Document:

exhibit_10-58.htm

    
      

    

    Exhibit
      10.58

     

    
       

      REGISTRATION
        RIGHTS AGREEMENT

       

      THIS
        REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of
        October _2_, 2007, by and among C-MARK INTERNATIONAL, INC., a
        South Carolina corporation, with its principal office located at 4130 E.
        Van
        Buren, Suite 325, Phoenix, AZ 85008 (the “Company”), and the undersigned
        investors (each, an “Investor” and collectively, the
“Investors”).

       

      WHEREAS:

       

      A.           In
        connection with the Securities Purchase Agreement by and among the parties
        hereto of even date herewith (the “Securities Purchase
        Agreement”), the Company has agreed, upon the terms and subject to the
        conditions of the Securities Purchase Agreement, to issue and sell to the
        Investors secured debentures (the “Debentures”), pursuant to the terms of
        the Securities Purchase Agreement providing that the Investor may purchase
        Debentures having up to an aggregate purchase price of up to One Million
        One
        Hundred Thousand U.S. Dollars ($1,100,000).  Capitalized terms
        not defined herein shall have the meaning ascribed to them in the Securities
        Purchase Agreement.

       

      B.           To
        induce the Investors to execute and deliver the Securities Purchase Agreement,
        the Company has agreed to provide certain registration rights under the
        Securities Act of 1933, as amended, and the rules and regulations there under,
        or any similar successor statute (collectively, the “1933 Act”), and
        applicable state securities laws.

       

      NOW,
        THEREFORE, in consideration of the premises and the mutual covenants
        contained herein and other good and valuable consideration, the receipt and
        sufficiency of which are hereby acknowledged, the Company and the Investors
        hereby agree as follows:

       

      1.      DEFINITIONS.

       

      As
        used
        in this Agreement, the following terms shall have the following
        meanings:

       

      (a)           “Person”
        means a corporation, a limited liability company, an association, a partnership,
        an organization, a business, an individual, a governmental or political
        subdivision thereof or a governmental agency.

       

      (b)           “Register,”
        “registered,” and “registration” refer to a registration effected
        by preparing and filing one or more Registration Statements (as defined below)
        in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act
        or
        any successor rule providing for offering securities on a continuous or delayed
        basis (“Rule 415”), and the declaration or ordering of effectiveness of
        such Registration Statement(s) by the United States Securities and Exchange
        Commission (the “SEC”).

       

      (c)           “Registrable
        Securities” means the shares of Common Stock issuable to Investors upon
        conversion of the Convertible Debentures pursuant to the Securities Purchase
        Agreement and the shares of Common Stock issuable to the Investors upon exercise
        of the Warrant issued pursuant to the Securities Purchase
        Agreement.  As to any particular Registrable Securities, such
        securities will cease to be Registrable Securities when (a) they have been
        effectively registered under the 1933 Act and disposed of in accordance with
        the
        Registration Statement covering them, (b) they are or may be freely traded
        without restriction and without  registration pursuant to Rule 144(k)
        promulgated under the Securities Act, as such Rule may be amended from time
        to
        time, or (c) they have been otherwise transferred and new certificates for
        them
        not bearing a restrictive legend have been issued by the Company and the
        Company
        shall not have “stop transfer” instructions against them.

       

      
        
          
          

        

        
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      (d)           “Registration
        Statement” means a registration statement under the 1933 Act which covers
        the Registrable Securities.

       

      2.      REGISTRATION.

       

      (a)           Right
        to Piggyback. Whenever the Company proposes to register any of its
        securities under the Securities Act of 1933, as amended (the “Securities
        Act”) and the registration form to be used may be used for the
        registration of Registrable Securities (a “Piggyback
        Registration”), the Company will give prompt written notice to the
        Investors of its intention to effect such a registration (such notice to
        be
        given a minimum of thirty (30) days prior to filing of the registration form)
        and will include in such registration form all Registrable Securities unless
        the
        Company has received written requests for exclusion therein of a portion
        or all
        of the Registrable Securities prior to filing thereof by the
        Company.   The Investors and James G. Dodrill II, P.A. shall
        furnish comments on the such Registration Statement to the Company by the
        later
        of: (a) seventy-two (72) hours of the receipt thereof from the Company and
        (b)
        the close of the third business day following receipt thereof from the
        Company.

       

      (b)           Priority
        on Primary Registrations. If a Piggyback Registration is an underwritten
        primary registration on behalf of the Company, and the managing underwriters
        advise the Company in writing that in their opinion the number of securities
        requested to be included in such registration exceeds the number which can
        be
        sold in such offering without adversely affecting the marketability of the
        offering, the Company will include in such registration (i) first, the
        Registrable Securities requested to be included in such registration, and
        (ii)
        second, the securities that the Company proposes to sell, and (iii) third,
        such
        other securities of the Company possessing registration rights.

       

      (c)           Priority
        on Secondary Registrations. If a Piggyback Registration is an underwritten
        secondary registration solely on behalf of holders of the Company’s securities,
        and the managing underwriters advise the Company in writing that in their
        opinion the number of securities requested to be included in such registration
        exceeds the number which can be sold in such offering without adversely
        affecting the marketability of the offering, the Company will include in
        such
        registration (i) first, the Registrable Securities requested to be included
        in
        such registration, (ii) second, the securities requested to be included therein
        by the holders requesting such registration, and (ii) third, such other
        securities of the Company with registration rights permitted to be included
        in
        such registration.

       

       

       

      
        
          
          

        

        
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      (d)           General
        Priority Rule. Notwithstanding anything contained in this Agreement to the
        contrary, in no event shall any Registrable Securities be excluded from such
        offering unless all other stockholders’ securities have first been
        excluded.

       

      (e)           Other
        Registrations. If the Company has previously filed a registration statement
        with respect to Registrable Securities pursuant to this Section, and if such
        previous registration has not been withdrawn or abandoned, the Company will
        not
        file or cause to be effected any other registration of any of its equity
        securities or securities convertible or exchangeable into or exercisable
        for its
        equity securities under the Securities Act (except on Form S-4 or Form S-8
        or
        any successor form), whether on its own behalf or at the request of any holder
        or holders of such securities, until a period of at least six (6) months
        has
        elapsed from the effective date of such previous registration.

       

      (f)           Limitations
        on Subsequent Registration Rights. From
        and
        after the date of this Agreement, the Company shall not, without the prior
        written consent of the Investor, enter into any agreement with any holder
        or
        prospective holder of any securities of the Company which would allow such
        holder or prospective holder (a) to include such securities in any
        registration unless under the terms of such agreement, such holder or
        prospective holder may include such securities in any such registration only
        to
        the extent that the inclusion of such securities will not reduce the amount
        of
        the Registrable Securities of the Investor that are included or (b) to
        demand registration of any securities held by such holder or prospective
        holder.

       

      (g)           Sufficient
        Number of Shares Registered. In the event the number of shares available
        under a Registration Statement filed pursuant to this Section 2 is insufficient
        to cover all of the Registrable Securities, the Company shall amend the
        Registration Statement, or file a new Registration Statement (on the short
        form
        available therefore, if applicable), or both, so as to cover all of such
        Registrable Securities as soon as practicable, but in any event not later
        than
        forty-five (45) days after the necessity therefore arises. The Company shall
        use
        it best efforts to cause such amendment and/or new Registration Statement
        to
        become effective as soon as practicable following the filing thereof. For
        purposes of the foregoing provision, the number of shares available under
        a
        Registration Statement shall be deemed "insufficient to cover all of the
        Registrable Securities" if at any time the number of Registrable Securities
        issuable on the delivery of a Conversion Notice (as defined in the Convertible
        Debentures) or an Exercise Notice (as defined in the Warrants) is greater
        than
        the number of shares available for resale under such Registration
        Statement.

       

      (h)           Alternative
        to Registration.  At Investor’s option, the Company shall take all
        necessary steps to ensure that the shares underlying the Warrants are issued
        pursuant to Rule 504 of Regulation D of the 1933 Act.

       

      

       

      3.      RELATED
        OBLIGATIONS.

       

      (a)           The
        Company shall keep any such filed Registration Statement effective until
        all of
        the Registrable Securities are eligible for resale by the Investors pursuant
        to
        Rule 144(k) of the Securities Act.  Any such Registration Statement
        (including any amendments or supplements thereto and prospectuses contained
        therein) shall not contain any untrue statement of a material fact or omit
        to
        state a material fact required to be stated therein, or necessary to make
        the
        statements therein, in light of the circumstances in which they were made,
        not
        misleading.

       

      
        
          
          

        

        
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      (b)           The
        Company shall prepare and file with the SEC such amendments (including
        post-effective amendments) and supplements to a Registration Statement and
        the
        prospectus used in connection with such Registration Statement, which prospectus
        is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may
        be
        necessary to keep such Registration Statement effective at all times during
        the
        Registration Period, and, during such period, comply with the provisions
        of the
        1933 Act with respect to the disposition of all Registrable Securities of
        the
        Company covered by such Registration Statement until such time as all of
        such
        Registrable Securities shall have been disposed of in accordance with the
        intended methods of disposition by the seller or sellers thereof as set forth
        in
        such Registration Statement.  In the case of amendments and
        supplements to a Registration Statement which are required to be filed pursuant
        to this Agreement (including pursuant to this Section 3(b)) by reason of
        the
        Company’s filing a report on Form 10-KSB, Form 10-QSB or Form 8-K or any
        analogous report under the Securities Exchange Act of 1934, as amended (the
        “1934 Act”), the Company shall incorporate such report by reference into
        the Registration Statement, if applicable, or shall file such amendments
        or
        supplements with the SEC on the same day on which the 1934 Act report is
        filed
        which created the requirement for the Company to amend or supplement the
        Registration Statement.

       

      (c)           The
        Company shall furnish to each Investor whose Registrable Securities are included
        in any Registration Statement, without charge, (i) at least one (1) copy
        of such
        Registration Statement as declared effective by the SEC and any amendment(s)
        thereto, including financial statements and schedules, all documents
        incorporated therein by reference, all exhibits and each preliminary prospectus,
        (ii) ten (10) copies of the final prospectus included in such Registration
        Statement and all amendments and supplements thereto (or such other number
        of
        copies as such Investor may reasonably request in writing) and (iii) such
        other
        documents as such Investor may reasonably request in writing from time to
        time
        in order to facilitate the disposition of the Registrable Securities owned
        by
        such Investor.

       

      (d)           The
        Company shall use its best efforts to (i) register and qualify the Registrable
        Securities covered by a Registration Statement under such other securities
        or
“blue sky” laws of such jurisdictions in the United States as any Investor
        reasonably requests, (ii) prepare and file in those jurisdictions, such
        amendments (including post-effective amendments) and supplements to such
        registrations and qualifications as may be necessary to maintain the
        effectiveness thereof during the Registration Period, (iii) take such other
        actions as may be necessary to maintain such registrations and qualifications
        in
        effect at all times during the Registration Period, and (iv) take all other
        actions reasonably necessary or advisable to qualify the Registrable Securities
        for sale in such jurisdictions; provided, however, that the Company shall
        not be
        required in connection therewith or as a condition thereto to (w) make any
        change to its certificate of incorporation or by-laws, (x) qualify to do
        business in any jurisdiction where it would not otherwise be required to
        qualify
        but for this Section 3(d), (y) subject itself to general taxation in any
        such
        jurisdiction, or (z) file a general consent to service of process in any
        such
        jurisdiction.  The Company shall promptly notify each Investor who
        holds Registrable Securities of the receipt by the Company of any notification
        with respect to the suspension of the registration or qualification of any
        of
        the Registrable Securities for sale under the securities or “blue sky” laws of
        any jurisdiction in the United States or its receipt of actual notice of
        the
        initiation or threat of any proceeding for such purpose.

       

      
        
          
          

        

        
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      (e)           As
        promptly as practicable after becoming aware of such event or development,
        the
        Company shall notify each Investor in writing of the happening of any event
        as a
        result of which the prospectus included in a Registration Statement, as then
        in
        effect, includes an untrue statement of a material fact or omission to state a
        material fact required to be stated therein or necessary to make the statements
        therein, in light of the circumstances under which they were made, not
        misleading (provided that in no event shall such notice contain any material,
        nonpublic information), and promptly prepare a supplement or amendment to
        such
        Registration Statement to correct such untrue statement or omission, and
        deliver
        ten (10) copies of such supplement or amendment to each Investor.  The
        Company shall also promptly notify each Investor in writing (i) when a
        prospectus or any prospectus supplement or post-effective amendment has been
        filed, and when a Registration Statement or any post-effective amendment
        has
        become effective (notification of such effectiveness shall be delivered to
        each
        Investor by facsimile on the same day of such effectiveness), (ii) of any
        request by the SEC for amendments or supplements to a Registration Statement
        or
        related prospectus or related information, and (iii) of the Company’s
        reasonable determination that a post-effective amendment to a Registration
        Statement would be appropriate.

       

      (f)           The
        Company shall use its best efforts to prevent the issuance of any stop order
        or
        other suspension of effectiveness of a Registration Statement, or the suspension
        of the qualification of any of the Registrable Securities for sale in any
        jurisdiction within the United States of America and, if such an order or
        suspension is issued, to obtain the withdrawal of such order or suspension
        at
        the earliest possible moment and to notify each Investor who holds Registrable
        Securities being sold of the issuance of such order and the resolution thereof
        or its receipt of actual notice of the initiation or threat of any proceeding
        for such purpose.

       

      (g)           [reserved]

       

      (h)           Upon
        written request, the Company shall make available for inspection by (i) any
        Investor and (ii) one (1) firm of accountants or other agents retained by
        the Investors (collectively, the “Inspectors”) all pertinent financial
        and other records, and pertinent corporate documents and properties of the
        Company (collectively, the “Records”), as shall be reasonably deemed
        necessary by each Inspector, and cause the Company’s officers, directors and
        employees to supply all information which any Inspector may reasonably request
        in writing; provided, however, that each Inspector shall agree, and each
        Investor hereby agrees, to hold in strict confidence and shall not make any
        disclosure (except to an Investor) or use  any Record or other
        information which the Company determines in good faith to be confidential,
        and
        of which determination the Inspectors are so notified, unless (a) the disclosure
        of such Records is necessary to avoid or correct a misstatement or omission
        in
        any Registration Statement or is otherwise required under the 1933 Act, (b)
        the
        release of such Records is ordered pursuant to a final, non-appealable subpoena
        or order from a court or government body of competent jurisdiction, or (c)
        the
        information in such Records has been made generally available to the public
        other than by disclosure in violation of this or any other agreement of which
        the Inspector and the Investor has knowledge.  Each Investor agrees
        that it shall, upon learning that disclosure of such Records is sought in
        or by
        a court or governmental body of competent jurisdiction or through other means,
        give prompt notice to the Company and allow the Company, at its expense,
        to
        undertake appropriate action to prevent disclosure of, or to obtain a protective
        order for, the Records deemed confidential.

       

      
        
          
          

        

        
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      (i)           The
        Company shall hold in confidence and not make any disclosure of information
        concerning an Investor provided to the Company unless (i) disclosure of such
        information is necessary to comply with federal or state securities laws,
        (ii)
        the disclosure of such information is necessary to avoid or correct a
        misstatement or omission in any Registration Statement, (iii) the release
        of
        such information is ordered pursuant to a subpoena or other final,
        non-appealable order from a court or governmental body of competent
        jurisdiction, or (iv) such information has been made generally available
        to the
        public other than by disclosure in violation of this Agreement or any other
        agreement.  The Company agrees that it shall, upon learning that
        disclosure of such information concerning an Investor is sought in or by
        a court
        or governmental body of competent jurisdiction or through other means, give
        prompt written notice to such Investor and allow such Investor, at the
        Investor’s expense, to undertake appropriate action to prevent disclosure of, or
        to obtain a protective order for, such information.

       

      (j)           The
        Company shall use its best efforts either to cause all the Registrable
        Securities covered by a Registration Statement (i) to be listed on each
        securities exchange on which securities of the same class or series issued
        by
        the Company are then listed, if any, if the listing of such Registrable
        Securities is then permitted under the rules of such exchange or (ii) the
        inclusion for quotation on the National Association of Securities Dealers,
        Inc.
        OTC Bulletin Board for such Registrable Securities.  The Company shall
        pay all fees and expenses in connection with satisfying its obligation under
        this Section 3(i).

       

      (k)           The
        Company shall cooperate with the Investors who hold Registrable Securities
        being
        offered and, to the extent applicable, to facilitate the timely preparation
        and
        delivery of certificates representing the Registrable Securities to be offered
        pursuant to a Registration Statement and enable such certificates to be in
        such
        denominations or amounts, as the case may be, as the Investors may reasonably
        request in writing and registered in such names as the Investors may
        request.  The certificates representing the Registrable Securities
        will bear a restrictive legend.

       

      (l)           The
        Company shall otherwise use its best efforts to comply with all applicable
        rules
        and regulations of the SEC in connection with any registration
        hereunder.

       

      (m)           Within
        two (2) business days after a Registration Statement which covers Registrable
        Securities is declared effective by the SEC, the Company shall deliver, and
        shall cause legal counsel for the Company to deliver, to the transfer agent
        for
        such Registrable Securities (with copies to the Investors whose Registrable
        Securities are included in such Registration Statement) confirmation that
        such
        Registration Statement has been declared effective by the SEC in the form
        attached hereto as Exhibit A.

       

      
        
          
          

        

        
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      (n)           The
        Company shall take all other reasonable actions necessary to expedite and
        facilitate the lawful disposition by the Investors of Registrable Securities
        pursuant to a Registration Statement.

       

      4.      OBLIGATIONS
        OF THE INVESTORS.

       

      Each
        Investor agrees that, upon receipt of any notice from the Company of the
        happening of any event of the kind described in Section 3(f) or the first
        sentence of Section 3(e), such Investor will immediately discontinue disposition
        of Registrable Securities pursuant to any Registration Statement(s) covering
        such Registrable Securities until such Investor’s receipt of the copies of the
        supplemented or amended prospectus contemplated by Section 3(e) or receipt
        of
        notice that no supplement or amendment is required.  Notwithstanding
        anything to the contrary, the Company shall cause its transfer agent to deliver
        unlegended certificates for shares of Common Stock to a transferee of an
        Investor in accordance with the terms of the Securities Purchase Agreement
        in
        connection with any sale of Registrable Securities with respect to which
        an
        Investor has entered into a contract for sale prior to the Investor’s receipt of
        a notice from the Company of the happening of any event of the kind described
        in
        Section 3(f) or the first sentence of Section 3(e) and for which the Investor
        has not yet settled.

       

      5.      EXPENSES
        OF REGISTRATION.

       

      All
        expenses incurred in connection with registrations, filings or qualifications
        pursuant to this Agreement, including, without limitation, all registration,
        listing and qualifications fees, printers, legal and accounting fees shall
        be
        paid by the Company.

       

      6.      INDEMNIFICATION.

       

      With
        respect to Registrable Securities which are included in a Registration Statement
        under this Agreement:

       

      (a)           To
        the fullest extent permitted by law, the Company will, and hereby does,
        indemnify, hold harmless and defend each Investor, the directors, officers,
        partners, employees, agents, representatives of, and each Person, if any,
        who
        controls any Investor within the meaning of the 1933 Act or the 1934 Act
        (each,
        an “Indemnified Person”), against any losses, claims, damages,
        liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’
fees, amounts paid in settlement or expenses, joint or several (collectively,
        “Claims”) incurred in investigating, preparing or defending any action,
        claim, suit, inquiry, proceeding, investigation or appeal taken from the
        foregoing by or before any court or governmental, administrative or other
        regulatory agency, body or the SEC, whether pending or threatened, whether
        or
        not an indemnified party is or may be a party thereto (“Indemnified
        Damages”), to which any of them may become subject insofar as such Claims
        (or actions or proceedings, whether commenced or threatened, in respect thereof)
        arise out of or are based upon: (i) any untrue statement or alleged untrue
        statement of a material fact in a Registration Statement or any post-effective
        amendment thereto or in any filing made in connection with the qualification
        of
        the offering under the securities or other “blue sky” laws of any jurisdiction
        in which Registrable Securities are offered (“Blue Sky Filing”), or
        the omission or alleged omission to state a material fact required to be
        stated
        therein or necessary to make the statements therein not misleading; (ii)
        any
        untrue statement or alleged untrue statement of a material fact contained
        in any
        final prospectus (as amended or supplemented, if the Company files any amendment
        thereof or supplement thereto with the SEC) or the omission or alleged omission
        to state therein any material fact necessary to make the statements made
        therein, in light of the circumstances under which the statements therein
        were
        made, not misleading; or (iii) any violation or alleged violation by the
        Company
        of the 1933 Act, the 1934 Act, any other law, including, without limitation,
        any
        state securities law, or any rule or regulation there under relating to the
        offer or sale of the Registrable Securities pursuant to a Registration Statement
        (the matters in the foregoing clauses (i) through (iii) being, collectively,
        “Violations”).  The Company shall reimburse the Investors and
        each such controlling person promptly as such expenses are incurred and are
        due
        and payable, for any legal fees or disbursements or other reasonable expenses
        incurred by them in connection with investigating or defending any such
        Claim.  Notwithstanding anything to the contrary contained herein, the
        indemnification agreement contained in this Section 6(a): (x) shall not apply
        to
        a Claim by an Indemnified Person arising out of or based upon a Violation
        which
        occurs in reliance upon and in conformity with information furnished in writing
        to the Company by such Indemnified Person expressly for use in connection
        with
        the preparation of the Registration Statement or any such amendment thereof
        or
        supplement thereto; (y) shall not be available to the extent such Claim is
        based
        on a failure of the Investor to deliver or to cause to be delivered the
        prospectus made available by the Company, if such prospectus was timely made
        available by the Company pursuant to Section 3(c); (z) shall not apply to
        amounts paid in settlement of any Claim if such settlement is effected without
        the prior written consent of the Company, which consent shall not be
        unreasonably withheld; and (aa) shall not apply to the extent that any such
        loss, claim, damage or liability (or action in respect thereof) arises out
        of or
        is based upon an untrue statement or alleged untrue statement or omission
        or
        alleged omission in such Registration Statement or Prospectus, which untrue
        statement or alleged untrue statement or omission or alleged omission is
        completely corrected in an amendment or supplement to the Registration Statement
        or Prospectus and Investor thereafter fails to deliver or cause to be delivered
        such Registration Statement or Prospectus as so amended or supplemented prior
        to
        or concurrently with the Registrable Securities, or the written confirmation
        of
        the sale of the Registrable Securities, as the case may be, to the person
        asserting such loss, claim, damage or liability (or action in respect thereof)
        or expense after the Company has furnished Investor with the same. Such
        indemnity shall remain in full force and effect regardless of any investigation
        made by or on behalf of the Indemnified Person and shall survive the transfer
        of
        the Registrable Securities by the Investors pursuant to Section 9
        hereof.

       

      
        
          
          

        

        
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      (b)           In
        connection with a Registration Statement, each Investor agrees to severally
        and
        not jointly indemnify, hold harmless and defend, to the same extent and in
        the
        same manner as is set forth in Section 6(a), the Company, each of its directors,
        each of its officers, employees, representatives, or agents and each Person,
        if
        any, who controls the Company within the meaning of the 1933 Act or the 1934
        Act
        (each an “Indemnified Party”), against any Claim or Indemnified Damages
        to which any of them may become subject, under the 1933 Act, the 1934 Act
        or
        otherwise, insofar as such Claim or Indemnified Damages arise out of or is
        based
        upon any Violation, in each case to the extent, and only to the extent, that
        such Violation occurs in reliance upon and in conformity with written
        information furnished to the Company by such Investor expressly for use in
        connection with such Registration Statement; and, subject to Section 6(d),
        such
        Investor will reimburse any legal or other expenses reasonably incurred by
        them
        in connection with investigating or defending any such Claim; provided, however,
        that the indemnity agreement contained in this Section 6(b) and the agreement
        with respect to contribution contained in Section 7 shall not apply to amounts
        paid in settlement of any Claim if such settlement is effected without the
        prior
        written consent of such Investor, which consent shall not be unreasonably
        withheld; provided, further, however, that the Investor shall be liable under
        this Section 6(b) for only that amount of a Claim or Indemnified Damages
        as does
        not exceed the net proceeds to such Investor as a result of the sale of
        Registrable Securities pursuant to such Registration Statement.  Such
        indemnity shall remain in full force and effect regardless of any investigation
        made by or on behalf of such Indemnified Party and shall survive the transfer
        of
        the Registrable Securities by the Investors pursuant to Section 9.

       

       

       

       

       

      
        
          
          

        

        
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      (c)           Promptly
        after receipt by an Indemnified Person or Indemnified Party under this Section
        6
        of notice of the commencement of any action or proceeding (including any
        governmental action or proceeding) involving a Claim, such Indemnified Person
        or
        Indemnified Party shall, if a Claim in respect thereof is to be made against
        any
        indemnifying party under this Section 6, deliver to the indemnifying party
        a
        written notice of the commencement thereof, and the indemnifying party shall
        have the right to participate in, and, to the extent the indemnifying party
        so
        desires, jointly with any other indemnifying party similarly noticed, to
        assume
        control of the defense thereof with counsel mutually satisfactory to the
        indemnifying party and the Indemnified Person or the Indemnified Party, as
        the
        case may be; provided, however, that an Indemnified Person or Indemnified
        Party
        shall have the right to retain its own counsel with the fees and expenses
        of not
        more than one (1) counsel for such Indemnified Person or Indemnified Party
        to be
        paid by the indemnifying party, if, in the reasonable opinion of counsel
        retained by the indemnifying party, the representation by such counsel of
        the
        Indemnified Person or Indemnified Party and the indemnifying party would
        be
        inappropriate due to actual or potential differing  interests between
        such Indemnified Person or Indemnified Party and any other party represented
        by
        such counsel in such proceeding.  The Indemnified Party or Indemnified
        Person shall cooperate fully with the indemnifying party in connection with
        any
        negotiation or defense of any such action or claim by the indemnifying party
        and
        shall furnish to the indemnifying party all information reasonably available
        to
        the Indemnified Party or Indemnified Person which relates to such action
        or
        claim.  The indemnifying party shall keep the Indemnified Party or
        Indemnified Person fully apprised at all times as to the status of the defense
        or any settlement negotiations with respect thereto.  No indemnifying
        party shall be liable for any settlement of any action, claim or proceeding
        effected without its prior written consent; provided, however, that the
        indemnifying party shall not unreasonably withhold, delay or condition its
        consent.  No indemnifying party shall, without the prior written
        consent of the Indemnified Party or Indemnified Person, consent to entry
        of any
        judgment or enter into any settlement or other compromise which does not
        include
        as an unconditional term thereof the giving by the claimant or plaintiff
        to such
        Indemnified Party or Indemnified Person of a release from all liability in
        respect to such claim or litigation.  Following indemnification as
        provided for hereunder, the indemnifying party shall be subrogated to all
        rights
        of the Indemnified Party or Indemnified Person with respect to all third
        parties, firms or corporations relating to the matter for which indemnification
        has been made.  The failure to deliver written notice to the
        indemnifying party within a reasonable time of the commencement of any such
        action shall not relieve such indemnifying party of any liability to the
        Indemnified Person or Indemnified Party under this Section 6, except to the
        extent that the indemnifying party is prejudiced in its ability to defend
        such
        action.

       

       

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      (d)           The
        indemnification required by this Section 6 shall be made by periodic payments
        of
        the amount thereof during the course of the investigation or defense, as
        and
        when bills are received or Indemnified Damages are incurred.

       

      (e)           The
        indemnity agreements contained herein shall be in addition to (i) any cause
        of action or similar right of the Indemnified Party or Indemnified Person
        against the indemnifying party or others, and (ii) any liabilities the
        indemnifying party may be subject to pursuant to the law.

       

      7.      CONTRIBUTION.

       

      To
        the
        extent any indemnification by an indemnifying party is prohibited or limited
        by
        law, the indemnifying party agrees to make the maximum contribution with
        respect
        to any amounts for which it would otherwise be liable under Section 6 to
        the
        fullest extent permitted by law; provided, however, that:  (i) no
        seller of Registrable Securities guilty of fraudulent misrepresentation (within
        the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
        from any seller of Registrable Securities who was not guilty of fraudulent
        misrepresentation; and (ii) contribution by any seller of Registrable Securities
        shall be limited in amount to the net amount of proceeds received by such
        seller
        from the sale of such Registrable Securities.

       

      8.      REPORTS
        UNDER THE 1934 ACT.

       

      With
        a
        view to making available to the Investors the benefits of Rule 144 promulgated
        under the 1933 Act or any similar rule or regulation of the SEC that may
        at any
        time permit the Investors to sell securities of the Company to the public
        without registration (“Rule 144”) the Company agrees to:

       

      (a)           make
        and keep public information available, as those terms are understood and
        defined
        in Rule 144;

       

      (b)           file
        with the SEC in a timely manner all reports and other documents required
        of the
        Company under the 1933 Act and the 1934 Act so long as the Company remains
        subject to such requirements (it being understood that nothing herein shall
        limit the Company’s obligations under Section 4(c) of the Securities Purchase
        Agreement) and the filing of such reports and other documents as are required
        by
        the applicable provisions of Rule 144; and

       

      (c)           furnish
        to each Investor so long as such Investor owns Registrable Securities, promptly
        upon written request, (i) a written statement by the Company that it has
        complied with the reporting requirements of Rule 144, the 1933 Act and the
        1934
        Act, (ii) a copy of the most recent annual or quarterly report of the Company
        and such other reports and documents so filed by the Company, and (iii) such
        other information as may be reasonably requested to permit the Investors
        to sell
        such securities pursuant to Rule 144 without registration.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      9.      AMENDMENT
        OF REGISTRATION RIGHTS.

       

      Provisions
        of this Agreement may be amended and the observance thereof may be waived
        (either generally or in a particular instance and either retroactively or
        prospectively), only with the written consent of the Company and Investors
        who
        then hold at least two-thirds (2/3) of the Registrable
        Securities.  Any amendment or waiver effected in accordance with this
        Section 9 shall be binding upon each Investor and the
        Company.  No such amendment shall be effective to the extent that it
        applies to fewer than all of the holders of the Registrable
        Securities.  No consideration shall be offered or paid to any Person
        to amend or consent to a waiver or modification of any provision of any of
        this
        Agreement unless the same consideration also is offered to all of the parties
        to
        this Agreement.

       

      10.      MISCELLANEOUS.

       

      (a)           A
        Person is deemed to be a holder of Registrable Securities whenever such Person
        owns or is deemed to own of record such Registrable Securities.  If
        the Company receives conflicting instructions, notices or elections from
        two (2)
        or more Persons with respect to the same Registrable Securities, the Company
        shall act upon the basis of instructions, notice or election received from
        the
        registered owner of such Registrable Securities.

       

      (b)           Any
        notices, consents, waivers or other communications required or permitted
        to be
        given under the terms of this Agreement must be in writing and will be deemed
        to
        have been delivered:  (i) upon receipt, when delivered personally;
        (ii) upon receipt, when sent by facsimile (provided confirmation of transmission
        is mechanically or electronically generated and kept on file by the sending
        party); or (iii) one (1) business day after deposit with a nationally recognized
        overnight delivery service, in each case properly addressed to the party
        to
        receive the same.  The addresses and facsimile numbers for such
        communications shall be:

       

      
        	
                If
                  to the Company, to:

              	
                C-Mark
                  International, Inc..

              
	 	
                4130
                  E. Van Buren, Suite 325

              
	 	
                Phoenix,
                  AZ 85008

              
	 	
                Attn:
                  Mr. Charles Jones, CEO

              
	 	
                Telephone:
                  (602) 443-8640

              
	 	
                Facsimile:
                  (602) 443-8646

              
	 	 
	
                With
                  a copy to:

              	
                The
                  O’Neal Law Firm, P.C.

              
	 	
                17100
                  E. Shea Blvd., Suite 400-D

              
	 	
                Fountain
                  Hills, AZ  85268

              
	 	
                Attention:  William
                  D. O’Neal, Esq.

              
	 	
                Telephone:
                  (480) 812-5058

              
	 	
                Facsimile:
                  (480) 816-9241

              

      

      

       

      If
        to an
        Investor, to its address and facsimile number on the Schedule of Investors
        attached hereto, with copies to such Investor’s representatives as set forth on
        the Schedule of Investors or to such other address and/or facsimile number
        and/or to the attention of such other person as the recipient party has
        specified by written notice given to each other party five (5) days prior
        to the
        effectiveness of such change.  Written confirmation of receipt (A)
        given by the recipient of such notice, consent, waiver or other communication,
        (B) mechanically or electronically generated by the sender’s facsimile machine
        containing the time, date, recipient facsimile number and an image of the
        first
        page of such transmission or (C) provided by a courier or overnight courier
        service shall be rebuttable evidence of personal service, receipt by facsimile
        or receipt from a nationally recognized overnight delivery service in accordance
        with clause (i), (ii) or (iii) above, respectively.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

       

      (c)           Failure
        of any party to exercise any right or remedy under this Agreement or otherwise,
        or delay by a party in exercising such right or remedy, shall not operate
        as a
        waiver thereof.

       

      (d)           The
        laws of the State of Florida shall govern all issues concerning the relative
        rights of the Company and the Investors as its stockholders.  All
        other questions concerning the construction, validity, enforcement and
        interpretation of this Agreement shall be governed by the internal laws of
        the
        State of Florida without giving effect to any choice of law or conflict of
        law
        provision or rule (whether of the State of Florida or any other jurisdiction)
        that would cause the application of the laws of any jurisdiction other than
        the
        State of Florida  Each party hereby irrevocably submits to the
        non-exclusive jurisdiction of the State Courts of the State of Florida sitting
        in Broward County, Florida and federal courts for the Southern District of
        Florida for the adjudication of any dispute hereunder or in connection herewith
        or with any transaction contemplated hereby or discussed herein, and hereby
        irrevocably waives, and agrees not to assert in any suit, action or proceeding,
        any claim that it is not personally subject to the jurisdiction of any such
        court, that such suit, action or proceeding is brought in an inconvenient
        forum
        or that the venue of such suit, action or proceeding is
        improper.  Each party hereby irrevocably waives personal service of
        process and consents to process being served in any such suit, action or
        proceeding by mailing a copy thereof to such party at the address for such
        notices to it under this Agreement and agrees that such service shall constitute
        good and sufficient service of process and notice thereof.  Nothing
        contained herein shall be deemed to limit in any way any right to serve process
        in any manner permitted by law.  If any provision of this Agreement
        shall be invalid or unenforceable in any jurisdiction, such invalidity or
        unenforceability shall not affect the validity or enforceability of the
        remainder of this Agreement in that jurisdiction or the validity or
        enforceability of any provision of this Agreement in any other
        jurisdiction.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
        HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
        DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT
        OR
        ANY TRANSACTION CONTEMPLATED HEREBY.

       

      (e)           This
        Agreement, the Irrevocable Transfer Agent Instructions, the Securities Purchase
        Agreement and related documents including the Convertible Debenture and the
        Escrow Agreement dated the date hereof by and among the Company, the Investors
        set forth on the Schedule of Investors attached hereto, and James G. Dodrill
        II,
        P.A. (the “Escrow Agreement”) and the Security Agreement dated the date
        hereof (the “Security Agreement”) constitute the entire agreement among
        the parties hereto with respect to the subject matter hereof and
        thereof.  There are no restrictions, promises, warranties or
        undertakings, other than those set forth or referred to herein and
        therein.  This Agreement, the Irrevocable Transfer Agent Instructions,
        the Securities Purchase Agreement and related documents including the
        Convertible Debenture, the Escrow Agreement and the Security Agreement supersede
        all prior agreements and understandings among the parties hereto with respect
        to
        the subject matter hereof and thereof.

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

       

      (f)           This
        Agreement shall inure to the benefit of and be binding upon the permitted
        successors and assigns of each of the parties hereto.

       

      (g)           The
        headings in this Agreement are for convenience of reference only and shall
        not
        limit or otherwise affect the meaning hereof.

       

      (h)           This
        Agreement may be executed in identical counterparts, each of which shall
        be
        deemed an original but all of which shall constitute one and the same
        agreement.  This Agreement, once executed by a party, may be delivered
        to the other party hereto by facsimile transmission of a copy of this Agreement
        bearing the signature of the party so delivering this Agreement.

       

      (i)           Each
        party shall do and perform, or cause to be done and performed, all such further
        acts and things, and shall execute and deliver all such other agreements,
        certificates, instruments and documents, as the other party may reasonably
        request in order to carry out the intent and accomplish the purposes of this
        Agreement and the consummation of the transactions contemplated
        hereby.

       

      (j)           The
        language used in this Agreement will be deemed to be the language chosen
        by the
        parties to express their mutual intent and no rules of strict construction
        will
        be applied against any party.

       

      (k)           This
        Agreement is intended for the benefit of the parties hereto and their respective
        permitted successors and assigns, and is not for the benefit of, nor may
        any
        provision hereof be enforced by, any other Person.

       

      

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

      

       

      
 

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF, the parties have caused this Registration Rights
        Agreement to be duly executed as of day and year first above
        written.

       

      

      
        	 	
                COMPANY:

              
	 	
                CMARK
                  INTERNATIONAL, INC.

              
	 	 
	 	
                By:  /s/ 
                  Charles W. Jones, Jr.       
                                      

              
	 	
                Name: 
                   Charles W. Jones,
                  Jr.     

              
	 	
                Title: 
                     President   

              
	 	 

      

      

      
        	 	
                BUYER:

              
	 	
                TRAFALGAR
                  CAPITAL SPECIALIZED

              
	 	
                INVESTMENT
                  FUND, LUXEMBOURG

              
	 	
                By:           Trafalgar
                  Capital Sarl

              
	 	
                Its:           General
                  Partner

              
	 	 
	 	
                By:     /s/ 
                  Andrew
                  Garai                                      
                  

              
	 	
                Name:       Andrew
                  Garai

              
	 	
                Title:         Chairman
                  of the Board

              

      

      

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      

       

      SCHEDULE
        I

       

      SCHEDULE
        OF INVESTORS

       

      

      
        	
                
                  Name

                

              	
                
                  Signature

                

              	
                
                  Address/Facsimile

                  Number
                    of Buyer

                

              
	 	 	
                8-10
                  Rue Mathias Hardt

              
	
                Trafalgar
                  Capital Specialized

              	
                By:           Trafalgar
                  Capital Sarl

              	
                BP
                  3023

              
	
                Investment
                  Fund,

              	
                Its:           General
                  Partner

              	
                L-1030
                  Luxembourg

              
	
                Luxembourg

              	 	
                Facsimile:

              
	 	 	
                011-44-207-405-0161

              
	 	
                By:   
                  /s/  Andrew
                  Garai                          
                  

              	
                And

              
	 	
                Name:      Andrew
                  Garai

              	
                001-786-323-1651

              
	 	
                Its:           Chairman
                  of the Board

              	 

      

      

      

      

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
        A

       

      FORM
        OF NOTICE OF EFFECTIVENESS

       

      OF
        REGISTRATION STATEMENT

       

      

      Attention:

      

      
        	
                 

              	
                Re:

              	
                C-MARK
                  INTERNATIONAL, INC.

              

      

      Ladies
        and Gentlemen:

      

      We
        are
        counsel to C-MARK INTERNATIONAL, INC.., a South Carolina
        corporation (the “Company”), and have represented the Company in
        connection with that certain Securities Purchase Agreement (the “Securities
        Purchase Agreement”) entered into by and among the Company and the investors
        named therein (collectively, the “Investors”) pursuant to which the
        Company issued to the Investors shares of its Common Stock, par value
        US$__________ per share (the “Common Stock”).  Pursuant to the
        Purchase Agreement, the Company also has entered into a Registration Rights
        Agreement with the Investors (the “Investor Registration Rights
        Agreement”) pursuant to which the Company agreed, among other things, to
        register the Registrable Securities (as defined in the Registration Rights
        Agreement) under the Securities Act of 1933, as amended (the “1933
        Act”).  In connection with the Company’s obligations under the
        Registration Rights Agreement, on ____________ ____, the Company filed a
        Registration Statement on Form ________ (File No. 333-_____________) (the
“Registration Statement”) with the Securities and Exchange SEC (the
“SEC”) relating to the Registrable Securities which names each
        of the
        Investors as a selling stockholder there under.

       

      In
        connection with the foregoing, we advise you that a member of the SEC’s staff
        has advised us by telephone that the SEC has entered an order declaring the
        Registration Statement effective under the 1933 Act at [ENTER TIME OF
        EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we
        have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that
        any stop order suspending its effectiveness has been issued or that any
        proceedings for that purpose are pending before, or threatened by, the SEC
        and
        the Registrable Securities are available for resale under the 1933 Act pursuant
        to the Registration Statement.

       

      Very
        truly yours,

      

      [INSERT
        NAME OF COMPANY COUNSEL]

      

      By:                                                                 

      

      cc:           [LIST
        NAMES OF INVESTORS]

       

       

       

       

      A-1exhibit_10-59.htm

    
      

    

    Exhibit
      10.59

     

    
       

      WARRANT

       

      THE
        SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
        LAWS.  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
        OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
        REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933,
        AS
        AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN
        A FORM
        REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER
        SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE
        144
        UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE
        PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT.

       

       

      C-MARK
        INTERNATIONAL, INC.

       

      Warrant
        To Purchase Common Stock

       

      
        
          	 Warrant
                  No.: 146W 	
                   Number
                    of Shares: Such Number as equals

                   seven
                    and one-half percent of the fully

                   diluted
                    outstanding shares of the

                   Company
                    upon exercise

                

        

      

       

      
Date
        of
        Issuance:  October 2, 2007

      

      C-Mark
        International, Inc., a South Carolina corporation (the “Company”), hereby
        certifies that, for Ten United States Dollars ($10.00) and other good and
        valuable consideration, the receipt and sufficiency of which are hereby
        acknowledged, Trafalgar Capital Specialized Investment Fund, Luxembourg,
        (“Trafalgar”), the registered holder hereof or its permitted assigns, is
        entitled, subject to the terms set forth below, to purchase from the Company
        upon surrender of this Warrant, at any time or times on or after the date
        hereof, but not after 11:59 P.M. Eastern Time on the Expiration Date (as
        defined herein) such number of shares of fully paid and nonassessable shares
        of
        Common Stock (as defined herein) of the Company as equals seven and one-half
        percent (7.5%) of the fully diluted outstanding shares of Common Stock upon
        exercise (the “Warrant Shares”) at the exercise price per share provided
        in Section 1(b) below or as subsequently adjusted; provided, however,
        unless mutually agreed otherwise by the Company and Trafalgar, that in no
        event
        shall the holder be entitled to exercise this Warrant for a number of Warrant
        Shares in excess of that number of Warrant Shares which, upon giving effect
        to
        such exercise, would cause the aggregate number of shares of Common Stock
        beneficially owned by the holder and its affiliates to exceed 4.99% of the
        outstanding shares of the Common Stock following such exercise, except within
        sixty (60) days of the Expiration Date.  For purposes of the foregoing
        proviso, the aggregate number of shares of Common Stock beneficially owned
        by
        the holder and its affiliates shall include the number of shares of Common
        Stock
        issuable upon exercise of this Warrant with respect to which the determination
        of such proviso is being made, but shall exclude shares of Common Stock which
        would be issuable upon (i) exercise of the remaining, unexercised Warrants
        beneficially owned by the holder and its affiliates and (ii) exercise or
        conversion of the unexercised or unconverted portion of any other securities
        of
        the Company beneficially owned by the holder and its affiliates (including,
        without limitation, any convertible notes or preferred stock) subject to
        a
        limitation on conversion or exercise analogous to the limitation contained
        herein.  Except as set forth in the preceding sentence, for purposes
        of this paragraph, beneficial ownership shall be calculated in accordance
        with
        Section 13(d) of the Securities Exchange Act of 1934, as amended.  For
        purposes of this Warrant, in determining the number of outstanding shares
        of
        Common Stock a holder may rely on the number of outstanding shares of Common
        Stock as reflected in (1) the Company’s most recent Form 10-QSB or Form 10-KSB,
        as the case may be, (2) a more recent public announcement by the Company
        or (3)
        any other notice by the Company or its transfer agent setting forth the number
        of shares of Common Stock outstanding.  Upon the written request of
        any holder, the Company shall promptly, but in no event later than one (1)
        Business Day following the receipt of such notice, confirm in writing to
        any
        such holder the number of shares of Common Stock then outstanding.  In
        any case, the number of outstanding shares of Common Stock shall be determined
        after giving effect to the exercise of Warrants (as defined below) by such
        holder and its affiliates since the date as of which such number of outstanding
        shares of Common Stock was reported.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

       

      Section
        1.

       

      (a)           This
        Warrant is the common stock purchase warrant (the “Warrant”) issued
        pursuant to a Securities Purchase Agreement dated October ___, 2007 by and
        between the Company and Trafalgar (the “Convertible
        Debenture”).

       

      (b)           Definitions.  The
        following words and terms as used in this Warrant shall have the following
        meanings:

       

      (i)           “Approved
        Stock Plan” means any employee benefit plan which has been approved by the
        Board of Directors of the Company, pursuant to which the Company’s securities
        may be issued to any employee, officer or director for services provided
        to the
        Company.

       

      (ii)           “Business
        Day” means any day other than Saturday, Sunday or other day on which
        commercial banks in the City of New York are authorized or required by law
        to
        remain closed.

       

      (iii)           “Closing
        Bid Price” means the closing bid price of Common Stock as quoted on the
        Principal Market (as reported by Bloomberg Financial Markets
        (“Bloomberg”) through its “Volume at Price” function).

       

      (iv)           “Common
        Stock” means (i) the Company’s common stock, par value $.0001 per
        share, and (ii) any capital stock into which such Common Stock shall have
        been changed or any capital stock resulting from a reclassification of such
        Common Stock.

       

      (v)           “Excluded
        Securities” means, provided such security is issued at a price which is
        greater than or equal to the arithmetic average of the Closing Bid Prices
        of the
        Common Stock for the ten (10) consecutive trading days immediately preceding
        the
        date of issuance, any of the following: (a) any issuance by the Company of
        securities in connection with a strategic partnership or a joint venture
        (the
        primary purpose of which is not to raise equity capital), (b) any issuance
        by
        the Company of securities as consideration for a merger or consolidation
        or the
        acquisition of a business, product, license, or other assets of another person
        or entity and (c) options to purchase shares of Common Stock, provided (I)
        such
        options are issued after the date of this Warrant to employees of the Company
        within thirty (30) days of such employee’s starting his employment with the
        Company, and (II) the exercise price of such options is not less than the
        Closing Bid Price of the Common Stock on the date of issuance of such
        option.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

       

      (vi)           “Expiration
        Date” means the date five (5) years from the Issuance Date of this Warrant
        or, if such date falls on a Saturday, Sunday or other day on which banks
        are
        required or authorized to be closed in the City of New York or the State
        of New
        York or on which trading does not take place on the Principal Exchange or
        automated quotation system on which the Common Stock is traded (a
“Holiday”), the next date that is not a Holiday.

       

      (vii)          “Issuance
        Date” means the date hereof.

       

      (viii)         “Options”
        means any rights, warrants or options to subscribe for or purchase Common
        Stock
        or Convertible Securities.

       

      (ix)     
              “Other Securities” means
        (i) those options and warrants of the Company issued prior to, and
        outstanding on, the Issuance Date of this Warrant, (ii) the shares of Common
        Stock issuable on exercise of such options and warrants, provided such options
        and warrants are not amended after the Issuance Date of this Warrant and
        (iii) the shares of Common Stock issuable upon exercise of this
        Warrant.

       

      (x)       
            “Person” means an individual, a limited liability
        company, a partnership, a joint venture, a corporation, a trust, an
        unincorporated organization and a government or any department or agency
        thereof.

       

      (xi)       
            “Principal Market” means the New York Stock
        Exchange, the American Stock Exchange, the Nasdaq National Market, the Nasdaq
        SmallCap Market, whichever is at the time the principal trading exchange
        or
        market for such security, or the over-the-counter market on the electronic
        bulletin board for such security as reported by Bloomberg or, if no bid or
        sale
        information is reported for such security by Bloomberg, then the average
        of the
        bid prices of each of the market makers for such security as reported in
        the
“pink sheets” by the National Quotation Bureau, Inc.

       

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

       

      (xiii)           “Warrant”
        means this Warrant and all Warrants issued in exchange, transfer or replacement
        thereof.

       

      (xiv)           “Warrant
        Exercise Price” shall be $.001 or as subsequently adjusted as provided in
        Section 8 hereof.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (xv)           “Warrant
        Shares” means the shares of Common Stock issuable at any time upon exercise
        of this Warrant.

       

      (c)           Other
        Definitional Provisions.

       

      (i)           Except
        as otherwise specified herein, all references herein (A) to the Company
        shall be deemed to include the Company’s successors and (B) to any
        applicable law defined or referred to herein shall be deemed references to
        such
        applicable law as the same may have been or may be amended or supplemented
        from
        time to time.

       

      (ii)           When
        used in this Warrant, the words “herein”, “hereof”, and
“hereunder” and words of similar import, shall
        refer to
        this Warrant as a whole and not to any provision of this Warrant, and the
        words
“Section”, “Schedule”, and “Exhibit” shall refer to
        Sections of, and Schedules and Exhibits to, this Warrant unless otherwise
        specified.

       

      (iii)           Whenever
        the context so requires, the neuter gender includes the masculine or feminine,
        and the singular number includes the plural, and vice versa.

       

      Section
        2.    Exercise of
        Warrant.  Subject to the terms and conditions hereof, this Warrant
        may be exercised by the holder hereof then registered on the books of the
        Company, pro rata as hereinafter provided, at any time on any Business Day
        on or
        after the opening of business on such Business Day, commencing with the first
        day after the date hereof, and prior to 11:59 P.M. Eastern Time on the
        Expiration Date, by (i) delivery of a written notice, in the form of the
        subscription notice attached as Exhibit A hereto (the “Exercise
        Notice”), of such holder’s election to exercise this Warrant, which notice
        shall specify the number of Warrant Shares to be purchased, (ii) payment to
        the Company of an amount equal to the Warrant Exercise Price(s) applicable
        to
        the Warrant Shares being purchased, multiplied by the number of Warrant
        Shares (at the applicable Warrant Exercise Price) as to which this Warrant
        is being exercised (plus any applicable issue or transfer taxes) (the
“Aggregate Exercise Price”) in cash or wire transfer of immediately
        available funds and (iii) the surrender of this Warrant (or an indemnification
        undertaking with respect to this Warrant in the case of its loss, theft or
        destruction) to a common carrier for overnight delivery to the Company as
        soon
        as practicable following such date.  In the event of any exercise of
        the rights represented by this Warrant in compliance with this Section 2(a),
        the
        Company shall on the fifth (5th) Business Day following the date of receipt
        of the Exercise Notice, the Aggregate Exercise Price and this Warrant (or
        an
        indemnification undertaking with respect to this Warrant in the case of its
        loss, theft or destruction) and the receipt of the representations of the
        holder
        specified in Section 6 hereof, if requested by the Company (the “Exercise
        Delivery Documents”), and if the Common Stock is DTC eligible 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 The Depository Trust
        Company; provided, however, if the holder who submitted the Exercise Notice
        requested physical delivery of any or all of the Warrant Shares, or, if the
        Common Stock is not DTC eligible  then the Company shall, on or before
        the fifth (5th) Business
        Day
        following receipt of the Exercise Delivery Documents, issue and surrender
        to a
        common carrier for overnight delivery to the address specified in the Exercise
        Notice, a certificate, registered in the name of the holder, for the number
        of
        shares of Common Stock to which the holder shall be entitled pursuant to
        such
        request.  Upon delivery of the Exercise Notice and Aggregate Exercise
        Price referred to in clause (ii) above the holder of this Warrant shall be
        deemed for all corporate purposes to have become the holder of record of
        the
        Warrant Shares with respect to which this Warrant has been
        exercised.  In the case of a dispute as to the determination of the
        Warrant Exercise Price, the Closing Bid Price or the arithmetic calculation
        of
        the Warrant Shares, the Company shall promptly issue to the holder the number
        of
        Warrant Shares that is not disputed and shall submit the disputed determinations
        or arithmetic calculations to the holder via facsimile within one (1) Business
        Day of receipt of the holder’s Exercise Notice.  If the holder and the
        Company are unable to agree upon the determination of the Warrant Exercise
        Price
        or arithmetic calculation of the Warrant Shares within one (1) day of such
        disputed determination or arithmetic calculation being submitted to the holder,
        then the Company shall immediately submit via facsimile (i) the disputed
        determination of the Warrant Exercise Price or the Closing Bid Price to an
        independent, reputable investment banking firm or (ii) the disputed arithmetic
        calculation of the Warrant Shares to its independent, outside
        accountant.  The Company shall cause the investment banking firm or
        the accountant, as the case may be, to perform the determinations or
        calculations and notify the Company and the holder of the results no later
        than
        forty-eight (48) hours from the time it receives the disputed determinations
        or
        calculations.  Such investment banking firm’s or accountant’s
        determination or calculation, as the case may be, shall be deemed conclusive
        absent manifest error.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

       

      (a)           Unless
        the rights represented by this Warrant shall have expired or shall have been
        fully exercised, the Company shall, as soon as practicable and in no event
        later
        than five (5) Business Days after any exercise and at its own expense, issue
        a
        new Warrant identical in all respects to this Warrant exercised except it
        shall
        represent rights to purchase the number of Warrant Shares purchasable
        immediately prior to such exercise under this Warrant exercised, less the
        number
        of Warrant Shares with respect to which such Warrant is exercised.

       

      (b)           No
        fractional Warrant Shares are to be issued upon any pro rata exercise of
        this
        Warrant, but rather the number of Warrant Shares issued upon such exercise
        of
        this Warrant shall be rounded up or down to the nearest whole
        number.

       

      (c)           If
        the Company or its Transfer Agent shall fail for any reason or for no reason
        to
        issue to the holder within ten (10) days of receipt of the Exercise
        Delivery Documents, a certificate for the number of Warrant Shares to which
        the
        holder is entitled or to credit the holder’s balance account with The Depository
        Trust Company for such number of Warrant Shares to which the holder is entitled
        upon the holder’s exercise of this Warrant, the Company shall, in addition to
        any other remedies under this Warrant or the Placement Agent Agreement or
        otherwise available to such holder, pay as additional damages in cash to
        such
        holder on each day the issuance of such certificate for Warrant Shares is
        not
        timely effected an amount equal to 0.025% of the product of (A) the sum of
        the
        number of Warrant Shares not issued to the holder on a timely basis and to
        which
        the holder is entitled, and (B) the Closing Bid Price of the Common Stock
        for
        the trading day immediately preceding the last possible date which the Company
        could have issued such Common Stock to the holder without violating this
        Section 2.

       

      (d)           If
        within ten (10) days after the Company’s receipt of the Exercise Delivery
        Documents, the Company fails to deliver a new Warrant to the holder for the
        number of Warrant Shares to which such holder is entitled pursuant to Section
        2
        hereof, then, in addition to any other available remedies under this Warrant
        or
        the Placement Agent Agreement, or otherwise
        available to such holder, the Company shall pay as additional damages in
        cash to
        such holder on each day after such tenth (10th) day
        that such
        delivery of such new Warrant is not timely effected in an amount equal to
        0.25%
        of the product of (A) the number of Warrant Shares represented by the
        portion of this Warrant which is not being exercised and (B) the Closing
        Bid Price of the Common Stock for the trading day immediately preceding the
        last
        possible date which the Company could have issued such Warrant to the holder
        without violating this Section 2.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      (e)           Recalculation
        of Number of Shares issuable upon partial exercise of Warrant.  In
        the event that Trafalgar partially exercises this Warrant, the percentage
        of the
        Company’s issued and outstanding Common Stock into which this Warrant is
        exercisable shall be reduced by the percent of the Company’s issued and
        outstanding Common Stock for which Trafalgar has then or previously exercised
        this Warrant.  By way of example, if Trafalgar exercises this Warrant
        to acquire one percent (1%) of the then issued and outstanding Common Stock
        of
        the Company, the percentage of the Company’s issued and outstanding Common Stock
        into which this Warrant is exercisable shall be reduced from seven and one-half
        percent (7.5%) to six and one-half percent (6.5%).  If Trafalgar
        subsequently exercised this Warrant to acquire an additional two percent
        of the
        then issued and outstanding Common Stock of the Company, the percentage of
        the
        Company’s issued and outstanding Common Stock into which this Warrant is
        exercisable would be reduced from six and one-half percent (6.5%) to four
        and
        one-half percent (4.5%).

       

      Section
        3.    Covenants as to
        Common Stock.  The Company hereby covenants and agrees as
        follows:

       

      (a)           This
        Warrant is, and any Warrants issued in substitution for or replacement of
        this
        Warrant will upon issuance be, duly authorized and validly issued.

       

      (b)           All
        Warrant Shares which may be issued upon the exercise of the rights represented
        by this Warrant will, upon issuance, be validly issued, fully paid and
        nonassessable and free from all taxes, liens and charges with respect to
        the
        issue thereof.

       

      (c)           During
        the period within which the rights represented by this Warrant may be exercised,
        the Company will at all times have authorized and reserved at least one hundred
        percent (100%) of the number of shares of Common Stock needed to provide
        for the
        exercise of the rights then represented by this Warrant and the par value
        of
        said shares will at all times be less than or equal to the applicable Warrant
        Exercise Price.  If at any time the Company does not have a sufficient
        number of shares of Common Stock authorized and available, then the Company
        shall call and hold a special meeting of its stockholders within sixty (60)
        days of that time for the sole purpose of increasing the number of authorized
        shares of Common Stock.

       

      (d)           If
        at any time after the date hereof the Company shall file a registration
        statement, the Company shall include the Warrant Shares issuable to the holder,
        pursuant to the terms of this Warrant and shall maintain, so long as any
        other
        shares of Common Stock shall be so listed, such listing of all Warrant Shares
        from time to time issuable upon the exercise of this Warrant; and the Company
        shall so list on each national securities exchange or automated quotation
        system, as the case may be, and shall maintain such listing of, any other
        shares
        of capital stock of the Company issuable upon the exercise of this Warrant
        if
        and so long as any shares of the same class shall be listed on such national
        securities exchange or automated quotation system.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

       

      (e)           The
        Company will not, by amendment of its Articles of Incorporation or through
        any
        reorganization, transfer of assets, consolidation, merger, dissolution, issue
        or
        sale of securities, or any other voluntary action, avoid or seek to avoid
        the
        observance or performance of any of the terms to be observed or performed
        by it
        hereunder, but will at all times in good faith assist in the carrying out
        of all
        the provisions of this Warrant and in the taking of all such action as may
        reasonably be requested by the holder of this Warrant in order to protect
        the
        exercise privilege of the holder of this Warrant against dilution or other
        impairment, consistent with the tenor and purpose of this
        Warrant.  The Company will not increase the par value of any shares of
        Common Stock receivable upon the exercise of this Warrant above the Warrant
        Exercise Price then in effect, and (ii) will take all such actions as may
        be necessary or appropriate in order that the Company may validly and legally
        issue fully paid and nonassessable shares of Common Stock upon the exercise
        of
        this Warrant.

       

      (f)           This
        Warrant will be binding upon any entity succeeding to the Company by merger,
        consolidation or acquisition of all or substantially all of the Company’s
        assets.

       

      Section
        4.    Taxes.  The
        Company shall pay any and all taxes, except any applicable withholding, which
        may be payable with respect to the issuance and delivery of Warrant Shares
        upon
        exercise of this Warrant.

       

      Section
        5.    Warrant Holder Not
        Deemed a Stockholder.  Except as otherwise specifically provided
        herein, no holder, as such, of this Warrant shall be entitled to vote or
        receive
        dividends or be deemed the holder of shares of capital stock of the Company
        for
        any purpose, nor shall anything contained in this Warrant be construed to
        confer
        upon the holder hereof, as such, any of the rights of a stockholder of the
        Company or any right to vote, give or withhold consent to any corporate action
        (whether any reorganization, issue of stock, reclassification of stock,
        consolidation, merger, conveyance or otherwise), receive notice of meetings,
        receive dividends or subscription rights, or otherwise, prior to the issuance
        to
        the holder of this Warrant of the Warrant Shares which he or she is then
        entitled to receive upon the due exercise of this Warrant.  In
        addition, nothing contained in this Warrant shall be construed as imposing
        any
        liabilities on such holder to purchase any securities (upon exercise of this
        Warrant or otherwise) or as a stockholder of the Company, whether such
        liabilities are asserted by the Company or by creditors of the
        Company.  Notwithstanding this Section 5, the Company will provide the
        holder of this Warrant with copies of the same notices and other information
        given to the stockholders of the Company generally, contemporaneously with
        the
        giving thereof to the stockholders.

       

      Section
        6.    Representations of
        Holder.  The holder of this Warrant, by the acceptance hereof,
        represents that it is acquiring this Warrant and the Warrant Shares for its
        own
        account for investment only and not with a view towards, or for resale in
        connection with, the public sale or distribution of this Warrant or the Warrant
        Shares, except pursuant to sales registered or exempted under the Securities
        Act; provided, however, that by making the representations herein, the holder
        does not agree to hold this Warrant or any of the Warrant Shares for any
        minimum
        or other specific term and reserves the right to dispose of this Warrant
        and the
        Warrant Shares at any time in accordance with or pursuant to a registration
        statement or an exemption under the Securities Act.  The holder of
        this Warrant further represents, by acceptance hereof, that, as of this date,
        such holder is an “accredited investor” as such term is defined in
        Rule 501(a)(1) of Regulation D promulgated by the Securities and Exchange
        Commission under the Securities Act (an “Accredited
        Investor”).  Upon exercise of this Warrant the holder shall, if
        requested by the Company, confirm in writing, in a form satisfactory to the
        Company, that the Warrant Shares so purchased are being acquired solely for
        the
        holder’s own account and not as a nominee for any other party, for investment,
        and not with a view toward distribution or resale and that such holder is
        an
        Accredited Investor.  If such holder cannot make such representations
        because they would be factually incorrect, it shall be a condition to such
        holder’s exercise of this Warrant that the Company receive such other
        representations as the Company considers reasonably necessary to assure the
        Company that the issuance of its securities upon exercise of this Warrant
        shall
        not violate any United States or state securities laws.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

       

      Section
        7.    Ownership and
        Transfer.

       

      (a)           The
        Company shall maintain at its principal executive offices (or such other
        office
        or agency of the Company as it may designate by notice to the holder hereof),
        a
        register for this Warrant, in which the Company shall record the name and
        address of the person in whose name this Warrant has been issued, as well
        as the
        name and address of each transferee.  The Company may treat the person
        in whose name any Warrant is registered on the register as the owner and
        holder
        thereof for all purposes, notwithstanding any notice to the contrary, but
        in all
        events recognizing any transfers made in accordance with the terms of this
        Warrant.

       

      Section
        8.    Adjustment of
        Warrant Exercise Price and Number of Shares.  The Warrant Exercise
        Price and the number of shares of Common Stock issuable upon exercise of
        this
        Warrant shall be adjusted from time to time as follows:

       

      (a)           Adjustment
        of Warrant Exercise Price and Number of Shares upon Issuance of Common
        Stock.  If and whenever on or after the Issuance Date of this
        Warrant the Company issues or sells, or is deemed to have issued or sold,
        any
        shares of Common Stock (other than (i) Excluded Securities and (ii) shares
        of Common Stock which are issued or deemed to have been issued by the Company
        in
        connection with an Approved Stock Plan or upon exercise or conversion of
        the
        Other Securities) for a consideration per share less than a price (the
“Applicable Price”) equal to the Warrant Exercise Price in effect
        immediately prior to such issuance or sale, then immediately after such issue
        or
        sale the Warrant Exercise Price then in effect shall be reduced to an amount
        equal to such consideration per share.  Upon each such adjustment of
        the Warrant Exercise Price hereunder, the number of Warrant Shares issuable
        upon
        exercise of this Warrant shall be adjusted to the number of shares determined
        by
        multiplying the Warrant Exercise Price in effect immediately prior to such
        adjustment by the number of Warrant Shares issuable upon exercise of this
        Warrant immediately prior to such adjustment and dividing the product thereof
        by
        the Warrant Exercise Price resulting from such
        adjustment.  Furthermore, if and whenever on or after the Issuance
        Date of this Warrant the Company issues or sells, or is deemed to have issued
        or
        sold any shares of Common Stock or securities convertible into Common Stock,
        the
        number of shares of Common Stock issuable under this Warrant shall be increased
        such that the total amount of shares issued under this Warrant equals seven
        and
        one-half percent (7.5%) of the fully diluted outstanding Common Stock of
        the
        Company.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

       

      (b)           Effect
        on Warrant Exercise Price of Certain Events.  For purposes of
        determining the adjusted Warrant Exercise Price under Section 8(a) above,
        the
        following shall be applicable:

       

      (i)           Issuance
        of Options.  If after the date hereof, the Company in any manner
        grants any Options and the lowest price per share for which one share of
        Common
        Stock is issuable upon the exercise of any such Option or upon conversion
        or
        exchange of any convertible securities issuable upon exercise of any such
        Option
        is less than the Applicable Price, then such share of Common Stock shall
        be
        deemed to be outstanding and to have been issued and sold by the Company
        at the
        time of the granting or sale of such Option for such price per
        share.  For purposes of this Section 8(b)(i), the lowest price per
        share for which one share of Common Stock is issuable upon exercise of such
        Options or upon conversion or exchange of such Convertible Securities shall
        be
        equal to the sum of the lowest amounts of consideration (if any) received
        or
        receivable by the Company with respect to any one share of Common Stock upon
        the
        granting or sale of the Option, upon exercise of the Option or upon conversion
        or exchange of any convertible security issuable upon exercise of such
        Option.  No further adjustment of the Warrant Exercise Price shall be
        made upon the actual issuance of such Common Stock or of such convertible
        securities upon the exercise of such Options or upon the actual issuance
        of such
        Common Stock upon conversion or exchange of such convertible
        securities.

       

      (ii)           Issuance
        of Convertible Securities.  If the Company in any manner issues or
        sells any convertible securities and the lowest price per share for which
        one
        share of Common Stock is issuable upon the conversion or exchange thereof
        is
        less than the Applicable Price, then such share of Common Stock shall be
        deemed
        to be outstanding and to have been issued and sold by the Company at the
        time of
        the issuance or sale of such convertible securities for such price per
        share.  For the purposes of this Section 8(b)(ii), the lowest
        price per share for which one share of Common Stock is issuable upon such
        conversion or exchange shall be equal to the sum of the lowest amounts of
        consideration (if any) received or receivable by the Company with respect
        to one
        share of Common Stock upon the issuance or sale of the convertible security
        and
        upon conversion or exchange of such convertible security.  No further
        adjustment of the Warrant Exercise Price shall be made upon the actual issuance
        of such Common Stock upon conversion or exchange of such convertible securities,
        and if any such issue or sale of such convertible securities is made upon
        exercise of any Options for which adjustment of the Warrant Exercise Price
        had
        been or are to be made pursuant to other provisions of this Section 8(b),
        no
        further adjustment of the Warrant Exercise Price shall be made by reason
        of such
        issue or sale.

       

      (iii)           Change
        in Option Price or Rate of Conversion.  If the purchase price
        provided for in any Options, the additional consideration, if any, payable
        upon
        the issue, conversion or exchange of any convertible securities, or the rate
        at
        which any convertible securities are convertible into or exchangeable for
        Common
        Stock changes at any time, the Warrant Exercise Price in effect at the time
        of
        such change shall be adjusted to the Warrant Exercise Price which would have
        been in effect at such time had such Options or convertible securities provided
        for such changed purchase price, additional consideration or changed conversion
        rate, as the case may be, at the time initially granted, issued or sold and
        the
        number of Warrant Shares issuable upon exercise of this Warrant shall be
        correspondingly readjusted.  For purposes of this Section 8(b)(iii),
        if the terms of any Option or convertible security that was outstanding as
        of
        the Issuance Date of this Warrant are changed in the manner described in
        the
        immediately preceding sentence, then such Option or convertible security
        and the
        Common Stock deemed issuable upon exercise, conversion or exchange thereof
        shall
        be deemed to have been issued as of the date of such change.  No
        adjustment pursuant to this Section 8(b) shall be made if such adjustment
        would result in an increase of the Warrant Exercise Price then in
        effect.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

       

      (c)           Effect
        on Warrant Exercise Price of Certain Events.  For purposes of
        determining the adjusted Warrant Exercise Price under Sections 8(a) and
        8(b), the following shall be applicable:

       

      (i)           Calculation
        of Consideration Received.  If any Common Stock, Options or
        convertible securities are issued or sold or deemed to have been issued or
        sold
        for cash, the consideration received therefore will be deemed to be the net
        amount received by the Company therefore.  If any Common Stock,
        Options or convertible securities are issued or sold for a consideration
        other
        than cash, the amount of such consideration received by the Company will
        be the
        fair value of such consideration, except where such consideration consists
        of
        marketable securities, in which case the amount of consideration received
        by the
        Company will be the market price of such securities on the date of receipt
        of
        such securities.  If any Common Stock, Options or convertible
        securities are issued to the owners of the non-surviving entity in connection
        with any merger in which the Company is the surviving entity, the amount
        of
        consideration therefore will be deemed to be the fair value of such portion
        of
        the net assets and business of the non-surviving entity as is attributable
        to
        such Common Stock, Options or convertible securities, as the case may
        be.  The fair value of any consideration other than cash or securities
        will be determined jointly by the Company and the holders of Warrants
        representing at least two-thirds (b) of the Warrant Shares issuable upon
        exercise of the Warrants then outstanding.  If such parties are unable
        to reach agreement within ten (10) days after the occurrence of an event
        requiring valuation (the “Valuation Event”), the fair value of such
        consideration will be determined within five (5) Business Days after the
        tenth (10th) day
        following the
        Valuation Event by an independent, reputable appraiser jointly selected by
        the
        Company and the holders of Warrants representing at least two-thirds (b)
        of the
        Warrant Shares issuable upon exercise of the Warrants then
        outstanding.  The determination of such appraiser shall be final and
        binding upon all parties and the fees and expenses of such appraiser shall
        be
        borne jointly by the Company and the holders of Warrants.

       

      (ii)           Integrated
        Transactions.  In case any Option is issued in connection with the
        issue or sale of other securities of the Company, together comprising one
        integrated transaction in which no specific consideration is allocated to
        such
        Options by the parties thereto, the Options will be deemed to have been issued
        for a consideration of $.01.

       

      (iii)           Treasury
        Shares.  The number of shares of Common Stock outstanding at any
        given time does not include shares owned or held by or for the account of
        the
        Company, and the disposition of any shares so owned or held will be considered
        an issue or sale of Common Stock.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (iv)           Record
        Date.  If the Company takes a record of the holders of Common
        Stock for the purpose of entitling them (1) to receive a dividend or other
        distribution payable in Common Stock, Options or in convertible securities
        or
        (2) to subscribe for or purchase Common Stock, Options or convertible
        securities, then such record date will 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.

       

      (d)           Adjustment
        of Warrant Exercise Price upon Subdivision or Combination of Common
        Stock.  If the Company at any time after the date of issuance of
        this Warrant subdivides (by any stock split, stock dividend, recapitalization
        or
        otherwise) one or more classes of its outstanding shares of Common Stock
        into a
        greater number of shares, any Warrant Exercise Price in effect immediately
        prior
        to such subdivision will be proportionately reduced and the number of shares
        of
        Common Stock obtainable upon exercise of this Warrant will be proportionately
        increased.  If the Company at any time after the date of issuance of
        this Warrant combines (by combination, reverse stock split or otherwise)
        one or
        more classes of its outstanding shares of Common Stock into a smaller number
        of
        shares, any Warrant Exercise Price in effect immediately prior to such
        combination will be proportionately increased and the number of Warrant Shares
        issuable upon exercise of this Warrant will be proportionately
        decreased.  Any adjustment under this Section 8(d) shall become
        effective at the close of business on the date the subdivision or combination
        becomes effective.

       

      (e)           Distribution
        of Assets.  If the Company shall declare or make any dividend or
        other distribution of its assets (or rights to acquire its assets) to holders
        of
        Common Stock, by way of return of capital or otherwise (including, without
        limitation, any distribution of cash, stock or other securities, property
        or
        options by way of a dividend, spin off, reclassification, corporate
        rearrangement or other similar transaction) (a “Distribution”), at any
        time after the issuance of this Warrant, then, in each such case:

       

      (i)           any
        Warrant Exercise Price in effect immediately prior to the close of business
        on
        the record date fixed for the determination of holders of Common Stock
        entitled to receive the Distribution shall be reduced, effective as
        of the close of business on such record date, to a price determined by
        multiplying such Warrant Exercise Price by a fraction of which (A) the numerator
        shall be the Closing Sale Price of the Common Stock on the trading day
        immediately preceding such record date minus the value of the Distribution
        (as
        determined in good faith by the Company’s Board of Directors) applicable to one
        share of Common Stock, and (B) the denominator shall be the Closing Sale
        Price
        of the Common Stock on the trading day immediately preceding such record
        date;
        and

       

      (ii)           either
        (A) the number of Warrant Shares obtainable upon exercise of this Warrant
        shall
        be increased to a number of shares equal to the number of shares of Common
        Stock
        obtainable immediately prior to the close of business on the record date
        fixed
        for the determination of holders of Common Stock entitled to receive the
        Distribution multiplied by the reciprocal of the fraction set forth in the
        immediately preceding clause (i), or (B) in the event that the Distribution
        is
        of common stock of a company whose common stock is traded on a national
        securities exchange or a national automated quotation system, then the holder
        of
        this Warrant shall receive an additional warrant to purchase Common Stock,
        the
        terms of which shall be identical to those of this Warrant, except that such
        warrant shall be exercisable into the amount of the assets that would have
        been
        payable to the holder of this Warrant pursuant to the Distribution had the
        holder exercised this Warrant immediately prior to such record date and with
        an
        exercise price equal to the amount by which the exercise price of this Warrant
        was decreased with respect to the Distribution pursuant to the terms of the
        immediately preceding clause (i).

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

       

      (f)           Certain
        Events.  If any event occurs of the type contemplated by the
        provisions of this Section 8 but not expressly provided for by such
        provisions (including, without limitation, the granting of stock appreciation
        rights, phantom stock rights or other rights with equity features), then
        the
        Company’s Board of Directors will make an appropriate adjustment in the Warrant
        Exercise Price and the number of shares of Common Stock obtainable upon exercise
        of this Warrant so as to protect the rights of the holders of the Warrants;
        provided, except as set forth in section 8(d),that no such adjustment pursuant
        to this Section 8(f) will increase the Warrant Exercise Price or decrease
        the
        number of shares of Common Stock obtainable as otherwise determined pursuant
        to
        this Section 8.

       

      (g)           Notices.

       

      (i)           Immediately
        upon any adjustment of the Warrant Exercise Price, the Company will give
        written
        notice thereof to the holder of this Warrant, setting forth in reasonable
        detail, and certifying, the calculation of such adjustment.

       

      (ii)           The
        Company will give written notice to the holder of this Warrant at least ten
        (10)
        days prior to the date on which the Company closes its books or takes a record
        (A) with respect to any dividend or distribution upon the Common Stock,
        (B) with respect to any pro rata subscription offer to holders of Common
        Stock or (C) for determining rights to vote with respect to any Organic
        Change (as defined below), dissolution or liquidation, provided that such
        information shall be made known to the public prior to or in conjunction
        with
        such notice being provided to such holder.

       

      (iii)           The
        Company will also give written notice to the holder of this Warrant at least
        ten
        (10) days prior to the date on which any Organic Change, dissolution or
        liquidation will take place, provided that such information shall be made
        known
        to the public prior to or in conjunction with such notice being provided
        to such
        holder.

       

      Section
        9.    Purchase Rights;
        Reorganization, Reclassification, Consolidation, Merger or
        Sale.

       

      (a)           In
        addition to any adjustments pursuant to Section 8 above, if at any time the
        Company grants, issues or sells any Options, Convertible Securities or rights
        to
        purchase stock, warrants, securities or other property pro rata to the record
        holders of any class of Common Stock (the “Purchase Rights”), then the
        holder of this Warrant will be entitled to acquire, upon the terms applicable
        to
        such Purchase Rights, the aggregate Purchase Rights which such holder could
        have
        acquired if such holder had held the number of shares of Common Stock acquirable
        upon complete exercise of this Warrant immediately before the date on which
        a
        record is taken for the grant, issuance or sale of such Purchase Rights,
        or, if
        no such record is taken, the date as of which the record holders of Common
        Stock
        are to be determined for the grant, issue or sale of such Purchase
        Rights.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

       

      (b)           Any
        recapitalization, reorganization, reclassification, consolidation, merger,
        sale
        of all or substantially all of the Company’s assets to another Person or other
        transaction in each case which is effected in such a way that holders of
        Common
        Stock are entitled to receive (either directly or upon subsequent liquidation)
        stock, securities or assets with respect to or in exchange for Common Stock
        is
        referred to herein as an “Organic Change.”  Prior to the
        consummation of any (i) sale of all or substantially all of the Company’s assets
        to an acquiring Person or (ii) other Organic Change following which the Company
        is not a surviving entity, the Company will secure from the Person purchasing
        such assets or the successor resulting from such Organic Change (in each
        case,
        the “Acquiring Entity”) a written agreement (in form and substance
        satisfactory to the holders of Warrants representing at least two-thirds
        of the
        Warrant Shares issuable upon exercise of the Warrants then outstanding) to
        deliver to each holder of Warrants in exchange for such Warrants, a security
        of
        the Acquiring Entity evidenced by a written instrument substantially similar
        in
        form and substance to this Warrant and satisfactory to the holders of the
        Warrants (including an adjusted warrant exercise price equal to the value
        for
        the Common Stock reflected by the terms of such consolidation, merger or
        sale,
        and exercisable for a corresponding number of shares of Common Stock acquirable
        and receivable upon exercise of the Warrants without regard to any limitations
        on exercise, if the value so reflected is less than any Applicable Warrant
        Exercise Price immediately prior to such consolidation, merger or
        sale).  Prior to the consummation of any other Organic Change, the
        Company shall make appropriate provision (in form and substance satisfactory
        to
        the holders of Warrants representing a majority of the
        Warrant Shares issuable upon exercise of the Warrants then outstanding) to
        insure that each of the holders of the Warrants will thereafter have the
        right
        to acquire and receive in lieu of or in addition to (as the case may be)
        the
        Warrant Shares immediately theretofore issuable and receivable upon the exercise
        of such holder’s Warrants (without regard to any limitations on exercise),
        such shares of stock, securities or assets that would have been issued or
        payable in such Organic Change with respect to or in exchange for the number
        of
        Warrant Shares which would have been issuable and receivable upon the exercise
        of such holder’s Warrant as of the date of such Organic Change (without taking
        into account any limitations or restrictions on the exercisability of this
        Warrant).

       

      Section
        10.    Lost, Stolen,
        Mutilated or Destroyed Warrant.  If this Warrant is lost, stolen,
        mutilated or destroyed, the Company shall promptly, on receipt of an
        indemnification undertaking (or, in the case of a mutilated Warrant, the
        Warrant), issue a new Warrant of like denomination and tenor as this Warrant
        so
        lost, stolen, mutilated or destroyed.

       

      Section
        11.    Notice.  Any
        notices, consents, waivers or other communications required or permitted
        to be
        given under the terms of this Warrant must be in writing and will be deemed
        to
        have been delivered:  (i) upon receipt, when delivered
        personally; (ii) upon receipt, when sent by facsimile (provided
        confirmation of receipt is received by the sending party transmission is
        mechanically or electronically generated and kept on file by the sending
        party);
        or (iii) one Business Day after deposit with a nationally recognized
        overnight delivery service, in each case properly addressed to the party
        to
        receive the same.  The addresses and facsimile numbers for such
        communications shall be:

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
        	
                If
                  to Trafalgar:

              	
                Trafalgar
                  Capital Specialized Investment Fund, Luxembourg

              
	 	
                8-10
                  Rue Mathias Hardt

              
	 	
                BP
                  3023

              
	 	
                L-1030
                  Luxembourg

              
	 	
                Attention:     Andrew
                  Garai, Chairman of the Board of

              
	 	
                                      
                  Trafalgar Capital Sarl, General Partner

              
	 	
                Facsimile:       011-44-207-405-0161
                  and

                                        001-786-323-1651

              
	 	 
	
                With
                  Copy to:

              	
                James
                  G. Dodrill II, P.A.

              
	 	
                5800
                  Hamilton Way

              
	 	
                Boca
                  Raton, FL  33496

              
	 	
                Attention:     James
                  Dodrill, Esq.

              
	 	
                Telephone:    (561)
                  862-0529

              
	 	
                Facsimile:     
                   (561) 892-7787

              
	 	 
	
                If
                  to the Company, to:

              	
                C-Mark
                  International, Inc..

              
	 	
                4180
                  E. Van Buren, Suite 325

              
	 	
                Phoenix,
                  AZ 85008

              
	 	
                Attn:
                  Mr. Charles Jones, CEO

              
	 	
                Telephone:
                  (602) 443-8640

              
	 	
                Facsimile:
                  (602) 443-8646

              
	 	 
	
                With
                  a copy to:

              	
                The
                  O’Neal Law Firm

              
	 	
                17100
                  E. Shea Blvd., Suite 400-D

              
	 	
                Fountain
                  Hills, AZ  85268

              
	 	
                Attention:  William
                  O’Neal, Esq.

              
	 	
                Telephone:
                  (480) 812-5058

              
	 	
                Facsimile:
                  (480) 816-9241

              

      

      

      If
        to a
        holder of this Warrant, to it at the address and facsimile number set forth
        on
Exhibit C hereto, with copies to such holder’s representatives as
        set forth on Exhibit C, or at such other address and facsimile as
        shall be delivered to the Company upon the issuance or transfer of this
        Warrant.  Each party shall provide five days’ prior written notice to
        the other party of any change in address or facsimile number.  Written
        confirmation of receipt (A) given by the recipient of such notice, consent,
        facsimile, waiver or other communication, (or (B) provided by a nationally
        recognized overnight delivery service shall be rebuttable evidence of personal
        service, receipt by facsimile or receipt from a nationally recognized overnight
        delivery service in accordance with clause (i), (ii) or (iii) above,
        respectively.

       

      Section
        12.    Date.  The
        date of this Warrant is set forth on page 1 hereof.  This Warrant,
        in all events, shall be wholly void and of no effect after the close of
        business on the Expiration Date, except that notwithstanding any other
        provisions hereof, the provisions of Section 8(b) shall continue in full
        force and effect after such date as to any Warrant Shares or other securities
        issued upon the exercise of this Warrant.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

       

      Section
        13.    Amendment and
        Waiver.  Except as otherwise provided herein, the provisions of
        the Warrants may be amended and the Company may take any action herein
        prohibited, or omit to perform any act herein required to be performed by
        it,
        only if the Company has obtained the written consent of the holders of Warrants
        representing at least two-thirds of the Warrant Shares issuable upon exercise
        of
        the Warrants then outstanding; provided that, except for Section 8(d), no
        such
        action may increase the Warrant Exercise Price or decrease the number of
        shares
        or class of stock obtainable upon exercise of any Warrant without the written
        consent of the holder of such Warrant.

       

      Section
        14.    Descriptive
        Headings; Governing Law.  The descriptive headings of the several
        sections and paragraphs of this Warrant are inserted for convenience only
        and do
        not constitute a part of this Warrant.  The corporate laws of the
        State of Florida shall govern all issues concerning the relative rights of
        the
        Company and its stockholders.  All other questions concerning the
        construction, validity, enforcement and interpretation of this Agreement
        shall
        be governed by the internal laws of the State of Florida without giving effect
        to any choice of law or conflict of law provision or rule (whether of the
        State
        of Florida or any other jurisdictions) that would cause the application of
        the
        laws of any jurisdictions other than the State of Florida  Each party
        hereby irrevocably submits to the exclusive jurisdiction of the state courts
        sitting in Broward County, Florida and the United States District Court for
        the
        Southern District of Florida for the adjudication of any dispute hereunder
        or in
        connection herewith or therewith, or with any transaction contemplated hereby
        or
        discussed herein, and hereby irrevocably waives, and agrees not to assert
        in any
        suit, action or proceeding, any claim that it is not personally subject to
        the
        jurisdiction of any such court, that such suit, action or proceeding is brought
        in an inconvenient forum or that the venue of such suit, action or proceeding
        is
        improper.  Each party hereby irrevocably waives personal service of
        process and consents to process being served in any such suit, action or
        proceeding by mailing a copy thereof to such party at the address for such
        notices to it under this Agreement and agrees that such service shall constitute
        good and sufficient service of process and notice thereof.  Nothing
        contained herein shall be deemed to limit in any way any right to serve process
        in any manner permitted by law.

       

      Section
        15.    Waiver of Jury
        Trial.  AS A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO
        ENTER INTO THIS WARRANT, THE PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL
        BY
        JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY
        AND
        ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS
        TRANSACTION.

       

      IN
        WITNESS WHEREOF, the Company has caused this Warrant to be signed as of
        the date first set forth above.

       

      
        	 	
                CMARK
                  INTERNATIONAL, INC.

              
	 	 
	 	
                By:   /s/
                  Charles W. Jones,
                  Jr.                        

              
	 	
                Name:   Charles
                  W. Jones,
                  Jr.                         

              
	 	
                Title:  President                                                
                  

              

      

      

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      

       

      EXHIBIT
        A TO WARRANT

       

      EXERCISE
        NOTICE

       

      TO
        BE EXECUTED

       

      BY
        THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

       

      C-MARK
        INTERNATIONAL, INC.

       

      The
        undersigned holder hereby exercises the right to purchase ______________
        of the
        shares of Common Stock (“Warrant Shares”) of C-Mark International, Inc.,
        a South Carolina corporation (the “Company”), evidenced by the attached
        Warrant (the “Warrant”).  Capitalized terms used herein and not
        otherwise defined shall have the respective meanings set forth in the
        Warrant.

       

      1.           Form
        of Warrant Exercise Price.  The Holder intends that payment of the
        Warrant Exercise Price shall be made as a “Cash Exercise” with respect to
        ______________ Warrant Shares.

       

      2.           Payment
        of Warrant Exercise Price. The holder shall pay the sum of $______________
        to the Company in accordance with the terms of the Warrant.

       

      3.           Delivery
        of Warrant Shares.  The Company shall deliver to the holder
        _________ Warrant Shares in accordance with the terms of the
        Warrant.

       

      Date:
        _______________ __, ______

      

      

      Name
        of
        Registered Holder

      

      By:                                                              
                                                             

      Name:                                                                                                                           

      Title:               
                                                                                                                     

      

      

      

      

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

      

       

      EXHIBIT
        B TO WARRANT

       

      FORM
        OF WARRANT POWER

       

      FOR
        VALUE RECEIVED, the undersigned does hereby assign and transfer to
        ________________, Federal Identification No. __________, a warrant to
        purchase ____________ shares of the capital stock of C-Mark International,
        Inc.,
        a South Carolina corporation, represented by warrant certificate no. _____,
        standing in the name of the undersigned on the books of said
        corporation.  The undersigned does hereby irrevocably constitute and
        appoint ______________, attorney to transfer the warrants of said corporation,
        with full power of substitution in the premises.

       

      
        	
                Dated:
                  _____________________________

              	 _____________________________________
	 	 
	 	
                By:                                           
                                                                                                                       

              
	 	
                Name:                              
                                                                

              
	 	
                Title:                             
                                                                   

              
	 	 

      

      

      
 

       

       

       B-1

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