB.

    

    4.21 Brokers
      and Finders.
      No
      Person will have, as a result of the transactions contemplated by the
      Transaction Documents, any valid right, interest or claim against or upon the
      Company, any Subsidiary or an Investor for any commission, fee or other
      compensation pursuant to any agreement, arrangement or understanding entered
      into by or on behalf of the Company, other than as described in Schedule
      4.21.

    

    4.22 No
      Directed Selling Efforts or General Solicitation.
      Neither
      the Company nor any Person acting on its behalf has conducted any general
      solicitation or general advertising (as those terms are used in Regulation
      D) in
      connection with the offer or sale of any of the Securities.

    

    4.23 No
      Integrated Offering.
      Neither
      the Company nor any of its Affiliates, nor any Person acting on its or their
      behalf has, directly or indirectly, made any offers or sales of any Company
      security or solicited any offers to buy any security, under circumstances that
      would adversely affect reliance by the Company on Section 4(2) for the exemption
      from registration for the transactions contemplated hereby or would require
      registration of the Securities under the 1933 Act.

    

    4.24 Private
      Placement.
      Assuming the representations of the Investors under Section 5 are accurate,
      the
      offer and sale of the Securities to the Investors as contemplated hereby is
      exempt from the registration requirements of the 1933 Act.

    

    4.25 Questionable
      Payments.
      Neither
      the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any of
      their respective current or former stockholders, directors, officers, employees,
      agents or other Persons acting on behalf of the Company or any Subsidiary,
      has
      on behalf of the Company or any Subsidiary or in connection with their
      respective businesses: (a) used any corporate funds for unlawful contributions,
      gifts, entertainment or other unlawful expenses relating to political activity;
      (b) made any direct or indirect unlawful payments to any governmental officials
      or employees from corporate funds; (c) established or maintained any unlawful
      or
      unrecorded fund of corporate monies or other assets; (d) made any false or
      fictitious entries on the books and records of the Company or any Subsidiary;
      or
      (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or
      other unlawful payment of any nature.

    

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    4.26 Transactions
      with Affiliates.
      Except
      as disclosed in the SEC Filings or as disclosed on Schedule
      4.26,
      none of
      the officers or directors of the Company and, to the Company’s Knowledge, none
      of the employees of the Company is presently a party to any transaction with
      the
      Company or any Subsidiary (other than as holders of stock options and/or
      warrants, and for services as employees, officers and directors), including
      any
      contract, agreement or other arrangement providing for the furnishing of
      services to or by, providing for rental of real or personal property to or
      from,
      or otherwise requiring payments to or from any officer, director or such
      employee or, to the Company’s Knowledge, any entity in which any officer,
      director, or any such employee has a substantial interest or is an officer,
      director, trustee or partner.

    

    4.27 Internal
      Controls.
      The
      Company is
      in
      material compliance with the provisions of the Sarbanes-Oxley Act of 2002
      currently applicable to the Company. The Company and
      the
      Subsidiaries maintain a system of internal accounting controls sufficient to
      provide reasonable assurance that (i) transactions are executed in accordance
      with management's general or specific authorizations, (ii) transactions are
      recorded as necessary to permit preparation of financial statements in
      conformity with GAAP and to maintain asset accountability, (iii) access to
      assets is permitted only in accordance with management's general or specific
      authorization, and (iv) the recorded accountability for assets is compared
      with
      the existing assets at reasonable intervals and appropriate action is taken
      with
      respect to any differences. The Company maintains and will continue to maintain
      a standard system of accounting established and administered in accordance
      with
      GAAP and the applicable requirements of the 1934 Act.

    

    4.28 Disclosures.
      Neither
      the Company nor any Person acting on its behalf has provided the Investors
      or
      their agents or counsel with any information that constitutes or might
      constitute material, non-public information. The written materials delivered
      to
      the Investors in connection with the transactions contemplated by the
      Transaction Documents do not contain any untrue statement of a material fact
      or
      omit to state a material fact necessary in order to make the statements
      contained therein, in light of the circumstances under which they were made,
      not
      misleading.

    

    5. Representations
      and Warranties of the Investors.
      Each of
      the Investors hereby severally, and not jointly, represents and warrants to
      the
      Company that:

    

    5.1 Organization
      and Existence.
      Such
      Investor is a validly existing corporation, limited partnership or limited
      liability company and has all requisite corporate, partnership or limited
      liability company power and authority to invest in the Securities pursuant
      to
      this Agreement.

    

    5.2 Authorization.
      The
      execution, delivery and performance by such Investor of the Transaction
      Documents to which such Investor is a party have been duly authorized and will
      each constitute the valid and legally binding obligation of such Investor,
      enforceable against such Investor in accordance with their respective terms,
      subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
      moratorium and similar laws of general applicability, relating to or affecting
      creditors’ rights generally.

    

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    5.3 Purchase
      Entirely for Own Account.
      The
      Securities to be received by such Investor hereunder will be acquired for such
      Investor’s own account, not as nominee or agent, and not with a view to the
      resale or distribution of any part thereof in violation of the 1933 Act, and
      such Investor has no present intention of selling, granting any participation
      in, or otherwise distributing the same in violation of the 1933 Act
      without
      prejudice, however, to such Investor’s right at all times to sell or otherwise
      dispose of all or any part of such Securities in compliance with applicable
      federal and state securities laws. Nothing
      contained herein shall be deemed a representation or warranty by such Investor
      to hold the Securities for any period of time. Such
      Investor
      is not a broker-dealer registered with the SEC under the 1934 Act or an entity
      engaged in a business that would require it to be so registered.

    

    5.4 Investment
      Experience.
      Such
      Investor acknowledges that it can bear the economic risk and complete loss
      of
      its investment in the Securities and has such knowledge and experience in
      financial or business matters that it is capable of evaluating the merits and
      risks of the investment contemplated hereby.

    

    5.5 Disclosure
      of Information.
      Such
      Investor has had an opportunity to receive all information related to the
      Company requested by it and to ask questions of and receive answers from the
      Company regarding the Company, its business and the terms and conditions of
      the
      offering of the Securities. Such Investor acknowledges receipt of copies of
      the
      SEC Filings. Neither such inquiries nor any other due diligence investigation
      conducted by such Investor shall modify, amend or affect such Investor’s right
      to rely on the Company’s representations and warranties contained in this
      Agreement.

    

    5.6 Restricted
      Securities.
      Such
      Investor understands that the Securities are characterized as “restricted
      securities” under the U.S. federal securities laws inasmuch as they are being
      acquired from the Company in a transaction not involving a public offering
      and
      that under such laws and applicable regulations such securities may be resold
      without registration under the 1933 Act only in certain limited
      circumstances.

    

    5.7 Legends.
      It is
      understood that, except as provided below, certificates evidencing the
      Securities may bear the following or any similar legend:

    

    (a) “The
      securities represented hereby may not be transferred unless (i) such securities
      have been registered for sale pursuant to the Securities Act of 1933, as
      amended, and applicable state securities laws, (ii) such securities may be
      sold
      pursuant to Rule 144(k), or (iii) the Company has received an opinion of counsel
      reasonably satisfactory to it that such transfer may lawfully be made without
      registration under the Securities Act of 1933 or qualification under applicable
      state securities laws.”

    

    (b) If
      required by the authorities of any state in connection with the issuance of
      sale
      of the Securities, the legend required by such state authority.

    

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    5.8 Accredited
      Investor.
      Such
      Investor is an accredited investor as defined in Rule 501(a) of Regulation
      D, as
      amended, under the 1933 Act.

    

    5.9 No
      General Solicitation.
      Such
      Investor did not learn of the investment in the Securities as a result of any
      public advertising or general solicitation.

    

    5.10 Brokers
      and Finders.
      No
      Person will have, as a result of the transactions contemplated by the
      Transaction Documents, any valid right, interest or claim against or upon the
      Company, any Subsidiary or an Investor for any commission, fee or other
      compensation pursuant to any agreement, arrangement or understanding entered
      into by or on behalf of such Investor.

    

    5.11 Prohibited
      Transactions.
      During
      the last thirty (30) days prior to the date of this Agreement, neither the
      Investor nor any Affiliate of such Investor which (x) had knowledge of the
      transactions contemplated hereby, (y) has or shares discretion relating to
      such
      Investor’s investments or trading or information concerning such Investor’s
      investments, including in respect of the Securities, or (z) is subject to such
      Investor’s review or input concerning such Affiliate’s investments or trading
      (collectively, “Trading Affiliates”) has, directly or indirectly, effected or
      agreed to effect any transactions in the securities of the Company, including
      any short sale, whether or not against the box, established any “put equivalent
      position” (as defined in Rule 16a-1(h) under the 1934 Act) with respect to the
      Common Stock, granted any other right (including, without limitation, any put
      or
      call option) with respect to the Common Stock or with respect to any security
      that includes, relates to or derived any significant part of its value from
      the
      Common Stock or otherwise sought to hedge its position in the
      Securities.

    

    6.
      Conditions
      to Closing.

    

    6.1 Conditions
      to the Investors’ Obligations.
      The
      obligation of each Investor to purchase the Notes and the Warrants at the
      Closing is subject to the fulfillment to such Investor’s satisfaction, on or
      prior to the Closing Date, of the following conditions, any of which may be
      waived by such Investor (as to itself only):

    

    (a) The
      representations and warranties made by the Company in Section 4 hereof qualified
      as to materiality shall be true and correct at all times prior to and on the
      Closing Date, except to the extent any such representation or warranty expressly
      speaks as of an earlier date, in which case such representation or warranty
      shall be true and correct as of such earlier date, and, the representations
      and
      warranties made by the Company in Section 4 hereof not qualified as to
      materiality shall be true and correct in all material respects at all times
      prior to and on the Closing Date, except to the extent any such representation
      or warranty expressly speaks as of an earlier date, in which case such
      representation or warranty shall be true and correct in all material respects
      as
      of such earlier date. The Company shall have performed in all material respects
      all obligations and covenants herein required to be performed by it on or prior
      to the Closing Date.

    

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    (b) The
      Company shall have obtained any and all consents, permits, approvals,
      registrations and waivers necessary or appropriate for consummation of the
      purchase and sale of the Securities and the consummation of the other
      transactions contemplated by the Transaction Documents, all of which shall
      be in
      full force and effect.

    

    (c) The
      Company shall have executed and delivered the Registration Rights
      Agreement.

    

    (d) No
      judgment, writ, order, injunction, award or decree of or by any court, or judge,
      justice or magistrate, including any bankruptcy court or judge, or any order
      of
      or by any governmental authority, shall have been issued, and no action or
      proceeding shall have been instituted by any governmental authority, enjoining
      or preventing the consummation of the transactions contemplated hereby or in
      the
      other Transaction Documents.

    

    (e) The
      Company shall have delivered a Certificate, executed on behalf of the Company
      by
      its Chief Executive Officer or its Chief Financial Officer, dated as of the
      Closing Date, certifying to the fulfillment of the conditions specified in
      subsections (a), (b), (d), and (h) of this Section 6.1. 

    

    (f) The
      Company shall have delivered a Certificate, executed on behalf of the Company
      by
      its Secretary, dated as of the Closing Date, certifying the resolutions adopted
      by the Board of Directors of the Company approving the transactions contemplated
      by this Agreement and the other Transaction Documents and the issuance of the
      Securities, certifying the current versions of the Certificate of Incorporation
      and Bylaws of the Company and certifying as to the signatures and authority
      of
      persons signing the Transaction Documents and related documents on behalf of
      the
      Company.

    

    (g) The
      Investors shall have received an opinion from Blank
      Rome LLP, the
      Company's counsel, dated as of the Closing Date, in form and substance
      reasonably acceptable to the Investors and addressing such legal matters as
      the
      Investors may reasonably request.

    

    (h) No
      stop
      order or suspension of trading shall have been imposed by the OTCBB, the SEC
      or
      any other governmental or regulatory body with respect to public trading in
      the
      Common Stock.

    

    (i) David
      Levy shall have executed and delivered the Stock Pledge Agreement to Nite
      Capital, L.P., as collateral agent on behalf of the Investors, and the stock
      certificates, duly endorsed in blank, representing the shares being pledged
      by
      him as security for the Notes.

    

    6.2 Conditions
      to Obligations of the Company.
      The
      Company's obligation to sell and issue the Notes and the Warrants at the Closing
      is subject to the fulfillment to the satisfaction of the Company on or prior
      to
      the Closing Date of the following conditions, any of which may be waived by
      the
      Company:

    

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    (a) The
      representations and warranties made by the Investors in Section 5 hereof, other
      than the representations and warranties contained in Sections 5.3, 5.4, 5.5,
      5.6, 5.7, 5.8 and 5.9 (the “Investment Representations”), shall be true and
      correct in all material respects when made, and shall be true and correct in
      all
      material respects on the Closing Date with the same force and effect as if
      they
      had been made on and as of said date. The Investment Representations shall
      be
      true and correct in all respects when made, and shall be true and correct in
      all
      respects on the Closing Date with the same force and effect as if they had
      been
      made on and as of said date. The Investors shall have performed in all material
      respects all obligations and covenants herein required to be performed by them
      on or prior to the Closing Date.

    

    (b) The
      Investors shall have executed and delivered the Registration Rights
      Agreement.

    

    (c) The
      Investors shall have delivered the Purchase Price to the Company.

    

    6.3 Termination
      of Obligations to Effect Closing; Effects.

    

    (a) The
      obligations of the Company, on the one hand, and the Investors, on the other
      hand, to effect the Closing shall terminate as follows:

    

    (i) Upon
      the
      mutual written consent of the Company and the Investors;

    

    (ii) By
      the
      Company if any of the conditions set forth in Section 6.2 shall have become
      incapable of fulfillment, and shall not have been waived by the
      Company;

    

    (iii) By
      an
      Investor (with respect to itself only) if any of the conditions set forth in
      Section 6.1 shall have become incapable of fulfillment, and shall not have
      been
      waived by the Investor; or

    

    (iv) By
      either
      the Company or any Investor (with respect to itself only) if the Closing has
      not
      occurred on or prior to April 30, 2006;

    

    provided,
      however, that, except in the case of clause (i) above, the party seeking to
      terminate its obligation to effect the Closing shall not then be in breach
      of
      any of its representations, warranties, covenants or agreements contained in
      this Agreement or the other Transaction Documents if such breach has resulted
      in
      the circumstances giving rise to such party’s seeking to terminate its
      obligation to effect the Closing.

    

    (b) In
      the
      event of termination by the Company or any Investor of its obligations to effect
      the Closing pursuant to this Section 6.3, written notice thereof shall forthwith
      be given to the other Investors and the other Investors shall have the right
      to
      terminate their obligations to effect the Closing upon written notice to the
      Company and the other Investors. Nothing in this Section 6.3 shall be deemed
      to
      release any party from any liability for any breach by such party of the terms
      and provisions of this Agreement or the other Transaction Documents or to impair
      the right of any party to compel specific performance by any other party of
      its
      obligations under this Agreement or the other Transaction
      Documents.

    

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    7. Covenants
      of the Company.

    

    7.1 Reservation
      of Common Stock.
      The
      Company shall at all times reserve and keep available out of its authorized
      but
      unissued shares of Common Stock, solely for the purpose of providing for the
      exercise of the Warrants and/or the issuance of shares of Common Stock
      underlying the Notes, such number of shares of Common Stock as shall from time
      to time equal the sum of (i) the Warrant Shares sufficient to permit the
      exercise of the Warrants, and (ii) the Conversion Shares and Interest Shares
      underlying the Notes, in each case, issued pursuant to this Agreement in
      accordance with their respective terms.

    

    7.2 Reports.
      The
      Company will furnish to the Investors and/or their assignees such information
      relating to the Company and its Subsidiaries as from time to time may reasonably
      be requested by the Investors and/or their assignees; provided, however, that
      the Company shall not disclose material nonpublic information to the Investors,
      or to advisors to or representatives of the Investors, unless prior to
      disclosure of such information the Company identifies such information as being
      material nonpublic information and provides the Investors, such advisors and
      representatives with the opportunity to accept or refuse to accept such material
      nonpublic information for review and any Investor wishing to obtain such
      information enters into an appropriate confidentiality agreement with the
      Company with respect thereto.

    

    7.3 No
      Conflicting Agreements.
      The
      Company will not take any action, enter into any agreement or make any
      commitment that would conflict or interfere in any material respect with the
      Company’s obligations to the Investors under the Transaction
      Documents.

    

    7.4 Insurance.
      The
      Company shall not materially reduce the insurance coverages described in Section
      4.19.

    

    7.5 Compliance
      with Laws.
      The
      Company will comply in all material respects with all applicable laws, rules,
      regulations, orders and decrees of all governmental authorities.

    

    7.6 Listing
      of Underlying Shares and Related Matters.
      For so
      long as the Common Stock or other securities of the Company are traded on the
      OTCBB, the Company covenants that the Conversion Shares, the Interest Shares
      and
      the Warrant Shares will also be tradeable on the OTCBB. If the Company applies
      to have its Common Stock or other securities traded on any principal stock
      exchange or market, it shall include in such application the Conversion Shares,
      the Interest Shares and the Warrant Shares and will take such other action
      as is
      necessary to cause such Common Stock to be so listed.

    

    7.7 Termination
      of Covenants.
      The
      provisions of Sections 7.2 through 7.5 shall terminate and be of no further
      force and effect on the date on which the Company’s obligations under the
      Registration Rights Agreement to register or maintain the effectiveness of
      any
      registration covering the Registrable Securities (as such term is defined in
      the
      Registration Rights Agreement) shall terminate.

    

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    7.8 Removal
      of Legends.
      Upon
      the earlier of (i) registration for resale pursuant to the Registration Rights
      Agreement or (ii) Rule 144(k) becoming available the Company shall (A) deliver
      to the transfer agent for the Common Stock (the “Transfer Agent”) irrevocable
      instructions that the Transfer Agent shall issue certificates representing
      the
      Conversion Shares, the Interest Shares and the Warrant Shares without legends
      upon receipt by such Transfer Agent of the Notes, the Warrants or any legended
      certificates previously issued for such shares, together with a customary
      representation by the Investor that Rule 144(k) applies to the shares of Common
      Stock to be represented thereby, and (B) cause its counsel to deliver to the
      Transfer Agent one or more blanket opinions to the effect that the issuance
      of
      such unlegended certificates in such circumstances may be effected under the
      1933 Act. From and after the earlier of such dates, upon an Investor’s written
      request, the Company shall promptly cause certificates evidencing the Investor’s
      Securities to be replaced with certificates which do not bear such restrictive
      legends, and Warrant Shares subsequently issued upon due exercise of the
      Warrants and Conversion Shares and/or Interest Shares subsequently issued in
      accordance with the terms of the Notes shall not bear such restrictive legends
      provided the provisions of either clause (i) or clause (ii) above, as
      applicable, are satisfied with respect to such Warrant Shares. When the Company
      is required to cause unlegended Securities to replace previously issued legended
      Securities, if unlegended Securities are not delivered to an Investor within
      three (3) Business Days of submission by that Investor of legended Securities
      to
      the Transfer Agent as provided above (or to the Company, in the case of the
      Notes or the Warrants), the Company shall be liable to the Investor for
      liquidated damages in an amount equal to 1.0% of the aggregate purchase price
      of
      the Securities evidenced for each thirty (30) day period (or portion thereof)
      beyond such three (3) Business Days that the unlegended Securities have not
      been
      so delivered.

    

    8. Survival
      and Indemnification.

    

    8.1 Survival.
      The
      representations, warranties, covenants and agreements contained in this
      Agreement shall survive the Closing of the transactions contemplated by this
      Agreement.

    

    8.2 Indemnification.
      The
      Company agrees to indemnify and hold harmless each Investor and its Affiliates
      and their respective directors, officers, employees and agents from and against
      any and all losses, claims, damages, liabilities and expenses (including without
      limitation reasonable attorney fees and disbursements and other expenses
      incurred in connection with investigating, preparing or defending any action,
      claim or proceeding, pending or threatened and the costs of enforcement thereof)
      (collectively, “Losses”) to which such Person may become subject as a result of
      any breach of representation, warranty, covenant or agreement made by or to
      be
      performed on the part of the Company under the Transaction Documents, and will
      reimburse any such Person for all such amounts as they are incurred by such
      Person.

    

    8.3 Conduct
      of Indemnification Proceedings.
      Promptly
      after receipt by any Person (the “Indemnified
      Person”) of notice of any demand, claim or circumstances which would or might
      give rise to a claim or the commencement of any action, proceeding or
      investigation in respect of which indemnity may be sought pursuant to Section
      8.2, such Indemnified Person shall promptly notify the Company in writing and
      the Company shall assume the defense thereof, including the employment of
      counsel reasonably satisfactory to such Indemnified Person, and shall assume
      the
      payment of all fees and expenses; provided,
      however, that
      the
      failure of any Indemnified Person so to notify the Company shall not relieve
      the
      Company of its obligations hereunder except to the extent that the Company
      is
      materially prejudiced by such failure to notify. In any such proceeding, any
      Indemnified Person shall have the right to retain its own counsel, but the
      fees
      and expenses of such counsel shall be at the expense of such Indemnified Person
      unless: (i) the Company and the Indemnified Person shall have mutually agreed
      to
      the retention of such counsel; or (ii) in the reasonable judgment of counsel
      to
      such Indemnified Person representation of both parties by the same counsel
      would
      be inappropriate due to actual or potential differing interests between them.
      The Company shall not be liable for any settlement of any proceeding effected
      without its written consent, which consent shall not be unreasonably withheld,
      but if settled with such consent, or if there be a final judgment for the
      plaintiff, the Company shall indemnify and hold harmless such Indemnified Person
      from and against any loss or liability (to the extent stated above) by reason
      of
      such settlement or judgment. Without the prior written consent of the
      Indemnified Person, which consent shall not be unreasonably withheld, the
      Company shall not effect any settlement of any pending or threatened proceeding
      in respect of which any Indemnified Person is or could have been a party and
      indemnity could have been sought hereunder by such Indemnified Party, unless
      such settlement includes an unconditional release of such Indemnified Person
      from all liability arising out of such proceeding.

    

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    9. Miscellaneous.

    

    9.1 Successors
      and Assigns.
      This
      Agreement may not be assigned by a party hereto without the prior written
      consent of the Company or the Investors, as applicable, provided, however,
      that
      an Investor may assign its rights and delegate its duties hereunder in whole
      or
      in part to an Affiliate or to a third party acquiring some or all of its
      Securities in a private transaction without the prior written consent of the
      Company or the other Investors, after notice duly given by such Investor to
      the
      Company provided, that no such assignment or obligation shall affect the
      obligations of such Investor hereunder. The provisions of this Agreement shall
      inure to the benefit of and be binding upon the respective permitted successors
      and assigns of the parties. Nothing in this Agreement, express or implied,
      is
      intended to confer upon any party other than the parties hereto or their
      respective successors and assigns any rights, remedies, obligations, or
      liabilities under or by reason of this Agreement, except as expressly provided
      in this Agreement.

    

    9.2 Counterparts;
      Faxes.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. This Agreement may also be executed via facsimile, which shall
      be
      deemed an original.

    

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    9.3 Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

    

    9.4 Notices.
      Unless
      otherwise provided, any notice required or permitted under this Agreement shall
      be given in writing and shall be deemed effectively given as hereinafter
      described (i) if given by personal delivery, then such notice shall be deemed
      given upon such delivery, (ii) if given by telex or telecopier, then such notice
      shall be deemed given upon receipt of confirmation of complete transmittal,
      (iii) if given by mail, then such notice shall be deemed given upon the earlier
      of (A) receipt of such notice by the recipient or (B) three days after such
      notice is deposited in first class mail, postage prepaid, and (iv) if given
      by
      an internationally recognized overnight air courier, then such notice shall
      be
      deemed given one Business Day after delivery to such carrier. All notices shall
      be addressed to the party to be notified at the address as follows, or at such
      other address as such party may designate by ten days’ advance written notice to
      the other party:

    

    If
      to the
      Company:

    

    The
      Tube
      Media Corp.

    1451
      West
      Cypress Creek Road

    Fort
      Lauderdale, Florida 33309

    Attention: 

    Fax: 

    

    With
      a
      copy to:

    

    Blank
      Rome LLP

    1200
      N.
      Federal Highway, Suite 417

    Boca
      Raton, FL 33432,

    Attention:
      Bruce C. Rosetto, Esq.

    Fax:
      (561) 417-8186

    

    If
      to the
      Investors:

    

    to
      the
      addresses set forth on the signature pages hereto.

    

    9.5 Expenses.
      The
      parties hereto shall pay their own costs and expenses in connection herewith,
      except that the Company shall pay the reasonable fees and expenses of Lowenstein
      Sandler PC, counsel for Nite Capital, L.P., including the fees and expenses
      associated with the negotiation, preparation and execution and delivery of
      this
      Agreement and the other Transaction Documents and any amendments, modifications
      or waivers thereto. The Company has paid $10,000 of such fees and expenses
      to
      Nite Capital, L.P. prior to the date hereof, and the remaining fees and expenses
      shall be paid by the Company on or prior to the Closing. In the event that
      legal
      proceedings are commenced by any party to this Agreement against another party
      to this Agreement in connection with this Agreement or the other Transaction
      Documents, the party or parties which do not prevail in such proceedings shall
      severally, but not jointly, pay their pro rata share of the reasonable
      attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred
      by the prevailing party in such proceedings.

    

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    9.6 Amendments
      and Waivers.
      Any
      term of this Agreement may be amended and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      retroactively or prospectively), only with the written consent of the Company
      and the Investors. Any amendment or waiver effected in accordance with this
      paragraph shall be binding upon each holder of any Securities purchased under
      this Agreement at the time outstanding, each future holder of all such
      Securities, and the Company.

    

    9.7 Publicity.
      Except
      as set forth below, no public release or announcement concerning the
      transactions contemplated hereby shall be issued by the Company or the Investors
      without the prior consent of the Company (in the case of a release or
      announcement by the Investors) or the Investors (in the case of a release or
      announcement by the Company) (which consents shall not be unreasonably
      withheld), except as such release or announcement may be required by law or
      the
      applicable rules or regulations of any securities exchange or securities market,
      in which case the Company or the Investors, as the case may be, shall allow
      the
      Investors or the Company, as applicable, to the extent reasonably practicable
      in
      the circumstances, reasonable time to comment on such release or announcement
      in
      advance of such issuance. By 8:30 a.m. (New York City time) on the trading
      day
      immediately following the Closing Date, the Company shall issue a press release
      disclosing the consummation of the transactions contemplated by this Agreement.
      No later than the third trading day following the Closing Date, the Company
      will
      file a Current Report on Form 8-K attaching the press release described in
      the
      foregoing sentence as well as copies of the Transaction Documents. In addition,
      the Company will make such other filings and notices in the manner and time
      required by the SEC. Notwithstanding the foregoing, the Company shall not
      publicly disclose the name of any Investor, or include the name of any Investor
      in any filing with the SEC (other than the Registration Statement and any
      exhibits to filings made in respect of this transaction in accordance with
      periodic filing requirements under the 1934 Act) or any regulatory agency,
      without the prior written consent of such Investor, except to the extent such
      disclosure is required by law or trading market regulations, in which case
      the
      Company shall provide the Investors with prior notice of such
      disclosure.

    

    9.8 Severability.
      Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof but shall be interpreted as if it were written so as to be
      enforceable to the maximum extent permitted by applicable law, and any such
      prohibition or unenforceability in any jurisdiction shall not invalidate or
      render unenforceable such provision in any other jurisdiction. To the extent
      permitted by applicable law, the parties hereby waive any provision of law
      which
      renders any provision hereof prohibited or unenforceable in any
      respect.

    

    9.9 Entire
      Agreement.
      This
      Agreement, including the Exhibits and the Disclosure Schedules, and the other
      Transaction Documents constitute the entire agreement among the parties hereof
      with respect to the subject matter hereof and thereof and supersede all prior
      agreements and understandings, both oral and written, between the parties with
      respect to the subject matter hereof and thereof.

    

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    9.10 Further
      Assurances.
      The
      parties shall execute and deliver all such further instruments and documents
      and
      take all such other actions as may reasonably be required to carry out the
      transactions contemplated hereby and to evidence the fulfillment of the
      agreements herein contained.

    

    9.11 Governing
      Law; Consent to Jurisdiction; Waiver of Jury Trial.
      This
      Agreement shall be governed by, and construed in accordance with, the internal
      laws of the State of New York without regard to the choice of law principles
      thereof. Each of the parties hereto irrevocably submits to the exclusive
      jurisdiction of the courts of the State of New York located in New York County
      and the United States District Court for the Southern District of New York
      for
      the purpose of any suit, action, proceeding or judgment relating to or arising
      out of this Agreement and the transactions contemplated hereby. Service of
      process in connection with any such suit, action or proceeding may be served
      on
      each party hereto anywhere in the world by the same methods as are specified
      for
      the giving of notices under this Agreement. Each of the parties hereto
      irrevocably consents to the jurisdiction of any such court in any such suit,
      action or proceeding and to the laying of venue in such court. Each party hereto
      irrevocably waives any objection to the laying of venue of any such suit, action
      or proceeding brought in such courts and irrevocably waives any claim that
      any
      such suit, action or proceeding brought in any such court has been brought
      in an
      inconvenient forum. EACH
      OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
      LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
      CONSULTED SPECIFICALLY AS TO THIS WAIVER.

    

    9.12 Independent
      Nature of Investors' Obligations and Rights.
      The
      obligations of each Investor under any Transaction Document are several and
      not
      joint with the obligations of any other Investor, and no Investor shall be
      responsible in any way for the performance of the obligations of any other
      Investor under any Transaction Document. The decision of each Investor to
      purchase Securities pursuant to the Transaction Documents has been made by
      such
      Investor independently of any other Investor. Nothing contained herein or in
      any
      Transaction Document, and no action taken by any Investor pursuant thereto,
      shall be deemed to constitute the Investors as a partnership, an association,
      a
      joint venture or any other kind of entity, or create a presumption that the
      Investors are in any way acting in concert or as a group with respect to such
      obligations or the transactions contemplated by the Transaction Documents.
      Each
      Investor acknowledges that no other Investor has acted as agent for such
      Investor in connection with making its investment hereunder and that no Investor
      will be acting as agent of such Investor in connection with monitoring its
      investment in the Securities or enforcing its rights under the Transaction
      Documents. Each Investor shall be entitled to independently protect and enforce
      its rights, including, without limitation, the rights arising out of this
      Agreement or out of the other Transaction Documents, and it shall not be
      necessary for any other Investor to be joined as an additional party in any
      proceeding for such purpose. The Company acknowledges that each of the Investors
      has been provided with the same Transaction Documents for the purpose of closing
      a transaction with multiple Investors and not because it was required or
      requested to do so by any Investor.

    

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    9.13 Stock
      Pledge Agreement.
      Each
      Investor hereby agrees to be bound by the terms and conditions of the Stock
      Pledge Agreement, including Sections 22 and 23 thereof pursuant to which, among
      other things, it appoints Nite Capital, L.P. as the collateral agent for the
      stock pledged pursuant to the Stock Pledge Agreement and provides certain
      indemnification rights in favor of Nite Capital, L.P., as collateral
      agent.

    

    9.14 Escrow
      Agent.
      Each
      Investor has read and reviewed the Escrow Agreement and hereby authorizes Nite
      Capital, L.P., on behalf of the Investors, to authorized the release of the
      Escrow Funds (as defined in the Escrow Agreement) in accordance with the terms
      thereof.

    

    [signature
      page follows]

    
 

     

     

     

     

     

     

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement or caused their duly
      authorized officers to execute this Agreement as of the date first above
      written.

     

    
      	 	 	 
	The
              Company:	THE
              TUBE MEDIA
              CORP.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:

	 	Title:
              

     

    

    

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    

     

    
      	 	 	 
	The
              Investors:	 
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:

	 	Title:
              

    

     

     

    Aggregate
      Purchase Price: 

    Principal
      Amount of Note: 

    Number
      of
      Warrants: 

    

    

    Address
      for Notice:    

    
 

    
      
         

      

      
        -26-

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