Document:

PURCHASE AGREEMENT
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          THIS  PURCHASE  AGREEMENT  ("Agreement")  is made as of the 8th day of
July,  2005 by and among LocatePLUS Holdings Corporation, a Delaware corporation
(the  "Company"),  and  the  Investors  set forth on the signature pages affixed
hereto  (each  an  "Investor"  and  collectively  the  "Investors").

                                    RECITALS

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

          B.     The  Investors  wish  to  purchase  from  the  Company, and the
Company wishes to sell and issue to the Investors, upon the terms and conditions
stated  in  this  Agreement,  (i)  an  aggregate of $8,000,000 in aggregate face
amount  of the Company's 3% Senior Convertible Notes in the form attached hereto
as  Exhibit  A  (the  "Notes"),  which  Notes are convertible into shares of the
Company's  Common  Stock  at  a  conversion  price  of $0.10 per share, and (ii)
warrants  to purchase an aggregate of 32,000,000 shares of Common Stock (subject
to  adjustment)  at an exercise price of $0.15 per share (subject to adjustment)
in  the  form  attached  hereto  as  Exhibit  B  (the  "Warrants");  and

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

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

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

          "Affiliate"  means, with respect to any Person, any other Person which
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directly  or  indirectly  through  one  or  more  intermediaries  Controls,  is
controlled  by,  or  is  under  common  control  with,  such  Person.

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

<PAGE>

          "Common  Stock"  shall  mean  (i)  prior  to  the  consummation of the
           -------------
Recapitalization, the Class A Voting Common Stock, par value $0.01 per share, of
the  Company;  provided,  however,  that if, upon conversion of the Notes or the
exercise of the Warrants, as the case may be, the authorized but unissued shares
of  Class A Voting Common Stock are not sufficient to permit the full conversion
of the Notes and the full exercise of the Warrants, then the term "Common Stock"
shall  mean such shares of Class A Voting Common Stock as are then available for
issuance  plus  such number of shares of Class B Nonvoting Common Stock as shall
permit  the  full  conversion of the Notes and the full exercise of the Warrants
and  (ii)  from  and  after  the  effective  time  of  the Recapitalization, the
Recapitalization  Stock.

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

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

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

          "Conversion Shares" means the shares of Common Stock issuable upon the
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conversion  of  the  Notes.

          "Effective  Date"  means  the  date  on which the initial Registration
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Statement  is  declared  effective  by  the  SEC.

          "Effectiveness  Deadline"  means  the  date  on  which  the  initial
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Registration Statement is required to be declared effective by the SEC under the
terms  of  the  Registration  Rights  Agreement.

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

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

<PAGE>

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

          "Purchase  Price"  means  Eight  Million  Dollars  ($8,000,000).
           ---------------

          "Recapitalization"  shall  mean  (i)  the  recapitalization  of  each
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outstanding  share of the Company's Class A Voting Common Stock, par value $0.01
per share, and the Company's Class B Nonvoting Common Stock, par value $0.01 per
share,  into  one  share  of  a  single  class of voting common stock and (ii) a
one-for-fifty  reverse  split  of  the  Common  Stock.

          "Recapitalization  Stock" shall mean the common stock, par value $0.01
           -----------------------
per  share,  of  the  Company  after  giving  effect  to  the  Recapitalization.

          "Required  Investors"  shall  mean the Investors purchasing at least a
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majority  in  aggregate  principal  amount  of  the  Notes  hereunder.

          "SEC  Filings"  has  the  meaning  set  forth  in  Section  4.6.
           ------------

          "Registration Statement" has the meaning set forth in the Registration
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Rights  Agreement.

          "Securities"  means the Notes, the Warrants, the Conversion Shares and
           ----------
the  Warrant  Shares.

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

          "Transaction Documents" means this Agreement, the Notes, the Warrants,
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the  Registration  Rights  Agreement  and  the  Voting  Agreement.

          "Voting  Agreement"  means  the  voting  agreement  to be entered into
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between  the  Company,  the Investors and Jon R. Latorella, in the form attached
hereto  as  Exhibit  D.

          "Warrant  Shares"  means  the shares of Common Stock issuable upon the
           ---------------
exercise  of  the  Warrants.

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

<PAGE>

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

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

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

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

          4.  1     Organization,  Good Standing and Qualification.  Each of the
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Company  and  its Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has  all requisite corporate power and authority to carry on its business as now
conducted  and  to own its properties.  Each of the Company and its Subsidiaries
is  duly  qualified  to  do  business  as  a  foreign corporation and is in good
standing  in  each  jurisdiction  in  which  the  conduct of its business or its
ownership  or  leasing of property makes such qualification or leasing necessary
unless the failure to so qualify has not and could not reasonably be expected to
have  a  Material  Adverse  Effect.  The  Company's  Subsidiaries  are listed on
Schedule  4.1  hereto.
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          4.2     Authorization.  The  Company has full power and authority and,
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except  for approval of the Recapitalization by its stockholders as contemplated
in  Section  7.9, has taken all requisite action on the part of the Company, its
officers,  directors  and  stockholders  necessary  for  (i)  the authorization,
execution  and  delivery of the Transaction Documents, (ii) the authorization of
the  performance  of all obligations of the Company hereunder or thereunder, and
(iii)  the authorization, issuance (or reservation for issuance) and delivery of
the  Securities.  The  Transaction  Documents  constitute  the  legal, valid and
binding  obligations  of  the  Company,  enforceable  against  the  Company  in
accordance  with  their  terms,  subject  to  bankruptcy,

<PAGE>
insolvency,  fraudulent transfer, reorganization, moratorium and similar laws of
general  applicability,  relating  to  or affecting creditors' rights generally.
The Board of Directors of the Company has (i) approved the specific terms of the
Recapitalization,  (ii) determined that the Recapitalization is advisable and in
the  best  interests of the Company and its stockholders, (iii) recommended that
the  stockholders  approve  the  Recapitalization  (the  "Company  Board
Recommendation")  and  (iv) resolved to submit the Recapitalization for approval
by  the  stockholders  at  the  Stockholders  Meeting (as defined in Section 7.9
below).

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

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

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

<PAGE>

          4.4     Valid  Issuance.  The Conversion Shares and the Warrant Shares
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have  been  duly  and validly authorized.  Upon the due conversion of the Notes,
the  Conversion  Shares  will  be  validly issued, fully paid and nonassessable,
shall  be  free and clear of all encumbrances and restrictions (other than those
created  by the Investors), except for restrictions on transfer set forth in the
Transaction  Documents  or  imposed by applicable securities laws.  The Warrants
have  been  duly and validly authorized.  Upon the due exercise of the Warrants,
the  Warrant  Shares  will be validly issued, fully paid and non-assessable free
and  clear  of  all  encumbrances  and  restrictions, except for restrictions on
transfer  set  forth  in  the  Transaction  Documents  or  imposed by applicable
securities  laws and except for those created by the Investors.  The Company has
reserved  a  sufficient  number  of shares of Common Stock for issuance upon the
conversion  of the Notes and the exercise of the Warrants, free and clear of all
encumbrances  and restrictions, except for restrictions on transfer set forth in
the  Transaction  Documents  or imposed by applicable securities laws and except
for  those  created  by  the  Investors.

          4.5     Consents.  Except  for approval of the Recapitalization by its
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stockholders  as  contemplated  in  Section  7.9,  the  execution,  delivery and
performance  by the Company of the Transaction Documents and the offer, issuance
and sale of the Securities require no consent of, action by or in respect of, or
filing  with,  any  Person,  governmental  body,  agency, or official other than
filings  that  have  been  made pursuant to applicable state securities laws and
post-sale filings pursuant to applicable state and federal securities laws which
the  Company  undertakes to file within the applicable time periods.  Subject to
the accuracy of the representations and warranties of each Investor set forth in
Section  5  hereof, the Company has taken all action necessary to exempt (i) the
issuance  and sale of the Securities, (ii) the issuance of the Conversion Shares
upon  due conversion of the Notes, (iii) the issuance of the Warrant Shares upon
due  exercise  of  the Warrants, and (iv) the other transactions contemplated by
the  Transaction Documents from the provisions of any stockholder rights plan or
other  "poison  pill"  arrangement,  any  anti-takeover, business combination or
control  share  law or statute binding on the Company or to which the Company or
any  of  its  assets  and  properties  may  be  subject and any provision of the
Company's Certificate of Incorporation or By-laws that is or could reasonably be
expected  to  become applicable to the Investors as a result of the transactions
contemplated  hereby,  including  without  limitation,  the  issuance  of  the
Securities  and  the  ownership,  disposition or voting of the Securities by the
Investors or the exercise of any right granted to the Investors pursuant to this
Agreement  or  the  other  Transaction  Documents.

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

<PAGE>
          4.7     Use  of  Proceeds.  The  net proceeds of the sale of the Notes
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and  the  Warrants  hereunder shall be used by the Company to repay indebtedness
and  for  working  capital  and  general  corporate  purposes.

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

               (i)     any  change  in  the  consolidated  assets,  liabilities,
financial  condition  or operating results of the Company from that reflected in
the  financial  statements  included  in  the Company's Quarterly Report on Form
10-QSB  for the quarter ended March 31, 2005, except for changes in the ordinary
course  of  business  which have not had and could not reasonably be expected to
have  a  Material  Adverse  Effect,  individually  or  in  the  aggregate;

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

          4.10     No  Conflict,  Breach,  Violation or Default.  Subject to the
approval  of the Recapitalization by its stockholders as contemplated in Section
7.9, the execution, delivery and performance of the Transaction Documents by the
Company  and  the  issuance and sale of the Securities will not conflict with or
result  in  a  breach  or  violation  of  any of the terms and provisions of, or
constitute a default under (i) the Company's Certificate of Incorporation or the
Company's  Bylaws,  both  as  in  effect on the date hereof (copies of which are
available  to  the  Investors through the EDGAR system), or (ii)(a) any statute,
rule,  regulation  or  order  of  any  governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company, any Subsidiary or any
of  their respective assets or properties, or (b) any agreement or instrument to
which  the  Company  or  any  Subsidiary is a party or by which the Company or a
Subsidiary  is bound or to which any of their respective assets or properties is
subject  which,  in the case of this clause (ii) only would be reasonably likely
to  have  a  Material  Adverse  Effect.

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

          4.12     Title  to Properties.  Except as disclosed in the SEC Filings
                   --------------------
or  as  described on Schedule 4.12, the Company and each Subsidiary has good and
                     -------------
marketable  title  to  all  real  properties and all other properties and assets
owned  by  it, in each case free from liens, encumbrances and defects that would
materially affect the value thereof or materially interfere with the use made or
currently planned to be made thereof by them; and except as disclosed in the SEC
Filings,  the  Company  and  each  Subsidiary  holds any leased real or personal
property

<PAGE>
under  valid  and  enforceable  leases  with no exceptions that would materially
interfere  with  the  use  made or currently planned to be made thereof by them.

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

          4.14     Labor  Matters.

          (a)     Except  as  set  forth  onSchedule  4.14, the Company is not a
party  to  or  bound by any collective bargaining agreements or other agreements
with  labor organizations.  The Company has not violated in any material respect
any  laws,  regulations,  orders  or  contract  terms,  affecting the collective
bargaining  rights of employees, labor organizations or any laws, regulations or
orders  affecting  employment  discrimination,  equal opportunity employment, or
employees'  health,  safety,  welfare,  wages  and  hours.

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

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

          (d)     Except  as  disclosed  in  the  SEC  Filings  or  as described
onSchedule  4.14,  the Company is not a party to, or bound by, any employment or
other  contract  or  agreement  that  contains any severance, termination pay or
change  of  control  liability or obligation, including, without limitation, any
"excess  parachute  payment,"  as  defined  in  Section  2806(b) of the Internal
Revenue  Code.

<PAGE>
          (e)     Except  as  specified  inSchedule  4.14,  to  the  Company's
Knowledge,  each  of  the Company's employees is a Person who is either a United
States  citizen  or  a permanent resident entitled to work in the United States.
To  the  Company's  Knowledge,  the  Company  has  no liability for the improper
classification  by  the  Company of such employees as independent contractors or
leased  employees.

          4.15     Intellectual  Property.
                   ----------------------

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

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

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

               (d)     To  the Company's Knowledge, the conduct of the Company's
and  its  Subsidiaries'  businesses  as currently conducted does not infringe or
otherwise  impair  or  conflict with (collectively, "Infringe") any Intellectual
Property  rights  of any third party or any confidentiality obligation owed to a
third  party,  and,  to  the  Company's Knowledge, the Intellectual Property and
Confidential  Information  of  the  Company  and  its  Subsidiaries  which

<PAGE>
are  necessary  for  the  conduct  of  Company's  and  each of its Subsidiaries'
respective  businesses  as  currently  conducted  or as currently proposed to be
conducted are not being Infringed by any third party.  There is no litigation or
order  pending  or  outstanding  or,  to  the Company's Knowledge, threatened or
imminent,  that seeks to limit or challenge or that concerns the ownership, use,
validity  or  enforceability  of  any  Intellectual  Property  or  Confidential
Information  of  the  Company  and  its  Subsidiaries  and the Company's and its
Subsidiaries' use of any Intellectual Property or Confidential Information owned
by  a  third party, and, to the Company's Knowledge, there is no valid basis for
the  same.

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

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

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

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

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

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

          4.20     Brokers and Finders.  No Person will have, as a result of the
                   -------------------
transactions  contemplated  by  the  Transaction  Documents,  any  valid  right,
interest  or  claim  against  or  upon  the  Company  or  any Subsidiary for any
commission,  fee or other compensation pursuant to any agreement, arrangement or
understanding  entered  into  by  or  on  behalf  of  the Company, other than as
described  in  Schedule  4.20.
               --------------

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

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

          4.23     Private  Placement.  Assuming  the  accuracy  of  the
                   ------------------
representations and warranties set forth in Section 5 hereto, the offer and sale
of  the  Securities  to  the Investors as contemplated hereby is exempt from the
registration  requirements  of  the  1933  Act.

          4.24     Questionable  Payments.  Neither  the  Company nor any of its
                   ----------------------
Subsidiaries nor, to the Company's Knowledge, any of their respective current or
former  stockholders,  directors,  officers,  employees, agents or other Persons
acting  on  behalf  of  the  Company  or  any

<PAGE>
Subsidiary, has on behalf of the Company or any Subsidiary or in connection with
their  respective  businesses:  (a)  used  any  corporate  funds  for  unlawful
contributions,  gifts,  entertainment  or  other  unlawful  expenses relating to
political  activity;  (b)  made  any direct or indirect unlawful payments to any
governmental  officials  or  employees  from corporate funds; (c) established or
maintained  any unlawful or unrecorded fund of corporate monies or other assets;
(d) made any false or fictitious entries on the books and records of the Company
or  any  Subsidiary;  or  (e) made any unlawful bribe, rebate, payoff, influence
payment,  kickback  or  other  unlawful  payment  of  any  nature.

          4.25     Transactions with Affiliates.  Except as disclosed in the SEC
                   ----------------------------
Filings  or  as disclosed on Schedule 4.25, none of the officers or directors of
                             -------------
the  Company  and,  to  the  Company's  Knowledge,  none of the employees of the
Company  is  presently  a  party  to  any  transaction  with  the Company or any
Subsidiary  (other  than  as  holders  of stock options and/or warrants, and for
services  as  employees,  officers  and  directors),  including  any  contract,
agreement  or  other  arrangement providing for the furnishing of services to or
by,  providing  for rental of real or personal property to or from, or otherwise
requiring  payments to or from any officer, director or such employee or, to the
Company's  Knowledge,  any  entity  in  which any officer, director, or any such
employee  has  a  substantial  interest  or  is an officer, director, trustee or
partner.

          4.26     Internal  Controls.  The  Company  is  in material compliance
with  the  provisions  of the Sarbanes-Oxley Act of 2002 currently applicable to
the  Company.  The  Companyand  the  Subsidiaries  maintain a system of internal
accounting  controls  sufficient  to  provide  reasonable  assurance  that  (i)
transactions  are  executed  in accordance with management's general or specific
authorizations,  (ii)  transactions  are  recorded  as  necessary  to  permit
preparation  of  financial  statements  in  conformity with GAAP and to maintain
asset  accountability,  (iii)  access  to assets is permitted only in accordance
with  management's  general  or  specific  authorization,  and (iv) the recorded
accountability  for  assets  is  compared with the existing assets at reasonable
intervals  and  appropriate action is taken with respect to any differences. The
Company  has  established disclosure controls and procedures (as defined in 1934
Act  Rules  13a-14  and  15d-14)  for  the  Company and designed such disclosure
controls  and  procedures  to  ensure  that material information relating to the
Company, including the Subsidiaries, is made known to the certifying officers by
others  within  those  entities,  particularly  during  the  period in which the
Company's  most recently filed period report under the 1934 Act, as the case may
be,  is  being  prepared.  The  Company's certifying officers have evaluated the
effectiveness  of  the  Company's  controls  and procedures as of the end of the
period  covered  by  the  most recently filed periodic report under the 1934 Act
(such  date, the "Evaluation Date").  The Company presented in its most recently
filed  periodic  report  under  the  1934  Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on  their  evaluations  as  of  the Evaluation Date.  Since the Evaluation Date,
there  have  been  no significant changes in the Company's internal controls (as
such  term  is  defined  in  Item 307(b) of Regulation S-K) or, to the Company's
Knowledge,  in  other  factors  that  could  significantly  affect the Company's
internal  controls.  The  Company  maintains  and  will  continue  to maintain a
standard  system  of  accounting established and administered in accordance with
GAAP  and  the  applicable  requirements  of  the  1934  Act.

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

          4.28     No  Other  Representations and Warranties.  The Company shall
                   -----------------------------------------
not be deemed to have made to the Investors any representation or warranty other
than  as  expressly  made  by  the  Company  in  this  Section  4.

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

          5.1     Organization  and  Existence.  Such  Investor  is  a  duly
                  ----------------------------
organized,  validly  existing  corporation,  limited  partnership  or  limited
liability  company  in  good  standing  under  the  laws  of its jurisdiction of
organization  and  has all requisite corporate, partnership or limited liability
company  power  and  authority  to  invest  in  the  Securities pursuant to this
Agreement.

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

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

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

          5.5     Disclosure  of  Information.  Such  Investor  has  had  an
                  ---------------------------
opportunity  to  receive  all information related to the Company requested by it
and  to  ask  questions  of  and  receive answers from the Company regarding the
Company,  its  business  and  the  terms  and

<PAGE>
conditions  of  the  offering  of  the  Securities.  Such  Investor acknowledges
receipt  of copies of the SEC Filings.  Neither such inquiries nor any other due
diligence investigation conducted by such Investor shall modify, amend or affect
such  Investor's  right  to rely on the Company's representations and warranties
contained  in  this  Agreement.

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

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

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

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

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

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

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

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

<PAGE>
derived  any  significant  part  of its value from the Common Stock or otherwise
sought  to  hedge  its  position  in  the  Securities  (each,  a  "Prohibited
Transaction").  Prior  to  the  earliest to occur of (i) the termination of this
Agreement,  (ii)  the  Effective  Date or (iii) the Effectiveness Deadline, such
Investor  shall  not,  and  shall  cause  its Trading Affiliates not to, engage,
directly or indirectly, in a Prohibited Transaction.  Such Investor acknowledges
that  the  representations,  warranties  and covenants contained in this Section
5.11  are being made for the benefit of the Investors as well as the Company and
that  each  of the other Investors shall have an independent right to assert any
claims  against  such  Investor  arising  out  of any breach or violation of the
provisions  of  this  Section  5.11.

     6.  Conditions  to  Closing.
         -----------------------

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

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

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

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

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

               (e)     The  Company shall have delivered a Certificate, executed
on  behalf  of the Company by its Chief Executive Officer or its Chief Financial
Officer,  dated  as  of

<PAGE>
the  Closing  Date, certifying to the fulfillment of the conditions specified in
subsections  (a),  (b),  (d)  and  (i)  of  this  Section  6.1.

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

               (g)     The  Investors  shall  have  received  an  opinion  from
Kirkpatrick  &  Lockhart  Nicholson  Graham LLP, special counsel to the Company,
dated as of the Closing Date, in form and substance reasonably acceptable to the
Investors  and  addressing  such  legal  matters as the Investors may reasonably
request.

               (h)     The  Company  shall  have  delivered a counterpart of the
Voting  Agreement  executed  on  behalf  of  the  Company  and Jon R. Latorella.

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

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

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

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

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

<PAGE>
          6.3     Termination  of  Obligations  to  Effect  Closing;  Effects.
                  -----------------------------------------------------------

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

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

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

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

                    (iv)     By either the Company or any Investor (with respect
to  itself  only)  if the Closing has not occurred on or prior to July 15, 2005;

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

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

     7.     Covenants  and  Agreements  of  the  Company.
            --------------------------------------------

          7.1     Reservation  of  Common Stock.  The Company shall at all times
                  -----------------------------
reserve  and  keep available out of its authorized but unissued shares of Common
Stock,  solely  for the purpose of providing for the conversion of the Notes and
the  exercise  of  the  Warrants, such number of shares of Common Stock as shall
from  time  to time equal the number of shares sufficient to permit the issuance
of  the  Conversion  Shares  and  the Warrant Shares pursuant to the Transaction
Documents  in  accordance  with  their  respective  terms.

          7.2     [Reserved]

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

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

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

          7.6     Listing  of  Underlying  Shares  and  Related Matters.  If the
                  -----------------------------------------------------
Company  applies  to  have  its  Common  Stock or other securities traded on any
principal  stock  exchange  or  market, it shall include in such application the
Conversion  Shares  and the Warrant Shares and will take such other action as is
necessary  to  cause  such  Common  Stock to be so listed.  The Company will use
commercially  reasonable  efforts  to  continue  the  listing and trading of its
Common  Stock  on  such  principal  stock exchange or market and, in accordance,
therewith,  will  use  commercially reasonable efforts to comply in all respects
with  the  Company's reporting, filing and other obligations under the bylaws or
rules  of  such  market  or  exchange,  as  applicable.

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

          7.8     Removal  of Legends.  Upon the earlier of (i) registration for
                  -------------------
resale  pursuant to the Registration Rights Agreement and receipt by the Company
of the Investor's written confirmation that such Securities will not be disposed
of  except  in  compliance with the prospectus delivery requirements of the 1933
Act or (ii) Rule 144(k) becoming available the Company shall, upon an Investor's
written  request,  promptly  cause  certificates  evidencing  the  Investor's
Securities  to  be replaced with certificates which do not bear such restrictive
legends,  and  Conversion  Shares subsequently issued upon due conversion of the
Notes  and  Warrant Shares subsequently issued upon due exercise of the Warrants
shall not bear such restrictive legends provided the provisions of either clause
(i)  or  clause  (ii)  above,  as applicable, are satisfied with respect to such
Conversion  Shares  and  Warrant  Shares.  When the Company is required to cause
unlegended  certificates  to replace previously issued legended certificates, if
unlegended  certificates  are  not  delivered  to  an  Investor within three (3)
Business  Days  of submission by that Investor of legended certificate(s) to the
Company's  transfer  agent  together  with  a representation letter in customary
form,  the  Company shall be liable to the Investor for liquidated damages in an
amount equal to 1.5% of the aggregate purchase price of the Securities evidenced
by  such  certificate(s)  for  each  thirty (30) day period (or portion thereof)
beyond  such  three  (3)  Business Day that the unlegended certificates have not
been  so  delivered.

          7.9     Proxy  Statement;  Stockholders  Meeting.  (a)  Promptly
following the Closing Date the Company shall take all action necessary to call a
meeting  of  its  stockholders

<PAGE>
(the  "Stockholders  Meeting"),  which shall occur not later than 120 days after
the  Closing  Date  (the  "Stockholders  Meeting  Deadline"), for the purpose of
seeking  approval  of  the  Company's stockholders for the Recapitalization (the
"Proposal").  In  connection  therewith,  the  Company will promptly prepare and
file  with  the  SEC  proxy  materials  (including a proxy statement and form of
proxy)  for  use  at  the Stockholders Meeting and, after receiving and promptly
responding  to  any  comments of the SEC thereon, shall promptly mail such proxy
materials  to  the  stockholders  of  the Company.  Each Investor shall promptly
furnish in writing to the Company such information relating to such Investor and
its  investment  in  the  Company  as  the  Company  may  reasonably request for
inclusion in the Proxy Statement.  The Company will comply with Section 14(a) of
the  1934  Act  and  the  rules  promulgated thereunder in relation to any proxy
statement  (as  amended  or supplemented, the "Proxy Statement") and any form of
proxy  to  be  sent  to  the  stockholders of the Company in connection with the
Stockholders  Meeting,  and  the Proxy Statement shall not, on the date that the
Proxy Statement (or any amendment thereof or supplement thereto) is first mailed
to  stockholders  or at the time of the Stockholders Meeting, contain any untrue
statement  of  a  material  fact or omit to state any material fact necessary in
order  to  make  the statements made therein not false or misleading, or omit to
state  any  material  fact  necessary  to  correct  any statement in any earlier
communication  with  respect  to the solicitation of proxies or the Stockholders
Meeting which has become false or misleading.  If the Company should discover at
any time prior to the Stockholders Meeting, any event relating to the Company or
any  of  its  Subsidiaries  or  any  of their respective affiliates, officers or
directors  that  is required to be set forth in a supplement or amendment to the
Proxy  Statement,  in  addition to the Company's obligations under the 1934 Act,
the  Company  will  promptly  inform  the  Investors  thereof.

          (b)     The  Company shall include the Company Board Recommendation in
the  Proxy  Statement  and  take  all commercially reasonable action (including,
without  limitation,  the  hiring  of  a  proxy  solicitation firm of nationally
recognized  standing)  to  solicit  the  approval  of  the  stockholders for the
Proposal unless the Board of Directors shall have modified, amended or withdrawn
the  Company  Board Recommendation pursuant to the provisions of the immediately
succeeding  sentence.  The  Company covenants that the Board of Directors of the
Company  shall  not  modify,  amend or withdraw the Company Board Recommendation
unless  the  Board  of  Directors (after consultation with the Company's outside
counsel)  shall  determine  in  the good faith exercise of its business judgment
that  maintaining  the  Company Board Recommendation would violate its fiduciary
duty  to  the  Company's  stockholders.  Whether  or  not the Company's Board of
Directors  modifies,  amends  or  withdraws  the  Company  Board  Recommendation
pursuant  to the immediately preceding sentence, the Company shall in accordance
with  Section  146 of the Delaware General Corporation Law and the provisions of
its  Certificate  of  Incorporation and Bylaws, (i) take all action necessary to
convene  the  Stockholders Meeting as promptly as practicable, but no later than
the Stockholders Meeting Deadline, to consider and vote upon the approval of the
Proposal  and  (ii)  submit  the  Proposal  at  the  Stockholders Meeting to the
stockholders  of  the  Company  for  their  approval.

<PAGE>
     8.     Survival  and  Indemnification.
            ------------------------------

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

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

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

     9.     Miscellaneous.
            -------------

          9.1     Successors and Assigns.  This Agreement may not be assigned by
                  ----------------------
a  party hereto without the prior written consent of the Company or the Required
Investors,  as  applicable,

<PAGE>
provided,  however,  that  an  Investor  may  assign its rights and delegate its
duties  hereunder  in  whole  or  in  part  to  an Affiliate or to a third party
acquiring  some  or  all  of its Securities in a private transaction without the
prior  written  consent of the Company or the other Investors, after notice duly
given  by  such  Investor  to  the Company; provided, that no such assignment or
obligation  shall  limit  the  obligations  of  such  Investor  hereunder.  The
provisions  of  this Agreement shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties.  Nothing in this
Agreement,  express  or implied, is intended to confer upon any party other than
the  parties  hereto  or  their  respective permitted successors and assigns any
rights,  remedies,  obligations,  or  liabilities  under  or  by  reason of this
Agreement,  except  as  expressly  provided  in  this  Agreement.

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

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

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

               If  to  the  Company:

LocatePLUS  Holdings  Corporation
100  Cummings  Center,  Suite  235M
Beverly,  Massachusetts  01915
Attention:  Chief  Financial  Officer
Fax:  (978)  524-8887

               With  a  copy  to:

Kirkpatrick  &  Lockhart  Nicholson  Graham  LLP
75  State  Street
Boston,  MA  02109
Attn:  Michael  A.  Hickey,  Esq.
Fax:  (617)  261-3175

               If  to  the  Investors:

to  the  addresses  set  forth  on  the  signature  pages  hereto.

          9.5     Expenses.  The  parties  hereto  shall pay their own costs and
                  --------
expenses  in connection herewith, except that the Company shall pay the fees and
expenses of Lowenstein Sandler PC not to exceed $35,000.  Such expenses shall be
paid not later than the Closing.  The Company shall reimburse the Investors upon
demand  for  all  reasonable  out-of-pocket  expenses incurred by the Investors,
including without limitation reimbursement of attorneys' fees and disbursements,
in  connection  with  any amendment, modification or waiver of this Agreement or
the  other  Transaction  Documents  requested by the Company.  In the event that
legal  proceedings  are commenced by any party to this Agreement against another
party  to  this  Agreement  in  connection  with  this  Agreement  or  the other
Transaction  Documents,  the  party  or  parties  which  do  not prevail in such
proceedings  shall  severally,  but not jointly, pay their pro rata share of the
reasonable attorneys' fees and other reasonable out-of-pocket costs and expenses
incurred  by  the  prevailing  party  in  such  proceedings.

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

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

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

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

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

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

          9.12     Independent Nature of Investors' Obligations and Rights.  The
obligations  of each Investor under any Transaction Document are several and not
joint  with  the  obligations  of  any  other Investor, and no Investor shall be
responsible  in  any  way  for  the  performance of the obligations of any other
Investor  under  any  Transaction  Document.  The  decision  of each Investor to
purchase  Securities pursuant to the Transaction Documents has been made by such
Investor  independently  of  any other Investor.  Nothing contained herein or in
any  Transaction Document, and no action taken by any Investor pursuant thereto,
shall  be deemed to constitute the Investors as a partnership, an association, a
joint  venture  or  any  other  kind  of  entity,  or  create

<PAGE>
a  presumption that the Investors are in any way acting in concert or as a group
with  respect  to  such  obligations  or  the  transactions  contemplated by the
Transaction  Documents.  Each  Investor  acknowledges that no other Investor has
acted  as  agent  for  such  Investor  in  connection with making its investment
hereunder  and  that  no  Investor  will  be acting as agent of such Investor in
connection  with  monitoring  its  investment in the Securities or enforcing its
rights  under  the  Transaction  Documents.  Each  Investor shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights  arising out of this Agreement or out of the other Transaction Documents,
and  it  shall  not  be  necessary  for  any  other  Investor to be joined as an
additional  party  in any proceeding for such purpose.  The Company acknowledges
that each of the Investors has been provided with the same Transaction Documents
for the purpose of closing a transaction with multiple Investors and not because
it  was  required  or  requested  to  do  so  by  any  Investor.
                            [signature pages follow]

<PAGE>

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

The  Company:                    LOCATEPLUS  HOLDINGS  CORPORATION

                         By:_________________________
                         Name:
                         Title:

<PAGE>

     -  3  -
BOS-874376  v10
                               PURCHASE AGREEMENT
                                (the "Agreement")

                            dated as of July 8, 2005

                                 by and between

                         LOCATEPLUS HOLDINGS CORPORATION
                                 (the "Company")

                                       and

                                  THE INVESTORS
                set forth on the signature pages affixed thereto
             (each an "Investor" and collectively the "Investors").

This  Disclosure Schedule is furnished by the Company to the Investors as of the
date  hereof  pursuant  to  and as part of the Agreement.  Capitalized terms not
defined  herein shall have the meanings ascribed to them in the Agreement.  This
Disclosure  Schedule  relates  to  certain  matters  concerning  the disclosures
required  and  transactions  contemplated  by  the  Agreement.  This  Disclosure
Schedule  is  qualified  in  its  entirety  by  the  Agreement  and shall not be
construed  as indicating that such matter is required to be disclosed, nor shall
any  disclosure  be  construed as an admission that such information is material
with respect to the Company, or any division, unit or Subsidiary of the Company,
except  to  the  extent required by the Agreement.  Any reference to a contract,
statement,  plan,  report  or  other  document  of  any  kind in this Disclosure
Schedule  shall be deemed to be full disclosure of all the written terms of such
writing  in  the  form  delivered  to  the  Investors (excluding any amendments,
modifications,  waivers,  variances  or  agreed  upon  courses  of  dealing  not
specifically  referenced  herein  for  such  writing), and, except to the extent
expressly  required  in  the Agreement, it shall not be necessary to identify or
reference  specific  provisions  of  such  documents  in  order  to  make  full
disclosure.  Headings  are  for  reference  only  and  shall not be construed to
affect  the  meaning  or  construction of the disclosure made in this Disclosure
Schedule.

<PAGE>
                                                                    SCHEDULE 4.1

                  ORGANIZATION, GOOD STANDING AND QUALIFICATION
                  ---------------------------------------------

Subsidiaries  of  LocatePLUS  Holdings  Corporation.

-     LocatePLUS  Corporation,  is  presently  located  in  Beverly,
Massachusetts
-     Worldwide  Information,  Inc.,  is  presently  located  in  Byfield,
Massachusetts
-     Dataphant,  Inc.,  is  located  in  Austin,  Texas
-     Certifion  Corporation,  (which  does  business  under  the  name
"Entersect"),  is  located  in  Santa  Ana,California
-     Metrigenics  Corporation  is  located  in  Rochester,  New  York

<PAGE>
                                                                    SCHEDULE 4.3

                                 CAPITALIZATION
                                 --------------
<TABLE>
<CAPTION>

                Issued and                      Issuable        Reserved
                                                 pursuant          for
Security . . .  Authorized   Outstanding        to stock plans  issuance
                -----------  -----------------  --------------  ----------
<S>             <C>          <C>                <C>             <C>
Class A Voting
Common . . . .  150,000,000        106,762,681      27,041,304  15,650,989
--------------  -----------  -----------------  --------------  ----------
Class B Non-
Voting Common.  250,000,000         74,499,178       5,700,000  23,735,875
--------------  -----------  -----------------  --------------  ----------
</TABLE>

Pursuant  to an Investment Agreement with Dutchess Private Equities, L.P., dated
August  5,  2003,  the  Company reserved 20,000,000 shares of its Class A Voting
Common  Stock  for  issuance under such agreement.  As of the date hereof, there
remains  695,752  shares  reserved  pursuant  to  the  agreement.

The  Company  has  reserved  15,000,000  shares  of its Class A Common Stock for
issuance  pursuant  to  the its Amended and Restated Incentive and Non-qualified
Stock  Option  Plan,  dated  November  16,  1999  and  approved by the Company's
stockholders  on  November  18,  1999.  As  of the date hereof, 7,041,304 shares
remain  available  for  option  grants  under  the  plan.

The  Company  has  reserved  25,000,000  shares  of its Class A Common Stock and
25,000,000 shares of its Class B Common Stock are reserved for issuance pursuant
to  its  Incentive and Non-qualified Stock Option Plan, dated March 28, 2003 and
approved  by  the  Company's  stockholders May 29, 2003.  As of the date hereof,
20,000,000  shares  remain  available  for  option  grants  under  the  plan.

<TABLE>
<CAPTION>

WARRANTS  AND  REGISTRATION  RIGHTS

WARRANTS - CL A                 NUMBER    Exercise                           Right
                               ---------  --------  --------------------------------------------------------
<S>                            <C>        <C>       <C>
Russo, Steven . . . . . . . .     50,000       .20  Piggy-Back - Subject to underwriter restriction
                               ---------  --------  --------------------------------------------------------
Jenkins, Dale . . . . . . . .     35,133      1.00  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Garlock, Thomas . . . . . . .    139,041      1.00  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Spears, George. . . . . . . .     53,065      1.00  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Garlock, Thomas . . . . . . .     21,500       .27  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Spears, George. . . . . . . .     13,000       .27  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Rossi, Patrick. . . . . . . .    472,500       .16  Demand & Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Kisiel, Kevin . . . . . . . .    187,500       .16  Demand & Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Glaude, David . . . . . . . .    531,750       .16  Demand & Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Parrott, Tod. . . . . . . . .    375,000       .16  Demand & Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Para, Edward. . . . . . . . .    270,000       .16  Demand & Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------

WARRANTS - CL B
Lindae, Greg. . . . . . . . .    500,000       .10  Piggy-Back - Subject to underwriter restriction
-----------------------------
Duchesneau, David . . . . . .     25,000       .20  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Shaheen, William. . . . . . .     25,000       .20  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Cromwell, Oliver D. . . . . .     26,346       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Gushee-Molkenthin . . . . . .     26,207       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Phillips, John B. . . . . . .     77,374       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Sappin, Edward J. . . . . . .      8,736       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Lyons, Charles. . . . . . . .     12,500       .20  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Pitcher, Frederick. . . . . .     12,500       .20  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Garlock, Thomas . . . . . . .    324,581       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Spears, George. . . . . . . .     42,553       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Lindae, Greg. . . . . . . . .  1,177,680       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Garlock, Thomas . . . . . . .     35,000       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Houlihan, John. . . . . . . .     35,000       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Garlock, Thomas . . . . . . .     27,089       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Spears, George. . . . . . . .     16,889       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Scalley, Gerard . . . . . . .     35,000       .22  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Yules, Dick . . . . . . . . .     35,000       .22  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Schneider Leasing Co. . . . .     57,184       .30  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
KFT . . . . . . . . . . . . .    250,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
Volones . . . . . . . . . . .    250,000       .22  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Elliott, Bob. . . . . . . . .     12,500       .22  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Petracca, Paul. . . . . . . .  1,111,110       .27  Demand & Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Martinelli, David . . . . . .     10,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
J&J Winn Family Ltd . . . . .     50,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
David & Marlo Russo . . . . .     65,000       .10  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
Anthony Hahn. . . . . . . . .      5,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
Michael Fahey . . . . . . . .    250,000       .10  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
Ronald Feldman. . . . . . . .     10,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
Fred Harshman . . . . . . . .     10,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
Steve & Debbie Sullivan . . .     35,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
J&J Winn. . . . . . . . . . .     50,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
J&J Winn. . . . . . . . . . .    200,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
J&J Winn. . . . . . . . . . .  1,300,000       .10  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
Garlock, Thom . . . . . . . .     35,000       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Kite, Bob . . . . . . . . . .     35,000       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Houlihan, John. . . . . . . .     35,000       .15  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
vFinance Investments. . . . .     20,000     .1925  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Jonathan Rich . . . . . . . .      2,500     .1925  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Vincent Calicchia . . . . . .      2,500     .1925  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Ronald Greenspon. . . . . . .    100,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
Michael Gibbard . . . . . . .      5,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
David & Marla Russo . . . . .     25,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
Steve Russo . . . . . . . . .     55,000       .22  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
Stephen Abdo Family Trust . .     10,000       .10  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
Deveraux, Inc.. . . . . . . .    300,000       .25  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
UpFront Consulting. . . . . .    150,000       .25  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Lisa Gordon . . . . . . . . .     25,000       .25  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
R. James Consulting . . . . .     25,000       .25  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Evergreen Investment Partners    700,000       .20  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Kenzy Investment Trust. . . .    300,000       .20  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Viraj Jha . . . . . . . . . .    250,000       .22  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
J&J Winn. . . . . . . . . . .  1,000,000       .27  Demand if short form (S-3 or equivalent) is available
-----------------------------  ---------  --------  --------------------------------------------------------
Evergreen Investment Partners    300,000       .20  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Kenzy Investment Trust. . . .    400,000       .20  Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
Para, Edward. . . . . . . . .    270,000       .16  Demand & Piggy-Back - Subject to underwriter restriction
-----------------------------  ---------  --------  --------------------------------------------------------
</TABLE>

Pursuant  to  an  Amended  and  Restated Secured Convertible Term Note, dated as
                                                                      ==========
ofNovember  30, 2004 (the "Note"), payable by the Company to Laurus Master Fund,
Ltd.  ("Laurus"),  the  Company  increased the aggregate principal amount of the
Secured Convertible Term Note, dated as of June 17, 2004, payable by the Company
to  Laurus  from  $3,000,000 to $4,000,000.  However, pursuant toa Payoff Letter
between  the  Company  and Laurus, the Company has agreed to pay all amounts due
and  owing  under  the  Note  and  Laurus  has  agreed not to convert such Note.
In  connection with the amendments described above, the Company issued to Laurus
a  Common  Stock  Purchase  Warrant  to  purchase  up  to  650,000 shares of the
Company's  Class  A  Voting  Common  Stock.
On  May  1,  2003,  the  Company issued to J&J Winn Family Limited Partnership a
Promissory  Note in the principal amount of $1,300,000 with interest accruing at
10%  per  annum,  payable  monthly.  On March 15, 2004, the term of the note was
extended  to December 1, 2005.  The Company has agreed to issue 5,000,000 shares
of  the Company's Class A Common Stock in the event there is an event of default
on the note.  In connection with the loan, the Company issued to J&J Winn Family
Limited Partnership warrants to purchase 1,300,000 shares of the Company's Class
B  Common  Stock  at  an  exercise  price  of  $0.10  per  share.
On  August  1, 2003, the Company issued to J&J Winn Family Limited Partnership a
Promissory  Note  in  the principal amount of $200,000 with interest accruing at
18%  per  annum,  payable  monthly.  On March 15, 2004, the term of the note was
extended  to  February 1, 2006. The Company has agreed to issue 5,000,000 shares
of  the Company's Class A Common Stock in the event there is an event of default
on the note.  In connection with the loan, the Company issued to J&J Winn Family
Limited Partnership warrants to purchase 1,000,000 shares of the Company's Class
B  Common  Stock  at  an  exercise  price  of  $0.027  per  share.

<PAGE>
                                                                    SCHEDULE 4.5
                                                                             ===
                                    CONSENTS
                                    --------
Pursuant  to a Securities Purchase Agreement, dated June 17, 2004, betweenLaurus
and  the Company, the Company must obtain consent from Laurus prior to incurring
any  indebtedness  and  Laurus  has a right of first negotiation with respect to
transactions  of the nature contemplated by the Transaction Documents.  However,
pursuant  toa Payoff Letter between the Company and Laurus, Laurus has agreed to
waive  these  rights  and  obligations.

<PAGE>
                                                                     SCHEDULE4.8
                                                                     ========
                           NO MATERIAL ADVERSE CHANGE
                           --------------------------
As  required  by  the  certain  agreements  with  Laurus, certain post effective
amendments  to  the  Company's  registrations on form SB2 necessary to keep such
statement  current  have  not  been  filed.   Failure  to  maintain an effective
registration  statement covering the registrable securities constitutes a breach
under  the  agreement  and  triggers  certain  cross-default  provisions  in the
Company's  other  agreements  with Laurus.  However, pursuant to a Payoff Letter
between  the  Company  and Laurus, Laurus has agreed to waive its rights against
the  Company  in  connection with this breach and granted the Company additional
time  to  complete the necessary registrations.  In consideration therefore, the
Company has agreed to pay in full the amounts due and owing under a Note payable
to  Laurus,  which  amount  includes  all  principal,  interest,  fees,  costs,
redemption  costs,  expenses and liquidated damages due and owing by the Company
under  its  agreements  with  Laurus.
Pursuant  to  an  Investment Agreement and a Registration Rights Agreement, each
dated  August  5,  2003,  between the Company and Dutchess Private Equities Fund
L.P.,  the  Company  is  required  to  maintain  a current registration covering
certain  shares  of  its Common Stock issued or issuable to Dutchess pursuant to
the  Investment  Agreement.  The Investment Agreement also granted to Dutchess a
right of first refusal with respect to certain issuances of the Company's Common
Stock  during  a  period  ending around October 1, 2004.  Certain post effective
amendments  to  the  registration  statement  necessary to keep the registration
statement  current  have  not  been  filed.  In  addition,  the Company may have
entered  into certain transactions prior to October 1, 2004 that would have been
subject  to  the  right  of first refusal provision of the Investment Agreement.
Dutchess  has waived all its rights under both the Registration Rights Agreement
and the Investment Agreement with respect to any violation of the aforementioned
provisions  up  to  and  including  July 8, 2005.  Dutchess has also granted the
Company  additional  time  to  complete  the  necessary  registrations.

<PAGE>
                                                                   SCHEDULE 4.10
                    NO CONFLICT, BREACH, VIOLATION OR DEFAULT
                    -----------------------------------------

See  disclosure  regarding agreements between the Company and Laurus and between
the  Company  and  Dutchess.

<PAGE>
                                                                   SCHEDULE 4.11
                                   TAX MATTERS
                                   -----------
None.

<PAGE>
                                                                   SCHEDULE 4.12
                               TITLE TO PROPERTIES
                               -------------------
Laurus Master Fund, Ltd. has a continuing security interest in all of the assets
of  LocatePLUS  Holdings Corporation and its subsidiaries until such time as the
balance  of  its  note  is paid in full.  Pursuant toa Payoff Letter between the
                                           ==========
Company  and  Laurus,  the  Company  has agreed to pay all amounts due and owing
under  the  Note  promptly  following  the  Closing.
Pursuant  to  a  Lease  Agreement  with  Cummings  Properties  Management,  Inc.
("Cummings"),  dated July 11, 1997, as amended, Cummings has a security interest
in  all  property  of  the  Company located in the leased premises to secure the
payment  of rent, the cost of leasehold improvements, and the performance of any
other  obligations  of  the  Company  under  this  lease.
The Company has purchased equipment under various leasing arrangements. Title to
the  leased  equipment  still  resides  with  the  leasing  companies.  It  is
anticipated  that  the majority of leased equipment will be purchased at the end
of the lease term. Until the end of lease purchase has taken place, title to the
equipment  is  still  held  by  the  leasing  companies.  The  following leasing
companies  have  a  security  interest  in equipment that has been leased to the
company.
-     Schneider  Leasing  Company
-     Boston  Financial  and  Equity  Corporation
-     NEXL  Financial  Services,  Inc.
-     Dell  Financial  Services

<PAGE>
                                                                   SCHEDULE 4.14
                                  LABOR MATTERS
                                  -------------
None.

<PAGE>
                                                                   SCHEDULE 4.17
                                   LITIGATION
                                   ----------
None.

<PAGE>
                                                                   SCHEDULE 4.18
                              FINANCIAL STATEMENTS
                              --------------------
None.
=====

<PAGE>
                                                                   SCHEDULE 4.20
                               BROKERS AND FINDERS
                               -------------------
Pursuant  to  an  agreement  between  the  Company  and Laidlaw & Co. (UK), Ltd.
("Laidlaw"),  Laidlaw  will  be  entitled  to  the  following:
-     a financing fee equal to nine (9%) percent of the total consideration paid
or  payable  in connection with the transactions contemplated by this Agreement;
-     6%  warrant  coverage  on any equity or debt securities issued pursuant to
the  Agreement;  and
-     Payment by the Company of fees and expenses of legal counsel not to exceed
$30,000.

<PAGE>
                                                                   SCHEDULE 4.25
                          TRANSACTIONS WITH AFFILIATES
                          ----------------------------
None.
=====THE  SECURITIES  REPRESENTED  HEREBY  MAY  NOT  BE  TRANSFERRED  UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933,
AS  AMENDED,  (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR (III)
THE  COMPANY  HAS  RECEIVED  AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT  SUCH  TRANSFER  MAY  LAWFULLY  BE  MADE  WITHOUT  REGISTRATION  UNDER  THE
SECURITIES  ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

                           3% SENIOR CONVERTIBLE NOTE
                           --------------------------

US$______________     July  8,  2005

     FOR VALUE RECEIVED, LocatePLUS Holdings Corporation, a Delaware corporation
(the  "Company"),  hereby  unconditionally  promises  to  pay  to  the  order of
       -------
________________________  (the  "Holder"),  having  an  address  at  153 E. 53rd
      --                         ------
Street,  55th  Floor,  10022,  at  such address or at such other place as may be
designated in writing by the Holder, or its assigns, the aggregate principal sum
of  _____________________  United  States  Dollars  ($_____________________),
together with interest from July 8, 2005 on the unpaid principal balance of this
Note  outstanding at a rate equal to three percent (3.0%) (computed on the basis
of the actual number of days elapsed in a 360-day year) per annum and continuing
on  the outstanding principal until this 3% Senior Convertible Note (the "Note")
                                                                          ----
is  converted  into  Common  Stock  as  provided  herein  or  indefeasibly  and
irrevocably  paid  in  full  by the Company.  Subject to the other provisions of
this Note, the principal of this Note and all accrued and unpaid interest hereon
shall  mature  and  become  due and payable on the earlier of (i) [120 days from
Closing]  and  (ii)  the  date  on  which the Company's stockholders vote not to
approve  the  Recapitalization  (the earlier of such dates, the "Stated Maturity
                                                                 ---------------
Date").  Except  as  provided  herein, all payments of principal and interest by
  --
the  Company  under  this  Note  shall  be  made  in  United  States  dollars in
immediately  available  funds  to  an  account  specified  by  the  Holder.
From  and  after  the Stated Maturity Date, all amounts due and owing under this
Note  shall automatically, and without action by any party hereto, bear interest
at  an  annual  rate  of  fifteen percent (15%).  In no event shall any interest
charged,  collected  or  reserved  under  this Note exceed the maximum rate then
permitted  by  applicable  law,  and if any such payment is paid by the Company,
then  such excess sum shall be credited by the Holder as a payment of principal.
1.     Definitions.  Unless the context otherwise requires, when used herein the
       ------------
     following  terms  shall  have  the  meaning  indicated:
     "Additional Rights" shall have the meaning ascribed to such term in Section
      -----------------
6  hereof.

<PAGE>
"Affiliate"  shall  mean,  with  respect  to  any Person, any other Person which
 ---------
directly  or  indirectly  through  one  or  more  intermediaries  Controls,  is
 ----
controlled  by,  or  is  under  common  control  with,  such  Person.
 ----
"Automatic  Conversion  Date"  shall  have  the meaning ascribed to such term in
 ---------------------------
Section  5  hereof.
 ---
"Board"  shall  mean  the  Board  of  Directors  of  the  Company.
 -----
"Business  Day" other than a Saturday or Sunday, on which banks in New York City
 -------------
are  open  for  the  general  transaction  of  business.
     "Change of Control" means, at any time (i) any Person or any Persons acting
      -----------------
together  that  would  constitute a "group" for purposes of  Section 13(d) under
the  Exchange  Act, or any successor provision thereto, shall acquire beneficial
ownership  (within  the  meaning  of  Rule  13d-3 under the Exchange Act, or any
successor  provision  thereto)  in  a  single transaction or a series of related
transactions,  of more than 50% of the aggregate voting power of the Company; or
(ii)  the  Company  merges  into  or  consolidates with any other Person, or any
Person  merges into or consolidates with the Company and, after giving effect to
such  transaction,  the  stockholders  of  the Company immediately prior to such
transaction  own  less  than 50% of the aggregate voting power of the Company or
the  successor  entity  of  such  transaction;  or  (iii)  the  Company sells or
transfers its assets, as an entirety or substantially as an entirety, to another
Person;  or  (iv)  any  "change  of  control"  or  similar  event under any loan
agreement,  mortgage,  indenture or other agreement relating to any indebtedness
for  borrowed  money of the Company shall occur; or (v) during any period of two
consecutive  years,  individuals who at the beginning of such period constituted
the  Board  of  Directors (together with any new directors whose election by the
shareholders  of the Company was proposed by a vote of the majority of directors
of  the  Company then still in office who were either directors at the beginning
of  such  period  or whose election or nomination for election was previously so
approved)  cease  for  any  reason  to  constitute  a  majority  of the Board of
Directors  then  in  office.
"Common Stock" shall mean (i) prior to the consummation of the Recapitalization,
 ------------
the  Class  A  Voting  Common  Stock, par value $0.01 per share, of the Company;
provided,  however,  that if, upon conversion of this Note and the other Company
Notes  as  provided  in  Section 6 hereof, the authorized but unissued shares of
Class  A Voting Common Stock are not sufficient to permit the full conversion of
this  Note  and the other Company Notes, then the term "Common Stock" shall mean
such  shares  of  Class A Voting Common Stock as are then available for issuance
plus such number of shares of Class B Nonvoting Common Stock as shall permit the
full conversion of this Note and the other Company Notes and (ii) from and after
the  effective  time  of  the  Recapitalization,  the  Recapitalization  Stock.
"Company"  shall  have  the meaning ascribed to such term in the first paragraph
 -------
herein.
 -
"Company Notes" shall have the meaning ascribed to such term in Section 2 hereof
 -------------
"Control"  (including  the terms "controlling", "controlled by" or "under common
 -------
control  with") means the possession, direct or indirect, of the power to direct
or  cause  the  direction  of  the  management and policies of a Person, whether
through  the  ownership  of  voting  securities,  by  contract  or  otherwise

<PAGE>
"Conversion  Price"  shall mean initially $0.10 per share, subject to adjustment
 -----------------
as  provided  in  Section  6.
"Convertible Securities" shall have the meaning ascribed to such term in Section
 ----------------------
6  hereof.
"Exchange  Act"  shall  mean  the  Securities  Exchange Act of 1934, as amended.
 -------------

"Event  of  Default"  shall  have the meaning ascribed to such term in Section 7
 ------------------
herein.
 --
"Excluded  Issuances"  shall have the meaning ascribed to such term in Section 6
 -------------------
herein.
"Holder"  shall  have  the  meaning ascribed to such term in the first paragraph
 ------
herein.
 --
"Investors"  shall  have  the  meaning  ascribed  to  such  term in the Purchase
 ---------
Agreement.
 ------
"Market  Price",  as of a particular date (the "Valuation Date"), shall mean the
 -------------                                  --------------
following  with respect to any class of securities: (A) if such security is then
listed  on  a national stock exchange, the Market Price shall be the closing bid
price  of  one  share  of such security on such exchange on the last Trading Day
prior  to  the  Valuation Date, provided that if such security has not traded in
the  prior  ten  (10)  trading  sessions,  the Market Price shall be the average
closing  bid price of such security in the most recent ten (10) trading sessions
during  which such security has traded; (B) if such security is then included in
The  Nasdaq Stock Market, Inc. ("Nasdaq"), the Market Price shall be the closing
                                 ------
bid  price of one share of such security on Nasdaq on the last Trading Day prior
to  the  Valuation  Date  or,  if  no  such closing sale price is available, the
average  of the high bid and the low ask price quoted on Nasdaq as of the end of
the last Trading Day prior to the Valuation Date, provided that if such security
has not traded in the prior ten (10) trading sessions, the Market Price shall be
the  average  closing price of one share of such security in the most recent ten
(10)  trading  sessions  during  which  such  security  has  traded; (C) if such
security  is  then  included  in the Over-the-Counter Bulletin Board, the Market
Price  shall  be  the  closing  sale  price of one share of such security on the
Over-the-Counter  Bulletin  Board on the last Trading Day prior to the Valuation
Date or, if no such closing sale price is available, the average of the high bid
and  the  low  ask price quoted on the Over-the-Counter Bulletin Board as of the
end  of  the last Trading Day prior to the Valuation Date, provided that if such
stock  has  not  traded in the prior ten (10) trading sessions, the Market Price
shall  be  the  average  closing price of one share of such security in the most
recent  ten  (10) trading sessions during which such security has traded; or (D)
if  such  security is then included in the "pink sheets," the Market Price shall
be  the closing sale price of one share of such security on the "pink sheets" on
the  last  Trading  Day  prior to the Valuation Date or, if no such closing sale
price  is available, the average of the high bid and the low ask price quoted on
the  "pink  sheets" as of the end of the last Trading Day prior to the Valuation
Date,  provided  that if such stock has not traded in the prior ten (10) trading
sessions,  the  Market  Price shall be the average closing price of one share of
such  security  in  the  most recent ten (10) trading sessions during which such
security  has  traded.
"Note"  shall  have  the  meaning  ascribed  to such term in the first paragraph
 ----
herein.
 ----

<PAGE>
"Options"  shall  have  the  meaning  ascribed to such term in Section 6 hereof.
 -------
"Person"  means  an  individual,  corporation,  partnership,  limited  liability
 ------
company, trust, business trust, association, joint stock company, joint venture,
 -----
sole  proprietorship, unincorporated organization, governmental authority or any
other  form  of  entity  not  specifically  listed  herein.
"Purchase  Agreement"  shall mean the Securities Purchase Agreement, dated as of
 -------------------
July  8,  2005,  and  as that agreement may be amended from time to time, by and
among  the  Company  and  the  Investors.
"Recapitalization" shall mean (i) the recapitalization of each outstanding share
 ----------------
of the Company's Class A Voting Common Stock, par value $0.01 per share, and the
Company's  Class  B  Nonvoting Common Stock, par value $0.01 per share, into one
share  of a single class of voting common stock and (ii) a one-for-fifty reverse
split  of  the  Common  Stock.
"Recapitalization Stock" shall mean the common stock, par value $0.01 per share,
 ----------------------
of  the  Company  after  giving  effect  to  the  Recapitalization.
"Registration  Rights  Agreement"  shall mean the Registration Rights Agreement,
 -------------------------------
dated  as  of  July  8,  2005, and as that agreement may be amended from time to
 -
time,  by  and  among  the  Company  and  the  Investors.
 -
"Stated Maturity Date" shall have the meaning ascribed to such term in the first
 --------------------
paragraph  herein.
"Stockholder  Approvals"  means  the  approval  of  the  Recapitalization by the
 ----------------------
stockholders  of  the  Company  in  accordance  with  applicable  law.
"Subsidiary"  of  any  Person  means  another  Person,  an  amount of the voting
 ----------
securities,  other  voting ownership or voting partnership interests of which is
 ------
sufficient  to  elect  at  least  a  majority of its Board of Directors or other
governing  body  (or,  if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first Person.
"Trading  Day" means (i) if the relevant stock or security is listed or admitted
 ------------
for  trading  on  The  New  York  Stock  Exchange,  Inc.  or  any other national
securities  exchange, a day on which such exchange is open for business; (ii) if
the relevant stock or security is quoted on the Nasdaq Stock Market or any other
system  of  automated dissemination of quotations of securities prices, a day on
which trades may be effected through such system; or (iii) if the relevant stock
or  security  is  not  listed or admitted for trading on any national securities
exchange  or  quoted on the Nasdaq Stock Market or any other system of automated
dissemination  of  quotation  of  securities prices, a day on which the relevant
stock  or security is traded in a regular way in the over-the-counter market and
for which a closing bid and a closing asked price for such stock or security are
available,  shall  mean a day, other than a Saturday or Sunday, on which The New
York  Stock  Exchange,  Inc.  is  open  for  trading.
"Trigger  Issuance"  shall  have  the meaning ascribed to such term in Section 6
 -----------------
hereof.
 --
2.     Purchase Agreement.  This Note is one of the several 3% Convertible Notes
       ------------------
     of  the  Company  issued  pursuant  to the Purchase Agreement (the "Company
                                                                         -------
Notes").  This  Note  is subject to the terms and conditions of, and entitled to
    -
the  benefit  of,  the  provisions  of  the
3.
<PAGE>
Purchase  Agreement.  This  Note is transferable and assignable to any person to
whom  such  transfer  is permissible under the Purchase Agreement and applicable
law.  The  Company  agrees  to issue from time to time a replacement Note in the
form  hereof  to  facilitate such transfers and assignments.  In addition, after
delivery  of  an  indemnity in form and substance reasonably satisfactory to the
Company,  the  Company  also agrees to promptly issue a replacement Note if this
Note  is  lost,  stolen,  mutilated  or  destroyed.
4.     No  Right of Prepayment or Redemption.  This Note shall not be prepayable
       -------------------------------------
or  redeemable  by  the  Company  prior  to  the  Stated  Maturity  Date.
5.     Restrictive  Covenants.  So long as any Company Notes remain outstanding,
       -----------------------
without  the  prior written consent of the holders of at least two-thirds of the
outstanding Company Notes given in person or by proxy, either in writing or at a
special  meeting  called  for  that  purpose,  the  Company  will  not:
(a)     enter  into  or  consummate  any  Change  of  Control;
(b)     incur,  assume  or  suffer to exist any indebtedness for borrowed money;
(c)     except  for  the  Recapitalization,  amend,  alter or repeal, whether by
merger,  consolidation or otherwise, the Certificate of Incorporation or By-laws
of  the Company or effect or approve any stock split, reverse stock split, stock
dividend  or other reclassification or combination of any class or series of its
capital  stock;
(d)     issue  or  authorize  the issuance of any shares of capital stock or any
Options  or  Convertible  Securities  (other  than  with  respect to Convertible
Securities  which  are  outstanding  prior  to  the  date  hereof (provided such
Convertible  Securities  are  not  amended  after  the  date  hereof));
(e)     directly  or  indirectly,  declare  or  pay  any  dividend  (other  than
dividends  payable  in  shares  of Common Stock but only to the extent that such
stock  dividend  results  in  an  adjustment of the Conversion Price pursuant to
Section  6  or  directly or indirectly purchase, redeem, repurchase or otherwise
acquire  or  permit  any Subsidiary to redeem, purchase, repurchase or otherwise
acquire  (or  make  any payment to a sinking fund for such redemption, purchase,
repurchase or other acquisition) any share of Common Stock or any other class or
series of the Company's capital stock whether in cash, securities or property or
in  obligations  of  the  Company  or  any  Subsidiary;  or
(f)     agree  to  do  any  of  the  foregoing.

6.     Automatic  Conversion.
       ---------------------
(a)     Following  receipt  of  the  Stockholder  Approvals,  this  Note  shall
automatically  and  with  no action on the part of the Holder convert into fully
paid  and  nonassessable  shares  of  Common  Stock  upon  satisfaction  of  the
requirements  of  this  Section  6.  Promptly  upon  receipt  of the Stockholder
Approvals,  but  in  no  event  more  than  two  (2)  Business
(b)
<PAGE>
Days  thereafter,  the  Company  shall  file  an  appropriate  amendment  to the
Company's  Certificate  of  Incorporation  to  effect  the Recapitalization (the
"Amendment"),  which,  by its terms, shall become effective upon filing with the
     -----
Secretary  of  State of Delaware.  The date on which such Amendment shall become
effective is hereinafter referred to as the "Automatic Conversion Date".  On the
                                             -------------------------
Automatic  Conversion  Date,  this  Note  and all interest accrued thereon shall
automatically  and  with  no  action on the part of the Holder convert into such
number of fully paid and nonassessable shares of Common Stock as is obtained by:
(i)  adding  (A)  the  principal  amount  of this Note and (B) the amount of any
accrued  but  unpaid interest on this Note and (ii) dividing the result obtained
pursuant  to  clause  (i)  above  by  the  Conversion Price then in effect.  The
Company  shall provide prompt written notice of the Automatic Conversion Date to
the  Holder.
(c)     Promptly  after  the  Automatic Conversion Date, the Holder of this Note
shall deliver this Note to the Company (or, in lieu thereof, an appropriate lost
security  affidavit in the event this Note shall have been lost or destroyed) to
the  Company  at  its  principal  office  (or such other office or agency of the
Company  as  the  Company  may  designate  by  notice in writing to the Holder),
together  with  a  statement  of  the  name or names (with address) in which the
certificate  or  certificates  for  shares  of  Common  Stock  shall  be issued.
Promptly  following the surrender of this Note (or, in lieu thereof, delivery of
an  appropriate  lost  security affidavit in the event this Note shall have been
lost  or  destroyed)  as aforesaid, but in no event more than three (3) Business
Days  thereafter, the Company shall issue and deliver, or cause to be issued and
delivered,  to  the  Holder,  registered in such name or names as the Holder may
direct  in writing, a certificate or certificates for the number of whole shares
of  Common  Stock  issuable  upon  the  conversion  of this Note.  To the extent
permitted by law, such conversion shall be deemed to have been effected, and the
Conversion  Price  shall  be  determined,  as  of  the  close of business on the
Automatic  Conversion  Date,  and  at  such time, the rights of the Holder shall
cease  with  respect  to  the Note being converted, and the Person or Persons in
whose  name  or names any certificate or certificates for shares of Common Stock
shall be issuable upon such conversion shall be deemed to have become the holder
or  holders  of  record  of  the  shares  represented  thereby.
(d)     No  fractional  shares  shall be issued upon any conversion of this Note
into  Common  Stock.  If  any fractional share of Common Stock would, except for
the  provisions  of  the  first sentence of this Section 5(c), be delivered upon
such conversion, the Company, in lieu of delivering such fractional share, shall
pay to the Holder an amount in cash equal to the Market Price of such fractional
share  of  Common  Stock.
7.     Conversion  Rights;  Adjustment  to  Conversion  Price.
       ------------------------------------------------------
(a)     Subject  to  and upon compliance with the provisions of this Note, prior
to  the  Stated Maturity Date, the Holder shall have the right, at its option at
any  time, to convert some or all of the Note into such number of fully paid and
nonassessable  shares  of  Common  Stock  as  is obtained by: (i) adding (A) the
principal  amount of this Note to be converted and (B) the amount of any accrued
but  unpaid  interest with respect to such portion of this Note to be converted;
and  (ii)  dividing  the  result  obtained  pursuant  to clause (i) above by the
Conversion  Price  then  in  effect  The  rights of conversion set forth in this
Section  6  shall  be  exercised  by  the Holder by giving written notice to the
Company  that  the  Holder  elects  to  convert  a  stated  amount
(b)
<PAGE>
of  this  Note  into  Common  Stock  and  by surrender of this Note (or, in lieu
thereof, by delivery of an appropriate lost security affidavit in the event this
Note  shall  have been lost or destroyed) to the Company at its principal office
(or  such  other office or agency of the Company as the Company may designate by
notice  in  writing  to  the  Holder)  at any time on the date set forth in such
notice  (which  date  shall  not  be  earlier than the Company's receipt of such
notice),  together with a statement of the name or names (with address) in which
the  certificate  or  certificates  for  shares of Common Stock shall be issued.
(c)     Promptly after receipt of the written notice referred to in Section 6(a)
above  and  surrender  of  this  Note  (or,  in  lieu thereof, by delivery of an
appropriate  lost security affidavit in the event this Note shall have been lost
or destroyed), but in no event more than three (3) Business Days thereafter, the
Company  shall  issue  and  deliver, or cause to be issued and delivered, to the
Holder,  registered in such name or names as the Holder may direct in writing, a
certificate  or  certificates  for  the  number  of whole shares of Common Stock
issuable  upon  the  conversion  of  such  portion  of this Note.  To the extent
permitted by law, such conversion shall be deemed to have been effected, and the
Conversion Price shall be determined, as of the close of business on the date on
which  such written notice shall have been received by the Company and this Note
shall  have  been  surrendered as aforesaid (or, in lieu thereof, an appropriate
lost  security  affidavit  has been delivered to the Company), and at such time,
the rights of the Holder shall cease with respect to the principal amount of the
Notes  being  converted,  and  the  Person or Persons in whose name or names any
certificate  or  certificates  for shares of Common Stock shall be issuable upon
such  conversion  shall be deemed to have become the holder or holders of record
of  the  shares  represented  thereby.
(d)     No  fractional  shares  shall be issued upon any conversion of this Note
into  Common  Stock.  If  any fractional share of Common Stock would, except for
the  provisions  of  the  first sentence of this Section 6(c), be delivered upon
such conversion, the Company, in lieu of delivering such fractional share, shall
pay to the Holder an amount in cash equal to the Market Price of such fractional
share  of  Common  Stock.  In case the principal amount of this Note exceeds the
principal  amount  being  converted,  the  Company  shall, upon such conversion,
execute and deliver to the Holder, at the expense of the Company, a new Note for
the  principal  amount  of  this  Note surrendered which is not to be converted.
(e)     If  the  Company shall, at any time or from time to time while this Note
is  outstanding,  pay  a  dividend or make a distribution on its Common Stock in
shares  of Common Stock, subdivide its outstanding shares of Common Stock into a
greater  number of shares or combine its outstanding shares of Common Stock into
a  smaller  number  of  shares  or  issue by reclassification of its outstanding
shares  of  Common  Stock  any  shares  of its capital stock (including any such
reclassification  in  connection  with  a  consolidation  or merger in which the
Company  is  the  continuing  corporation),  then the Conversion Price in effect
immediately  prior  to  the  date upon which such change shall become effective,
shall  be  adjusted by the Company so that the Holder thereafter converting this
Note  shall be entitled to receive the number of shares of Common Stock or other
capital  stock  which  the  Holder  would  have  received  if  the Note had been
converted  immediately  prior  to  such event upon payment of a Conversion Price
that  has  been  adjusted  to reflect a fair allocation of the economics of such
event  to  the  Holder, without regard to any conversion limitation specified in
this  Section 6.  Such adjustments shall be made successively whenever any event
listed  above  shall  occur.
(f)
<PAGE>
If  any  capital  reorganization,  reclassification  of the capital stock of the
Company,  consolidation  or  merger  of  the Company with another corporation in
which the Company is not the survivor, or sale, transfer or other disposition of
all or substantially all of the Company's assets to another corporation shall be
effected,  then,  as  a  condition  of  such  reorganization,  reclassification,
consolidation,  merger, sale, transfer or other disposition, lawful and adequate
provision  shall  be  made whereby the Holder shall thereafter have the right to
purchase  and  receive  upon  the basis and upon the terms and conditions herein
specified  and  in  lieu  of  the shares of Common Stock immediately theretofore
issuable  upon  conversion  of  this  Note,  without  regard  to  any conversion
limitation specified in Section 6, such shares of stock, securities or assets as
would  have been issuable or payable with respect to or in exchange for a number
of  shares  of  Common  Stock  equal  to  the  number  of shares of Common Stock
immediately  theretofore  issuable  upon  conversion  of  this  Note,  had  such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition  not  taken  place,  without  regard  to  any  conversion limitation
specified in Section 6, and in any such case appropriate provision shall be made
with  respect  to  the  rights  and  interests of the Holder to the end that the
provisions  hereof  (including,  without limitation, provision for adjustment of
the  Conversion  Price)  shall thereafter be applicable, as nearly equivalent as
may  be  practicable  in  relation  to any shares of stock, securities or assets
thereafter deliverable upon the conversion hereof.  The Company shall not effect
any such consolidation, merger, sale, transfer or other disposition unless prior
to or simultaneously with the consummation thereof the successor corporation (if
other  than  the  Company)  resulting  from such consolidation or merger, or the
corporation  purchasing  or otherwise acquiring such assets or other appropriate
corporation  or  entity shall assume the obligation to deliver to the Holder, at
the  last  address  of  the  Holder  appearing on the books of the Company, such
shares  of  stock,  securities  or  assets  as, in accordance with the foregoing
provisions,  the  Holder  may  be  entitled  to  purchase, without regard to any
conversion  limitation  specified  in Section 6, and the other obligations under
this  Note.  The  provisions  of  this  paragraph  (e)  shall similarly apply to
successive  reorganizations,  reclassifications, consolidations, mergers, sales,
transfers  or  other  dispositions.
(g)     In  case  the  Company  shall  fix  a  payment  date for the making of a
distribution  to  all  holders  of Common Stock (including any such distribution
made  in  connection  with a consolidation or merger in which the Company is the
continuing  corporation) of evidences of indebtedness or assets (other than cash
dividends  or  cash distributions payable out of consolidated earnings or earned
surplus  or  dividends  or  distributions  referred  to  in  Section  6(d)),  or
subscription  rights  or  Notes, the Conversion Price to be in effect after such
payment  date  shall be determined by multiplying the Conversion Price in effect
immediately  prior  to  such  payment date by a fraction, the numerator of which
shall  be  the  total number of shares of Common Stock outstanding multiplied by
the  Market  Price  of Common Stock immediately prior to such payment date, less
the fair market value (as determined by the Board of Directors in good faith) of
said assets or evidences of indebtedness so distributed, or of such subscription
rights  or  Notes,  and  the  denominator  of which shall be the total number of
shares  of  Common Stock outstanding multiplied by such Market Price immediately
prior to such payment date.  Such adjustment shall be made successively whenever
such  a  payment  date  is  fixed.
(h)     An adjustment to the Conversion Price shall become effective immediately
after  the  payment  date  in  the  case  of  each  dividend or distribution and
immediately  after  the  effective  date  of  each other event which requires an
adjustment.
(i)
<PAGE>
In the event that, as a result of an adjustment made pursuant to this Section 6,
the  Holder  shall become entitled to receive any shares of capital stock of the
Company  other  than  shares of Common Stock, the number of such other shares so
receivable  upon  conversion  of  this  Note  shall  be  subject  thereafter  to
adjustment  from  time  to time in a manner and on terms as nearly equivalent as
practicable  to  the  provisions  contained  in  this  Note.
(j)     Except  as  provided  in Section 6(j) below, if and whenever the Company
shall  issue  or  sell,  or  is,  in  accordance  with  Sections 5(i)(i) through
5(i)(vii)  hereof, deemed to have issued or sold, any shares of Common Stock for
a consideration per share less than the Conversion Price (a "Trigger Issuance"),
                                                             ----------------
effective  as  of  the  close  of  business on the effective date of the Trigger
Issuance  the  then-existing  Conversion  Price  shall  be  reduced  to  a price
determined  as  follows:

     Adjusted  Conversion  Price  =    (A  x  B)  +  D
                                       ---------------
                                           A+C

     where

     "A"  equals  the  number  of  shares of Common Stock outstanding, including
Additional  Shares  of  Common  Stock  (as  defined  below)  deemed to be issued
hereunder,  in  both  cases  immediately  preceding  such  Trigger  Issuance;

     "B"  equals  the  Conversion  Price  in  effect  immediately preceding such
Trigger  Issuance;

     "C" equals the number of Additional Shares of Common Stock issued or deemed
issued  hereunder  as  a  result  of  the  Trigger  Issuance;  and

     "D"  equals  the  aggregate consideration, if any, received or deemed to be
received  by  the  Company  upon  such  Trigger  Issuance;

provided,  however,  that  in  no  event shall the Conversion Price after giving
effect  to  such Trigger Issuance be greater than the Conversion Price in effect
prior  to  such  Trigger  Issuance.

     For  purposes  of  this subsection (i), "Additional Shares of Common Stock"
shall  mean  all  shares  of  Common Stock issued by the Company or deemed to be
issued  pursuant  to  this  subsection  (i),  other  than Excluded Issuances (as
defined  in  subsection  (j)  hereof).

          For purposes of this Section 6(i), the following subsections (i)(i) to
(i)(vii) shall also be applicable (subject, in each such case, to the provisions
of  Section  6(j)  hereof):

(i)     In  case at any time the Company shall in any manner grant (directly and
not  by  assumption  in  a  merger or otherwise) any warrants or other rights to
subscribe  for  or to purchase, or any options for the purchase of, Common Stock
or any stock or security convertible into or exchangeable for Common Stock (such
     warrants,  rights  or  options  being  called  "Options"
                                                     -------
(ii)
<PAGE>
and  such  convertible  or  exchangeable  stock  or  securities  being  called
"Convertible Securities") whether or not such Options or the right to convert or
          -------------
exchange  any  such  Convertible Securities are immediately exercisable, and the
price  per  share  for  which Common Stock is issuable upon the exercise of such
Options  or  upon  the  conversion  or  exchange  of such Convertible Securities
(determined  by  dividing (i) the sum (which sum shall constitute the applicable
consideration)  of  (x)  the total amount, if any, received or receivable by the
Company  as  consideration  for  the  granting  of  such  Options,  plus (y) the
aggregate  amount  of  additional  consideration payable to the Company upon the
exercise of all such Options, plus (z), in the case of such Options which relate
to  Convertible Securities, the aggregate amount of additional consideration, if
any,  payable upon the issue or sale of such Convertible Securities and upon the
conversion  or  exchange  thereof, by (ii) the total maximum number of shares of
Common  Stock  issuable upon the exercise of such Options or upon the conversion
or  exchange  of  all  such Convertible Securities issuable upon the exercise of
such  Options)  shall  be  less  than  the  Market  Price  of  the  Common Stock
immediately  prior  to  the time of the granting of such Options, then the total
number  of  shares of Common Stock issuable upon the exercise of such Options or
upon  conversion  or exchange of the total amount of such Convertible Securities
issuable  upon  the exercise of such Options shall be deemed to have been issued
for  such  price  per  share  as  of the date of granting of such Options or the
issuance  of  such  Convertible  Securities and thereafter shall be deemed to be
outstanding for purposes of adjusting the Conversion Price.  Except as otherwise
provided in subsection 6(i)(iii), no adjustment of the Conversion Price shall be
made  upon  the  actual  issue  of  such  Common  Stock  or  of such Convertible
Securities upon exercise of such Options or upon the actual issue of such Common
Stock  upon  conversion  or  exchange  of  such  Convertible  Securities.
(iii)     In  case  the  Company  shall in any manner issue (directly and not by
assumption in a merger or otherwise) or sell any Convertible Securities, whether
or  not  the  rights  to exchange or convert any such Convertible Securities are
immediately  exercisable,  and  the  price  per  share for which Common Stock is
issuable  upon  such  conversion or exchange (determined by dividing (i) the sum
(which  sum  shall  constitute  the  applicable  consideration) of (x) the total
amount  received  or receivable by the Company as consideration for the issue or
sale of such Convertible Securities, plus (y) the aggregate amount of additional
consideration,  if  any,  payable to the Company upon the conversion or exchange
thereof,  by  (ii)  the total number of shares of Common Stock issuable upon the
conversion  or  exchange  of all such Convertible Securities) shall be less than
the Market Price of the Common Stock immediately prior to the time of such issue
or  sale,  then the total maximum number of shares of Common Stock issuable upon
conversion  or  exchange  of  all such Convertible Securities shall be deemed to
have been issued for such price per share as of the date of the issue or sale of
such Convertible Securities and thereafter shall be deemed to be outstanding for
purposes  of  adjusting  the  Conversion  Price,  provided  that  (a)  except as
otherwise  provided  in  subsection  6(i)(iii),  no adjustment of the Conversion
Price  shall  be  made  upon  the  actual  issuance  of  such  Common Stock upon
conversion  or  exchange  of  such  Convertible  Securities  and  (b) no further
adjustment  of the Conversion Price shall be made by reason of the issue or sale
of  Convertible  Securities  upon  exercise  of any Options to purchase any such
Convertible  Securities  for which adjustments of the Conversion Price have been
made  pursuant  to  the  other  provisions  of  subsection  6(i).
(iv)     Upon  the  happening  of  any  of  the following events, namely, if the
purchase  price  provided  for  in  any Option referred to in subsection 6(i)(i)
hereof,  the  additional  consideration,  if any, payable upon the conversion or
exchange  of  any  Convertible  Securities
(v)
<PAGE>
referred to in subsections 5(i)(i) or 5(i)(ii), or the rate at which Convertible
Securities  referred  to in subsections 5(i)(i) or 5(i)(ii) are convertible into
or  exchangeable  for  Common Stock shall change at any time (including, but not
limited to, changes under or by reason of provisions designed to protect against
dilution),  the  Conversion  Price  in  effect  at  the time of such event shall
forthwith  be readjusted to the Conversion Price which would have been in effect
at  such  time  had  such  Options  or  Convertible Securities still outstanding
provided for such changed purchase price, additional consideration or conversion
rate, as the case may be, at the time initially granted, issued or sold.  On the
termination  of  any  Option  for which any adjustment was made pursuant to this
subsection  6(i)  or any right to convert or exchange Convertible Securities for
which  any  adjustment  was  made  pursuant  to  this subsection 6(i) (including
without  limitation  upon  the  redemption or purchase for consideration of such
Convertible  Securities  by  the  Company),  the Conversion Price then in effect
hereunder  shall  forthwith  be changed to the Conversion Price which would have
been  in  effect  at the time of such termination had such Option or Convertible
Securities,  to  the  extent  outstanding immediately prior to such termination,
never  been  issued.
(vi)     Subject  to  the  other  provisions  of  this Section 6(i), in case the
Company  shall  declare a dividend or make any other distribution upon any stock
of the Company (other than the Common Stock) payable in Common Stock, Options or
Convertible  Securities,  then  any  Common  Stock,  Options  or  Convertible
Securities,  as  the  case  may  be,  issuable  in  payment  of such dividend or
distribution  shall be deemed to have been issued or sold without consideration.
(vii)     In  case any shares of Common Stock, Options or Convertible Securities
shall  be  issued or sold for cash, the consideration received therefor shall be
deemed  to  be  the net amount received by the Company therefor, after deduction
therefrom  of  any  expenses  incurred  or  any  underwriting  commissions  or
concessions paid or allowed by the Company in connection therewith.  In case any
shares  of  Common  Stock,  Options or Convertible Securities shall be issued or
sold  for a consideration other than cash, the amount of the consideration other
than  cash  received by the Company shall be deemed to be the fair value of such
consideration  as  determined  in  good  faith  by the Board of Directors, after
deduction  of  any  expenses  incurred  or  any  underwriting  commissions  or
concessions paid or allowed by the Company in connection therewith.  In case any
Options  shall  be  issued  in  connection  with  the  issue  and  sale of other
securities of the Company, together comprising one integral transaction in which
no  specific  consideration is allocated to such Options by the parties thereto,
such  Options  shall  be  deemed  to  have been issued for such consideration as
determined  in  good  faith by the Board of Directors of the Company.  If Common
Stock,  Options or Convertible Securities shall be issued or sold by the Company
and,  in  connection  therewith,  other  Options  or Convertible Securities (the
"Additional Rights") are issued, then the consideration received or deemed to be
     -------------
received  by  the  Company  shall  be  reduced  by  the fair market value of the
Additional Rights (as determined using the Black-Scholes option pricing model or
another  method mutually agreed to by the Company and the Holder).  The Board of
Directors  shall respond promptly, in writing, to an inquiry by the Holder as to
the  fair market value of the Additional Rights.  In the event that the Board of
Directors  and  the Holder are unable to agree upon the fair market value of the
Additional Rights, the Company and the Holder shall jointly select an appraiser,
who  is  experienced  in  such matters.  The decision of such appraiser shall be
final  and  conclusive,  and the cost of such appraiser shall be borne evenly by
the  Company  and  the  Holder.
(viii)
<PAGE>
In  case  the Company shall take a record of the holders of its Common Stock for
the  purpose  of  entitling them (i) to receive a dividend or other distribution
payable  in Common Stock, Options or Convertible Securities or (ii) to subscribe
for  or  purchase  Common  Stock,  Options  or Convertible Securities, then such
record date shall be deemed to be the date of the issue or sale of the shares of
Common  Stock  deemed  to  have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the granting of
such  right  of  subscription  or  purchase,  as  the  case  may  be.
(ix)     The  number  of  shares  of  Common Stock outstanding at any given time
shall  not  include shares owned or held by or for the account of the Company or
any  of  its  wholly-owned  subsidiaries, and the disposition of any such shares
(other than the cancellation or retirement thereof) shall be considered an issue
or  sale  of  Common  Stock  for  the  purpose  of  this  subsection  (i).
(k)     Anything  herein  to the contrary notwithstanding, the Company shall not
be  required  to  make any adjustment of the Conversion Price in the case of the
issuance  of(A)  capital  stock,  Options  or  Convertible  Securities issued to
directors,  officers, employees or consultants of the Company in connection with
their  service  as  directors of the Company, their employment by the Company or
their retention as consultants by the Company pursuant to an equity compensation
     program approved by the Board of Directors or the compensation committee of
the Board of Directors, (B) shares of Common Stock issued upon the conversion or
exercise  of  Options or Convertible Securities issued prior to the date hereof,
provided  such  securities  are not amended after the date hereof (C) securities
issued  pursuant  to  the  Purchase  Agreement  and  securities  issued upon the
exercise  or  conversion  of  those  securities,  and (D) shares of Common Stock
issued or issuable by reason of a dividend, stock split or other distribution on
shares  of  Common  Stock (but only to the extent that such a dividend, split or
distribution  results  in  an adjustment in the Conversion Price pursuant to the
other  provisions  of  this  Note)  (collectively,  "Excluded  Issuances").
                                                     -------------------
(l)     In  case  at  any  time:
(i)     the  Company  shall  declare  any  dividend upon its Common Stock or any
other  class  or series of capital stock of the Company payable in cash or stock
or  make  any  other distribution to the holders of its Common Stock or any such
other  class  or  series  of  capital  stock;
(ii)     the Company shall offer for subscription pro rata to the holders of its
                                                  --- ----
Common  Stock  or  any other class or series of capital stock of the Company any
additional  shares  of  stock  of  any  class  or  other  rights;  or
(iii)     there  shall  be any capital reorganization or reclassification of the
capital  stock  of the Company, any acquisition or a liquidation, dissolution or
winding  up  of  the  Company;
then,  in  any one or more of said cases, the Company shall give, by delivery in
person  or  by certified or registered mail, return receipt requested, addressed
to  the  Holder  at  the  address  of  such  Holder as shown on the books of the
Company,  (a)  at  least  20  Business Days' prior written notice of the date on
which  the  books  of  the  Company  shall  close or a record shall be taken for

<PAGE>
such  dividend, distribution or subscription rights or for determining rights to
vote  in respect of any event set forth in clause (iii) of this Section 6(k) and
(b)  in the case of any event set forth in clause (iii) of this Section 6(l), at
least  20  Business  Days'  prior written notice of the date when the same shall
take  place.  Such notice in accordance with the foregoing clause (a) shall also
specify,  in the case of any such dividend, distribution or subscription rights,
the  date  on which the holders of Common Stock or such other class or series of
capital  stock  shall be entitled thereto and such notice in accordance with the
foregoing  clause (b) shall also specify the date on which the holders of Common
Stock  and  such  other  series  or  class of capital stock shall be entitled to
exchange  their  Common  Stock  and other stock for securities or other property
deliverable  upon consummation of the applicable event set forth in clause (iii)
of  this  Section  6(k).
(m)     Upon  any adjustment of the Conversion Price, then and in each such case
the  Company  shall give prompt written notice thereof, by delivery in person or
by  certified  or  registered  mail,  return receipt requested, addressed to the
Holder at the address of such Holder as shown on the books of the Company, which
     notice  shall state the Conversion Price resulting from such adjustment and
setting  forth  in  reasonable  detail the method upon which such calculation is
based.
(n)     The  Company  shall  at  all times reserve and keep available out of its
authorized  Common  Stock, solely for the purpose of issuance upon conversion of
this  Note  as  herein  provided, such number of shares of Common Stock as shall
then  be  issuable upon the conversion of this Note.  The Company covenants that
all  shares  of  Common Stock which shall be so issued shall be duly and validly
issued  and  fully  paid  and  nonassessable, and free from all taxes, liens and
charges  with respect to the issue thereof, and, without limiting the generality
of  the  foregoing,  and  that  the Company will from time to time take all such
action  as may be requisite to assure that the par value per share of the Common
Stock  is  at  all times equal to or less than the Conversion Price in effect at
the  time.  The Company shall take all such action as may be necessary to assure
that  all  such shares of Common Stock may be so issued without violation of any
applicable  law  or regulation, or of any requirement of any national securities
exchange  upon which the Common Stock may be listed.  The Company shall not take
any  action which results in any adjustment of the Conversion Price if the total
number  of  shares  of  Common  Stock issued and issuable after such action upon
conversion  of this Note would exceed the total number of shares of Common Stock
then  authorized  by  the  Company's  articles  of  association or memorandum of
association.
(o)     The  issuance of certificates for shares of Common Stock upon conversion
of  this  Note  shall  be  made  without  charge  to the holders thereof for any
issuance tax in respect thereof, provided that the Company shall not be required
to  pay  any tax which may be payable in respect of any transfer involved in the
issuance  and  delivery  of  any  certificate  in  a name other than that of the
Holder.
(p)     The  Company  will  not at any time close its transfer books against the
transfer, as applicable, of this Note or of any shares of Common Stock issued or
issuable  upon  the  conversion of this Note in any manner which interferes with
the  timely  conversion  of  this  Note,  except as may otherwise be required to
comply  with  applicable  securities  laws.
(q)
<PAGE>
To  the  extent  permitted by applicable law and the listing requirements of any
market  or  exchange  on which the Common Stock is then listed, the Company from
time  to  time may decrease the Conversion Price by any amount for any period of
time  if  the  period  is at least twenty (20) days, the decrease is irrevocable
during  the  period  and  the Board of Directors shall have made a determination
that  such  decrease  would  be  in  the  best  interests  of the Company, which
determination  shall  be conclusive.  Whenever the Conversion Price is decreased
pursuant  to  the  preceding  sentence, the Company shall provide written notice
thereof to the Holder at least fifteen (15) days prior to the date the decreased
Conversion  Price  takes  effect,  and  such  notice  shall  state the decreased
Conversion  Rate  and  the  period  during  which  it  will  be  in  effect.
8.     Event  of  Default.  The  occurrence  of  any  of  following events shall
       ------------------
constitute  an  "Event  of  Default"  hereunder:
                 ------------------
(a)     the failure of the Company to make any payment of principal on this Note
     when  due,  whether  at  maturity,  upon  acceleration  or  otherwise;
(b)     the failure of the Company to make any payment of interest on this Note,
or  any  other amounts due under the Purchase Agreement, the Registration Rights
Agreement  or  this  Note  or  the  Warrants when due, whether at maturity, upon
acceleration  or  otherwise,  and  such failure continues for more than five (5)
days;
(c)     the  Company  and/or its Subsidiaries fail to make a required payment or
payments  on  indebtedness  for  borrowed  money  (other  than Company Notes) of
Twenty-Five  Thousand  United  States  Dollars  ($25,000)  or  more in aggregate
principal  amount  and  such  failure  continues  for  more  than ten (10) days;
(d)     there  shall have occurred an acceleration of the stated maturity of any
indebtedness  for  borrowed money of the Company or its Subsidiaries (other than
Company  Notes)  of Twenty-Five Thousand United States Dollars ($25,000) or more
in  aggregate principal amount (which acceleration is not rescinded, annulled or
otherwise  cured  within ten (10) days of receipt by the Company or a Subsidiary
of  notice  of  such  acceleration);
(e)     the  Company  makes an assignment for the benefit of creditors or admits
in  writing  its  inability to pay its debts generally as they become due; or an
order,  judgment  or  decree  is entered adjudicating the Company as bankrupt or
insolvent;  or any order for relief with respect to the Company is entered under
the  Federal  Bankruptcy  Code or any other bankruptcy or insolvency law; or the
Company petitions or applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Company or of any substantial part of the
assets  of  the  Company,  or  commences any proceeding relating to it under any
bankruptcy,  reorganization,  arrangement,  insolvency,  readjustment  of  debt,
dissolution  or  liquidation  law  of  any jurisdiction; or any such petition or
application  is  filed, or any such proceeding is commenced, against the Company
and  either  (i) the Company by any act indicates its approval thereof, consents
thereto  or acquiescence therein or (ii) such petition application or proceeding
is  not  dismissed  within  sixty  (60)  days;
(f)
<PAGE>
a  final, non-appealable judgment which, in the aggregate with other outstanding
final judgments against the Company and its Subsidiaries, exceeds Fifty Thousand
United  States  Dollars  ($50,000)  shall  be  rendered against the Company or a
Subsidiary  and within sixty (60) days after entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or within sixty (60) days
after  the  expiration  of  such  stay,  such  judgment  is  not  discharged;
(g)     the  Company  is  in  breach  of  the requirements of Section 7.9 of the
Purchase  Agreement;
(h)     if  any  representation  or  statement  of  fact  made  in  the Purchase
Agreement  or furnished to the Holder at any time by or on behalf of the Company
proves  to  have  been  false in any material respect when made or furnished; or
(i)     if  the  Company fails to observe or perform in any material respect any
of  its  covenants  contained in the Purchase Agreement, the Registration Rights
Agreement, the Warrants or this Note (other than any failure which is covered by
     Section  7(a), (b) or (g)), and such failure continues for thirty (30) days
after  receipt  by  the  Company  of  notice  thereof.
          Upon  the occurrence of any such Event of Default all unpaid principal
and  accrued  interest  under this Note shall become immediately due and payable
(A) upon election of the Holder, with respect to (a) through (d) and (f) through
(i),  and  (B)  automatically,  with  respect to (e).  Upon the occurrence of an
Event  of  Default, the Holder shall have the right to exercise any other right,
power or remedy as may be provided herein or in the Security Agreement or as may
be  provided  at  law  or  in  equity,  including, without limitation, the right
                                        ---------  ------------------
realize  on  its  interest  in  the  Collateral.
9.
<PAGE>
No  waiver.  No  delay  or  omission on the part of the Holder in exercising any
----------
right  under  this  Note shall operate as a waiver of such right or of any other
---
right of the Holder, nor shall any delay, omission or waiver on any one occasion
--
be  deemed  a  bar  to  or  waiver  of the same or any other right on any future
occasion.
10.     Amendments in Writing.  None of the terms or provisions of this Note may
        ---------------------
be excluded, modified or amended except by a written instrument duly executed by
the  Holder  and  the Company expressly referring to this Note and setting forth
the  provision  so  excluded,  modified  or  amended.
11.     Waivers.  The  Company  hereby  forever  waives  presentment,  demand,
        -------
presentment  for payment, protest, notice of protest, notice of dishonor of this
Note  and  all  other  demands  and  notices  in  connection  with the delivery,
acceptance,  performance  and  enforcement  of  this  Note.
12.     Waiver  of  Jury  Trial.  THE  COMPANY HEREBY WAIVES ITS RIGHT TO A JURY
        -----------------------
TRIAL  OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS NOTE OR
ANY  CONTEMPLATED  TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL
OTHER  CLAIMS.  THE  COMPANY  HAS  REVIEWED  THIS  WAIVER  WITH  ITS  COUNSEL.
13.     Govering  Law;  Consent to Jurisdiction.  This Note shall be governed by
        ---------------------------------------
and  construed  under the law of the State of New York, without giving effect to
the  conflicts  of  law  principles thereof.  The Company and, by accepting this
Note,  the Holder, each irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States
District  Court  for  the  Southern  District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Note and
the transactions contemplated hereby.  Service of process in connection with any
such  suit,  action or proceeding may be served on each party hereto anywhere in
the  world  by the same methods as are specified for the giving of notices under
this  Note.  The  Company  and,  by  accepting  this  Note,  the  Holder,  each
irrevocably  consents  to  the  jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court.  The Company and,
by accepting this Note, the Holder, each irrevocably waives any objection to the
laying  of  venue  of any such suit, action or proceeding brought in such courts
and  irrevocably  waives  any  claim  that  any  such suit, action or proceeding
brought  in  any  such  court  has  been  brought  in  an  inconvenient  forum.
14.     Costs.  If  action  is  instituted  to collect on this Note, the Company
        -----
promises  to  pay  all costs and expenses, including reasonable attorney's fees,
incurred  in  connection  with  such  action.
15.
<PAGE>
Notices.  All  notices  hereunder  shall be given in writing and shall be deemed
-------
delivered  when  received  by the other party hereto at the address set forth in
--
the  Purchase  Agreement  or  at  such other address as may be specified by such
--
party  from  time  to  time  in  accordance  with  the  Purchase  Agreement.
--
16.     Successors  and Assigns.  This Note shall be binding upon the successors
        -----------------------
or  assigns  of the Company and shall inure to the benefit of the successors and
assigns  of  the  Holder.
                  [Remainder of Page Intentionally Left Blank]

<PAGE>

LOCATEPLUS  HOLDINGS  CORPORATION

By:___________________________
Name:
Title:

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