Document:

Exhibit 4.1

    

    

    

    
      PREFERRED STOCK PURCHASE AGREEMENT
    

    
      This Preferred Stock Purchase Agreement (“Agreement”) is
      entered into and effective as of February 5, 2010 (“Effective
      Date”), by and among PureSpectrum, Inc., a Delaware corporation (“Company”),
      and Socius Capital Group, LLC, a Delaware limited liability company, dba
      Socius Energy Capital Group, LLC (including its designees, successors
      and assigns, “Investor”).
    

    
      RECITALS
    

    
      A.                 The parties desire that, upon the terms and subject
      to the conditions contained herein, the Company shall issue to Investor,
      and Investor shall purchase from the Company, from time to time as
      provided herein, up to $5,000,000.00 of shares of Series A Preferred
      Stock; and
    

    
      B.                 The offer and sale of the Securities provided for
      herein are being made without registration under the Act, in reliance
      upon the provisions of Section 4(2) of the Act, Regulation D promulgated
      under the Act, and such other exemptions from the registration
      requirements of the Act as may be available with respect to any or all
      of the purchases of Securities to be made hereunder.
    

    
      AGREEMENT
    

    
      In consideration of the premises, the mutual provisions of this
      Agreement, and other good and valuable consideration the receipt and
      adequacy of which are hereby acknowledged, Company and Investor agree as
      follows:
    

    
      ARTICLE 1
DEFINITIONS
    

    
      In addition to the terms defined elsewhere in this Agreement:  (a)
      capitalized terms that are not otherwise defined herein have the
      meanings given to such terms in the Certificate of Designations, and (b)
      the following terms have the meanings indicated in this ARTICLE 1:
    

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

    
      “Affiliate” means any Person that, directly or indirectly
      through one or more intermediaries, controls, is controlled by, or is
      under common control with a Person, as such terms are used in and
      construed under Rule 144 under the Act.  With respect to Investor,
      without limitation, any Person owning, owned by, or under common
      ownership with Investor, and any investment fund or managed account that
      is managed on a discretionary basis by the same investment manager as
      Investor will be deemed to be an Affiliate.
    

    
      “Agreement” means this Preferred Stock Purchase Agreement.
    

    
      “Bloomberg” means Bloomberg Financial Markets.
    

    
      “Change in Control” has the meaning set forth within the
      definition of Fundamental Transaction, below.
    

    

    

    
      
        

        

      

      
        
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      “Certificate of Designations” means the certificate to be
      filed with the Secretary of State of the State of Delaware, in the form
      attached hereto as Exhibit B.
    

    
      “Closing” means any one of (i) the Commitment Closing and
      (ii) each Tranche Closing.
    

    
      “Closing Bid Price” and “Closing Sale Price”
      means, for any security as of any date, the last closing bid price and
      last closing trade price, respectively, for such security on the Trading
      Market, as reported by Bloomberg, or, if the Trading Market begins to
      operate on an extended hours basis and does not designate the closing
      bid price or the closing trade price, as the case may be, then the last
      bid price or last trade price, respectively, of such security prior to
      4:00 p.m., Eastern time, as reported by Bloomberg, or, if the Trading
      Market is not the principal securities exchange or trading market for
      such security, the last closing bid price or last trade price,
      respectively, of such security on the principal securities exchange or
      trading market where such security is listed or traded as reported by
      Bloomberg, or if the foregoing do not apply, the last closing bid price
      or last trade price, respectively, of such security in the
      over-the-counter market on the electronic bulletin board for such
      security as reported by Bloomberg, or, if no closing bid price or last
      trade price, respectively, is reported for such security by Bloomberg,
      the average of the bid prices, or the ask prices, respectively, of any
      market makers for such security as reported in the “pink sheets” by Pink
      Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the
      Closing Bid Price or the Closing Sale Price cannot be calculated for a
      security on a particular date on any of the foregoing bases, the Closing
      Bid Price or the Closing Sale Price, as the case may be, of such
      security on such date shall be the fair market value as mutually
      determined by the Company and Investor.  If the Company and Investor are
      unable to agree upon the fair market value of such security, then such
      dispute shall be resolved pursuant to Section 6.7.  All such
      determinations to be appropriately adjusted for any stock dividend,
      stock split, stock combination or other similar transaction during the
      applicable calculation period.
    

    
      “Commitment Closing” has the meaning set forth in Section
      2.2(a).
    

    
      “Commitment Fee” means a non-refundable fee of $250,000.00
      (5.0% of the Maximum Placement), payable by the Company to Investor in
      consideration of Investor’s commitment to fund the investment
      contemplated by this Agreement.  The Commitment Fee is payable as
      follows: On the Effective Date, the Company will issue to Investor a
      stock certificate evidencing shares of Common Stock equal in value to
      $250,000.00, with such valuation based upon 82% of the VWAP of the
      Common Stock for the five Trading Days preceding the Effective
      Date.  The Commitment Fee shall be payable in full on the earliest of
      (i) the first Tranche Closing Date, in cash by offset from the proceeds
      of the first Tranche, or (ii) the six-month anniversary of the Effective
      Date, at the Company’s option either in cash or in shares of Common
      Stock valued at the Commitment Fee VWAP Price, or (iii) the date that
      the Registration Statement is declared effective by the SEC, at the
      Company’s option either in cash or in shares of Common Stock valued at
      the Commitment Share VWAP Price.    
    

    
      “Commitment Fee Shares” means any shares of Common Stock
      issued to Investor in payment of the Commitment Fee.
    

    
      “Commitment Share VWAP Price” means the lower of (1) 82% of
      the VWAP of the Common Stock for the five Trading Days immediately
      preceding the Effective Date, or (2) 82% of the VWAP of the Common Stock
      for the five Trading Days immediately preceding the date that the
      Commitment Fee is first payable to Investor.
    

    

    

    
      
        

        

      

      
        
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      “Common Shares” includes the Warrant Shares and any
      Commitment Fee Shares.
    

    
      “Common Stock” means the common stock, par value $0.0001
      per share, of the Company, and any replacement or substitute thereof, or
      any share capital into which such Common Stock shall have been changed
      or any share capital resulting from a reclassification of such Common
      Stock.
    

    
      “Company Termination” has the meaning set forth in Section
      3.2.
    

    
      “Delisting Event” means any time during the term of this
      Agreement, that the Common Stock is not listed for and actively and/or
      regularly trading on a Trading Market, or is suspended or delisted with
      respect to the trading of the shares of Common Stock on a Trading Market.
    

    
      “Disclosure Schedules” means the disclosure schedules of
      the Company delivered concurrently herewith, attached hereto, and
      incorporated herein by reference.  The Disclosure Schedules shall
      contain no material non-public information.
    

    
      “DTC” means The Depository Trust Company, or any successor
      performing substantially the same function for Company.
    

    
      “DWAC Shares” means, following the earlier of the date that
      the Registration Statement is declared effective by the SEC or the
      six-month anniversary of issuance, all Common Shares or other shares of
      Common Stock issued or issuable to Investor or any Affiliate, successor
      or assign of Investor pursuant to any of the Transaction Documents,
      including without limitation any Warrant Shares, all of which shall be
      (a) issued in electronic form, (b) freely tradable and without
      restriction on resale, and (c) timely credited by Company to the
      specified Deposit/Withdrawal at Custodian (DWAC) account with DTC under
      its Fast Automated Securities Transfer (FAST) Program or any similar
      program hereafter adopted by DTC performing substantially the same
      function, in accordance with irrevocable instructions issued to and
      countersigned by the Transfer Agent, in the form attached hereto as Exhibit
      C or in such other form agreed upon by the parties.
    

    
      “Exchange Act” means the Securities Exchange Act of 1934,
      as amended.
    

    
      “Fundamental Transaction” means and shall be deemed to have
      occurred at such time upon any of the following events:
    

    
      (i)                     a consolidation, merger or other business
      combination or event or transaction, following which the holders of
      Common Stock immediately preceding such consolidation, merger,
      combination or event either (a) no longer hold a majority of the shares
      of Common Stock or (b) no longer have the ability to elect a majority of
      the board of directors of the Company (a “Change in Control”);
    

    
      (ii)                    the sale or transfer of all or substantially all
      of the Company’s assets, other than in the ordinary course of business;
      or
    

    

    

    
      
        

        

      

      
        
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      (iii)                   a purchase, tender or exchange offer made to the
      holders of the outstanding shares of Common Stock that is accepted by a
      majority of such holders.
    

    
      “GAAP” means United States generally accepted accounting
      principles applied on a consistent basis during the periods involved.
    

    
      “Indebtedness” means (a) any liabilities for borrowed money
      or amounts owed in excess of $250,000 (other than trade accounts payable
      incurred in the ordinary course of business), (b) all guaranties,
      endorsements and other contingent obligations in respect of Indebtedness
      of others, whether or not the same are or should be reflected in the
      Company’s balance sheet (or the notes thereto), except guaranties by
      endorsement of negotiable instruments for deposit or collection or
      similar transactions in the ordinary course of business; and (c) the
      present value of any lease payments in excess of $250,000 due under
      leases required to be capitalized in accordance with GAAP.  
    

    
      “Liens” means a lien, charge, security interest,
      encumbrance, right of first refusal, preemptive right or other
      restriction.
    

    
      “Lock-Up Agreements” means an agreement in the form
      attached as Exhibit D, executed by each of the Company’s
      officers, directors and beneficial owners of 10% or more of the Common
      Stock, precluding each such Person from participating in any sale of the
      Common Stock from the Tranche Notice Date through the Tranche Closing
      Date.
    

    
      “Material Adverse Effect” means any material adverse effect
      on (i) the legality, validity or enforceability of any Transaction
      Document, (ii) the results of operations, assets, business, prospects or
      financial condition of the Company and the Subsidiaries, taken as a
      whole, or (iii) a the Company’s ability to perform in any material
      respect on a timely basis its obligations under any Transaction Document.
    

    
      “Material Agreement” means any material loan agreement,
      financing agreement, equity investment agreement or securities
      instrument to which Company is a party, any agreement or instrument to
      which Company and Investor or any Affiliate of Investor is a party, and
      any other material agreement listed, or required to be listed, on any of
      Company’s reports filed or required to be filed with the SEC, including
      without limitation Forms 10-K, 10-Q or 8-K.
    

    
      “Maximum Placement” means $5,000,000.00.
    

    
      “Maximum Tranche Amount” means, subject to any other
      applicable limitations set forth in this Agreement, the Maximum
      Placement less the amount of any previously noticed and funded Tranches.
    

    
       “Officer’s Closing Certificate” means a
      certificate in customary form reasonably acceptable to Investor,
      executed by an authorized officer of the Company.
    

    
      “Opinion” means an opinion from Company’s independent legal
      counsel, in the form attached as Exhibit E or in such other form
      agreed upon by the parties, to be delivered in connection with the
      Commitment Closing and any Tranche Closing.
    

    

    

    
      
        

        

      

      
        
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      “Person” means an individual or corporation, partnership,
      trust, incorporated or unincorporated association, joint venture,
      limited liability company, joint stock company, government (or an agency
      or subdivision thereof) or other entity of any kind.
    

    
      “Preferred Shares” means shares of Series A Preferred Stock
      of the Company provided for in the Certificate of Designations, to be
      issued to Investor pursuant to this Agreement.
    

    
      “Prospectus” includes each prospectus and prospectus
      supplement (within the meaning of the Act) related to the sale or
      offering of any Common Shares, including without limitation any
      prospectus or prospectus supplement contained within the Registration
      Statement.
    

    
      “Registration Statement” means a valid, current and
      effective registration statement registering for resale the shares of
      Common Stock to be issued as Warrant Shares and Commitment Fee Shares
      hereunder, and except where the context otherwise requires, means such
      registration statement, as amended, including (i) all documents filed as
      a part thereof or incorporated by reference therein, and (ii) any
      information contained or incorporated by reference in a prospectus filed
      with the SEC in connection with such registration statement, to the
      extent such information is deemed under the Act to be part of such
      registration statement.
    

    
      “Regulation D” means Regulation D promulgated under the Act.
    

    
      “Required Approval” means any approval of the Trading
      Market or the Company’s stockholders required to be obtained by Company
      prior to issuing the Securities pursuant to any applicable rules of the
      Trading Market.
    

    
      “Required Tranche Documents” has the meaning set forth in Section
      2.3(e).
    

    
      “Rule 144” means Rule 144 promulgated by the SEC pursuant
      to the Act, as such Rule may be amended from time to time, or any
      similar rule or regulation hereafter adopted by the SEC having
      substantially the same effect.
    

    
      “Rule 144 Eligible” means eligible for immediate resale
      under Rule 144 without limitation on the amount of securities sold under
      Rule 144(e) and without  requiring discharge by payment in full of any
      promissory notes given to the Company prior to the sale of the
      securities under Rule 144(d)(2)(iii).
    

    
      “SEC” means the United States Securities and Exchange
      Commission.
    

    
      “SEC Reports” includes all reports required to be filed by
      the Company under the Act and/or the Exchange Act, including pursuant to
      Section 13(a) or 15(d) thereof, for the two years preceding the
      Effective Date (or such shorter period as the Company was required by
      law to file such material) and for the period in which this Agreement is
      in effect.
    

    
      “Securities” includes the Warrant, the Common Shares and
      the Preferred Shares issuable pursuant to this Agreement.
    

    

    

    
      
        

        

      

      
        
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      “Subsidiary” means any Person the Company owns or controls,
      or in which the Company, directly or indirectly, owns a majority of the
      capital stock or similar interest that would be disclosable pursuant to
      Regulation S-K, Item 601(b)(21).
    

    
      “Termination” has the meaning set forth in Section
      3.1.
    

    
      “Termination Date” means the earlier of (i) the date that
      is the two-year anniversary of the Effective Date, or (ii) the Tranche
      Closing Date on which the sum of the aggregate Tranche Purchase Price
      for all Tranche Shares equals the Maximum Placement.
    

    
      “Termination Notice” has the meaning as set forth in Section
      3.2.
    

    
      “Trading Day” means any day on which the Common Stock is
      traded on the Trading Market; provided that it shall not include any day
      on which the Common Stock is (a) scheduled to trade for less than 5
      hours, or (b) suspended from trading.
    

    
      “Trading Market” means the OTC Bulletin Board, the NASDAQ
      Capital Market, the NASDAQ Global Market, the NASDAQ Global Select
      Market, the NYSE Amex, or the New York Stock Exchange, whichever is at
      the time the principal trading system, exchange or market for the Common
      Stock, but does not include the Pink Sheets inter-dealer electronic
      quotation and trading system.
    

    
      “Tranche” has the meaning set forth in Section
      2.3(a).
    

    
      “Tranche Amount” means the amount of any individual
      purchase of Preferred Shares under this Agreement, as specified by the
      Company, and shall not exceed the Maximum Tranche Amount.
    

    
      “Tranche Closing” has the meaning set forth in Section
      2.3(f)(iv).
    

    
      “Tranche Closing Date” has the meaning set forth in Section
      2.3(f)(i).
    

    
      “Tranche Notice” has the meaning set forth in Section
      2.3(b).
    

    
      “Tranche Notice Date” has the meaning set forth in Section
      2.3(b).
    

    
      “Tranche Purchase Price” has the meaning set forth in Section
      2.3(b), and shall be specified in writing by the Company.
    

    
      “Tranche Share Price” means $10,000.00 per Preferred
      Share.  The Company may not issue fractional Preferred Shares.
    

    
      “Tranche Shares” means the Preferred Shares that are
      purchased by Investor pursuant to a Tranche.  For the Maximum Placement,
      the Company shall issue 500 Preferred Shares to Investor.
    

    
      “Transaction Documents” means this Agreement, the other
      agreements and documents referenced herein, and the exhibits and
      schedules hereto and thereto.
    

    

    

    
      
        

        

      

      
        
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      “Transfer Agent” means Transfer Online, Inc. or any
      successor transfer agent for the Common Stock.
    

    
      “Use of Proceeds Certificate” means a certificate, in
      substantially the form attached as Exhibit F, signed by an
      officer of the Company, setting forth how the Tranche Purchase Price
      will be applied by the Company.
    

    
      “VWAP” means, for any date, the volume-weighted average
      price, calculated by dividing the aggregate value of Common Stock traded
      on the Trading Market (price multiplied by number of shares traded) by
      the total volume (number of shares) of Common Stock traded on the
      Trading Market for such date, or the nearest preceding Trading Day.
    

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

    
      “Warrant” means the warrant issuable under this Agreement,
      in the form attached hereto as Exhibit A, to purchase shares of
      Common Stock with an aggregate exercise price equal to 135.0% of the
      Maximum Placement (subject to adjustment as set forth therein).
    

    
      ARTICLE 2
PURCHASE AND SALE
    

    
      2.1                Agreement
      to Purchase.  Subject to the terms and conditions herein and the
      satisfaction of the conditions to closing set forth in this ARTICLE 2:
    

    
      (a)       Investor hereby
      agrees to purchase such amounts of Preferred Shares as the Company may,
      in its sole and absolute discretion, from time to time elect to issue
      and sell to Investor according to one or more Tranches pursuant to Section
      2.3 below; and
    

    
      (b)       The Company agrees
      to pay the Commitment Fee and to issue the Preferred Shares, the Common
      Shares, the Commitment Fee Shares, and the Warrant to Investor as
      provided herein.
    

    
      2.2                Investment
      Commitment
    

    
      (a)       Investment
      Commitment. The closing of this Agreement (the “Commitment
      Closing”) shall be deemed to occur when this Agreement has been duly
      executed by both Investor and the Company, and the other Conditions to
      the Commitment Closing set forth in Section 2.2(b)(i) and Section
      2.2(c) have been met.
    

    
      (b)       Commitment Fee
      Shares.  
    

    
      (i)       As a condition to
      the Commitment Closing, on or prior to the Effective Date the Company
      shall issue to Investor, as an estimate of the maximum number of
      Commitment Fee Shares to which Investor may be or become entitled under
      this Agreement, 10,000,000 Commitment Fee Shares.  The Commitment Fee
      Shares shall be evidenced by a stock certificate delivered to Investor
      and titled in the name of Investor or its designee.  The stock
      certificate shall bear a legend substantially in the form set forth in Section
      5.1(b) hereof and, at the Company’s option, an additional legend
      indicating that such shares are subject to the contractual restrictions
      set forth in this Agreement.  
    

    

    

    
      
        

        

      

      
        
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      (ii)      If the Commitment Fee is
      paid in cash when due, the Commitment Fee Shares issued to Investor
      pursuant to Section 2.2(b)(i) shall be returned by Investor to
      the Company.  
    

    
      (iii)     If for any reason whatsoever
      the Commitment Fee has not been paid by the earliest of (i) the first
      Tranche Closing Date, (ii) the six-month anniversary of the Effective
      Date, or (iii) the date that the Registration Statement is declared
      effective by the SEC, then the Commitment Fee Shares issued to Investor
      pursuant to Section 2.2(b)(i) will be retained by Investor as
      final payment of the Commitment Fee and, on such date, the legends shall
      be removed from the stock certificate evidencing such shares.  If
      necessary to make the aggregate number of shares delivered to Investor
      equal to the total Commitment Fee divided by the then-applicable
      Commitment Share VWAP Price, on the date the Commitment Fee is first
      payable the Company shall deliver to Investor either (A) if more shares
      are required, a second legend-free certificate for the balance of the
      required shares, or (B) if less shares are required, a legend-free
      replacement certificate for the total required number of shares and, in
      such case, the original certificate shall be returned to the Company for
      cancellation.
    

    
      (iv)      A total of 10,000,000
      shares of Common Stock shall be included in the Registration Statement
      for potential use by the Company in satisfaction of the Commitment
      Fee.  Any such shares that are registered for resale but are not used in
      payment of the Commitment Fee shall be cancelled by the Company.  Prior
      to the date that Investor is entitled to receive legend-free
      certificates, neither Investor nor the Company shall be entitled to
      sell, pledge, assign or otherwise transfer any of the Commitment Fee
      Shares nor shall Investor be entitled to vote the shares.  
    

    
      (c)       Conditions to
      Investment Commitment. As a condition precedent to the Commitment
      Closing, all of the following (the “Conditions to Commitment
      Closing”) shall have been satisfied prior to or concurrently with
      the Company’s execution and delivery of this Agreement:
    

    
      (i)       the following
      documents shall have been delivered to Investor:  (A) this Agreement,
      executed by the Company; (B) a Secretary’s Certificate as to (x) the
      resolutions of the Company’s board of directors authorizing this
      Agreement and the Transaction Documents, and the transactions
      contemplated hereby and thereby, and (y) a copy of the Company’s current
      Certificate of Incorporation, Bylaws, and other governing documents; (C)
      the Certificate of Designations executed by the Company and filed with
      the Delaware Secretary of State; (D) the Opinion; and (E) a copy of (1)
      the Company’s press release (if any) announcing the transactions
      contemplated by this Agreement; and (F) a copy of the Company’s Current
      Report on Form 8-K, as filed with the SEC, describing the transaction
      contemplated by, and attaching a complete copy of, the Transaction
      Documents;
    

    
      (ii)      other than for losses
      incurred in the ordinary course of business, there has not been any
      Material Adverse Effect on the Company since the date of the last SEC
      Report filed by the Company, including but not limited to incurring
      material liabilities;
    

    

    

    
      
        

        

      

      
        
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      (iii)     the representations and
      warranties of the Company in this Agreement shall be true and correct in
      all material respects and the Company shall have delivered an Officer’s
      Closing Certificate to such effect to Investor, signed by an officer of
      the Company;
    

    
      (iv)      the Warrant to purchase
      shares of Common Stock with an aggregate exercise price equal to 135.0%
      of the Maximum Placement (subject to adjustment as set forth therein)
      shall have been delivered to Investor;
    

    
      (v)       the Commitment Fee
      Shares shall have been received by Investor; and
    

    
      (vi)      any Required Approval has
      been obtained.
    

    
      (d)       Investor’s
      Obligation to Purchase. Subject to the prior satisfaction of all
      conditions set forth in this Agreement, following Investor’s receipt of
      a validly delivered Tranche Notice, Investor shall be required to
      purchase from the Company a number of Tranche Shares equal to the
      permitted Tranche Share Amount, in the manner described below.
    

    
      2.3                Tranches
      to Investor
    

    
      (a)       Procedure to
      Elect a Tranche. Subject to the Maximum Tranche Amount, the Maximum
      Placement and the other conditions and limitations set forth in this
      Agreement, at any time beginning on the effective date of the
      Registration Statement, the Company may, in its sole and absolute
      discretion, elect to exercise one or more individual purchases of
      Preferred Shares under this Agreement (each a “Tranche”)
      according to the following procedure.
    

    
      (b)       Delivery of
      Tranche Notice.  The Company shall deliver an irrevocable written
      notice (the “Tranche Notice”), in the form attached hereto
      as Exhibit G, to Investor stating that the Company shall exercise
      a Tranche and stating the number of Preferred Shares which the Company
      will sell to Investor at the Tranche Share Price, and the aggregate
      purchase price for such Tranche (the “Tranche Purchase Price”).  A
      Tranche Notice delivered by the Company to Investor by 4:30 p.m. Eastern
      time on any Trading Day shall be deemed delivered on the same day.  A
      Tranche Notice delivered by the Company to Investor after 4:30 p.m.
      Eastern time on any Trading Day, or at any time on a non-Trading Day,
      shall be deemed delivered on the next Trading Day.  The date that the
      Tranche Notice is deemed delivered is the “Tranche Notice Date”.  Each
      Tranche Notice shall be delivered via facsimile or electronic mail, with
      confirming copy by overnight carrier, in each case to the address set
      forth in Section 6.2.  Except for the first Tranche Closing, the
      Company may not give a Tranche Notice unless the Tranche Closing for the
      prior Tranche has occurred or has been cancelled by the Company pursuant
      to Section 2.3(g).
    

    
      (c)       Warrant.  On
      each Tranche Notice Date, that portion of the Warrant equal to 135% of
      the Tranche Amount shall vest and become exercisable, and such vested
      portion may be exercised at any time on or after such Tranche Notice
      Date.  Any portion of the Warrant that becomes exercisable in connection
      with the delivery of the Tranche Notice and is exercised by Investor in
      accordance with Section 1.1 of the Warrant shall be deemed
      exercised (i) on the applicable Tranche Notice Date, if the Company
      receives the Exercise Delivery Documents from Investor by 6:30 p.m.
      Eastern time on the Tranche Notice Date, or (ii) on the next Trading
      Day, if the Company receives the Exercise Delivery Documents from
      Investor after 6:30 p.m. Eastern Time on the applicable Tranche Notice
      Date or on any subsequent date.  
    

    

    

    
      
        

        

      

      
        
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      (d)       Conditions
      Precedent to Right to Deliver a Tranche Notice.  The right of the
      Company to deliver a Tranche Notice is subject to the satisfaction (or
      written waiver by Investor in its sole discretion), on the date of
      delivery of such Tranche Notice, of each of the following conditions:
    

    
      (i)       the Common Stock
      (including without limitation any shares of Common Stock that may be
      issued to Investor in payment of the Commitment Fee) shall be listed for
      and currently trading on the Trading Market, and to the Company’s
      knowledge there is no notice of any suspension or delisting with respect
      the trading of the shares of Common Stock on such Trading Market;
    

    
      (ii)      the representations and
      warranties of the Company set forth in this Agreement shall be true and
      correct in all material respects as if made on such date (except for any
      representations and warranties that are expressly made as of a
      particular date, in which case such representations and warranties shall
      be true and correct as of such particular date), and no default shall
      have occurred under this Agreement, or any other agreement with Investor
      or any Affiliate of Investor, or any other Material Agreement, and the
      Company shall deliver an Officer’s Closing Certificate to such effect to
      Investor, signed by an officer of the Company;
    

    
      (iii)     other than losses incurred in
      the ordinary course of business, there has been no Material Adverse
      Effect on the Company since the Commitment Closing;
    

    
      (iv)      the Company is not, and
      will not be as a result of the applicable Tranche, in default of this
      Agreement, any other agreement with Investor or any Affiliate of
      Investor, or any other Material Agreement;
    

    
      (v)       there is not then in
      effect any law, rule or regulation prohibiting or restricting the
      transactions contemplated in this Agreement or any other Transaction
      Document, or requiring any consent or approval which shall not have been
      obtained, nor is there any pending or threatened proceeding or
      investigation which may have the effect of prohibiting or adversely
      affecting any of the transactions contemplated by this Agreement; no
      statute, rule, regulation, executive order, decree, ruling or injunction
      shall have been enacted, entered, promulgated or adopted by any court or
      governmental authority of competent jurisdiction that prohibits the
      transactions contemplated by this Agreement, and no actions, suits or
      proceedings shall be in progress, pending or, to the Company’s knowledge
      threatened, by any person (other than Investor or any Affiliate of
      Investor), that seek to enjoin or prohibit the transactions contemplated
      by this Agreement;
    

    
      (vi)      all Common Shares shall
      have been timely delivered at the times provided for in this Agreement,
      including all Warrant Shares issuable pursuant to any Exercise Notice
      delivered to Company prior to the Tranche Notice Date;
    

    
      (vii)     all previously-issued and
      issuable Warrant Shares and (except with respect to the first Tranche
      Closing) all previously issued and issuable Commitment Fee Shares are
      DWAC Shares, are DTC eligible, and can be immediately converted into
      electronic form without restriction on resale;
    

    

    

    
      
        

        

      

      
        
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      (viii)    Company is in compliance with all
      requirements to maintain its then-current listing on the Trading Market;
    

    
      (ix)      Company has a current,
      valid and effective Registration Statement permitting the lawful resale
      of all previously-issued and issuable Common Shares (including without
      limitation all Warrant Shares issuable upon exercise of the Warrant
      delivered in connection with such Tranche and any Commitment Fee Shares);
    

    
      (x)       Company has a
      sufficient number of duly authorized shares of Common Stock reserved for
      issuance in such amount as may be required to fulfill its obligations
      pursuant to the Transaction Documents and any outstanding agreements
      with Investor and any Affiliate of Investor, including without
      limitation all Warrant Shares issuable upon exercise of the Warrant
      issued in connection with such Tranche;
    

    
      (xi)      Company has provided
      notice of its delivery of the Tranche Notice to all signatories of a
      Lock-Up Agreement as required under the Lock-Up Agreement;
    

    
      (xii)     the aggregate number of
      Warrant Shares issuable upon exercise of the Warrant on the Tranche
      Notice Date, when aggregated with all other shares of Common Stock
      deemed beneficially owned by Investor and its Affiliates (whether
      acquired in connection with the transactions contemplated by the
      Transaction Documents or otherwise), would not result in Investor owning
      more than 9.99% of all Common Stock outstanding on the Tranche Notice
      Date, as determined in accordance with Section 13(d) of the Exchange Act
      and the rules and regulations promulgated thereunder; and
    

    
      (xiii)    for any Tranche Notice delivered
      after the earliest of (A) the first Tranche Closing, (B) the six-month
      anniversary of the Effective Date, or (C) the date the Registration
      Statement is declared effective by the SEC, Investor shall have
      previously received the Commitment Fee.
    

    
      (e)       Documents to be
      Delivered at Tranche Closing. The Closing of any Tranche and
      Investor’s obligations hereunder shall additionally be conditioned upon
      the delivery to Investor of each of the following (the “Required
      Tranche Documents”) on or before the applicable Tranche Closing Date:
    

    
      (i)       a number of
      Preferred Shares equal to the Tranche Purchase Price divided by the
      Tranche Share Price shall have been delivered to Investor or an account
      specified by Investor for the Tranche Shares;
    

    
      (ii)      the following executed
      documents: Opinion, Officer’s Certificate and Lock-Up Agreements;
    

    
      (iii)     a Use of Proceeds Certificate,
      signed by an officer of the Company, and setting forth how the Tranche
      Purchase Price will be applied by the Company;
    

    

    

    
      
        

        

      

      
        
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      (iv)      all Warrant Shares shall
      have been timely delivered in accordance with any Exercise Notice
      delivered to Company prior to the Tranche Closing Date;
    

    
      (v)       all documents,
      instruments and other writings required to be delivered by the Company
      to Investor on or before the Tranche Closing Date pursuant to any
      provision of this Agreement or in order to implement and effect the
      transactions contemplated herein; and
    

    
      (vi)      payment of a $5,000.00
      non-refundable administrative fee to Investor’s counsel, by offset
      against the Tranche Amount, or by wire transfer of immediately available
      funds.
    

    
      (f)       Mechanics of
      Tranche Closing.  
    

    
      (i)       Each of the Company
      and Investor shall deliver all documents, instruments and writings
      required to be delivered by either of them pursuant to Section 2.3(e)
      of this Agreement at or prior to each Tranche Closing. Subject to such
      delivery and the satisfaction of the conditions set forth in Section
      2.3(d) as of the Tranche Closing Date, the closing of the purchase
      by Investor of Preferred Shares shall occur by 5:00 p.m. Eastern time,
      on the date which is ten (10) Trading Days following (and not counting)
      the Tranche Notice Date (each a “Tranche Closing Date”) at
      the offices of Investor.  
    

    
      (ii)      If any portion of the
      Warrant is exercised by Investor on or after the Tranche Notice Date and
      prior to or on the Tranche Closing Date (which exercise shall be
      effected by Investor sending the Exercise Delivery Documents to the
      Company in accordance with Section 1.1 of the Warrant), the
      Company shall send Investor an electronic copy of its share issuance
      instructions to the Transfer Agent and shall cause the requisite number
      of Warrant Shares to be credited to Investor’s account with DTC as DWAC
      Shares by 4:00 p.m. Eastern time on the Trading Day after the date the
      Company receives the Exercise Delivery Documents from
      Investor.  Notwithstanding the foregoing 4:00 p.m. deadline, if DWAC
      shares are not credited pursuant to this Section 2.3(f)(ii) by
      12:00 p.m. Eastern time on the Trading Day after the date the Company
      receives the Exercise Delivery Documents from Investor, then the Tranche
      Closing Date shall be extended by one Trading Day for each Trading Day
      that such credit of DWAC Shares is not made.  
    

    
      (iii)     On or before each Tranche
      Closing Date, Investor shall deliver to the Company, in cash or
      immediately available funds, the Tranche Purchase Price to be paid for
      such Tranche Shares.  
    

    
      (iv)      The closing (each a “Tranche
      Closing”) for each Tranche shall occur on the date that both (i) the
      Company has delivered to Investor all Required Tranche Documents, and
      (ii) Investor has delivered to the Company the Tranche Purchase Price.
    

    
      (g)       Limitation on
      Obligations to Purchase and Sell.  Notwithstanding any other
      provision, in the event the Closing Bid Price of the Common Stock during
      any one or more of the 9 Trading Days following the Tranche Notice Date
      is below 75.0% of the Closing Bid Price on the Tranche Notice Date,
      except as otherwise agreed in writing between Investor and the Company,
      Investor may, at its option, decline to purchase any Tranche Shares on
      the Tranche Closing Date.
    

    

    

    
      
        

        

      

      
        
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      2.4                Share
      Sufficiency.  On or before the date on which any portion of the
      Warrant become exercisable, the Company shall have a sufficient number
      of duly authorized shares of Common Stock for issuance in such amount as
      may be required to fulfill its obligations pursuant to the Transaction
      Documents and any outstanding agreements with Investor and any Affiliate
      of Investor.
    

    
      2.5                Maximum
      Placement.  Investor shall not be obligated to purchase any
      additional Tranche Shares once the aggregate Tranche Purchase Price paid
      by Investor equals the Maximum Placement.
    

    
      ARTICLE 3
TERMINATION
    

    
      3.1                Termination.  The
      Investor may elect to terminate this Agreement and the Company’s right
      to initiate subsequent Tranches to Investor under this Agreement (each,
      a “Termination”) upon the occurrence of any of the
      following:
    

    
      (a)       if, at any time,
      either the Company or any director or executive officer of the Company
      has engaged in a transaction or conduct related to the Company that has
      resulted in (i) a SEC enforcement action, including without limitation
      such director or executive officer being sanctioned by the SEC, or (ii)
      a civil judgment or criminal conviction for fraud or misrepresentation,
      or for any other offense that, if prosecuted criminally, would
      constitute a felony under applicable law;
    

    
      (b)       on any date after a
      Delisting Event that lasts for an aggregate of 20 Trading Days during
      any calendar year;
    

    
      (c)       if at any time the
      Company has filed for and/or is subject to any bankruptcy, insolvency,
      reorganization or liquidation proceedings or other proceedings for
      relief under any bankruptcy law or any law for the relief of debtors
      instituted by or against the Company or any Subsidiary of the Company;
    

    
      (d)       the Company is in
      breach or default of any Material Agreement, which breach or default
      could have a Material Adverse Effect;
    

    
      (e)       the Company is in
      breach or default of this Agreement, any Transaction Document, or any
      agreement with Investor or any Affiliate of Investor;
    

    
      (f)       upon the occurrence
      of a Fundamental Transaction;
    

    
      (g)       so long as any
      Preferred Shares are outstanding, the Company effects or publicly
      announces its intention to create a security senior to the Series A
      Preferred Stock, or substantially altering the capital structure of the
      Company in a manner that materially adversely affects the rights or
      preferences of the Series A Preferred Stock; and
    

    

    

    
      
        

        

      

      
        
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      (h)       on the Termination
      Date.
    

    
      3.2                Company
      Termination.  The Company may at any time in its sole discretion
      terminate (a “Company Termination”) this Agreement and its
      right to initiate future Tranches by providing thirty (30) days advance
      written notice (“Termination Notice”) to Investor.  
    

    
      3.3                Effect
      of Termination.  Except as otherwise provided herein, the
      termination of this Agreement will have no effect on any Common Shares,
      Preferred Shares, Commitment Fee Shares, Warrant, Warrant Shares, or
      DWAC Shares previously issued, delivered or credited, or on any
      then-existing rights of any holder thereof. Notwithstanding any other
      provision of this Agreement and regardless of whether the first Tranche
      has closed, the Commitment Fee is payable despite any termination of
      this Agreement and all fees paid to Investor or its counsel are
      non-refundable.  
    

    
      ARTICLE 4
REPRESENTATIONS AND WARRANTIES
    

    
      4.1                Representations
      and Warranties of the Company.  Except as set forth under the
      corresponding section of the Disclosure Schedules, which shall be deemed
      a part hereof and which shall not contain any material non-public
      information, the Company hereby represents and warrants to, and as
      applicable covenants with, Investor as of each Closing:
    

    
      (a)       Subsidiaries.  All
      of the direct and indirect subsidiaries of the Company are set forth on Section
      4.1(a) to the Disclosure Schedule.  The Company owns, directly or
      indirectly, all of the capital stock or other equity interests of each
      Subsidiary, and all of such directly or indirectly owned capital stock
      or other equity interests are owned free and clear of any Liens.  All
      the issued and outstanding shares of capital stock of each Subsidiary
      are duly authorized, validly issued, fully paid, non-assessable and free
      of preemptive and similar rights to subscribe for or purchase
      securities.  
    

    
      (b)       Organization and
      Qualification.  Each of the Company and each Subsidiary is an entity
      duly incorporated or otherwise organized, validly existing and in good
      standing under the laws of the jurisdiction of its incorporation or
      organization, as applicable, with the requisite power and authority to
      own and use its properties and assets and to carry on its business as
      currently conducted.  Neither the Company nor any Subsidiary is in
      violation or default of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational
      or charter documents.  Each of the Company and each Subsidiary is duly
      qualified to conduct business and is in good standing as a foreign
      corporation or other entity in each jurisdiction in which the nature of
      the business conducted or property owned by it makes such qualification
      necessary, except where the failure to be so qualified or in good
      standing, as the case may be, could not have or reasonably be expected
      to result in a Material Adverse Effect and no proceeding has been
      instituted in any such jurisdiction revoking, limiting or curtailing or
      seeking to revoke, limit or curtail such power and authority or
      qualification.
    

    
      (c)       Authorization;
      Enforcement.  The Company has the requisite corporate power and
      authority to enter into and to consummate the transactions contemplated
      by each of the Transaction Documents and otherwise to carry out its
      obligations hereunder or thereunder.  The execution and delivery of each
      of the Transaction Documents by the Company and the consummation by it
      of the transactions contemplated hereby or thereby have been duly
      authorized by all necessary action on the part of the Company and no
      further consent or action is required by the Company other than the
      filing of the Certificate of Designations.  Each of the Transaction
      Documents has been, or upon delivery will be, duly executed by the
      Company and, when delivered in accordance with the terms hereof, will
      constitute the valid and binding obligation of the Company, enforceable
      against the Company in accordance with its terms, except (i) as limited
      by general equitable principles and applicable bankruptcy, insolvency,
      reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally, (ii) as limited by
      laws relating to the availability of specific performance, injunctive
      relief or other equitable remedies and (iii) insofar as indemnification
      and contribution provisions may be limited by applicable law.  Neither
      the Company nor any Subsidiary is in violation of any of the provisions
      of its respective certificate or articles of incorporation, by-laws or
      other organizational or charter documents.
    

    

    

    
      
        

        

      

      
        
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      (d)       No Conflicts.  The
      execution, delivery and performance of the Transaction Documents by the
      Company, the issuance and sale of the Securities and the consummation by
      the Company of the other transactions contemplated thereby do not and
      will not (i) conflict with or violate any provision of the Company’s or
      any Subsidiary’s certificate or articles of incorporation, articles of
      association, bylaws, or other organizational or charter documents, or
      (ii) conflict with, or constitute a default (or an event that with
      notice or lapse of time or both would become a default) under, result in
      the creation of any Lien upon any of the properties or assets of the
      Company or any Subsidiary, or give to others any rights of termination,
      amendment, acceleration or cancellation (with or without notice, lapse
      of time or both) of, any agreement, credit facility, debt or other
      instrument (evidencing a Company or Subsidiary debt or otherwise) or
      other understanding to which the Company or any Subsidiary is a party or
      by which any property or asset of the Company or any Subsidiary is bound
      or affected, or (iii) conflict with or result in a violation of any law,
      rule, regulation, order, judgment, injunction, decree or other
      restriction of any court or governmental authority to which the Company
      or a Subsidiary is subject (including federal and state securities laws
      and regulations), or by which any property or asset of the Company or a
      Subsidiary is bound or affected, or (iv) conflict with or violate the
      terms of any agreement by which the Company or any Subsidiary is bound
      or to which any property or asset of the Company or any Subsidiary is
      bound or affected; except in the case of each of clauses (ii) and (iii),
      such as could not have or reasonably be expected to result in a Material
      Adverse Effect.
    

    
      (e)       Filings, Consents
      and Approvals.  Neither the Company nor any Subsidiary is required
      to obtain any consent, waiver, authorization or order of, give any
      notice to, or make any filing or registration with, any court or other
      federal, state, local or other governmental authority or other Person in
      connection with the execution, delivery and performance by the Company
      of the Transaction Documents, other than the filing of the Certificate
      of Designations and required federal and state securities filings and
      such filings and approvals as are required to be made or obtained under
      the applicable Trading Market rules in connection with the transactions
      contemplated hereby, each of which has been, or (if not yet required to
      be filed) shall be, timely filed.
    

    

    

    
      
        

        

      

      
        
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      (f)       Issuance of the
      Securities.  The Securities are duly authorized and, when issued and
      paid for in accordance with the applicable Transaction Documents, will
      be duly and validly issued, fully paid and nonassessable, free and clear
      of all Liens.  The Company has reserved from its duly authorized capital
      stock a number of shares of Common Stock and Preferred Stock for
      issuance of the Securities at least equal to the number of Securities
      which could be issued pursuant to the terms of the Transaction
      Documents, based on the then-anticipated exercise prices of the Warrant.
    

    
      (g)       Capitalization.  Other
      than as set forth in Section 4.1(g) to the Disclosure Schedule,
      the capitalization of the Company is as described in the Company’s most
      recently filed periodic SEC Report.  No Person has any right of first
      refusal, preemptive right, right of participation, or any similar right
      to participate in the transactions contemplated by the Transaction
      Documents.  Except (i) as a result of the purchase and sale of the
      Securities or (ii) as set forth in the SEC Reports or on Section
      4.1(g) to the Disclosure Schedule or (iii) as a result of subsequent
      subscriptions for shares of Common Stock or convertible debt or loans
      not to exceed $1,000,000 in aggregate additional capital investment or
      loans into the Company following the Effective Date, there are no
      outstanding options, warrants, script rights to subscribe to, calls or
      commitments of any character whatsoever relating to, or securities,
      rights or obligations convertible into or exchangeable for, or giving
      any Person any right to subscribe for or acquire, any shares of Common
      Stock, or contracts, commitments, understandings or arrangements by
      which the Company or any Subsidiary is or may become bound to issue
      additional shares of Common Stock or securities convertible into or
      exercisable for shares of Common Stock.  The issuance and sale of the
      Securities will not obligate the Company to issue shares of Common Stock
      or other securities to any Person (other than Investor) and will not
      result in a right of any holder of Company securities to adjust the
      exercise, conversion, exchange, or reset price under such securities.
      All of the outstanding shares of capital stock of the Company are
      validly issued, fully paid and nonassessable, have been issued in
      compliance with all federal and state securities laws, and none of such
      outstanding shares was issued in violation of any preemptive rights or
      similar rights to subscribe for or purchase securities.  No further
      approval or authorization of any stockholder, the Board of Directors of
      the Company or others is required for the issuance and sale of the
      Securities.  There are no stockholders agreements, voting agreements or
      other similar agreements with respect to the Company’s capital stock to
      which the Company is a party or, to the knowledge of the Company,
      between or among any of the Company’s stockholders.
    

    
      (h)       SEC Reports;
      Financial Statements.  The Company has filed all required SEC
      Reports for the two years preceding the Effective Date (or such shorter
      period as the Company was required by law to file such SEC Reports) on a
      timely basis.  As of their respective dates, the SEC Reports complied in
      all material respects with the requirements of the Act and the Exchange
      Act and the rules and regulations of the SEC promulgated thereunder, as
      applicable, and none of the SEC Reports, when filed, contained any
      untrue statement of a material fact or omitted to state a material fact
      required to be stated therein or necessary in order to make the
      statements therein, in light of the circumstances under which they were
      made, not misleading.  The financial statements of the Company included
      in the SEC Reports comply in all material respects with applicable
      accounting requirements and the rules and regulations of the SEC with
      respect thereto as in effect at the time of filing.  Such financial
      statements have been prepared in accordance with GAAP, except as may be
      otherwise specified in such financial statements or the notes thereto
      and except that unaudited financial statements may not contain all
      footnotes required by GAAP, and fairly present in all material respects
      the financial position of the Company and its consolidated subsidiaries
      as of and for the dates thereof and the results of operations and cash
      flows for the periods then ended, subject, in the case of unaudited
      statements, to normal, immaterial, year-end audit adjustments.
    

    

    

    
      
        

        

      

      
        
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      (i)       Material Changes.  Since
      the date of the latest audited financial statements included within the
      SEC Reports, except as set forth on Section 4(i) to the
      Disclosure Schedule, (i) there has been no event, occurrence or
      development that has had, or that could reasonably be expected to result
      in, a Material Adverse Effect, (ii) the Company has not incurred any
      liabilities (contingent or otherwise) other than (A) trade payables and
      accrued expenses incurred in the ordinary course of business consistent
      with past practice, and (B) liabilities not required to be reflected in
      the Company’s financial statements pursuant to GAAP or required to be
      disclosed in filings made with the SEC, (iii) the Company has not
      altered its method of accounting, (iv) the Company has not declared or
      made any dividend or distribution of cash or other property to its
      stockholders or purchased, redeemed or made any agreements to purchase
      or redeem any shares of its capital stock and (v) the Company has not
      issued any equity securities to any officer, director or Affiliate,
      except as disclosed in the SEC Reports.  The Company does not have
      pending before the SEC any request for confidential treatment of
      information.
    

    
      (j)       Litigation.  There
      is no action, suit, inquiry, notice of violation, proceeding or
      investigation pending or, to the knowledge of the Company, threatened
      against or affecting the Company, any Subsidiary or any of their
      respective properties before or by any court, arbitrator, governmental
      or administrative agency or regulatory authority (federal, state,
      county, local or foreign) (collectively, an “Action”),
      which (i) adversely affects or challenges the legality, validity or
      enforceability of any of the Transaction Documents or the Securities, or
      (ii) could, if there were an unfavorable decision, have or reasonably be
      expected to result in a Material Adverse Effect.  Neither the Company
      nor any Subsidiary, nor to the knowledge of the Company any director or
      officer thereof, is or has been the subject of any Action involving a
      claim of violation of or liability under federal or state securities
      laws or a claim of breach of fiduciary duty.  There has not been, and to
      the knowledge of the Company, there is not pending or contemplated, any
      investigation by the SEC involving the Company or any current or former
      director or officer of the Company.  The SEC has not issued any stop
      order or other order suspending the effectiveness of any registration
      statement filed by the Company or any Subsidiary under the Exchange Act
      or the Act.
    

    
      (k)       Labor Relations.  No
      material labor dispute exists or, to the knowledge of the Company, is
      imminent with respect to any of the employees of the Company, which
      could reasonably be expected to result in a Material Adverse Effect.
    

    
      (l)       Compliance.  Neither
      the Company nor any Subsidiary (i) is in default under or in violation
      of (and no event has occurred that has not been waived that, with notice
      or lapse of time or both, would result in a default by the Company or
      any Subsidiary under), nor has the Company or any Subsidiary received
      notice of a claim that it is in default under or that it is in violation
      of, any indenture, loan or credit agreement or any other similar
      agreement or instrument to which it is a party or by which it or any of
      its properties is bound (whether or not such default or violation has
      been waived), (ii) is in violation of any order of any court, arbitrator
      or governmental body, or (iii) is or has been in violation of any
      statute, rule or regulation of any governmental authority, including
      without limitation all foreign, federal, state and local laws applicable
      to its business, except in each case under clauses (i)-(iii) above as
      could not have a Material Adverse Effect.
    

    

    

    
      
        

        

      

      
        
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      (m)       Regulatory Permits.  The
      Company and each Subsidiary possess all certificates, authorizations and
      permits issued by the appropriate federal, state, local or foreign
      regulatory authorities necessary to conduct their respective businesses
      as described in the SEC Reports, except where the failure to possess
      such permits could not, individually or in the aggregate, have or
      reasonably be expected to result in a Material Adverse Effect (“Material
      Permits”), and neither the Company nor any Subsidiary has received
      any notice of proceedings relating to the revocation or modification of
      any Material Permit.
    

    
      (n)       Title to Assets.  The
      Company and each Subsidiary have good and marketable title in fee simple
      to all real property owned by them that is material to the business of
      the Company and each Subsidiary and good and marketable title in all
      personal property owned by them that is material to the business of the
      Company and each Subsidiary, in each case free and clear of all Liens,
      except for Liens that do not materially affect the value of such
      property and do not materially interfere with the use made and proposed
      to be made of such property by the Company and each Subsidiary and Liens
      for the payment of federal, state or other taxes, the payment of which
      is neither delinquent nor subject to penalties.  Any real property and
      facilities held under lease by the Company and each Subsidiary are held
      by them under valid, subsisting and enforceable leases of which the
      Company and each Subsidiary are in compliance.
    

    
      (o)       Patents and
      Trademarks.  The Company and each Subsidiary have, or have rights to
      use, all patents, patent applications, trademarks, trademark
      applications, service marks, trade names, copyrights, licenses and other
      similar rights that are necessary or material for use in connection with
      their respective businesses as described in the SEC Reports and which
      the failure to so have could have a Material Adverse Effect
      (collectively, the “Intellectual Property Rights”).  Neither
      the Company nor any Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or any Subsidiary
      violates or infringes upon the rights of any Person. To the knowledge of
      the Company, all such Intellectual Property Rights are enforceable and
      there is no existing infringement by another Person of any of the
      Intellectual Property Rights of the Company or each Subsidiary.
    

    
      (p)       Insurance.  The
      Company and each Subsidiary are insured by insurers of recognized
      financial responsibility against such losses and risks and in such
      amounts as are prudent and customary in the businesses in which the
      Company and each Subsidiary are engaged, including but not limited to
      directors and officers insurance coverage at least equal to the total
      aggregate amount of all Tranche Amounts reflected in all Tranche Notices
      issued by Company hereunder.  To the best of Company’s knowledge, such
      insurance contracts and policies are accurate and complete.  Neither the
      Company nor any Subsidiary has any reason to believe that it will not be
      able to renew its existing insurance coverage as and when such coverage
      expires or to obtain similar coverage from similar insurers as may be
      necessary to continue its business without a significant increase in
      cost.
    

    

    

    
      
        

        

      

      
        
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      (q)       Transactions With
      Affiliates and Employees.  Except as set forth in the SEC Reports,
      none of the officers or directors of the Company and, to the knowledge
      of the Company, none of the employees of the Company is presently a
      party to any transaction with the Company or any Subsidiary (other than
      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 knowledge of the Company, any
      entity in which any officer, director, or any such employee has a
      substantial interest or is an officer, director, trustee or partner, in
      each case in excess of $120,000 other than (i) for payment of salary or
      consulting fees for services rendered, (ii) reimbursement for expenses
      incurred on behalf of the Company and (iii) for other employee benefits,
      including stock option agreements under any equity incentive plan of the
      Company.
    

    
      (r)       Sarbanes-Oxley;
      Internal Accounting Controls.  The Company is in material compliance
      with all provisions of the Sarbanes-Oxley Act of 2002, which are
      applicable to it as of the date of the Commitment Closing.  The Company
      and each Subsidiary 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 Exchange Act Rules 13a-15(e) and
      15d-15(e)) for the Company and designed such disclosure controls and
      procedures to ensure that material information relating to the Company,
      including its 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 periodic report under the Exchange
      Act, as the case may be, is being prepared.  The Company’s certifying
      officers have evaluated the effectiveness of the Company’s disclosure
      controls and procedures as of the date prior to the filing date of the
      most recently filed periodic report under the Exchange Act (such date,
      the “Evaluation Date”).  The Company presented in its most
      recently filed periodic report under the Exchange Act the conclusions of
      the certifying officers about the effectiveness of the Company’s
      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 accounting controls or its
      disclosure controls and procedures or, to the Company’s knowledge, in
      other factors that could materially affect the Company’s internal
      accounting controls or its disclosure controls and procedures.
    

    
      (s)       Certain Fees.  Except
      for the payment of the Commitment Fee, no brokerage or finder’s fees or
      commissions are or will be payable by the Company to any broker,
      financial advisor or consultant, finder, placement agent, investment
      banker, bank or other Person with respect to the transactions
      contemplated by this Agreement.  Investor shall have no obligation with
      respect to any fees or with respect to any claims made by or on behalf
      of other Persons for fees of a type contemplated in this Section
      4.1(s) that may be due in connection with the transactions
      contemplated by this Agreement or the other Transaction Documents.
    

    

    

    
      
        

        

      

      
        
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      (t)       Private Placement.
      Assuming the accuracy of Investor representations and warranties set
      forth in Section 4.2, no registration under the Act is required
      for the offer and sale of the Securities by the Company to Investor as
      contemplated hereby. The issuance and sale of the Securities hereunder
      does not contravene the rules and regulations of any Trading Market.
    

    
      (u)       Investment Company.
      The Company is not, and is not an Affiliate of, and immediately after
      receipt of payment for the Securities, will not be or be an Affiliate
      of, an “investment company” within the meaning of the Investment Company
      Act of 1940, as amended.  The Company shall conduct its business in a
      manner so that it will not become subject to the Investment Company Act.
    

    
      (v)       Registration
      Rights.  No Person (other than Investor pursuant to the Transaction
      Documents) has any right to cause the Company to effect the registration
      under the Act of any securities of the Company.
    

    
      (w)       Listing and
      Maintenance Requirements.  The Common Stock is registered pursuant
      to Section 12 of the Exchange Act, and the Company has taken no action
      designed to, or which to its knowledge is likely to have the effect of,
      terminating the registration of the Common Stock under the Exchange Act
      nor has the Company received any notification that the SEC is
      contemplating terminating such registration.  The Company has not, in
      the 12 months preceding the Effective Date, received notice from any
      Trading Market on which the Common Stock is or has been listed or quoted
      to the effect that the Company is not in compliance with the listing or
      maintenance requirements of such Trading Market. The Company is, and has
      no reason to believe that it will not in the foreseeable future continue
      to be, in compliance with all such listing and maintenance requirements.
    

    
      (x)       Application of
      Takeover Protections.  The Company and its Board of Directors have
      taken all action deemed reasonable or prudent by them in their sole
      discretion, or as may be required by the Company’s organizational
      documents or applicable law, in order to render inapplicable any control
      share acquisition, business combination, poison pill (including any
      distribution under a rights agreement) or other similar anti takeover
      provision under the Company’s Certificate of Incorporation (or similar
      charter documents) or the laws of its state of incorporation that is or
      could become applicable to Investor as a result of Investor and the
      Company fulfilling their obligations or exercising their rights under
      the Transaction Documents, including without limitation the Company’s
      issuance of the Securities and Investor’s ownership of the Securities.
    

    
      (y)       Disclosure;
      Non-Public Information.  Except with respect to the information that
      will be, and to the extent that it actually is timely publicly disclosed
      by the Company pursuant to Section 2.2(c)(i), and notwithstanding
      any other provision in this Agreement or the other Transaction
      Documents, neither the Company nor any other Person acting on its behalf
      has provided Investor or its agents or counsel with any information that
      constitutes or might constitute material, non-public information,
      including without limitation this Agreement and the Exhibits, Appendices
      and Schedules hereto, unless prior thereto Investor shall have executed
      a written agreement regarding the confidentiality and use of such
      information.  The Company understands and confirms that neither Investor
      nor any Affiliate of Investor shall have any duty of trust or confidence
      that is owed directly, indirectly, or derivatively to the Company or the
      shareholders of the Company or to any other Person who is the source of
      material non-public information regarding the Company.  No information
      contained in the Disclosure Schedules constitutes material non-public
      information.  There is no adverse material information regarding the
      Company that has not been publicly disclosed prior to the Effective
      Date.  The Company understands and confirms that Investor will rely on
      the foregoing representations and covenants in effecting transactions in
      securities of the Company.  All disclosure provided to Investor
      regarding the Company, its business and the transactions contemplated
      hereby, including the Disclosure Schedules to this Agreement, furnished
      by or on behalf of the Company with respect to the representations and
      warranties made herein are true and correct in all material respects and
      do 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 light of the circumstances under which they were made, not
      misleading.
    

    

    

    
      
        

        

      

      
        
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      (z)       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 security or solicited any offers to buy any
      security, under circumstances that would cause this offering of the
      Securities to be integrated with prior offerings by the Company for
      purposes of the Act or which could violate any applicable stockholder
      approval provisions, including, without limitation, under the rules and
      regulations of the Trading Market.
    

    
      (aa)      Financial Condition.  Based
      on the financial condition of the Company as of the date of the
      Commitment Closing: (i) the fair saleable market value of the Company’s
      assets exceeds the amount that will be required to be paid on or in
      respect of the Company’s existing debts and other liabilities (including
      known contingent liabilities) as they mature; (ii) the Company’s assets
      do not constitute unreasonably small capital to carry on its business
      for the current fiscal year as now conducted and as proposed to be
      conducted including its capital needs taking into account the particular
      capital requirements of the business conducted by the Company, and
      projected capital requirements and capital availability thereof; and
      (iii) the current cash flow of the Company, together with the proceeds
      the Company would receive, were it to liquidate all of its assets, after
      taking into account all anticipated uses of the cash, would be
      sufficient to pay all amounts on or in respect of its debt when such
      amounts are required to be paid.  The Company does not intend to incur
      debts beyond its ability to pay such debts as they mature (taking into
      account the timing and amounts of cash to be payable on or in respect of
      its debt). The Company has no knowledge of any facts or circumstances,
      which lead it to believe that it will file for reorganization or
      liquidation under the bankruptcy or reorganization laws of any
      jurisdiction within one year from the date of the Commitment
      Closing.  The SEC Reports set forth as of the dates thereof all
      outstanding secured and unsecured Indebtedness of the Company or any
      Subsidiary, or for which the Company or any Subsidiary has
      commitments.  Neither the Company nor any Subsidiary is in default with
      respect to any Indebtedness.  
    

    
      (bb)      Tax Status.  The
      Company and each of its Subsidiaries has made or filed all federal,
      state and foreign income and all other tax returns, reports and
      declarations required by any jurisdiction to which it is subject (unless
      and only to the extent that the Company and each of its Subsidiaries has
      set aside on its books provisions reasonably adequate for the payment of
      all unpaid and unreported taxes) and has paid all taxes and other
      governmental assessments and charges that are material in amount, shown
      or determined to be due on such returns, reports and declarations,
      except those being contested in good faith and has set aside on its
      books provisions reasonably adequate for the payment of all taxes for
      periods subsequent to the periods to which such returns, reports or
      declarations apply.  There are no unpaid taxes in any material amount
      claimed to be due by the taxing authority of any jurisdiction, and the
      officers of the Company know of no basis for any such claim.  The
      Company has not executed a waiver with respect to the statute of
      limitations relating to the assessment or collection of any foreign,
      federal, statue or local tax.  None of the Company’s tax returns is
      presently being audited by any taxing authority.
    

    

    

    
      
        

        

      

      
        
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      (cc)      No General
      Solicitation or Advertising.  Neither the Company nor, to the
      knowledge of the Company, any of its directors or officers (i) has
      conducted or will conduct any general solicitation (as that term is used
      in Rule 502(c) of Regulation D) or general advertising with respect to
      the sale of the Securities, or (ii) made any offers or sales of any
      security or solicited any offers to buy any security under any
      circumstances that would require registration of the Securities under
      the Act or made any “directed selling efforts” as defined in Rule 902 of
      Regulation S.
    

    
      (dd)      Foreign Corrupt
      Practices.  Neither the Company, nor to the knowledge of the
      Company, any agent or other person acting on behalf of the Company, has
      (i) directly or indirectly, used any corrupt funds for unlawful
      contributions, gifts, entertainment or other unlawful expenses related
      to foreign or domestic political activity, (ii) made any unlawful
      payment to foreign or domestic government officials or employees or to
      any foreign or domestic political parties or campaigns from corporate
      funds, (iii) failed to disclose fully any contribution made by the
      Company (or made by any person acting on its behalf of which the Company
      is aware) which is  in violation of law, or (iv) violated in any
      material respect any provision of the Foreign Corrupt Practices Act of
      1977, as amended.
    

    
      (ee)      Acknowledgment
      Regarding Investor’s Purchase of Securities.  The Company
      acknowledges and agrees that Investor is acting solely in the capacity
      of arm’s length purchaser with respect to this Agreement and the
      transactions contemplated hereby.  The Company further acknowledges that
      Investor is not acting as a financial advisor or fiduciary of the
      Company (or in any similar capacity) with respect to this Agreement and
      the transactions contemplated hereby and any statement made by Investor
      or any of its representatives or agents in connection with this
      Agreement and the transactions contemplated hereby is not advice or a
      recommendation and is merely incidental to Investor’s purchase of the
      Securities.  The Company further represents to Investor that the
      Company’s decision to enter into this Agreement has been based solely on
      the independent evaluation of the Company and its representatives.
    

    
      (ff)      Accountants.  The
      Company’s accountants are set forth in the SEC Reports and such
      accountants are an independent registered public accounting firm as
      required by the Act.
    

    
      (gg)      No Disagreements with
      Accountants and Lawyers.  There are no disagreements of any kind
      presently existing, or reasonably anticipated by the Company to arise,
      between the accountants and lawyers formerly or presently employed by
      the Company, and the Company is current with respect to any fees owed to
      its accountants and lawyers, except for any past-due amounts that may be
      owed in the ordinary course of business.
    

    
      (hh)      Registration
      Statements and Prospectuses.  
    

    

    

    
      
        

        

      

      
        
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      (i)       The offer and sale
      of the Common Shares as contemplated hereby complies with the
      requirements of Rule 415 under the Act.
    

    
      (ii)      The Company has not,
      directly or indirectly, used or referred to any “free writing
      prospectus” (as defined in Rule 405 under the Act) except in compliance
      with Rules 164 and 433 under the Act.
    

    
      (iii)     The Company is not an
      “ineligible issuer” (as defined in Rule 405 under the Act) as of the
      eligibility determination date for purposes of Rules 164 and 433 under
      the Act with respect to the offering of the Common Shares contemplated
      by any Registration Statement filed or to be filed, without taking into
      account any determination by the SEC pursuant to Rule 405 under the Act
      that it is not necessary under the circumstances that the Company be
      considered an “ineligible issuer.”
    

    
      (ii)      Section 5 Compliance.
      No representation or warranty or other statement made by Company in the
      Transaction Documents contains any untrue statement or omits to state a
      material fact necessary to make any of them, in light of the
      circumstances in which it was made, not misleading.  The Company is not
      aware of any facts or circumstances that would cause the transactions
      contemplated by the Transaction Documents, when consummated, to violate
      Section 5 of the Act or other federal or state securities laws or
      regulations.
    

    
      4.2                Representations
      and Warranties of Investor. Investor hereby represents and
      warrants as of the Effective Date as follows:
    

    
      (a)       Organization;
      Authority.  Investor is an entity duly incorporated, validly
      existing and in good standing under the laws of the jurisdiction of its
      organization with full right, company power and authority to enter into
      and to consummate the transactions contemplated by the Transaction
      Documents and otherwise to carry out its obligations thereunder.  The
      execution, delivery and performance by Investor of the transactions
      contemplated by this Agreement have been duly authorized by all
      necessary company or similar action on the part of Investor.  Each
      Transaction Document to which it is a party has been (or will be) duly
      executed by Investor, and when delivered by Investor in accordance with
      the terms hereof, will constitute the valid and legally binding
      obligation of Investor, enforceable against it in accordance with its
      terms, except (i) as limited by general equitable principles and
      applicable bankruptcy, insolvency, reorganization, moratorium and other
      laws of general application affecting enforcement of creditors’ rights
      generally, (ii) as limited by laws relating to the availability of
      specific performance, injunctive relief or other equitable remedies and
      (iii) insofar as indemnification and contribution provisions may be
      limited by applicable law.
    

    
      (b)       Investor Status.  At
      the time Investor was offered the Securities, it was, and at the
      Effective Date it is an “accredited investor” as defined in Rule 501(a)
      under the Act.  
    

    
      (c)       Experience of
      Investor.  Investor, either alone or together with its
      representatives, has such knowledge, sophistication and experience in
      business and financial matters so as to be capable of evaluating the
      merits and risks of the prospective investment in the Securities, and
      has so evaluated the merits and risks of such investment.  Investor is
      able to bear the economic risk of an investment in the Securities and,
      at the present time, is able to afford a complete loss of such
      investment.
    

    

    

    
      
        

        

      

      
        
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      (d)       General
      Solicitation.  Investor is not purchasing the Securities as a result
      of any advertisement, article, notice or other communication regarding
      the Securities published in any newspaper, magazine or similar media or
      broadcast over television or radio or presented at any seminar or any
      other general solicitation or general advertisement.
    

    
      The Company acknowledges and agrees that Investor does not make or has
      not made any representations or warranties with respect to the
      transactions contemplated hereby other than those specifically set forth
      in this Section 4.2.
    

    
      ARTICLE 5
OTHER AGREEMENTS OF THE PARTIES
    

    
      5.1                Transfer
      Restrictions
    

    
      (a)       The Securities may
      only be disposed of in compliance with state and federal securities
      laws.  In connection with any transfer of Securities other than (i)
      pursuant to an effective Registration Statement or Rule 144, (ii) to the
      Company, (iii) to an Affiliate of Investor, or (iv) in connection with a
      pledge as contemplated in Section 5.1(b), the Company may require
      the transferor thereof to provide to the Company an opinion of Luce
      Forward Hamilton & Scripps LLP (“Luce Forward”), or
      other counsel selected by the transferor and reasonably acceptable to
      the Company, to the effect that such transfer does not require
      registration of such transferred Securities under the Act.
    

    
      (b)       Investor agrees to
      the imprinting, so long as is required by this Section 5.1, of
      the following legend, or substantially similar legend, on any
      certificate evidencing Securities other than DWAC Shares:
    

    
      NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES
      ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
      COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
      OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
      UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR
      IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
      THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
      SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
      OR OTHER LOAN SECURED BY SUCH SECURITIES.
    

    
      The Company agrees to cause such legend to be removed immediately upon
      effectiveness of a Registration Statement, or when any Common Shares are
      eligible for sale under Rule 144 and, if requested by Investor or the
      transfer agent, to promptly provide at the Company’s expense a legal
      opinion of counsel to the Company confirming that such legend may be
      removed.  Company further acknowledges and agrees that Investor may from
      time to time pledge pursuant to a bona fide margin agreement with a
      registered broker-dealer or grant a security interest in some or all of
      the Securities to a financial institution that is an “accredited
      investor” as defined in Rule 501(a) under the Act and who agrees to be
      bound by the provisions of this Agreement and, if required under the
      terms of such arrangement, Investor may transfer pledged or secured
      Securities to the pledgees or secured parties.  Such a pledge or
      transfer would not be subject to approval of the Company and no legal
      opinion of legal counsel of the pledgee, secured party or pledgor shall
      be required in connection therewith.  Further, no notice shall be
      required of such pledge.  At Investor’s reasonable expense, the Company
      will execute and deliver such documentation as a pledgee or secured
      party of Securities may reasonably request in connection with a pledge
      or transfer of the Securities.
    

    

    

    
      
        

        

      

      
        
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      5.2                Furnishing
      of Information.  As long as Investor owns Securities, the
      Company covenants to timely file (or obtain extensions in respect
      thereof and file within the applicable grace period) all reports
      required to be filed by the Company after the Effective Date pursuant to
      the Exchange Act.  Upon the request of Investor, the Company shall
      deliver to Investor a written certification of a duly authorized officer
      as to whether it has complied with the preceding sentence. As long as
      Investor owns Securities, if the Company is not required to file reports
      pursuant to such laws, it will prepare and furnish to Investor and make
      publicly available in accordance with Rule 144(c) such information as is
      required for Investor to sell the Securities under Rule 144.  The
      Company further covenants that it will take such further action as any
      holder of Securities may reasonably request, all to the extent required
      from time to time to enable such Person to sell such Securities without
      registration under the Act within the limitation of the exemptions
      provided by Rule 144.
    

    
      5.3                Integration.  The
      Company shall not sell, offer for sale or solicit offers to buy or
      otherwise negotiate in respect of any security (as defined in Section 2
      of the Act) that would be integrated with the offer or sale of the
      Securities in a manner that would require the registration under the Act
      of the sale of the Securities to Investor or that would be integrated
      with the offer or sale of the Securities for purposes of the rules and
      regulations of any Trading Market such that it would require stockholder
      approval prior to the closing of such other transaction unless
      stockholder approval is obtained before the closing of such subsequent
      transaction.
    

    
      5.4                Securities
      Laws Disclosure; Publicity.  The Company shall timely file a
      Current Report on Form 8-K as required by this Agreement, and in the
      Company’s discretion shall file a press release, in each case reasonably
      acceptable to Investor, disclosing the material terms of the
      transactions contemplated hereby.  The Company and Investor shall
      consult with each other in issuing any press releases with respect to
      the transactions contemplated hereby, and neither the Company nor
      Investor shall issue any such press release or otherwise make any such
      public statement without the prior consent of the Company, with respect
      to any such press release of Investor, or without the prior consent of
      Investor, with respect to any such press release of the Company, which
      consent shall not unreasonably be withheld or delayed, except if such
      disclosure is required by law or Trading Market regulations, in which
      case the disclosing party shall promptly provide the other party with
      prior notice of such public statement or communication.  Notwithstanding
      the foregoing, the Company shall not publicly disclose the name of
      Investor, or include the name of Investor in any filing with the SEC or
      any regulatory agency or Trading Market, without the prior written
      consent of Investor, except (i) as contained in the Current Report on
      Form 8-K and press release described above, (ii) as required by federal
      securities law in connection with any registration statement under which
      the Common Shares are registered, (iii) to the extent such disclosure is
      required by law or Trading Market regulations, in which case the Company
      shall provide Investor with prior notice of such disclosure, or (iv) to
      the extent such disclosure is required in any SEC Report filed by the
      Company.
    

    

    

    
      
        

        

      

      
        
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      5.5                Shareholders
      Rights Plan.  No claim will be made or enforced by the Company
      or, to the knowledge of the Company, any other Person that Investor is
      an “Acquiring Person” under any shareholders rights plan or similar plan
      or arrangement in effect or hereafter adopted by the Company, or that
      Investor could be deemed to trigger the provisions of any such plan or
      arrangement, by virtue of receiving Securities under the Transaction
      Documents or under any other agreement between the Company and Investor.
      The Company shall conduct its business in a manner so that it will not
      become subject to the Investment Company Act of 1940, as amended.
    

    
      5.6                Non-Public
      Information.  The Company covenants and agrees that neither it
      nor any other Person acting on its behalf will provide Investor or its
      agents or counsel with any information that the Company believes or
      reasonably should believe constitutes material non-public information,
      unless prior thereto Investor shall have executed a written agreement
      regarding the confidentiality and use of such information.  On and after
      the Effective Date, neither Investor nor any Affiliate Investor shall
      have any duty of trust or confidence that is owed directly, indirectly,
      or derivatively, to the Company or the shareholders of the Company, or
      to any other Person who is the source of material non-public information
      regarding the Company.  The Company understands and confirms that
      Investor shall be relying on the foregoing in effecting transactions in
      securities of the Company.
    

    

    

    
      
        

        

      

      
        
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      5.7                Reimbursement.  If
      Investor becomes involved in any capacity in any proceeding by or
      against any Person who is a stockholder of the Company (except as a
      result of sales, pledges, margin sales and similar transactions by
      Investor to or with any current stockholder), solely as a result of
      Investor’s acquisition of the Securities under this Agreement, the
      Company will reimburse Investor for its reasonable legal and other
      expenses (including the cost of any investigation preparation and travel
      in connection therewith) incurred in connection therewith, as such
      expenses are incurred, or will assume the defense of Investor in such
      matter.  The reimbursement obligations of the Company under this Section
      5.7 shall be in addition to any liability which the Company may
      otherwise have, shall extend upon the same terms and conditions to any
      Affiliates of Investor who are actually named in such action, proceeding
      or investigation, and partners, directors, agents, employees and
      controlling persons (if any), as the case may be, of Investor and any
      such Affiliate, and shall be binding upon and inure to the benefit of
      any successors, assigns, heirs and personal representatives of the
      Company, Investor and any such Affiliate and any such Person.  The
      Company also agrees that neither Investor nor any such Affiliates,
      partners, directors, agents, employees or controlling persons shall have
      any liability to the Company or any Person asserting claims on behalf of
      or in right of the Company solely as a result of acquiring the
      Securities under this Agreement.
    

    
      5.8                Indemnification
      of Investor
    

    
      (a)       Company
      Indemnification Obligation.  Subject to the provisions of this Section
      5.8, the Company will indemnify and hold Investor and any Warrant
      holder, their Affiliates and attorneys, and each of their directors,
      officers, shareholders, partners, employees, agents, and any person who
      controls Investor within the meaning of Section 15 of the Act or Section
      20 of the Exchange Act (collectively, the “Investor Parties”
      and each an “Investor Party”), harmless from any and all
      losses, liabilities, obligations, claims, contingencies, damages, costs
      and expenses, including all judgments, amounts paid in settlements,
      court costs and reasonable attorneys’ fees and costs of investigation
      (collectively, “Losses”) that any Investor Party may suffer
      or incur as a result of or relating to (i) any breach of any of the
      representations, warranties, covenants or agreements made by the Company
      in this Agreement or in the other Transaction Documents, (ii) any action
      instituted against any Investor Party, or any of them or their
      respective Affiliates, by any stockholder of the Company who is not an
      Affiliate of an Investor Party, with respect to any of the transactions
      contemplated by the Transaction Documents (unless such action is based
      upon a breach of Investor’s representations, warranties or covenants
      under the Transaction Documents or any agreements or understandings
      Investor may have with any such stockholder or any violations by
      Investor of state or federal securities laws or any conduct by Investor
      which constitutes fraud, gross negligence, willful misconduct or
      malfeasance), (iii) any untrue statement or alleged untrue statement of
      a material fact contained in a Registration Statement (or in a
      Registration Statement as amended by any post-effective amendment
      thereof by the Company) or arising out of or based upon any omission or
      alleged omission to state a material fact required to be stated therein
      or necessary to make the statements therein not misleading, and/or (iv)
      any untrue statement or alleged untrue statement of a material fact
      included in any Prospectus (or any amendments or supplements to any
      Prospectus), in any free writing prospectus, in any “issuer information”
      (as defined in Rule 433 under the Act) of the Company, or in any
      Prospectus together with any combination of one or more of the free
      writing prospectuses, if any, or arising out of or based upon any
      omission or alleged omission to state a material fact necessary in order
      to make the statements therein, in the light of the circumstances under
      which they were made, not misleading.
    

    

    

    
      
        

        

      

      
        
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      (b)       Indemnification
      Procedures.  If any action shall be brought against an Investor
      Party in respect of which indemnity may be sought pursuant to this
      Agreement, such Investor Party shall promptly notify the Company in
      writing, and the Company shall have the right to assume the defense
      thereof with counsel of its own choosing.  The Investor Parties shall
      have the right to employ separate counsel in any such action and
      participate in the defense thereof, but the fees and expenses of such
      counsel shall be at the expense of the Investor Parties except to the
      extent that (i) the employment thereof has been specifically authorized
      by the Company in writing, (ii) the Company has failed after a
      reasonable period of time to assume such defense and to employ counsel
      or (iii) in such action there is, in the reasonable opinion of such
      separate counsel, a material conflict with respect to the dispute in
      question on any material issue between the position of the Company and
      the position of the Investor Parties such that it would be inappropriate
      for one counsel to represent the Company and the Investor Parties.  The
      Company will not be liable to the Investor Parties under this Agreement
      (i) for any settlement by an Investor Party effected without the
      Company’s prior written consent, which shall not be unreasonably
      withheld or delayed; or (ii) to the extent, but only to the extent that
      a loss, claim, damage or liability is either attributable to Investor’s
      breach of any of the representations, warranties, covenants or
      agreements made by Investor in this Agreement or in the other
      Transaction Documents.
    

    
      5.9                Reservation
      of Securities.  The Company shall maintain a reserve from its
      duly authorized shares of Common Stock for issuance pursuant to the
      Transaction Documents in such amount as may be required to fulfill its
      obligations in full under the Transaction Documents.
    

    
      5.10                Limited
      Standstill.  The Company will deliver to Investor on or before
      each Tranche Closing Date, and will honor and enforce, and will take
      reasonable actions to assist Investor in enforcing, the provisions of,
      the Lock-Up Agreements with the Company’s officers, directors and
      beneficial owners of 10% or more of the Common Stock.
    

    
      5.11                Prospectus
      Availability and Changes.  The Company will make available to
      Investor upon request, and thereafter from time to time will furnish
      Investor, as many copies of any Prospectus (or of the Prospectus as
      amended or supplemented if the Company shall have made any amendments or
      supplements thereto after the effective date of the applicable
      Registration Statement) as Investor may request for the purposes
      contemplated by the Act; and in case Investor is required to deliver a
      prospectus after the nine-month period referred to in Section 10(a)(3)
      of the Act in connection with the sale of the Common Shares, or after
      the time a post-effective amendment to the applicable Registration
      Statement is required pursuant to Item 512(a) of Regulation S-K under
      the Act, the Company will prepare, at its expense, promptly upon request
      such amendment or amendments to the Registration Statement and the
      Prospectus as may be necessary to permit compliance with the
      requirements of Section 10(a)(3) of the Act or Item 512(a) of Regulation
      S-K under the Act, as the case may be.
    

    
      The Company will advise Investor promptly of the happening of any event
      within the time during which a Prospectus is required to be delivered
      under the Act which could require the making of any change in the
      Prospectus then being used so that the Prospectus would not include an
      untrue statement of material fact or omit to state a material fact
      necessary in order to make the statements therein, in the light of the
      circumstances under which they are made, not misleading, and to advise
      Investor promptly if, during such period, it shall become necessary to
      amend or supplement any Prospectus to cause such Prospectus to comply
      with the requirements of the Act, and in each case, during such time, to
      prepare and furnish, at the Company’s expense, to Investor promptly such
      amendments or supplements to such Prospectus as may be necessary to
      reflect any such change or to effect such compliance.
    

    

    

    
      
        

        

      

      
        
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      5.12               Required
      Approval.  No transactions contemplated under this Agreement or
      the Transaction Documents shall be consummated for an amount that would
      require approval by any Trading Market or Company stockholders under any
      approval provisions, rules or regulations of any Trading Market
      applicable to the Company, unless and until such approval is
      obtained.  Company shall use best efforts to obtain any required
      approval as soon as possible.
    

    
      5.13               Activity
      Restrictions.  For so long as Investor or any of its Affiliates
      holds any Preferred Shares, Commitment Fee Shares, Warrant, Warrant
      Shares, or DWAC Shares, neither Investor nor any Affiliate will: (i)
      vote any shares of Common Stock owned or controlled by it, solicit any
      proxies, or seek to advise or influence any Person with respect to any
      voting securities of the Company; (ii) engage or participate in any
      actions, plans or proposals which relate to or would result in (a)
      acquiring additional securities of the Company, alone or together with
      any other Person, which would result in beneficially owning or
      controlling more than 9.99% of the total outstanding Common Stock or
      other voting securities of the Company, (b) an extraordinary corporate
      transaction, such as a merger, reorganization or liquidation, involving
      Company or any of its subsidiaries, (c) a sale or transfer of a material
      amount of assets of the Company or any of its subsidiaries, (d) any
      change in the present board of directors or management of the Company,
      including any plans or proposals to change the number or term of
      directors or to fill any existing vacancies on the board, (e) any
      material change in the present capitalization or dividend policy of the
      Company, (f) any other material change in the Company’s business or
      corporate structure, including but not limited to, if the Company is a
      registered closed-end investment company, any plans or proposals to make
      any changes in its investment policy for which a vote is required by
      Section 13 of the Investment Company Act of 1940, (g) changes in the
      Company’s charter, bylaws or instruments corresponding thereto or other
      actions which may impede the acquisition of control of the Company by
      any Person, (h) causing a class of securities of the Company to be
      delisted from a national securities exchange or to cease to be
      authorized to be quoted in an inter-dealer quotation system of a
      registered national securities association, (i) a class of equity
      securities of the Company becoming eligible for termination of
      registration pursuant  to Section 12(g)(4) of the Act, or (j) any
      action, intention, plan or arrangement similar to any of those
      enumerated above; or (iii) request the Company or its directors,
      officers, employees, agents or representatives to amend or waive any
      provision of this Section 5.13.  
    

    
      5.14               Registration
      Statements and Prospectuses.  
    

    
      (a)       The Company will use
      its best efforts to file within 30 (thirty) calendar days after the
      Effective Date (or as soon as possible thereafter), to cause to become
      effective as soon as possible thereafter, and to remain effective until
      all Common Shares have been sold or are Rule 144 Eligible, a
      Registration Statement for the resale of all Common Shares issued
      or  issuable hereunder (including without limitation all Warrant Shares
      underlying the Warrant and any Common Shares that may be issued to
      Investor in payment of the Commitment Fee).  Each Registration Statement
      shall comply when it becomes effective, and, as amended or supplemented,
      at the time of any Tranche Notice Date, Tranche Closing Date, or
      issuance of any Common Shares, and at all times during which a
      prospectus is required by the Act to be delivered in connection with any
      sale of Common Shares, will comply, in all material respects, with the
      requirements of the Act.
    

    

    

    
      
        

        

      

      
        
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      (b)       Each Registration
      Statement, as of its respective effective time, will not, as applicable,
      contain any untrue statement of a material fact or omit to state a
      material fact required to be stated therein or necessary to make the
      statements therein not misleading.
    

    
      (c)       Each Prospectus will
      comply, as of its date and the date it will be filed with the SEC,  and,
      at the time of any Tranche Notice Date, Tranche Closing Date, or
      issuance of any Common Shares, and at all times during which a
      prospectus is required by the Act to be delivered in connection with any
      sale of Common Shares, will comply, in all material respects, with the
      requirements of the Act.
    

    
      (d)       At no time during
      the period that begins on the date a Prospectus is filed with the SEC
      and ends at the time a Prospectus is no longer required by the Act to be
      delivered in connection with any sale of Common Shares will any such
      Prospectus, as then amended or supplemented, include an untrue statement
      of a material fact or omit to state a material fact necessary in order
      to make the statements therein, in the light of the circumstances under
      which they were made, not misleading.
    

    
      (e)       Each Registration
      Statement will meet, and the offering and sale of the Common Shares as
      contemplated hereby will comply with, the requirements of Rule 415 under
      the Act.
    

    
      (f)       The Company will
      not, directly or indirectly, use or refer to any “free writing
      prospectus” (as defined in Rule 405 under the Act) except in compliance
      with Rules 164 and 433 under the Act.
    

    
      (g)       The Company will not
      be an “ineligible issuer” (as defined in Rule 405 under the Act) as of
      the eligibility determination date for purposes of Rules 164 and 433
      under the Act with respect to the offering of the Common Shares
      contemplated by any Registration Statement that is filed, without taking
      into account any determination by the SEC pursuant to Rule 405 under the
      Act that it is not necessary under the circumstances that the Company be
      considered an “ineligible issuer.”
    

    
      5.15               Investor
      Due Diligence.  Investor shall have the right and opportunity to
      conduct due diligence, at its own expense, with respect to any
      Registration Statement or Prospectus in which the name of Investor or
      any Affiliate of Investor appears.
    

    
      ARTICLE 6
MISCELLANEOUS
    

    
      6.1                Fees
      and Expenses.  Except for the $20,000.00 non-refundable document
      preparation fee previously paid by the Company to counsel for Investor
      (which shall cover only the initial draft of the Transaction Documents
      and one week of legal fees), the receipt of which is hereby
      acknowledged, and the $5,000.00 non-refundable administrative fee
      payable to counsel for Investor at each Tranche Closing, or as may be
      otherwise provided in this Agreement, each party shall pay the fees and
      expenses of its own advisers, counsel, accountants and other experts, if
      any, and all other expenses incurred by such party incident to the
      negotiation, preparation, execution, delivery and performance of the
      Transaction Documents.  The Company acknowledges and agrees that Luce
      Forward solely represents Investor, and does not represent the Company
      or its interests in connection with the Transaction Documents or the
      transactions contemplated thereby.  The Company shall pay all stamp and
      other taxes and duties levied in connection with the sale of the
      Securities, if any.
    

    

    

    
      
        

        

      

      
        
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      6.2                Notices.  Unless
      a different time of day or method of delivery is set forth in the
      Transaction Documents, any and all notices or other communications or
      deliveries required or permitted to be provided hereunder shall be in
      writing and shall be deemed given and effective on the earliest of:  (a)
      the date of transmission, if such notice or communication is delivered
      via facsimile or electronic mail prior to 5:30 p.m. Eastern time on a
      Trading Day and an electronic confirmation of delivery is received by
      the sender, (b) the next Trading Day after the date of transmission, if
      such notice or communication is delivered later than 5:30 p.m. Eastern
      time or on a day that is not a Trading Day, (c) three Trading Days
      following the date of mailing, if sent by U.S. nationally recognized
      overnight courier service, or (d) upon actual receipt by the party to
      whom such notice is required to be given.  The addresses for such
      notices and communications are those set forth following the signature
      page hereof, or such other address as may be designated in writing
      hereafter, in the same manner, by such Person.
    

    
      6.3                Amendments;
      Waivers.  No provision of this Agreement may be waived or
      amended except in a written instrument signed, in the case of an
      amendment, by the Company and Investor or, in the case of a waiver, by
      the party against whom enforcement of any such waiver is sought.  No
      waiver of any default with respect to any provision, condition or
      requirement of this Agreement shall be deemed to be a continuing waiver
      in the future or a waiver of any subsequent default or a waiver of any
      other provision, condition or requirement hereof, nor shall any delay or
      omission of either party to exercise any right hereunder in any manner
      impair the exercise of any such right.
    

    
      6.4                Headings.  The
      headings herein are for convenience only, do not constitute a part of
      this Agreement and shall not be deemed to limit or affect any of the
      provisions hereof
    

    
      6.5                Successors
      and Assigns.  This Agreement shall be binding upon and inure to
      the benefit of the parties and their successors and permitted
      assigns.  The Company may not assign this Agreement or any rights or
      obligations hereunder without the prior written consent of Investor,
      which consent shall not be unreasonably withheld or delayed.  Investor
      may assign any or all of its rights under this Agreement (a) to any
      Affiliate, or (b) to any Person to whom Investor assigns or transfers
      any Securities.
    

    
      6.6                No
      Third-Party Beneficiaries.  This Agreement is intended for the
      benefit of the parties hereto and their respective successors and
      permitted assigns and is not for the benefit of, nor may any provision
      hereof be enforced by, any other Person, except as otherwise set forth
      in Section 5.8.
    

    

    

    
      
        

        

      

      
        
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      6.7                Governing
      Law; Dispute Resolution.  All questions concerning the
      construction, validity, enforcement and interpretation of the
      Transaction Documents shall be governed by and construed and enforced in
      accordance with the laws of the State of New York, without regard to the
      principles of conflicts of law that would require or permit the
      application of the laws of any other jurisdiction.  Each party agrees
      that all legal proceedings concerning the interpretations, enforcement
      and defense of the transactions contemplated by this Agreement and any
      other Transaction Documents (whether brought against a party hereto or
      its respective affiliates, directors, officers, shareholders, employees
      or agents) shall be commenced exclusively in the state and federal
      courts sitting in the City of New York.  Each party hereby irrevocably
      submits to the exclusive jurisdiction of the state and federal courts
      sitting in the City of New York, Borough of Manhattan, for the
      adjudication of any dispute hereunder or in connection herewith or with
      any transaction contemplated hereby or discussed herein (including with
      respect to the enforcement of any of the Transaction Documents), and
      hereby irrevocably waives, and agrees not to assert in any suit, action
      or proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, that such suit, action or proceeding is
      improper or inconvenient venue for such proceeding.  Each party hereby
      irrevocably waives personal service of process and consents to process
      being served in any such suit, action or proceeding by mailing a copy
      thereof via registered or certified mail or overnight delivery (with
      evidence of delivery) to such party at the address in effect for notices
      to it under this Agreement and agrees that such service shall constitute
      good and sufficient service of process and notice thereof.  Nothing
      contained herein shall be deemed to limit in any way any right to serve
      process in any manner permitted by law.  The parties hereby waive all
      rights to a trial by jury.  If either party shall commence an action or
      proceeding to enforce any provisions of the Transaction Documents, then
      the prevailing party in such action or proceeding shall be reimbursed by
      the other party for its reasonable attorneys’ fees and other costs and
      expenses reasonably incurred in connection with the investigation,
      preparation and prosecution of such action or proceeding.  
    

    
      6.8                Survival.  The
      representations and warranties contained herein shall survive the
      Closing and the delivery and exercise of the Securities.
    

    
      6.9                Execution.  This
      Agreement may be executed in two or more counterparts, all of which when
      taken together shall be considered one and the same agreement and shall
      become effective when counterparts have been signed by each party and
      delivered to the other party, it being understood that both parties need
      not sign the same counterpart.  In the event that any signature is
      delivered by facsimile transmission, such signature shall create a valid
      and binding obligation of the party executing (or on whose behalf such
      signature is executed) with the same force and effect as if such
      facsimile signature page were an original thereof.
    

    
      6.10                Severability.  If
      any provision of this Agreement is held to be invalid or unenforceable
      in any respect, the validity and enforceability of the remaining terms
      and provisions of this Agreement shall not in any way be affected or
      impaired thereby and the parties will attempt to agree upon a valid and
      enforceable provision that is a reasonable substitute therefor, and upon
      so agreeing, shall incorporate such substitute provision in this
      Agreement.
    

    
      6.11                Replacement
      of Securities.  If any certificate or instrument evidencing any
      Securities is mutilated, lost, stolen or destroyed, the Company shall
      issue or cause to be issued in exchange and substitution for and upon
      cancellation thereof, or in lieu of and substitution therefor, a new
      certificate or instrument, but only upon receipt of evidence reasonably
      satisfactory to the Company of such loss, theft or destruction and
      customary and reasonable indemnity, if requested.  The applicants for a
      new certificate or instrument under such circumstances shall also pay
      any reasonable third-party costs associated with the issuance of such
      replacement Securities.
    

    

    

    
      
        

        

      

      
        
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      6.12                Remedies.  In
      addition to being entitled to exercise all rights provided herein or
      granted by law, including recovery of damages, each of Investor and the
      Company will be entitled to specific performance under the Transaction
      Documents.  The parties agree that monetary damages may not be adequate
      compensation for any loss incurred by reason of any breach of
      obligations described in the foregoing sentence and hereby agrees to
      waive in any action for specific performance of any such obligation the
      defense that a remedy at law would be adequate.   
    

    
      6.13                Payment
      Set Aside.  To the extent that the Company makes a payment or
      payments to Investor pursuant to any Transaction Document or Investor
      enforces or exercises its rights thereunder, and such payment or
      payments or the proceeds of such enforcement or exercise or any part
      thereof are subsequently invalidated, declared to be fraudulent or
      preferential, set aside, recovered from, disgorged by or are required to
      be refunded, repaid or otherwise restored to the Company, a trustee,
      receiver or any other person under any law (including, without
      limitation, any bankruptcy law, state or federal law, common law or
      equitable cause of action), then to the extent of any such restoration
      the obligation or part thereof originally intended to be satisfied shall
      be revived and continued in full force and effect as if such payment had
      not been made or such enforcement or setoff had not occurred.
    

    
      6.14                Liquidated
      Damages.  The Company’s obligations to pay any partial
      liquidated damages or other amounts owing under the Transaction
      Documents is a continuing obligation of the Company and shall not
      terminate until all unpaid partial liquidated damages and other amounts
      have been paid notwithstanding the fact that the instrument or security
      pursuant to which such partial liquidated damages or other amounts are
      due and payable shall have been cancelled.
    

    
      6.15                Time
      of the Essence.  Time is of the essence with respect to all
      provisions of this Agreement that specify a time for performance.
    

    
      6.16                Construction.  The
      parties agree that each of them and/or their respective counsel has
      reviewed and had an opportunity to revise the Transaction Documents and,
      therefore, the normal rule of construction to the effect that any
      ambiguities are to be resolved against the drafting party shall not be
      employed in the interpretation of the Transaction Documents or any
      amendments hereto. The language used in this Agreement will be deemed to
      be the language chosen by the parties to express their mutual intent,
      and no rules of strict construction will be applied against any party.
    

    
      6.17                Entire
      Agreement.  This Agreement, together with the Exhibits,
      Appendices and Schedules hereto, contains the entire agreement and
      understanding of the parties, and supersedes all prior and
      contemporaneous agreements, term sheets, letters, discussions,
      communications and understandings, both oral and written, which the
      parties acknowledge have been merged into this Agreement.  No party,
      representative, attorney or agent has relied upon any collateral
      contract, agreement, assurance, promise, understanding or representation
      not expressly set forth hereinabove.  The parties hereby expressly waive
      all rights and remedies, at law and in equity, directly or indirectly
      arising out of or relating to, or which may arise as a result of, any
      Person’s reliance on any such assurance.
    

    

    

    
      
        

        

      

      
        
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      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
      duly executed by their respective authorized signatories as of the date
      first indicated above.
    

    
      

      PURESPECTRUM, INC.

By:/Lee Vanatta/
Name: Lee Vanatta
Title:   President
      and CEO

SOCIUS ENERGY CAPITAL GROUP, LLC

By:/Terren
      Peizer/
Name: Terren Peizer
Title: Managing Director
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      Addresses for Notice
    

    
      

      

      To Company:

PureSpectrum, Inc.
340 Eisenhower Drive,
      Suite 610
Savannah, Georgia 31406
Attention: William R. Norton
Fax
      No.:  912.351.4501
Email:  BNorton@PureSpectrumLighting.com

with
      a copy (which shall not constitute notice) to:

Bouhan,
      Williams & Levy LLP
The Armstrong House
447 Bull Street
Savannah,
      Georgia 31401
Attention:  David Michael Conner, Esq.
Fax
      No.:  (912) 644-6243
Email: dmconner@bouhan.com

    

    

    

    
      To Investor:

Socius Energy Capital Group, LLC
11150
      Santa Monica Boulevard, Suite 1500
Los Angeles, California 90025
Fax
      No.: (310) 444-5300
Email: info@sociuscg.com

with a copy
      (which shall not constitute notice) to:

Luce Forward Hamilton &
      Scripps LLP
601 South Figueroa Street, Suite 3900
Los Angeles,
      California 90017
Attention:  John C. Kirkland, Esq.
Fax
      No.: (213) 452-8035
Email: jkirkland@luce.com
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      Exhibit A
    

    
      Form of Warrant
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
      CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
      EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE
      OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF
      (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH
      COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
      FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
      SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING
      THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
      FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY
      THE SECURITIES.
    

    
      PURESPECTRUM, INC.
    

    
      WARRANT TO PURCHASE COMMON STOCK
    

    
      Warrant No.: 2010-1
                                                        Issuance
      Date:   February 5, 2010
    

    
      Number of Warrant Shares:  107,142,857
    

    
      Initial Exercise Price:  $0.063 per share
    

    
      PureSpectrum, Inc., a Delaware corporation (“Company”),
      hereby certifies that, for good and valuable consideration, the receipt
      and sufficiency of which are hereby acknowledged,
    

    
      Socius CG II, Ltd., a Bermuda exempted company, the holder hereof or its
      designees or assigns (“Holder”), is entitled, subject to
      the terms set forth herein, to purchase from the Company, at the
      Exercise Price then in effect, upon exercise of this Warrant to Purchase
      Common Stock (including any warrant issued in exchange, transfer or
      replacement hereof, the “Warrant”), at any time or times
      after issuance of the Warrant and until 11:59 p.m. Eastern time on the
      fifth anniversary of the Issuance Date, subject to acceleration pursuant
      to Section 3.3 hereof, that number of duly authorized, validly
      issued, fully paid and non-assessable shares of Common Stock set forth
      above and as adjusted herein (the “Warrant Shares”); provided,
      however, that this Warrant may only be exercised, from time to
      time, for that number of shares of Common Stock with an Aggregate
      Exercise Price equal to up to 135% of the cumulative amount of Tranche
      Purchase Prices under Tranche Notices delivered prior to or on the date
      of exercise.  
    

    
      This Warrant is issued pursuant to the Preferred Stock Purchase
      Agreement dated February 5, 2010, by and among the Company and the
      investor referred to therein (the “Purchase Agreement”).  Except
      as otherwise defined herein, capitalized terms in this Warrant shall
      have the meanings set forth in ARTICLE 13 hereof.
    

    

    

    
      
        

        

      

      
        
          1
        

        
          

        

      

      
        

        

      

    

    

    

    
      This Warrant shall consist of and be exercisable in tranches (each, a “Warrant
      Tranche”), with a separate tranche being created upon each delivery
      of a Tranche Notice under the Purchase Agreement.  Each Warrant Tranche
      will grant to the Holder the right, for a five-year period commencing on
      the applicable Tranche Notice Date, to exercise the Warrant and purchase
      up to a number of shares of Common Stock with an Aggregate Exercise
      Price equal to 135% of the Tranche Purchase Price for the applicable
      Tranche Notice.  Attached to this Warrant is a schedule (the “Warrant
      Tranche Schedule”) that sets forth the issuance date, the number of
      Warrant Shares, and the Exercise Price for each Warrant Tranche.  The
      Warrant Tranche Schedule shall be updated by the Company, with an
      updated copy provided to the Holder, promptly following each exercise of
      this Warrant.  No portion of this Warrant shall vest or be exercisable
      except under the Warrant Tranches.  
    

    
      ARTICLE 1
EXERCISE OF WARRANT.
    

    
      1.1                Mechanics
      of Exercise.  
    

    
      1.1.1                            Subject
      to the terms and conditions hereof, this Warrant may be exercised by the
      Holder on any day on or after the Issuance Date, in whole or in part, by
      (i) delivery of a written notice to the Company, in the form attached
      hereto as Appendix 1 (the “Exercise Notice”), of the
      Holder’s election to exercise this Warrant, and (ii) payment to the
      Company of an amount equal to the applicable Exercise Price multiplied
      by the number of Warrant Shares as to which this Warrant is being
      exercised (the “Aggregate Exercise Price”), with such
      payment made, at Investor’s option, (x) in cash or by wire transfer of
      immediately available funds, (y) by the issuance and delivery of a
      recourse promissory note substantially in the form attached hereto as
      Appendix 2 (each, a “Recourse Note”), or (z) if applicable,
      by cashless exercise pursuant to Section 1.3.  
    

    
      1.1.2                            The
      Holder shall not be required to deliver the original Warrant in order to
      effect an exercise hereunder.  Execution and delivery of the Exercise
      Notice with respect to less than all of the Warrant Shares shall have
      the same effect as cancellation of the original Warrant and issuance of
      a new Warrant evidencing the right to purchase the remaining number of
      Warrant Shares.  
    

    
      1.1.3                            On
      the Trading Day on which the Company has received each of the Exercise
      Notice and the Aggregate Exercise Price (the “Exercise Delivery
      Documents”) from the Holder by 6:30 p.m. Eastern time, or on the
      next Trading Day if the Exercise Delivery Documents are received after
      6:30 p.m. Eastern time or on a non-Trading Day (in each case, the “Exercise
      Delivery Date”), the Company shall transmit (i) a facsimile
      acknowledgment of confirmation of receipt of the Exercise Delivery
      Documents to the Holder, and (ii) an electronic copy of its share
      issuance instructions to the Holder and to the Company’s transfer agent
      (the “Transfer Agent”), with such transmissions to comply
      with the notice provisions contained in Section 6.2 of the Purchase
      Agreement, and shall instruct and authorize the Transfer Agent to credit
      such aggregate number of freely-tradable Warrant Shares to which the
      Holder is entitled to receive upon such exercise to the Holder’s or its
      designee’s balance account with The Depository Trust Company (DTC)
      through the Fast Automated Securities Transfer (FAST) Program through
      its Deposit Withdrawal Agent Commission (DWAC) system, with such credit
      to occur no later than 4:00 p.m. Eastern Time on the Trading Day
      following the Exercise Delivery Date, time being of the essence; provided,
      however, that, notwithstanding the foregoing 4:00 p.m. deadline,
      if the Warrant Shares are not credited as DWAC Shares by 12:00 p.m.
      Eastern Time on the Trading Day following the Exercise Delivery Date,
      then the Tranche Closing Date applicable to the Exercise Notice shall be
      extended by one Trading Day for each Trading Day that timely credit of
      DWAC Shares is not made.  
    

    

    

    
      
        

        

      

      
        
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      1.1.4                            Upon
      delivery of the Exercise Delivery Documents, the Holder shall be deemed
      for all corporate purposes to have become the holder of record of the
      Warrant Shares with respect to which this Warrant has been exercised,
      irrespective of the date such Warrant Shares are credited to the
      Holder’s DTC account.  Any Warrant delivered in connection with a
      Tranche Notice and exercised by Holder shall be deemed exercised (i) on
      the Tranche Notice Date, if exercised by 6:30 p.m. Eastern time on the
      Tranche Notice Date, or (ii) on the next Trading Day, if exercised by
      Investor after 6:30 p.m. Eastern Time on the Tranche Notice Date or on
      any other date, in each case with Holder deemed to be a holder of record
      as of such date.
    

    
      1.1.5                            If
      this Warrant is exercised and the number of Warrant Shares represented
      by this Warrant is greater than the number of Warrant Shares being
      acquired upon such exercise, then the Company shall, as soon as
      practicable and in no event later than three (3) Trading Days after such
      exercise, update the Tranche Exercise Schedule to reflect the revised
      number of Warrant Shares for which this Warrant is then exercisable and
      deliver a copy of the updated Tranche Exercise Schedule to the
      Holder.  No fractional shares of Common Stock are to be issued upon the
      exercise of this Warrant, but rather the number of shares of Common
      Stock to be issued shall be rounded up to the nearest whole number.  The
      Company shall pay any and all taxes which may be payable with respect to
      the issuance and delivery of Warrant Shares upon exercise of this
      Warrant.  
    

    
      1.2                Adjustments
      to Exercise Price and Number of Shares.  In addition to other
      adjustments specified herein, the Exercise Price of this Warrant and the
      number of shares of Common Stock issuable upon exercise shall be
      adjusted as follows:
    

    
      1.2.1                            Exercise
      Price.  The “Exercise Price” per share of Common Stock
      underlying this Warrant, subject to further adjustment as provided
      herein, shall be as follows:
    

    
      (i) with respect to the portion of this Warrant issued on the Effective
      Date and until the first Tranche Notice Date, the amount per Warrant
      Share set forth on the face of this Warrant, which is equal to Closing
      Bid Price for the Common Stock on the Trading Day prior to the Effective
      Date, and (ii) with respect to the portion of this Warrant that becomes
      exercisable on any Tranche Notice Date (including the first Tranche
      Notice Date), an amount per Warrant Share equal to the Closing Bid Price
      of a share of Common Stock on such Tranche Notice Date.
    

    
      1.2.2                            Number
      of Shares.  The number of Warrant Shares underlying this Warrant
      and each Warrant Tranche, subject to further adjustment as provided
      herein, shall be as follows: (i) with respect to the portion of this
      Warrant issued on the Effective Date and until the first Tranche Notice
      Date, the number of shares set forth on the face of this Warrant, which
      is a number of shares of Common Stock equal to the Maximum Placement
      multiplied by 135%, with the resulting sum divided by the Closing Bid
      Price of a share of Common Stock on the Trading Day prior to the
      Effective Date, and (ii) with respect to the portion of this Warrant
      issued on any Tranche Notice Date including the first Tranche Notice
      Date, a number of shares equal to the Tranche Purchase Price set forth
      in the applicable Tranche Notice multiplied by 135%, with the resulting
      sum divided by the Closing Bid Price of a share of Common Stock on the
      Tranche Notice Date.  For example, if the Tranche Purchase Price is
      $1,000,000 and the Closing Bid Price is $0.50, then the number of
      Warrant Shares underlying that Warrant Tranche shall be $1,000,000 x
      135% = $1,350,000 divided by $0.50 = 2,700,000 shares of Common
      Stock.  On each Tranche Notice Date, the number of Warrant Shares
      underlying the related Warrant Tranche shall vest and become
      exercisable, and the aggregate number of Warrant Shares underlying this
      Warrant that are currently exercisable shall automatically adjust up or
      down to account for the change in the number of Warrant Shares covered
      by the new Warrant Tranche and for any Warrant Shares issued upon any
      prior or simultaneous exercise of this Warrant.  If at any time the
      Holder reasonably believes that the number of Warrant Shares included in
      the Registration Statement is not sufficient to cover all exercises
      under this Warrant, then the Company shall amend such Registration
      Statement to include the additional number of Warrant Shares that may be
      required to provide such coverage.   
    

    

    

    
      
        

        

      

      
        
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      1.3                Cashless
      Exercise.  Notwithstanding anything contained herein to the
      contrary, if at any time there is not a current, valid and effective
      registration statement covering the Warrant Shares that are the subject
      of the Exercise Notice (the “Unavailable Warrant Shares”),
      the Holder may, in its sole discretion, exercise this Warrant in whole
      or in part and, in lieu of making the cash payment otherwise
      contemplated to be made to the Company upon such exercise in payment of
      the Aggregate Exercise Price, elect instead to receive upon such
      exercise the “Net Number” of shares of Common Stock determined according
      to the following formula (a “Cashless Exercise”):
    

    
      Net Number =        (B-C) x A
    

    
                                      B
    

    
      For purposes of the foregoing formula:
    

    
      A = the total number of shares with respect to which this Warrant is
      then being exercised.
    

    
      B = the average of the Closing Bid Prices of the shares of Common Stock
      (as reported by Bloomberg) for the five (5) consecutive Trading Days
      ending on the date immediately preceding the date of the Exercise Notice.
    

    
      C = the Exercise Price then in effect for the applicable Warrant Shares
      at the time of such exercise.
    

    

    

    
      
        

        

      

      
        
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      1.4                Company’s
      Failure to Timely Deliver Securities.  If the Company shall fail
      for any reason or for no reason to credit to the Holder’s balance
      account with DTC, by 4:00 p.m. Eastern time on the Trading Day following
      the Exercise Delivery Date, the number of shares of Common Stock to
      which the Holder is entitled upon the Holder’s exercise of this Warrant,
      then, in addition to all other remedies available to the Holder, the
      Company shall pay in cash to the Holder on each day after such Trading
      Day that the issuance of such shares of Common Stock is not timely
      effected an amount equal to 0.5% of the product of (A) the sum of the
      number of shares of Common Stock not issued to the Holder on a timely
      basis and to which the Holder is entitled and (B) the Closing Bid Price
      of the shares of Common Stock on the Trading Day immediately preceding
      the last possible date which the Company could have issued such shares
      of Common Stock to the Holder without violating Section 1.1.  In
      addition to the foregoing,
    

    
      (A) notwithstanding the foregoing 4:00 p.m. deadline, if the Warrant
      Shares are not credited to the Holder’s balance account with DTC by
      12:00 p.m. Eastern Time on the Trading Day following the Exercise
      Delivery Date, then the Tranche Closing Date applicable to the Exercise
      Notice shall be extended by one Trading Day for each Trading Day that
      timely credit of DWAC Shares is not made, and (B) if after the Company’s
      receipt of an Exercise Notice the Company shall fail to timely (pursuant
      to Section 1.1.3 hereof) credit the Holder’s balance account with DTC
      for the number of shares of Common Stock to which the Holder is entitled
      upon the Holder’s exercise hereunder, and the Holder purchases (in an
      open market transaction or otherwise) shares of Common Stock to deliver
      in satisfaction of a sale by the Holder of shares of Common Stock
      issuable upon such exercise that the Holder anticipated receiving from
      the Company, then the Company shall, within one Trading Day after the
      Holder’s request and in the Holder’s discretion, either (i) pay cash to
      the Holder in an amount equal to the Holder’s total purchase price
      (including brokerage commissions, if any) for the shares of Common Stock
      so purchased (the “Buy-In Price”), at which point the
      Company’s obligation to credit such Holder’s balance account with DTC
      for the number of Warrant Shares to which the Holder is entitled upon
      the Holder’s exercise hereunder and to issue such Warrant Shares shall
      terminate, or (ii) promptly honor its obligation to credit such Holder’s
      balance account with DTC for the number of Warrant Shares to which the
      Holder is entitled upon the Holder’s exercise hereunder and pay cash to
      the Holder in an amount equal to the excess (if any) of the Buy-In Price
      over the product of (A) such number of shares of Common Stock sold by
      Holder in satisfaction of its obligations, times (B) the Closing Bid
      Price on the date of exercise.
    

    
      1.5                Exercise
      Limitation.  Notwithstanding any other provision, at no time may
      the Holder (a) exercise this Warrant such that the number of Warrant
      Shares to be received pursuant to such exercise exceeds 135.0% of the
      aggregate of all Tranche Purchase Prices under and in connection with
      all Tranche Notices delivered pursuant to the Purchase Agreement prior
      to the date of exercise; or (b) exercise this Warrant such that the
      number of Warrant Shares to be received pursuant to such exercise,
      aggregated with all other shares of Common Stock then owned, or deemed
      beneficially owned, by the Holder and its affiliates, would result in
      the Holder and its affiliates owning more than 4.99% of all of such
      Common Stock as would be outstanding on the date of exercise, as
      determined in accordance with Section 13(d) of the Exchange Act and the
      rules and regulations promulgated thereunder.  In addition, as of any
      date, the aggregate number of shares of Common Stock into which this
      Warrant is exercisable within 61 days, together with all other shares of
      Common Stock then beneficially owned (as such term is defined in Rule
      13(d) under the Exchange Act) by Holder and its affiliates, shall not
      exceed 9.99% of the total outstanding shares of Common Stock as of such
      date.  
    

    

    

    
      
        

        

      

      
        
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      1.6                Activity
      Restrictions.  For so long as Holder or any of its affiliates
      holds this Warrant or any Warrant Shares, neither Holder nor any
      affiliate will:  (i) vote any shares of Common Stock owned or controlled
      by it, solicit any proxies, or seek to advise or influence any Person
      with respect to any voting securities of the Company; (ii) engage or
      participate in any actions, plans or proposals which relate to or would
      result in (a) acquiring additional securities of the Company, alone or
      together with any other Person, which would result in beneficially
      owning or controlling more than 9.99% of the total outstanding Common
      Stock or other voting securities of the Company, (b) an extraordinary
      corporate transaction, such as a merger, reorganization or liquidation,
      involving Company or any of its subsidiaries, (c) a sale or transfer of
      a material amount of assets of the Company or any of its subsidiaries,
      (d) any change in the present board of directors or management of the
      Company, including any plans or proposals to change the number or term
      of directors or to fill any existing vacancies on the board, (e) any
      material change in the present capitalization or dividend policy of the
      Company, (f) any other material change in the Company’s business or
      corporate structure, including but not limited to, if the Company is a
      registered closed-end investment company, any plans or proposals to make
      any changes in its investment policy for which a vote is required by
      Section 13 of the Investment Company Act of 1940, (g) changes in the
      Company’s charter, bylaws or instruments corresponding thereto or other
      actions which may impede the acquisition of control of the Company by
      any Person, (h) causing a class of securities of the Company to be
      delisted from a national securities exchange or to cease to be
      authorized to be quoted in an inter-dealer quotation system of a
      registered national securities association, (i) a class of equity
      securities of the Company becoming eligible for termination of
      registration pursuant  to Section 12(g)(4) of the Act, or (j) any
      action, intention, plan or arrangement similar to any of those
      enumerated above; or (iii) request the Company or its directors,
      officers, employees, agents or representatives to amend or waive any
      provision of this Section 1.6.  
    

    
      1.7                Disputes.  In
      the case of a dispute as to the determination of the Exercise Price or
      the arithmetic calculation of the Warrant Shares, the Company shall
      promptly issue to the Holder the number of Warrant Shares that are not
      disputed and resolve such dispute in accordance with Section 12.
    

    
      1.8                Insufficient
      Authorized Shares.  If at any time while any portion of this
      Warrant remains outstanding the Company does not have a sufficient
      number of authorized and unreserved shares of Common Stock to satisfy
      its obligation to reserve for issuance upon exercise of this Warrant at
      least a number of shares of Common Stock equal to 110% of the number of
      shares of Common Stock as shall from time to time be necessary to effect
      the exercise of the portion of the Warrant then outstanding (the “Required
      Reserve Amount”) (an “Authorized Share Failure”),
      then the Company shall immediately take all action necessary to increase
      the Company’s authorized shares of Common Stock to an amount sufficient
      to allow the Company to reserve the Required Reserve Amount for the
      portion of the Warrant then outstanding.  Without limiting the
      generality of the foregoing sentence, as soon as practicable after the
      date of the occurrence of an Authorized Share Failure, but in no event
      later than 90 days after the occurrence of such Authorized Share
      Failure, the Company shall hold a meeting of its stockholders for the
      approval of an increase in the number of authorized shares of Common
      Stock.  In connection with such meeting, the Company shall provide each
      stockholder with a proxy statement and shall use its best efforts to
      solicit its stockholders’ approval of such increase in authorized shares
      of Common Stock and to cause its board of directors to recommend to the
      stockholders that they approve such proposal.
    

    

    

    
      
        

        

      

      
        
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      ARTICLE 2
ADJUSTMENT UPON SUBDIVISION OR
      COMBINATION OF COMMON STOCK
    

    
      If the Company at any time on or after the Issuance Date subdivides (by
      any stock split, stock dividend, recapitalization or otherwise) one or
      more classes of its outstanding shares of Common Stock into a greater
      number of shares, the Exercise Price in effect immediately prior to such
      subdivision will be proportionately reduced and the number of Warrant
      Shares will be proportionately increased.  If the Company at any time on
      or after the Issuance Date combines (by combination, reverse stock split
      or otherwise) one or more classes of its outstanding shares of Common
      Stock into a smaller number of shares, the Exercise Price in effect
      immediately prior to such combination will be proportionately increased
      and the number of Warrant Shares will be proportionately decreased.  Any
      adjustment under this ARTICLE 2 shall become effective at the close of
      business on the date the subdivision or combination becomes effective.
    

    
      ARTICLE 3
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS
    

    
      3.1                Purchase
      Rights.  In addition to any adjustments pursuant to ARTICLE 2
      above, if at any time the Company grants, issues or sells any Options,
      Convertible Securities or rights to purchase stock, warrants, securities
      or other property pro rata to the record holders of any class of shares
      of Common Stock (the “Purchase Rights”), then the Holder
      will be entitled to acquire, upon the terms applicable to such Purchase
      Rights, the aggregate Purchase Rights which the Holder could have
      acquired if the Holder had held the number of shares of Common Stock
      acquirable upon complete exercise of this Warrant (without regard to any
      limitations on the exercise of this Warrant) immediately before the date
      on which a record is taken for the grant, issuance or sale of such
      Purchase Rights, or, if no such record is taken, the date as of which
      the record holders of shares of Common Stock are to be determined for
      the grant, issue or sale of such Purchase Rights.
    

    
      3.2                Subsequent
      Equity Sales. In addition to any adjustments made pursuant to
      ARTICLE 2 above, except as in connection with subsequent subscriptions
      for shares of Common Stock not to exceed $1,000,000 in aggregate
      additional capital investment into the Company following the Effective
      Date (as defined in the Purchase Agreement), if the Company or any
      Subsidiary thereof, as applicable, at any time while this Warrant is
      outstanding, shall sell or grant any option to purchase, or sell or
      grant any right to reprice, or otherwise dispose of or issue (or
      announce any offer, sale, grant or any option to purchase or other
      disposition) any Common Stock or Common Stock Equivalents entitling any
      Person to acquire shares of Common Stock, at an effective price per
      share less than the then Exercise Price (such lower price, the “Base
      Share Price” and such issuances, collectively, a “Dilutive
      Issuance”), then the Exercise Price shall be reduced and only
      reduced to equal the Base Share Price and the number of Warrant Shares
      issuable hereunder shall be increased such that the aggregate Exercise
      Price payable hereunder, after taking into account the decrease in the
      Exercise Price, shall be equal to the aggregate Exercise Price prior to
      such adjustment.  Such adjustment shall be made whenever such Common
      Stock or Common Stock Equivalents are issued.  If the holder of the
      Common Stock or Common Stock Equivalents so issued shall at any time,
      whether by operation of purchase price adjustments, reset provisions,
      floating conversion, exercise or exchange prices or otherwise, or due to
      warrants, options or rights per share which are issued in connection
      with such issuance, be entitled to receive shares of Common Stock at an
      effective price per share which is less than the Exercise Price, such
      issuance shall be deemed to have occurred for less than the Exercise
      Price on such date of the Dilutive Issuance.  Notwithstanding the
      foregoing, no adjustments shall be made, paid or issued under this Section
      3.2 in respect of an Exempt Issuance, subject to adjustment for
      reverse and forward stock splits, stock dividends, stock combinations
      and other similar transactions of the Common Stock that occur after the
      date of the Purchase Agreement. The Company shall notify the Holder in
      writing, no later than the Trading Day following the issuance of any
      Common Stock or Common Stock Equivalents subject to this Section 3.2,
      indicating therein the applicable issuance price, or applicable reset
      price, exchange price, conversion price and other pricing terms (such
      notice the “Dilutive Issuance Notice”).  For purposes of
      clarification, whether or not the Company provides a Dilutive Issuance
      Notice pursuant to this Section 3.2, upon the occurrence of any
      Dilutive Issuance, after the date of such Dilutive Issuance the Holder
      is entitled to receive a number of Warrant Shares based upon the Base
      Share Price regardless of whether the Holder accurately refers to the
      Base Share Price in the Notice of Exercise.
    

    

    

    
      
        

        

      

      
        
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      3.3                Fundamental
      Transactions.  The Company shall not enter into or be party to a
      Fundamental Transaction unless the Successor Entity assumes in writing
      all of the obligations of the Company under this Warrant in accordance
      with the provisions of this Section 3.3 pursuant to written
      agreements in form and substance satisfactory to the Required Holders
      and approved by the Required Holders prior to such Fundamental
      Transaction, including agreements to deliver to each Holder of this
      Warrant in exchange for such Warrant a security of the Successor Entity
      evidenced by a written instrument substantially similar in form and
      substance to this Warrant, including, without limitation, an adjusted
      exercise price equal to the value for the shares of Common Stock
      reflected by the terms of such Fundamental Transaction, and exercisable
      for a corresponding number of shares of capital stock equivalent to the
      shares of Common Stock acquirable and receivable upon exercise of this
      Warrant (without regard to any limitations on the exercise of this
      Warrant) prior to such Fundamental Transaction, and satisfactory to the
      Required Holders.  Upon the occurrence of any Fundamental Transaction,
      the Successor Entity shall succeed to, and be substituted for (so that
      from and after the date of such Fundamental Transaction, the provisions
      of this Warrant referring to the “Company” shall refer instead to the
      Successor Entity), and may exercise every right and power of the Company
      and shall assume all of the obligations of the Company under this
      Warrant with the same effect as if such Successor Entity had been named
      as the Company herein.  Upon consummation of the Fundamental
      Transaction, the Successor Entity shall deliver to the Holder
      confirmation that there shall be issued upon exercise of this Warrant at
      any time after the consummation of the Fundamental Transaction, in lieu
      of the shares of the Common Stock (or other securities, cash, assets or
      other property) purchasable upon the exercise of this Warrant prior to
      such Fundamental Transaction, such shares of stock, securities, cash,
      assets or any other property whatsoever (including warrants or other
      purchase or subscription rights) which the Holder would have been
      entitled to receive upon the happening of such Fundamental Transaction
      had this Warrant been converted immediately prior to such Fundamental
      Transaction, as adjusted in accordance with the provisions of this
      Warrant.  In addition to and not in substitution for any other rights
      hereunder, prior to the consummation of any Fundamental Transaction
      pursuant to which holders of shares of Common Stock are entitled to
      receive securities or other assets with respect to or in exchange for
      shares of Common Stock (a “Corporate Event”), the Company
      shall make appropriate provision to insure that the Holder will
      thereafter have the right to receive upon an exercise of this Warrant at
      any time after the consummation of the Fundamental Transaction, in lieu
      of the shares of the Common Stock (or other securities, cash, assets or
      other property) purchasable upon the exercise of this Warrant prior to
      such Fundamental Transaction, such shares of stock, securities, cash,
      assets or any other property whatsoever (including warrants or other
      purchase or subscription rights) which the Holder would have been
      entitled to receive upon the happening of such Fundamental Transaction
      had this Warrant been exercised immediately prior to such Fundamental
      Transaction; provided, however, that in the event the Fundamental
      Transaction involves the issuance of cash or freely tradable securities
      by an issuer listed on the New York Stock Exchange or the Nasdaq Stock
      Market, then the ability to exercise this Warrant shall expire on the
      consummation of that Fundamental Transaction.  Provision made pursuant
      to the preceding sentence shall be in a form and substance reasonably
      satisfactory to the Required Holders.  The provisions of this Section
      3.3 shall apply similarly and equally to successive Fundamental
      Transactions and Corporate Events and shall be applied without regard to
      any limitations on the exercise of this Warrant.
    

    

    

    
      
        

        

      

      
        
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      3.4                Notwithstanding
      the foregoing Section 3.3, in the event of a Fundamental
      Transaction other than one in which the Successor Entity is a Public
      Successor Entity that assumes this Warrant such that this Warrant shall
      be exercisable for the publicly traded common stock of such Public
      Successor Entity, at the request of the Holder delivered before the 90th
      day after the effective date of such Fundamental Transaction, the
      Company (or the Successor Entity) shall purchase this Warrant from the
      Holder by paying to the Holder, within five (5) Trading Days after such
      request (or, if later, on the effective date of the Fundamental
      Transaction), cash in an amount equal to the value of the remaining
      unexercised portion of this Warrant on the date of such consummation,
      which value shall be determined by use of the Black Scholes Option
      Pricing Model using a volatility equal to the 100 day average historical
      price volatility prior to the date of the public announcement of such
      Fundamental Transaction.
    

    

    

    
      
        

        

      

      
        
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      ARTICLE 4
NONCIRCUMVENTION
    

    
      The Company hereby covenants and agrees that the Company will not, by
      amendment of its certificate or articles of incorporation, articles of
      association, bylaws, or any other organization documents, or through any
      reorganization, transfer of assets, consolidation, merger, scheme of
      arrangement, dissolution, issue or sale of securities, or any other
      voluntary action, avoid or seek to avoid the observance or performance
      of any of the terms of this Warrant, and will at all times in good faith
      carry out all the provisions of this Warrant and take all action as may
      be required to protect the rights of the Holder.  Without limiting the
      generality of the foregoing, the Company (i) shall not increase the par
      value of any shares of Common Stock receivable upon the exercise of this
      Warrant above the Exercise Price then in effect, (ii) shall take all
      such actions as may be necessary or appropriate in order that the
      Company may validly and legally issue fully paid and nonassessable
      shares of Common Stock upon the exercise of this Warrant, and (iii)
      shall, so long as any portion of this Warrant remains outstanding, take
      all action necessary to reserve and keep available out of its authorized
      and unissued shares of Common Stock, solely for the purpose of effecting
      the exercise of this Warrant, 110% of the number of shares of Common
      Stock as shall from time to time be necessary to effect the exercise of
      this Warrant then outstanding (without regard to any limitations on
      exercise).
    

    
      ARTICLE 5
WARRANT HOLDER NOT DEEMED A STOCKHOLDER
    

    
      Except as otherwise specifically provided herein, the Holder, solely in
      such Person’s capacity as a holder of this Warrant, shall not be
      entitled to vote or receive dividends or be deemed the holder of share
      capital of the Company for any purpose, nor shall anything contained in
      this Warrant be construed to confer upon the Holder, solely in such
      Person’s capacity as the Holder of this Warrant, any of the rights of a
      stockholder of the Company or any right to vote, give or withhold
      consent to any corporate action (whether any reorganization, issue of
      stock, reclassification of stock, consolidation, merger, conveyance or
      otherwise), receive notice of meetings, receive dividends or
      subscription rights, or otherwise, prior to the issuance to the Holder
      of the Warrant Shares which such Person is then entitled to receive upon
      the due exercise of this Warrant.  In addition, nothing contained in
      this Warrant shall be construed as imposing any liabilities on the
      Holder to purchase any securities (upon exercise of this Warrant or
      otherwise) or as a stockholder of the Company, whether such liabilities
      are asserted by the Company or by creditors of the
      Company.  Notwithstanding this ARTICLE 5, the Company shall provide the
      Holder with copies of the same notices and other information given to
      the stockholders of the Company generally, contemporaneously with the
      giving thereof to the stockholders.
    

    
      ARTICLE 6
REISSUANCE OF WARRANTS
    

    
      6.1                Transfer
      of Warrant.  If this Warrant is to be transferred, the Holder
      shall surrender this Warrant to the Company, whereupon the Company will
      forthwith issue and deliver upon the order of the Holder a new Warrant
      (in accordance with Section 6.4), registered as the Holder may request,
      representing the right to purchase the number of Warrant Shares being
      transferred by the Holder and, if less then the total number of Warrant
      Shares then underlying this Warrant is being transferred, a new Warrant
      (in accordance with Section 6.4) to the Holder representing the right to
      purchase the number of Warrant Shares not being transferred.
    

    

    

    
      
        

        

      

      
        
          10
        

        
          

        

      

      
        

        

      

    

    

    

    
      6.2                Lost,
      Stolen or Mutilated Warrant.  Upon receipt by the Company of
      evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant, and, in the case of loss,
      theft or destruction, of any indemnification undertaking by the Holder
      to the Company in customary form and, in the case of mutilation, upon
      surrender and cancellation of this Warrant, the Company shall execute
      and deliver to the Holder a new Warrant (in accordance with Section 6.4)
      representing the right to purchase the Warrant Shares then underlying
      this Warrant.
    

    
      6.3                Exchangeable
      for Multiple Warrant.  This Warrant is exchangeable, upon the
      surrender hereof by the Holder at the principal office of the Company,
      for a new Warrant or Warrants (in accordance with Section 6.4)
      representing in the aggregate the right to purchase the number of
      Warrant Shares then underlying this Warrant, and each such new Warrant
      will represent the right to purchase such portion of such Warrant Shares
      as is designated by the Holder at the time of such surrender; provided,
      however, that no Warrant for fractional shares of Common Stock shall be
      given.
    

    
      6.4                Issuance
      of New Warrant.  Whenever the Company is required to issue a new
      Warrant pursuant to the terms of this Warrant, such new Warrant (i)
      shall be of like tenor with this Warrant, (ii) shall represent, as
      indicated on the face of such new Warrant, the right to purchase the
      Warrant Shares then underlying this Warrant (or in the case of a new
      Warrant being issued pursuant to Section 6.1 or Section 6.3, the Warrant
      Shares designated by the Holder which, when added to the number of
      shares of Common Stock underlying the other new Warrant issued in
      connection with such issuance, does not exceed the number of Warrant
      Shares then underlying this Warrant), (iii) shall have an issuance date,
      as indicated on the face of such new Warrant which is the same as the
      Issuance Date, and (iv) shall have the same rights and conditions as
      this Warrant.
    

    
      ARTICLE 7
NOTICES
    

    
      Whenever notice is required to be given under this Warrant, unless
      otherwise provided herein, such notice shall be given in accordance with
      Section 6.2 of the Purchase Agreement.  The Company shall provide the
      Holder with prompt written notice of all actions taken pursuant to this
      Warrant, including in reasonable detail a description of such action and
      the reason therefore.  Without limiting the generality of the foregoing,
      the Company will give written notice to the Holder (i) immediately upon
      any adjustment of the Exercise Price, setting forth in reasonable
      detail, and certifying, the calculation of such adjustment and (ii) at
      least ten (10) days prior to the date on which the Company closes its
      books or takes a record (A) with respect to any dividend or distribution
      upon the shares of Common Stock, (B) with respect to any grants,
      issuances or sales of any Options, Convertible Securities or rights to
      purchase stock, warrants, securities or other property to holders of
      shares of Common Stock as such or (C) for determining rights to vote
      with respect to any Fundamental Transaction, dissolution or liquidation,
      provided in each case that such information shall be made known to the
      public prior to or in conjunction with such notice being provided to the
      Holder.
    

    

    

    
      
        

        

      

      
        
          11
        

        
          

        

      

      
        

        

      

    

    

    

    
      ARTICLE 8
AMENDMENT AND WAIVER
    

    
      Except as otherwise provided herein, the provisions of this Warrant may
      be amended and the Company may take any action herein prohibited, or
      omit to perform any act herein required to be performed by it, only if
      the Company has obtained the written consent of the Required Holders;
      provided that except as set forth in this Warrant no such action may
      increase the exercise price of any Warrant or decrease the number of
      shares or class of stock obtainable upon exercise of any Warrant without
      the written consent of the Holder.  No such amendment shall be effective
      to the extent that it applies to less than all of the holders of this
      Warrant.
    

    
      ARTICLE 9
GOVERNING LAW
    

    
      This Warrant shall be governed by and construed and enforced in
      accordance with, and all questions concerning the construction,
      validity, interpretation and performance of this Warrant shall be
      governed by, the internal laws of the State of New York, without giving
      effect to any choice of law or conflict of law provision or rule
      (whether of the State of New York or any other jurisdictions) that would
      cause the application of the laws of any jurisdictions other than the
      State of New York.
    

    
      ARTICLE 10
CONSTRUCTION; HEADINGS
    

    
      This Warrant shall be deemed to be jointly drafted by the Company and
      the Holder and shall not be construed against any person as the drafter
      hereof.  The headings of this Warrant are for convenience of reference
      and shall not form part of, or affect the interpretation of, this
      Warrant.
    

    
      ARTICLE 11
DISPUTE RESOLUTION
    

    
      In the case of a dispute as to the determination of the Exercise Price
      or the arithmetic calculation of the Warrant Shares, the Company shall
      submit the disputed determinations or arithmetic calculations via
      facsimile within three (3) Trading Days of receipt of the Exercise
      Notice giving rise to such dispute, as the case may be, to the
      Holder.  If the Holder and the Company are unable to agree upon such
      determination or calculation of the Exercise Price or the Warrant Shares
      within three (3) Trading Days of such disputed determination or
      arithmetic calculation being submitted to the Holder, then the Company
      shall, within 2 Trading Days submit via facsimile (a) the disputed
      determination of the Exercise Price or arithmetic calculation to an
      independent, reputable investment bank or independent registered public
      accounting firm selected by Holder subject to Company’s approval, which
      may not be unreasonably withheld or delayed, or (b) the disputed
      arithmetic calculation of the Warrant Shares to the Company’s
      independent registered public accounting firm.  The Company shall cause
      at its expense the investment bank or the accountant, as the case may
      be, to perform the determinations or calculations and notify the Company
      and the Holder of the results no later than 3 Trading Days from the time
      it receives the disputed determinations or calculations.  Such
      investment bank’s or accountant’s determination or calculation, as the
      case may be, shall be binding upon all parties absent demonstrable error.
    

    

    

    
      
        

        

      

      
        
          12
        

        
          

        

      

      
        

        

      

    

    

    

    
      ARTICLE 12
REMEDIES, OTHER OBLIGATIONS, BREACHES
      AND INJUNCTIVE RELIEF
    

    
      The remedies provided in this Warrant shall be cumulative and in
      addition to all other remedies available under this Warrant, at law or
      in equity (including a decree of specific performance and/or other
      injunctive relief), and nothing herein shall limit the right of the
      Holder right to pursue actual damages for any failure by the Company to
      comply with the terms of this Warrant.  The Company acknowledges that a
      breach by it of its obligations hereunder will cause irreparable harm to
      the Holder and that the remedy at law for any such breach may be
      inadequate.  The Company therefore agrees that, in the event of any such
      breach or threatened breach, the holder of this Warrant shall be
      entitled, in addition to all other available remedies, to an injunction
      restraining any breach, without the necessity of showing economic loss
      and without any bond or other security being required.
    

    
      ARTICLE 13
DEFINITIONS
    

    
      For purposes of this Warrant, in addition to the terms defined elsewhere
      herein, the following terms shall have the following meanings:
    

    
      13.1               “Bloomberg”
      means Bloomberg Financial Markets.
    

    
      13.2               “Closing
      Bid Price” and “Closing Sale Price” means, for any security as of
      any date, the last closing bid price and last closing trade price,
      respectively, for such security on the Trading Market, as reported by
      Bloomberg, or, if the Trading Market begins to operate on an extended
      hours basis and does not designate the closing bid price or the closing
      trade price, as the case may be, then the last bid price or last trade
      price, respectively, of such security prior to 4:00 p.m., Eastern time,
      as reported by Bloomberg, or, if the Trading Market is not the principal
      securities exchange or trading market for such security, the last
      closing bid price or last trade price, respectively, of such security on
      the principal securities exchange or trading market where such security
      is listed or traded as reported by Bloomberg, or if the foregoing do not
      apply, the last closing bid price or last trade price, respectively, of
      such security in the over-the-counter market on the electronic bulletin
      board for such security as reported by Bloomberg, or, if no closing bid
      price or last trade price, respectively, is reported for such security
      by Bloomberg, the average of the bid prices, or the ask prices,
      respectively, of any market makers for such security as reported in the
      “pink sheets” by Pink Sheets LLC (formerly the National Quotation
      Bureau, Inc.).  If the Closing Bid Price or the Closing Sale Price
      cannot be calculated for a security on a particular date on any of the
      foregoing bases, the Closing Bid Price or the Closing Sale Price, as the
      case may be, of such security on such date shall be the fair market
      value as mutually determined by the Company and Holder.  If the Company
      and Holder are unable to agree upon the fair market value of such
      security, then such dispute shall be resolved pursuant to ARTICLE
      11.  All such determinations to be appropriately adjusted for any stock
      dividend, stock split, stock combination or other similar transaction
      during the applicable calculation period.
    

    

    

    
      
        

        

      

      
        
          13
        

        
          

        

      

      
        

        

      

    

    

    

    
      13.3               “Common
      Stock” means (i) the Company’s shares of Common Stock, par value
      $0.0001 per share, and (ii) any share capital into which such Common
      Stock shall have been changed or any share capital resulting from a
      reclassification of such Common Stock.
    

    
      13.4               “Common
      Stock Deemed Outstanding” means, at any given time, the number of
      shares of Common Stock actually outstanding at such time, plus the
      number of shares of Common Stock deemed to be outstanding pursuant to
      Section 3.1 hereof regardless of whether the Options or Convertible
      Securities are actually exercisable at such time, but excluding any
      shares of Common Stock owned or held by or for the account of the
      Company or issuable upon exercise of this Warrant.
    

    
      13.5               “Common
      Stock Equivalents” means any securities of the Company or the
      Subsidiaries which would entitle the holder thereof to acquire at any
      time Common Stock, including, without limitation, any debt, preferred
      stock, rights, options, warrants or other instrument that is at any time
      convertible into or exercisable or exchangeable for, or otherwise
      entitles the holder thereof to receive, Common Stock.
    

    
      13.6               “Convertible
      Securities” means any stock or securities (other than Options)
      directly or indirectly convertible into or exercisable or exchangeable
      for shares of Common Stock.
    

    
      13.7               “DWAC
      Shares” means all Warrant Shares issued or issuable to Holder or any
      Affiliate, successor or assign of Holder pursuant to this Warrant, all
      of which shall be (a) issued in electronic form, (b) freely tradable and
      without restriction on resale, and (c) timely credited by Company to the
      specified Deposit/Withdrawal at Custodian (DWAC) account with DTC under
      its Fast Automated Securities Transfer (FAST) Program or any similar
      program hereafter adopted by DTC performing substantially the same
      function, in accordance with instructions issued to and countersigned by
      the Transfer Agent of the Company.
    

    
      13.8               “Eligible
      Market” means the Trading Market, The New York Stock Exchange, Inc.,
      The NASDAQ Global Select Market, The NASDAQ Global Market, The NASDAQ
      Capital Market, the NYSE Amex or the OTC Bulletin Board, but does not
      include the Pink Sheets.
    

    
      13.9               “Exempt
      Issuance” means the issuance of (a) shares of Common Stock or
      options to employees, officers, or directors of the Company pursuant to
      any stock or option plan duly adopted for such purpose, by a majority of
      the non-employee members of the Board of Directors or a majority of the
      members of a committee of non-employee directors established for such
      purpose, (b) securities upon the exercise or exchange of or conversion
      of any Securities issued hereunder and/or other securities exercisable
      or exchangeable for or convertible into shares of Common Stock issued
      and outstanding on the date of this Agreement, provided that such
      securities have not been amended since the date of this Agreement to
      increase the number of such securities or to decrease the exercise
      price, exchange price or conversion price of such securities (except as
      a result of anti-dilution provisions therein), and (c) securities issued
      pursuant to acquisitions or strategic transactions approved by a
      majority of the disinterested directors of the Company, provided that
      any such issuance shall only be to a Person (or to the equity holders of
      a Person) which is, itself or through its subsidiaries, an operating
      company or an asset in a business synergistic with the business of the
      Company and shall provide to the Company additional benefits in addition
      to the investment of funds, but shall not include a transaction in which
      the Company is issuing securities primarily for the purpose of raising
      capital or to an entity whose primary business is investing in
      securities.
    

    

    

    
      
        

        

      

      
        
          14
        

        
          

        

      

      
        

        

      

    

    

    

    
      13.10              “Fundamental
      Transaction” has the meaning set forth in the Purchase Agreement.
    

    
      13.11              “Maximum
      Placement” has the meaning set forth in the Purchase Agreement.
    

    
      13.12              “Options”
      means any rights, warrants or options to subscribe for or purchase
      shares of Common Stock or Convertible Securities.
    

    
      13.13              “Parent
      Entity” of a Person means an entity that, directly or indirectly,
      controls the applicable Person and whose common stock or equivalent
      equity security is quoted or listed on an Eligible Market, or, if there
      is more than one such Person or Parent Entity, the Person or Parent
      Entity with the largest public market capitalization as of the date of
      consummation of the Fundamental Transaction.
    

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

    
      13.15              “Public
      Successor Entity” means a Successor Entity that is a publicly traded
      corporation whose stock is quoted or listed for trading on an Eligible
      Market.
    

    
      13.16              “Required
      Holders” means the Holders of this Warrant representing at least a
      majority of shares of Common Stock underlying this Warrant as then
      outstanding.
    

    
      13.17              “Successor
      Entity” means the Person (or, if so elected by the Required Holders,
      the Parent Entity) formed by, resulting from or surviving any
      Fundamental Transaction or the Person (or, if so elected by the Required
      Holders, the Parent Entity) with which such Fundamental Transaction
      shall have been entered into.
    

    

    

    
      
        

        

      

      
        
          15
        

        
          

        

      

      
        

        

      

    

    

    

    
      13.18              “Trading
      Day” means any day on which the Common Stock is traded on an
      Eligible Market; provided that it shall not include any day on which the
      Common Stock (a) is suspended from trading, or (b) is scheduled to trade
      on such exchange or market for less than 5 hours.
    

    
      13.19              “Trading
      Market” means the OTC Bulletin Board, the NASDAQ Capital Market, the
      NASDAQ Global Market, the NASDAQ Global Select Market, the NYSE Amex, or
      the New York Stock Exchange, whichever is at the time the principal
      trading exchange or market for the Common Stock, but does not include
      the Pink Sheets inter-dealer electronic quotation and trading system.
    

    
      13.20              “Tranche
      Closing Date” has the meaning set forth in the Purchase Agreement.
    

    
      13.21              “Tranche
      Notice” has the meaning set forth in the Purchase Agreement.
    

    
      13.22              “Tranche
      Notice Date” has the meaning set forth in the Purchase Agreement.
    

    
      13.23              “Tranche
      Purchase Price” has the meaning set forth in the Purchase Agreement.
    

    

    

    
      
        

        

      

      
        
          16
        

        
          

        

      

      
        

        

      

    

    

    

    
      IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase
      Common Stock to be duly executed as of the Issuance Date set out above.
    

    
      

      PURESPECTRUM, INC.

By:                                                         
Name:
Title:  
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      Warrant Exercise Schedule
    

    
    	
           
        	
           
        	
           
        	
           
        	
           
        
	
          Exercise Date
        	
          
            Number of
Warrant Shares
          

        	
          
            Exercise Price
Per Share
          

        	
          
            Aggregate Exercise
Price
          

        	
          
            Dollar Amount
Remaining
          

        
	
           
        	
           
        	
           
        	
           
        	
           
        

    

    
      

      

    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      APPENDIX 1
    

    

    

    
      EXERCISE NOTICE

PURESPECTRUM, INC.
    

    
      The undersigned hereby exercises the right to purchase ________________
      shares of Common Stock (“Warrant Shares”) of PureSpectrum,
      Inc., a Delaware corporation (“Company”), evidenced by the
      attached Warrant to Purchase Common Stock (“Warrant”).  Capitalized
      terms used herein and not otherwise defined shall have the respective
      meanings set forth in the Warrant.  The Holder intends that payment of
      the Exercise Price shall be made as:
    

    
      ___       Cash Exercise with respect to ____________ Warrant Shares
    

    
      ___       Cashless Exercise with respect to ____________ Warrant Shares
    

    
      ___       Recourse Note Exercise with respect to ____________ Warrant
      Shares
    

    
                Please issue
    

    
      ___       A certificate or certificates representing said shares of
      Common Stock in the name specified below
    

    
      ___       Said shares in electronic form to the Deposit/Withdrawal at
      Custodian (DWAC) account with Depository Trust Company (DTC) specified
      below.
    

    
      

      

      _______________________________
Holder Name

By:   _                                            
Name:                                             
Title:  _                                          
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      ACKNOWLEDGMENT

    

    
      The Company hereby acknowledges the foregoing Exercise Notice and hereby
      directs [_________] to issue the above indicated number of shares of
      Common Stock as specified above, in accordance with the Transfer Agent
      Instructions dated [_________] from the Company, and acknowledged and
      agreed to by the transfer agent.
    

    
      

      PURESPECTRUM, INC.

By:                                                                   
Name:                                                       _____
Title:                                                      ______
    

    

    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      APPENDIX 2
    

    

    

    
      FORM OF NOTE
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      SECURED PROMISSORY NOTE
    

    

    

    
      $[_____________]                                                                Date:     [________],
      20[__]
    

    
      FOR VALUE RECEIVED, [_____________] (“Borrower”) promises
      to pay to the order of PureSpectrum, Inc. (“Lender”), at
      [________], or at such other place as Lender may from time to time
      designate in writing, the principal sum of $[________], with interest,
      as follows:
    

    
      1.                 Interest.  The
      principal balance outstanding from time to time under this Secured
      Promissory Note (this “Note”), shall bear interest from and
      after the date hereof at the rate of 2.0% per year.  Interest shall be
      calculated on a simple interest basis and the number of days elapsed
      during the period for which interest is being calculated.  Payments of
      interest will be due on each annual anniversary of the date of this
      Note; provided that Borrower will not be in default hereunder for
      failure to make any annual interest payment when due (other than on the
      Maturity Date) and the amount of interest not paid when due shall be
      added to the principal balance of this Note and such amount will
      thereafter accrue interest at the rate set forth above.
    

    
      2.                 Payments.  If
      not sooner paid, the entire unpaid principal balance, interest thereon
      and any other charges due and payable under this Note shall be due and
      payable on the fourth anniversary of the date of this Note (“Maturity
      Date”); provided, however, that no payments on
      this Note will be due or payable so long as either (a) Lender is in
      default under any preferred stock purchase agreement for Series A
      Preferred Stock with Borrower or any Warrant issued pursuant thereto,
      any loan agreement or other material agreement entered into with
      Borrower, or (b) there are any shares of Series A Preferred Stock of
      Lender issued or outstanding (each, a “Non-Payment Event”).  Upon
      the termination or cure of any Non-Payment Event, Borrower’s obligation
      to pay amounts outstanding on this Note will immediately be
      reinstated.  Borrower shall have the right to prepay all or any part of
      the principal balance of this Note at any time without penalty or
      premium.  In the event that Lender redeems all or a portion of any
      shares of Series A Preferred Stock then held by Borrower, the proceeds
      of any such redemption will be applied by Borrower to pay down the
      accrued interest and outstanding principal of this Note and Lender will
      be permitted to offset the full amount of such proceeds against amounts
      outstanding under this Note.  All payments on this Note shall be first
      applied to interest, then to reduce the outstanding principal balance
      hereof.
    

    
      3.                 Full
      Recourse Note.  THIS IS A FULL RECOURSE PROMISSORY
      NOTE.  Accordingly, notwithstanding that Borrower’s obligations under
      this Note are secured by the Collateral, in the event of a material
      default hereunder, Lender shall have full recourse to all the other
      assets of Borrower.  Moreover, Lender shall not be required to proceed
      against or exhaust any Collateral, or to pursue any Collateral in any
      particular order, before Lender pursues any other remedies against
      Borrower or against any of Borrower’s assets.
    

    
      4.                 Security
    

    
      a.                           Pledge.  As
      security for the due and prompt payment and performance of all payment
      obligations under this Note and any modifications, replacements and
      extensions hereof (collectively, “Secured Obligations”),
      Borrower hereby pledges and grants a security interest to Lender in all
      of Borrower’s right, title, and interest in and to all of the following,
      now owned or hereafter acquired or arising (together the “Collateral”):
    

    

    

    
      
        

        

      

      
        
          1
        

        
          

        

      

      
        

        

      

    

    

    

    
      i.                                     Freely tradable shares of common
      stock, preferred stock, bonds, notes and/or debentures (collectively, “Pledged
      Securities”) with a fair market value on the date hereof at least
      equal to the principal amount of this Note, based upon the trading price
      of such securities on the OTC Bulletin Board, NASDAQ Capital Market,
      NASDAQ Global Market, NASDAQ Global Select Market, NYSE Amex, or New
      York Stock Exchange;
    

    
      ii.                                    all rights of Borrower with
      respect to or arising out of the Pledged Securities, including voting
      rights, and all equity and debt securities and other property
      distributed or distributable with respect thereto as a result of merger,
      consolidation, dissolution, reorganization, recapitalization, stock
      split, stock dividend, reclassification, exchange, redemption, or other
      change in capital structure; and
    

    
      iii.                                   all proceeds, replacements,
      substitutions, accessions and increases in any of the Collateral.
    

    
      b.                           Replacement
      Securities.  So long as any Secured Obligations remain outstanding,
      in the event that Borrower sells or disposes of any Pledged Securities,
      Borrower shall promptly provide replacement securities of equal or
      greater value than such Pledged Securities.
    

    
      c.                           Rights
      With Respect to Distributions.  So long as no default shall have
      occurred and be continuing under this Note, Borrower shall be entitled
      to receive any and all dividends and distributions made with respect to
      the Pledged Securities and any other Collateral.  However, upon the
      occurrence and during the continuance of any default, Lender shall have
      the sole right (unless otherwise agreed by Lender) to receive and retain
      dividends and distributions and apply them to the outstanding balance of
      this Note or hold them as Collateral, at Lender’s election.  
    

    
      d.                           Voting
      Rights.  So long as no default shall have occurred and be continuing
      under this Note, Borrower shall be entitled to exercise all voting
      rights pertaining to the Pledged Securities and any other
      Collateral.  However, upon the occurrence and during the continuance of
      any default, all rights of Borrower to exercise the voting rights that
      Borrower would otherwise be entitled to exercise with respect to the
      Collateral shall cease and (unless otherwise agreed by Lender) all such
      rights shall thereupon become vested in Lender, which shall thereupon
      have the sole right to exercise such rights.  
    

    
      e.                           Financing
      Statement; Further Assurances.  Borrower agrees, concurrently with
      executing this Note, that Lender may file a UCC-1 financing statement
      relating to the Collateral in favor of Lender, and any similar financing
      statements in any jurisdiction in which Lender reasonably determines
      such filing to be necessary.  Borrower further agrees that at any time
      and from time to time Borrower shall promptly execute and deliver all
      further instruments and documents that Lender may request in order to
      perfect and protect the security interest granted hereby, or to enable
      Lender to exercise and enforce its rights and remedies with respect to
      any Collateral following an event of default.  In addition, following an
      event of default, Borrower shall deliver the Collateral, including
      original certificates or other instruments representing the Pledged
      Securities, to Lender to hold as secured party, and Borrower shall, if
      requested by Lender, execute a securities account control agreement.  
    

    

    

    
      
        

        

      

      
        
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      f.                           Powers
      of Lender.  Borrower hereby appoints Lender as Borrower’s true and
      lawful attorney-in-fact to perform any and all of the following acts,
      which power is coupled with an interest, is irrevocable until the
      Secured Obligations are paid and performed in full, and may be exercised
      from time to time by Lender in its discretion:  To take any action and
      to execute any instrument which Lender may deem reasonably necessary or
      desirable to accomplish the purposes of this Section 4(f) and,
      more broadly, this Note including, without limitation:  (i) to exercise
      voting and consent rights with respect to Collateral in accordance with
      this Note, (ii) during the continuance of any default hereunder, to
      receive, endorse and collect all instruments or other forms of payment
      made payable to Borrower representing any dividend, interest payment or
      other distribution in respect of the Collateral or any part thereof and
      to give full discharge for the same, when and to the extent permitted by
      this Note, (iii) to perform or cause the performance of any obligation
      of Borrower hereunder in Borrower’s name or otherwise, (iv) during the
      continuance of any default hereunder, to liquidate any Collateral
      pledged to Lender hereunder and to apply proceeds thereof to the payment
      of the Secured Obligations or to place such proceeds into a cash
      collateral account or to transfer the Collateral into the name of
      Lender, all at Lender’s sole discretion, (v)  to enter into any
      extension, reorganization or other agreement relating to or affecting
      the Collateral, and, in connection therewith, to deposit or surrender
      control of the Collateral, (vi) to accept other property in exchange for
      the Collateral, (vii) to make any compromise or settlement Lender deems
      desirable or proper, and (viii) to execute on Borrower’s behalf and in
      Borrower’s name any documents required in order to give Lender a
      continuing first lien upon the Collateral or any part thereof.
    

    
      5.                 Additional
      Terms
    

    
      a.                           No
      Waiver.  The acceptance by Lender of payment of a portion of any
      installment when due or an entire installment but after it is due shall
      neither cure nor excuse the default caused by the failure of Borrower
      timely to pay the whole of such installment and shall not constitute a
      waiver of Lender’s right to require full payment when due of any future
      or succeeding installments.
    

    
      b.                           Default.  Any
      one or more of the following shall constitute a “default” under this
      Note:  (i) a default in the payment when due of any amount hereunder,
      (ii) Borrower’s refusal to perform any material term, provision or
      covenant under this Note, (iii) the commencement of any liquidation,
      receivership, bankruptcy, assignment for the benefit of creditors or
      other debtor-relief proceeding by or against Borrower, (iv) the transfer
      by Borrower of any Pledged Securities without being replaced by Pledged
      Securities in accordance with Section 4(b), and (iv) the levying
      of any attachment, execution or other process against Borrower, the
      Collateral or any material portion thereof.
    

    
      c.                           Default
      Rights
    

    
      i.                                     Upon the occurrence of any
      payment default Lender may, at its election, declare the entire balance
      of principal and interest under this Note immediately due and
      payable.  A delay by Lender in exercising any right of acceleration
      after a default shall not constitute a waiver of the default or the
      right of acceleration or any other right or remedy for such
      default.  The failure by Lender to exercise any right of acceleration as
      a result of a default shall not constitute a waiver of the right of
      acceleration or any other right or remedy with respect to any other
      default, whenever occurring.  
    

    

    

    
      
        

        

      

      
        
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      ii.                                    Further, upon the occurrence of
      any material non-monetary default, following 30 days notice from Lender
      to Borrower specifying the default and demanded manner of cure for any
      non-monetary default, Lender shall thereupon and thereafter have any and
      all of the rights and remedies to which a secured party is entitled
      after a default under the applicable Uniform Commercial Code, as then in
      effect.  In addition to Lender’s other rights and remedies, Borrower
      agrees that, upon the occurrence of default, Lender may in its sole
      discretion do or cause to be done any one or more of the following:
    

    
      (a)                                              Proceed to realize upon
      the Collateral or any portion thereof as provided by law, and without
      liability for any diminution in price which may have occurred, sell the
      Collateral or any part thereof, in such manner, whether at any public or
      private sale, and whether in one lot as an entirety, or in separate
      portions, and for such price and other terms and conditions as is
      commercially reasonable given the nature of the Collateral.  
    

    
      (b)                                              If notice to Borrower
      is required, give written notice to Borrower at least ten days before
      the date of sale of the Collateral or any portion thereof.
    

    
      (c)                                              Transfer all or any
      part of the Collateral into Lender’s name or in the name of its nominee
      or nominees.
    

    
      (d)                                              Vote all or any part of
      the Collateral (whether or not transferred into the name of Lender ) and
      give all consents, waivers and ratifications in respect of the
      Collateral and otherwise act with respect thereto, as though Lender were
      the outright owner thereof.
    

    
      iii.                                   Borrower acknowledges that all or
      part of foreclosure of the Collateral may be restricted by state or
      federal securities laws, Lender may be unable to effect a public sale of
      all or part of the Collateral, that a public sale is or may be
      impractical and inappropriate and that, in the event of such
      restrictions, Lender thus may be compelled to resort to one or more
      private sales to a restricted group of purchasers who will be obliged to
      agree, among other things, to acquire the Collateral for their own
      account, for investment and not with a view to its distribution or
      resale.  Borrower agrees that if reasonably necessary Lender may resort
      to one or more sales to a single purchaser or a restricted or limited
      group of purchasers.  Lender shall not be obligated to make any sale or
      other disposition, unless the terms thereof shall be satisfactory to it.
    

    
      iv.                                    If, in the opinion of Lender
      based upon written advice of counsel, any consent, approval or
      authorization of any federal, state or other governmental agency or
      authority should be necessary to effectuate any sale or other
      disposition of any Collateral, Borrower shall execute all such
      applications and other instruments as may reasonably be required in
      connection with securing any such consent, approval or authorization,
      and will otherwise use its commercially reasonable best efforts to
      secure the same.
    

    

    

    
      
        

        

      

      
        
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      v.                                     The rights, privileges, powers
      and remedies of Lender shall be cumulative, and no single or partial
      exercise of any of them shall preclude the further or other exercise of
      any of them.  Any waiver, permit, consent or approval of any kind by
      Lender of any default hereunder, or any such waiver of any provisions or
      conditions hereof, must be in writing and shall be effective only to the
      extent set forth in writing.  Any proceeds of any disposition of the
      Collateral, or any part thereof, may be applied by Lender to the payment
      of expenses incurred by Lender in connection with the foregoing, and the
      balance of such proceeds shall be applied by Lender toward the payment
      of the Secured Obligations.
    

    
      d.        No Oral Waivers or
      Modifications.  No provision of this Note may be waived or modified
      orally, but only in a writing signed by Lender and Borrower.
    

    
      e.        Attorney Fees.  The
      prevailing party in any action by Lender to collect any amounts due
      under this Note shall be entitled to recover its reasonable attorneys
      fees and costs.
    

    
      f.        Governing Law.  This
      Note has been executed and delivered in, and is to be construed,
      enforced, and governed according to the internal laws of, the State of
      New York without regard to its principles of conflict of laws that would
      require or permit the application of the laws of any other
      jurisdiction.  
    

    
      g.        Severability.  Whenever
      possible, each provision of this Note shall be interpreted in such
      manner as to be effective and valid under applicable law.  However, if
      any provision of this Note shall be held to be prohibited by or invalid
      under applicable law, it shall be ineffective only to the extent of such
      prohibition or invalidity without invalidating the remainder of that
      provision or the other provisions of this Note.
    

    
      h.        Entire Agreement.  This
      Note contains the entire understanding of the parties with respect to
      the subject matter hereof and supersedes all prior agreements and
      understandings, oral or written, with respect to such matters.
    

    

    

    
      _______________________________
    

    
      

      

      By:                                               
Name:                                             
Title:                                            
    

    

    

    
      
        

        

      

      
        
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      Exhibit B
    

    
      Certificate of Designations
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      PURESPECTRUM, INC.

CERTIFICATE OF DESIGNATIONS
OF PREFERENCES,
      RIGHTS AND LIMITATIONS
OF
SERIES A PREFERRED STOCK
    

    
            The undersigned, [_________] and [_________], hereby certify that:
    

    
      1.        They are the [_________] and [_________], respectively, of
      PureSpectrum, Inc., a Delaware corporation (the “Corporation”).
    

    
      2.        The Corporation is authorized to issue 50,000,000 shares of
      preferred stock, of which [_________] shares are issued or outstanding.
    

    
      3.        The following resolutions were duly adopted by the Board of
      Directors:
    

    
      WHEREAS, the Amended and Restated Certificate of Incorporation of the
      Corporation provides for a class of its authorized stock known as
      preferred stock, comprised of 50,000,000 shares, $0.0001 par value per
      share (the Preferred Stock”), issuable from time to time in one
      or more series;
    

    
      WHEREAS, the Board of Directors of the Corporation is authorized to fix
      the dividend rights, dividend rate, voting rights, conversion rights,
      rights and terms of redemption and liquidation preferences of any wholly
      unissued series of Preferred Stock and the number of shares constituting
      any series and the designation thereof, of any of them; and
    

    
      WHEREAS, it is the desire of the Board of Directors of the Corporation,
      pursuant to its authority as aforesaid, to fix the rights, preferences,
      restrictions and other matters relating to a series of Preferred Stock,
      which shall consist of up to 1,000 shares of the Preferred Stock which
      the Corporation has the authority to issue, with face value of
      $10,000.00 per share, as follows:
    

    
      NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
      provide for the issuance of a series of Preferred Stock for cash or
      exchange of other securities, rights or property and does hereby fix and
      determine the rights, preferences, restrictions and other matters
      relating to such series of Preferred Stock as follows:
    

    
      TERMS OF PREFERRED STOCK
    

    
      1.                 Designation,
      Amount and Par Value.  The series of Preferred Stock shall be
      designated as the Corporation’s Series A Preferred Stock (the “Series
      A Preferred Stock”) and the number of shares so designated shall be
      1,000 (which shall not be subject to increase without any consent of the
      holders of the Series A  Preferred Stock (each a “Holder”
      and collectively, the “Holders”) that may be required by
      applicable law.  Each share of Series A Preferred Stock shall have a par
      value of $0.0001 per share.
    

    

    

    
      
        

        

      

      
        
          1
        

        
          

        

      

      
        

        

      

    

    

    

    
      2.                 Ranking
      and Voting.  
    

    
      a.                           Ranking.  The
      Series A Preferred Stock shall, with respect to dividend rights and
      rights upon liquidation, winding-up or dissolution, rank: (i) senior to
      the Corporation’s common stock, par value $0.0001 per share (“Common
      Stock”), and any other class or series of preferred stock of the
      Corporation (collectively, together with any warrants, rights, calls or
      options exercisable for or convertible into such Preferred Stock, the “Junior
      Securities”); and (ii) junior to all existing and future
      indebtedness of the Corporation.
    

    
      b.                           Voting.  Except
      as required by applicable law or as set forth herein, the holders of
      shares of Series A Preferred Stock will have no right to vote on any
      matters, questions or proceedings of this Corporation including, without
      limitation, the election of directors.
    

    
      3.                 Dividends
      and Other Distributions.  Commencing on the date of the issuance of
      any such shares of Series A Preferred Stock (each respectively an “Issuance
      Date”), Holders of Series A Preferred Stock shall be entitled to
      receive annual dividends on each outstanding share of Series A Preferred
      Stock (“Dividends”), which shall accrue in shares of Series
      A Preferred Stock at a rate equal to 10.0% per annum from the
      Issuance Date.  Accrued Dividends shall be payable upon redemption of
      the Series A Preferred Stock in accordance with Section 6.
    

    
      a.                           Any calculation of the amount of such
      Dividends payable pursuant to the provisions of this Section 3
      shall be made based on a 365-day year and on the number of days actually
      elapsed during the applicable period, compounded annually.
    

    
      b.                           So long as any shares of Series A Preferred
      Stock are outstanding, no dividends or other distributions will be paid,
      declared or set apart with respect to any Junior Securities.  The Common
      Stock shall not be redeemed while the Series A Preferred Stock is
      outstanding.
    

    
      4.                 Protective
      Provision.  So long as any shares of Series A Preferred Stock are
      outstanding, the Corporation shall not, without the affirmative approval
      of the Holders of a majority of the shares of the Series A Preferred
      Stock then outstanding (voting as a class), (a) alter or change
      adversely the powers, preferences or rights given to the Series A
      Preferred Stock or alter or amend this Certificate of Designations, (b)
      authorize or create any class of stock ranking as to distribution of
      assets upon a liquidation senior to or otherwise pari passu with the
      Series A Preferred Stock, (c) amend its certificate or articles of
      incorporation, articles of association, or other charter documents in
      breach of any of the provisions hereof, (d) increase the authorized
      number of shares of Series A Preferred Stock, (e) liquidate, dissolve or
      wind-up the business and affairs of the Corporation, or effect any
      Deemed Liquidation Event (as defined below), or (f) enter into any
      agreement with respect to the foregoing.  
    

    
      a.        A “Deemed
      Liquidation Event” shall mean:  (i) a merger or consolidation in
      which the Corporation is a constituent party or a subsidiary of the
      Corporation is a constituent party and the Corporation issues shares of
      its capital stock pursuant to such merger or consolidation, except any
      such merger or consolidation involving the Corporation or a subsidiary
      in which the shares of capital stock of the Corporation outstanding
      immediately prior to such merger or consolidation continue to represent,
      or are converted into or exchanged for shares of capital stock that
      represent, immediately following such merger or consolidation, at least
      a majority, by voting power, of the capital stock of the surviving or
      resulting corporation or if the surviving or resulting corporation is a
      wholly owned subsidiary of another corporation immediately following
      such merger or consolidation, the parent corporation of such surviving
      or resulting corporation; or (ii) the sale, lease, transfer, exclusive
      license or other disposition, in a single transaction or series of
      related transactions, by the Corporation or any subsidiary of the
      Corporation of all or substantially all the assets of the Corporation
      and its subsidiaries taken as a whole,  or the sale or disposition
      (whether by merger or otherwise) of one or more subsidiaries of the
      Corporation if substantially all of the assets of the Corporation and
      its subsidiaries taken as a whole are held by such subsidiary or
      subsidiaries, except where such sale, lease, transfer, exclusive license
      or other disposition is to a wholly owned subsidiary of the
      Corporation.   
    

    

    

    
      
        

        

      

      
        
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      b.        The Corporation shall not have the power to effect a Deemed
      Liquidation Event referred to in Section 4(a) unless the agreement or
      plan of merger or consolidation for such transaction provides that the
      consideration payable to the stockholders of the Corporation shall be
      allocated among the holders of capital stock of the Corporation in
      accordance with Section 5.
    

    
      5.                 Liquidation.
    

    
      a.                           Upon any liquidation, dissolution or
      winding up of the Corporation, whether voluntary or involuntary, after
      payment or provision for payment of debts and other liabilities of the
      Corporation, before any distribution or payment shall be made to the
      holders of any Junior Securities by reason of their ownership thereof,
      the Holders of Series A Preferred Stock shall first be entitled to be
      paid out of the assets of the Corporation available for distribution to
      its stockholders an amount with respect to each outstanding share of
      Series A Preferred Stock equal to $10,000.00 (the “Original
      Series A Issue Price”), plus any accrued but unpaid Dividends
      thereon (collectively, the “Series A Liquidation Value”).  If,
      upon any liquidation, dissolution or winding up of the Corporation,
      whether voluntary or involuntary, the amounts payable with respect to
      the shares of Series A Preferred Stock are not paid in full, the holders
      of shares of Series A Preferred Stock shall share equally and ratably in
      any distribution of assets of the Corporation in proportion to the
      liquidation preference and an amount equal to all accumulated and unpaid
      Dividends, if any, to which each such holder is entitled.
    

    
      b.                           After payment has been made to the Holders
      of the Series A Preferred Stock of the full amount of the Series A
      Liquidation Value, any remaining assets of the Corporation shall be
      distributed among the holders of the Corporation’s Junior Securities in
      accordance with the Corporation’s Certificates of Designation and
      Certificate of Incorporation.
    

    
      c.                           If, upon any liquidation, dissolution or
      winding up of the Corporation, the assets of the Corporation shall be
      insufficient to make payment in full to all Holders, then such assets
      shall be distributed among the Holders at the time outstanding, ratably
      in proportion to the full amounts to which they would otherwise be
      respectively entitled.
    

    
      6.                Redemption.
    

    
      a.        Corporation’s
      Redemption Option.  Upon or after the fourth anniversary of the
      initial Issuance Date, the Corporation shall have the right, at the
      Corporation’s option, to redeem all or a portion of the shares of Series
      A Preferred Stock, at a price per share (the “Corporation
      Redemption Price”) equal to 100% of the Series A Liquidation Value.
    

    

    

    
      
        

        

      

      
        
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      b.        Early Redemption.  Prior
      to redemption pursuant to Section 6(a) hereof, the Corporation shall
      have the right, at the Corporation’s option, to redeem all or a portion
      of the shares of Series A Preferred Stock, at a price per share equal
      to: (i) 127% of the Series A Liquidation Value if redeemed on or after
      the first anniversary but prior to the second anniversary of the initial
      Issuance Date, (ii) 118% of the Series A Liquidation Value if redeemed
      on or after the second anniversary but prior to the third anniversary of
      the initial Issuance Date, and (iii) 109% of the Series A Liquidation
      Value if redeemed on or after the third anniversary but prior to the
      fourth anniversary of the initial Issuance Date.
    

    
      c.        Mandatory
      Redemption.  If the Corporation determines to liquidate, dissolve or
      wind-up its business and affairs, or effect any Deemed Liquidation
      Event, the Corporation shall redeem the Series A Preferred Stock at the
      prices set forth in Section 6(b) including the premium for early
      redemption set forth therein.   
    

    
      d.                           Mechanics
      of Redemption.  If the Corporation elects to redeem any of the
      Holders’ Series A Preferred Stock then outstanding, it shall do so by
      delivering written notice thereof via facsimile and overnight courier (“Notice
      of Redemption at Option of Corporation”) to each Holder, which
      Notice of Redemption at Option of Corporation shall indicate (A) the
      number of shares of Series A Preferred Stock that the Corporation is
      electing to redeem and (B) the Corporation Redemption Price (plus the
      premium for early redemption pursuant to Section 6(b) if
      applicable).
    

    
      e.                           Payment
      of Redemption Price.  Upon receipt by any Holder of a Notice of
      Redemption at Option of Corporation, such Holder shall promptly submit
      to the Corporation such Holder’s Series A Preferred Stock
      certificates.  Upon receipt of such Holder’s Series A Preferred Stock
      certificates, the Corporation shall pay the Corporation Redemption Price
      (plus the premium for early redemption pursuant to Section 6(b)
      if applicable), to such Holder, at the Corporation’s option either (i)
      in cash, or (ii) by offset against any outstanding note payable from
      Holder to the Corporation that was issued by Holder in connection with
      the exercise of warrants by such Holder.
    

    
      7.        Transferability.
      The Series A Preferred Stock may only be sold, transferred, assigned,
      pledged or otherwise disposed of (“Transfer”) in accordance
      with state and federal securities laws.  The Corporation shall keep at
      its principal office, or at the offices of the transfer agent, a
      register of the Series A Preferred Stock.  Upon the surrender of any
      certificate representing Series A Preferred Stock at such place, the
      Corporation, at the request of the record Holder of such certificate,
      shall execute and deliver (at the Corporation’s expense) a new
      certificate or certificates in exchange therefor representing in the
      aggregate the number of shares represented by the surrendered
      certificate.  Each such new certificate shall be registered in such name
      and shall represent such number of shares as is requested by the Holder
      of the surrendered certificate and shall be substantially identical in
      form to the surrendered certificate.
    

    

    

    
      
        

        

      

      
        
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      8.        Miscellaneous.
    

    
      a.                           Notices.  Any
      and all notices to the Corporation shall be addressed to the
      Corporation’s President or Chief Executive Officer at the Corporation’s
      principal place of business on file with the Secretary of State of the
      State of Delaware.  Any and all notices or other communications or
      deliveries to be provided by the Corporation to any Holder hereunder
      shall be in writing and delivered personally, by facsimile, sent by a
      nationally recognized overnight courier service addressed to each Holder
      at the facsimile telephone number or address of such Holder appearing on
      the books of the Corporation, or if no such facsimile telephone number
      or address appears, at the principal place of business of the Holder.
      Any notice or other communication or deliveries hereunder shall be
      deemed given and effective on the earliest of (i) the date of
      transmission, if such notice or communication is delivered via facsimile
      at the facsimile telephone number specified in this Section 8
      prior to 5:30 p.m. Eastern time, (ii) the date after the date of
      transmission, if such notice or communication is delivered via facsimile
      at the facsimile telephone number specified in this section later than
      5:30 p.m. but prior to 11:59 p.m. Eastern time on such date, (iii) the
      second business day following the date of mailing, if sent by nationally
      recognized overnight courier service, or (iv) upon actual receipt by the
      party to whom such notice is required to be given.
    

    
      b.                           Lost
      or Mutilated Preferred Stock Certificate.  Upon receipt of evidence
      reasonably satisfactory to the Corporation (an affidavit of the
      registered Holder shall be satisfactory) of the ownership and the loss,
      theft, destruction or mutilation of any certificate evidencing shares of
      Series A Preferred Stock, and in the case of any such loss, theft or
      destruction upon receipt of indemnity reasonably satisfactory to the
      Corporation (provided that if the Holder is a financial institution or
      other institutional investor its own agreement shall be satisfactory) or
      in the case of any such mutilation upon surrender of such certificate,
      the Corporation shall, at its expense, execute and deliver in lieu of
      such certificate a new certificate of like kind representing the number
      of shares of such class represented by such lost, stolen, destroyed or
      mutilated certificate and dated the date of such lost, stolen, destroyed
      or mutilated certificate.
    

    
      c.                           Headings.  The
      headings contained herein are for convenience only, do not constitute a
      part of this Certificate of Designations and shall not be deemed to
      limit or affect any of the provisions hereof.
    

    
      
        

        

      

      
        
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      RESOLVED, FURTHER, that the chairman, chief executive officer, president
      or any vice-president, and the secretary or any assistant secretary, of
      the Corporation be and they hereby are authorized and directed to
      prepare and file a Designation of Preferences, Rights and Limitations of
      Series A Preferred Stock in accordance with the foregoing resolution and
      the provisions of Delaware law.
    

    
      IN WITNESS WHEREOF, the undersigned have executed this Certificate of
      Designations this ___ day of [                         ], 20[  ].
    

    
      

      By:       ____________________
Name:
Title:   
    

    

    

    
      By:       ____________________
Name:  
Title:    
    

    

    

    
      
        

        

      

      
        
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      Exhibit C
    

    
      Transfer Agent Instructions
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      [Date]
    

    

    

    
      Transfer Online, Inc.

    

    
      Re:  PureSpectrum, Inc.
    

    
      Ladies and Gentlemen:
    

    
      In accordance with the Preferred Stock Purchase Agreement (“Purchase
      Agreement”), dated February 5, 2010, by and between PureSpectrum,
      Inc., a Delaware corporation (“Company”), and Socius
      Capital Group, LLC, a Delaware limited liability company, dba Socius
      Energy Capital Group, LLC (“Buyer”), pursuant to which
      Company may issue and deliver shares of common stock of the Company, par
      value $0.0001 per share (“Common Stock”), in payment of the
      Commitment Fee payable thereunder (the “Commitment Fee Shares”),
      and a warrant (the “Warrant”) to purchase additional shares
      of Common Stock (the “Warrant Shares”) (the Commitment Fee
      Shares and Warrant Shares, collectively, the “Common Shares”),
      this shall serve as our irrevocable authorization and direction to you
      (provided that you are the transfer agent of the Company at such time)
      to issue the Fee Shares and, in the event the holder of the Warrant
      elects or has elected to exercise all or any portion of the Warrant,
      from time to time, upon surrender to you of a notice of exercise of the
      Warrant, the Warrant Shares. Capitalized terms used herein without
      definition shall have the respective meanings ascribed to them in the
      Purchase Agreement.
    

    
      Specifically, this shall constitute an irrevocable instruction to you to
      process any notice of exercise of the Warrant in accordance with the
      terms of these instructions as soon as practicable. Upon your receipt of
      a copy of the executed notice of exercise of the Warrant, the Company
      requests and instructs that you use your best efforts to, within one (1)
      Trading Day following the date of receipt of the notice of exercise, (A)
      issue and surrender to a common carrier for overnight delivery to the
      address as specified in the notice of exercise a certificate, registered
      in the name of the Buyer or its designee, for the number of shares of
      Common Stock to which the Buyer is entitled upon exercise of the Warrant
      as set forth in the notice of exercise, or (B) provided you are
      participating in The Depository Trust Company (DTC) Fast Automated
      Securities Transfer (FAST) Program, upon the request of the Buyer,
      credit such aggregate number of shares of Common Stock to which the
      Buyer is entitled to the Buyer’s or its designee’s balance account with
      DTC through its Deposit Withdrawal At Custodian (DWAC) system provided
      the Buyer causes its bank or broker to initiate the DWAC transaction.   
    

    
      The Company hereby confirms that the Common Shares should not be subject
      to any stop-transfer restrictions and shall otherwise be freely
      transferable on the books and records of the Company.  If the Common
      Shares are certificated, the certificates shall not bear any legend
      restricting transfer of the shares represented thereby.
    

    

    

    
      
        

        

      

      
        
          1
        

        
          

        

      

      
        

        

      

    

    

    

    
      The Company hereby confirms and instructs that, in the event counsel to
      the Company does not issue any opinion of counsel required to issue any
      Common Shares free of legend, the Company authorizes you to accept an
      opinion of counsel from Luce Forward Hamilton & Scripps LLP.
    

    
      The Company hereby confirms that no instructions other than as
      contemplated herein will be given to you by the Company with respect to
      the Common Shares. The Company hereby agrees that it shall not replace
      you as the Company’s transfer agent, until such time as the Company
      provides written notice to you and Buyer that a suitable replacement has
      agreed to serve as transfer agent and to be bound by the terms and
      conditions of this letter agreement regarding Irrevocable Transfer Agent
      Instructions (this “Agreement”).
    

    
      The Company confirms that complying with the terms of this Agreement
      does not and shall not prohibit you from satisfying any and all
      fiduciary responsibilities and duties you may owe to the Company.
    

    
      The Company acknowledges that the Buyer is relying on the
      representations and covenants made by the Company and that such
      representations and covenants are a material inducement to the Buyer to
      enter into the Purchase Agreement. The Company and you further
      acknowledge that without such representations and covenants made
      hereunder, the Buyer would not enter into the Purchase Agreement and
      purchase Securities pursuant thereto.
    

    
      The Company acknowledges that a breach or threatened breach of any
      provision hereof will cause irreparable damage to Holder and that
      damages at law would be an inadequate remedy if this Agreement were not
      specifically enforced.  
    

    
      The Company asks that, before you resign as transfer agent hereunder,
      you give fifteen (15) days prior written notice of resignation to the
      Company and the Buyer. Prior to the effective date of the resignation as
      specified in such notice, the Company will issue to you instructions
      authorizing delivery of Common Shares to a substitute transfer agent
      selected by, and in the sole discretion of, the Company. If no successor
      transfer agent is named by the Company, you may apply to a court of
      competent jurisdiction in the State of Delaware for appointment of a
      successor transfer agent and for an order to deposit Common Shares with
      the clerk of any such court.
    

    
      The Company must keep its bill current with you – if the Company is not
      current and is on suspension, the Buyer will have the right to pay the
      Company’s outstanding bill, in order for you to act upon this Agreement.
    

    
      
        

        

      

      
        
          2
        

        
          

        

      

      
        

        

      

    

    
      IN WITNESS WHEREOF, the parties have caused this letter agreement
      regarding Irrevocable Transfer Agent Instructions to be duly executed
      and delivered as of the date first written above.
    

    

    

    
      

      PURESPECTRUM, INC.

By:                                                         
Name:
Title:
         

    

    
      THE FOREGOING INSTRUCTIONS ARE ACKNOWLEDGED:

Transfer Online, Inc.

By:                                               
Name:                                             
Title:                                            
    

    

    

    
      
        

        

      

      
        
          3
        

        
          

        

      

      
        

        

      

    

    

    

    
      Exhibit D
    

    
      Lock-Up Agreement
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      [Date]
    

    
      

      

      Socius Energy Capital Group, LLC
11150 Santa Monica Boulevard, Suite
      1500
Los Angeles, CA 90025

Ladies and Gentlemen:

    

    
      This Lock-Up Agreement is being delivered to you in connection with the
      Preferred Stock Purchase Agreement dated as of February 5, 2010 (“Purchase
      Agreement”) and entered into by and among PureSpectrum, Inc., a
      Delaware corporation (“Company”) and Socius Capital Group,
      LLC, a Delaware limited liability company, dba Socius Energy Capital
      Group, LLC (“Investor”), with respect to the purchase
      without registration under the Securities Act of 1933, as amended (the “Act”),
      in reliance on Section 4(2) of the Act and Rule 506 of Regulation D
      promulgated thereunder, of shares of the Company’s Series A Preferred
      Stock and related Securities.  Capitalized terms used herein without
      definition shall have the respective meanings ascribed to them in the
      Purchase Agreement.
    

    
      In order to induce Investor to enter into the Purchase Agreement, the
      undersigned agrees that, for a period of five (5) Trading Days beginning
      on each date the Company delivers a Tranche Notice to Investor (the “Tranche
      Notice Date”) and ending on the Tranche Closing Date pursuant to the
      terms of the Purchase Agreement (the “Lock-up Period”), the
      undersigned will not, without the prior written consent of Investor, (a)
      sell, offer to sell, contract or agree to sell, hypothecate, pledge,
      grant any option to purchase or otherwise dispose of or agree to dispose
      of, directly or indirectly, in respect of, or establish or increase a
      put equivalent position or liquidate or decrease a call equivalent
      position within the meaning of Section 16 of the Securities Exchange Act
      of 1934, as amended, and the rules and regulations of the SEC
      promulgated thereunder (the “Exchange Act”) with respect
      to, any Common Stock of the Company or any securities convertible into
      or exercisable or exchangeable for Common Stock, or warrants or other
      rights to purchase Common Stock or any such securities, or any
      securities substantially similar to the Common Stock, (b) enter into any
      swap or other arrangement that transfers to another, in whole or in
      part, any of the economic consequences of ownership of Common Stock or
      any securities convertible into or exercisable or exchangeable for
      Common Stock or any such securities, or warrants or other rights to
      purchase Common Stock, whether any such transaction is to be settled by
      delivery of Common Stock or such other securities, in cash or otherwise,
      or (c) publicly announce an intention to effect any transaction
      specified in clause (a) or (b).  
    

    
      The foregoing sentence shall not apply to (a) bona fide gifts, provided
      the recipient thereof agrees in writing to be bound by the terms of this
      Lock-Up Agreement, (b) dispositions to any trust for the direct or
      indirect benefit of the undersigned and/or the immediate family of the
      undersigned, provided that such trust agrees in writing to be bound by
      the terms of this Lock-Up Agreement, (c) sales made pursuant to any
      written sales plans established prior to the date of this Lock-Up
      Agreement in conformity with the requirements of Rule 10b5-1(c)
      promulgated under the Exchange Act or (d) exercise of options for Common
      Stock and the disposition (whether by sale, gift or otherwise) of Common
      Stock underlying such options.  Notwithstanding clause (a) above, the
      undersigned may make a bona fide gift of up to 10,000 shares of Common
      Stock to a charity or other non-profit entity and such charity or entity
      shall not be required to be bound by the terms of this Lock-Up
      Agreement; provided, however, that in the event the
      undersigned exercises options during the Lock-Up Period, the undersigned
      may not, during the Lock-Up Period, dispose of the number of shares of
      Common Stock underlying such exercised options equal to the number of
      shares of Common Stock gifted by the undersigned pursuant to this
      sentence during the Lock-Up Period.  For purposes of this paragraph,
      “immediate family” shall mean the undersigned and those persons living
      or residing with the undersigned in the same household.
    

    

    

    
      
        

        

      

      
        
          1
        

        
          

        

      

      
        

        

      

    

    

    

    
      The Company agrees to provide the undersigned with notice that the
      Company has delivered a Tranche Notice to Investor prior to, or
      simultaneous with, its delivery of the Tranche Notice to Investor.  Such
      notice shall provide the undersigned with the Tranche Notice Date and
      clearly indicate the beginning of the Lock-up Period.
    

    
      Upon the termination of the Purchase Agreement, this Lock-Up Agreement
      shall be terminated and the undersigned shall be released from its
      obligations hereunder.
    

    
      Sincerely,

_______________________________
Stockholder
Print
      Name: [                                       ]
    

    
      

      

      Acknowledged and Agreed:

PureSpectrum, Inc.

By:                                               
Name:     
Title:    
    

    

    

    
      
        

        

      

      
        
          2
        

        
          

        

      

      
        

        

      

    

    

    

    
      Exhibit E
    

    
      Opinion
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      [LETTERHEAD OF COMPANY COUNSEL]
    

    
      February 5, 2010
    

    
      

      

      

      

      Socius Energy Capital Group, LLC
11150 Santa Monica Boulevard, Suite
      1500
Los Angeles, CA 90025

    

    
      Re:: PureSpectrum, Inc.
    

    
      Ladies and Gentlemen:
    

    
      We are counsel to PureSpectrum, Inc., a Delaware corporation
      (“Company”), in connection with the sale and issuance of (a) up to 1,000
      shares of its Series A Preferred Stock, par value $0.0001 per share
      (“Preferred Shares”), along with (b) shares (“Commitment
      Fee Shares”) of the Company’s common stock, par value $0.0001 per
      share (“Common Stock”), (c) warrants (the “Warrant”)
      to purchase shares of Common Stock, and (d) shares of Common Stock
      issuable upon exercise of the Warrant (the “Warrant Shares,”
      and together with the Preferred Shares and the Warrant, the “Securities”),
      to Socius Capital Group, LLC, a Delaware limited liability company, dba
      Socius Energy Capital Group, LLC (“Investor”), pursuant to the terms of
      the Preferred Stock Purchase Agreement dated as of February 5, 2010
      (“Agreement”), by and between Company and Investor.  Capitalized terms
      not otherwise defined herein have the meanings set forth in the
      Agreement.
    

    
      We are of the opinion that as of the date hereof:
    

    
      1.        Company is a corporation duly incorporated, validly existing
      and in good standing under the laws of the State of Delaware.
    

    
      2.        The Securities are duly authorized, the Preferred Shares,
      Commitment Fee Shares and Warrant are, and when issued in accordance
      with the terms and conditions of the Agreement the Warrant Shares will
      be, validly issued, fully paid and non-assessable.  The issuance of the
      Securities will not be subject to any statutory or contractual
      preemptive rights of any stockholder of the Company.
    

    
      3.        Company has the corporate power and authority to (a) execute,
      deliver and perform all of its obligations under the Agreement and the
      Transaction Documents, and (b) issue, sell and deliver each of the
      Securities.
    

    
      4.        The execution, delivery and performance of the Agreement and
      the Transaction Documents have been duly authorized by all necessary
      corporate action on the part of Company, and have been duly executed and
      delivered by Company.
    

    

    

    
      
        

        

      

      
        
          1
        

        
          

        

      

      
        

        

      

    

    

    

    
      5.        The execution and delivery of the Transaction Documents by
      Company does not, and Company’s performance of its obligations
      thereunder will not (a) violate the Certificate of Incorporation,
      Bylaws, or other organizational or governing documents of Company, as in
      effect on the date hereof, (b) violate in any material respect any
      federal or state law, rule or regulation, or judgment, order or decree
      of any state or federal court or governmental or administrative
      authority, in each case that, to our knowledge, is applicable to Company
      or its properties or assets and which could have a material adverse
      effect on Company’s business, properties, assets, financial condition or
      results of operations or prevent the performance by Company of any
      material obligation under the Agreement, or (c) require the
      authorization, consent, approval of or other action of, notice to or
      filing or qualification with, any state or federal governmental
      authority, except as have been, or will be, made or obtained.  
    

    
                                                                         Sincerely,
    

    
                                                                                                   Very
      truly yours,
    

    
      [___________________________]
    

    
      By:_______________________
    

    

    

    
      
        

        

      

      
        
          2
        

        
          

        

      

      
        

        

      

    

    

    

    
      Exhibit F
    

    
      Use of Proceeds Certificate
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      PURESPECTRUM, INC.
    

    
      USE OF PROCEEDS CERTIFICATE
    

    
      The undersigned, [                        ] and
      [                        ], hereby certify that:
    

    
      1.        They are the [                        ] and
      [                        ], respectively, of PureSpectrum, Inc., a
      Delaware corporation (the “Company”).
    

    
      2.        This Use of Proceeds Certificate (this “Certificate”) is being
      delivered to
    

    
      Socius Capital Group, LLC, doing business as Socius Energy Capital
      Group, LLC (“Investor”), by the Company, to fulfill the
      requirement under Section 2.3(d)(iii) of the Preferred Stock Purchase
      Agreement, dated as of February 5, 2010, between Investor and the
      Company (the “Purchase Agreement”).  Terms used and not
      defined in this Certificate have the meanings set forth in the Purchase
      Agreement.
    

    
      3.        On or prior to the date hereof, the Company has delivered to
      Investor a Tranche Notice for the purchase by Investor of Tranche Shares
      upon payment by the Company to Investor of the Tranche Purchase Price.
    

    
                   The undersigned do hereby certify that the Tranche Purchase
      Price will be used for the following purpose or purposes:
    

    
      [                                                                            ].
    

    
      

      

    

    
      IN WITNESS WHEREOF, the undersigned have executed this Certificate
      this[__] day of _________, 2010.
    

    
      

      

      By:       ___________________________
Name:     
Title:    

By:       ___________________________
Name:     
Title:    
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      Exhibit G
    

    
      Tranche Notice
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      Dated: [________], 20[__]
    

    
      

      Socius Energy Capital Group, LLC
11150 Santa Monica Boulevard, Suite
      1500
Los Angeles, CA 90025
    

    
                Re:       Tranche Notice
    

    
      Ladies & Gentlemen:
    

    
      Pursuant to the February 5, 2010 Preferred Stock Purchase Agreement (“Agreement”)
      between PureSpectrum, Inc., a Delaware corporation (“Company”),
      and Socius Energy Capital Group, LLC (“Investor”), Company
      hereby elects to exercise a Tranche.  Capitalized terms not otherwise
      defined herein shall have the meanings defined in the Agreement.
    

    
      At the Tranche Closing, Company will sell to Investor [___________]
      Preferred Shares at $10,000.00 per share for a Tranche Amount of
      $[___________].
    

    
      On behalf of Company, the undersigned hereby certifies to Investor as
      follows:
    

    
      1.        The undersigned is a duly authorized officer of Company;
    

    
      2.        The above Tranche Amount does not exceed the Maximum Tranche
      Amount; and
    

    
      3.        All of the conditions precedent to the right of the Company to
      deliver a Tranche Notice set forth in Section 2.3(d) of the
      Agreement have been satisfied.
    

    
      IN WITNESS WHEREOF, the Company has executed and delivered this Tranche
      Notice as of the date first written above.
    

    
      PURESPECTRUM, INC.

By:                                                         
Name:
Title:Exhibit 10.1
    

    

    

    
      NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
      CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
      EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE
      OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF
      (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH
      COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
      FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
      SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING
      THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
      FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY
      THE SECURITIES.
    

    

    

    
      PURESPECTRUM, INC.

    

    
      WARRANT TO PURCHASE COMMON STOCK

    

    
    	
          
            Warrant No.: 2010-1
          

        	
           
        	
          
            Issuance Date:   February 5, 2010
          

        

    

    
      Number of Warrant Shares:  107,142,857

    

    
      Initial Exercise Price:  $0.063 per share

    

    
      PureSpectrum, Inc., a Delaware corporation (“Company”),
      hereby certifies that, for good and valuable consideration, the receipt
      and sufficiency of which are hereby acknowledged, Socius CG II, Ltd., a
      Bermuda exempted company, the holder hereof or its designees or assigns
      (“Holder”), is entitled, subject to the terms set forth
      herein, to purchase from the Company, at the Exercise Price then in
      effect, upon exercise of this Warrant to Purchase Common Stock
      (including any warrant issued in exchange, transfer or replacement
      hereof, the “Warrant”), at any time or times after issuance
      of the Warrant and until 11:59 p.m. Eastern time on the fifth
      anniversary of the Issuance Date, subject to acceleration pursuant to Section
      3.3 hereof, that number of duly authorized, validly issued, fully
      paid and non-assessable shares of Common Stock set forth above and as
      adjusted herein (the “Warrant Shares”); provided,
      however, that this Warrant may only be exercised, from time to
      time, for that number of shares of Common Stock with an Aggregate
      Exercise Price equal to up to 135% of the cumulative amount of Tranche
      Purchase Prices under Tranche Notices delivered prior to or on the date
      of exercise.  
    

    
      This Warrant is issued pursuant to the Preferred Stock Purchase
      Agreement dated February 5, 2010, by and among the Company and the
      investor referred to therein (the “Purchase Agreement”).  Except
      as otherwise defined herein, capitalized terms in this Warrant shall
      have the meanings set forth in ARTICLE 13 hereof.
    

    
      
        

        

      

      
        
          1
        

        
          

        

      

      
        

        

      

    

    
      This Warrant shall consist of and be exercisable in tranches (each, a “Warrant
      Tranche”), with a separate tranche being created upon each delivery
      of a Tranche Notice under the Purchase Agreement.  Each Warrant Tranche
      will grant to the Holder the right, for a five-year period commencing on
      the applicable Tranche Notice Date, to exercise the Warrant and purchase
      up to a number of shares of Common Stock with an Aggregate Exercise
      Price equal to 135% of the Tranche Purchase Price for the applicable
      Tranche Notice.  Attached to this Warrant is a schedule (the “Warrant
      Tranche Schedule”) that sets forth the issuance date, the number of
      Warrant Shares, and the Exercise Price for each Warrant Tranche.  The
      Warrant Tranche Schedule shall be updated by the Company, with an
      updated copy provided to the Holder, promptly following each exercise of
      this Warrant.  No portion of this Warrant shall vest or be exercisable
      except under the Warrant Tranches.
    

    

    

    
      ARTICLE 1
EXERCISE OF WARRANT.

    

    
         1.1  Mechanics of Exercise.

    

    
           1.1.1  Subject to the terms
      and conditions hereof, this Warrant may be exercised by the Holder on
      any day on or after the Issuance Date, in whole or in part, by (i)
      delivery of a written notice to the Company, in the form attached hereto
      as Appendix 1 (the “Exercise Notice”), of the Holder’s
      election to exercise this Warrant, and (ii) payment to the Company of an
      amount equal to the applicable Exercise Price multiplied by the number
      of Warrant Shares as to which this Warrant is being exercised (the “Aggregate
      Exercise Price”), with such payment made, at Investor’s option, (x)
      in cash or by wire transfer of immediately available funds, (y) by the
      issuance and delivery of a recourse promissory note substantially in the
      form attached hereto as Appendix 2 (each, a “Recourse Note”),
      or (z) if applicable, by cashless exercise pursuant to Section 1.3.  
    

    
           1.1.2  The Holder shall not be
      required to deliver the original Warrant in order to effect an exercise
      hereunder.  Execution and delivery of the Exercise Notice with respect
      to less than all of the Warrant Shares shall have the same effect as
      cancellation of the original Warrant and issuance of a new Warrant
      evidencing the right to purchase the remaining number of Warrant Shares.  
    

    
           1.1.3  On the Trading Day on which
      the Company has received each of the Exercise Notice and the Aggregate
      Exercise Price (the “Exercise Delivery Documents”) from the
      Holder by 6:30 p.m. Eastern time, or on the next Trading Day if the
      Exercise Delivery Documents are received after 6:30 p.m. Eastern time or
      on a non-Trading Day (in each case, the “Exercise Delivery Date”),
      the Company shall transmit (i) a facsimile acknowledgment of
      confirmation of receipt of the Exercise Delivery Documents to the
      Holder, and (ii) an electronic copy of its share issuance instructions
      to the Holder and to the Company’s transfer agent (the “Transfer
      Agent”), with such transmissions to comply with the notice
      provisions contained in Section 6.2 of the Purchase Agreement, and shall
      instruct and authorize the Transfer Agent to credit such aggregate
      number of freely-tradable Warrant Shares to which the Holder is entitled
      to receive upon such exercise to the Holder’s or its designee’s balance
      account with The Depository Trust Company (DTC) through the Fast
      Automated Securities Transfer (FAST) Program through its Deposit
      Withdrawal Agent Commission (DWAC) system, with such credit to occur no
      later than 4:00 p.m. Eastern Time on the Trading Day following the
      Exercise Delivery Date, time being of the essence; provided, however,
      that, notwithstanding the foregoing 4:00 p.m. deadline, if the Warrant
      Shares are not credited as DWAC Shares by 12:00 p.m. Eastern Time on the
      Trading Day following the Exercise Delivery Date, then the Tranche
      Closing Date applicable to the Exercise Notice shall be extended by one
      Trading Day for each Trading Day that timely credit of DWAC Shares is
      not made.
    

    
      
        

        

      

      
        
          2
        

        
          

        

      

      
        

        

      

    

    
           1.1.4  Upon delivery of the
      Exercise Delivery Documents, the Holder shall be deemed for all
      corporate purposes to have become the holder of record of the Warrant
      Shares with respect to which this Warrant has been exercised,
      irrespective of the date such Warrant Shares are credited to the
      Holder’s DTC account.  Any Warrant delivered in connection with a
      Tranche Notice and exercised by Holder shall be deemed exercised (i) on
      the Tranche Notice Date, if exercised by 6:30 p.m. Eastern time on the
      Tranche Notice Date, or (ii) on the next Trading Day, if exercised by
      Investor after 6:30 p.m. Eastern Time on the Tranche Notice Date or on
      any other date, in each case with Holder deemed to be a holder of record
      as of such date.
    

    
           1.1.5  If this Warrant is exercised
      and the number of Warrant Shares represented by this Warrant is greater
      than the number of Warrant Shares being acquired upon such exercise,
      then the Company shall, as soon as practicable and in no event later
      than three (3) Trading Days after such exercise, update the Tranche
      Exercise Schedule to reflect the revised number of Warrant Shares for
      which this Warrant is then exercisable and deliver a copy of the updated
      Tranche Exercise Schedule to the Holder.  No fractional shares of Common
      Stock are to be issued upon the exercise of this Warrant, but rather the
      number of shares of Common Stock to be issued shall be rounded up to the
      nearest whole number.  The Company shall pay any and all taxes which may
      be payable with respect to the issuance and delivery of Warrant Shares
      upon exercise of this Warrant.  
    

    
         1.2  Adjustments to Exercise Price and
      Number of Shares.  In addition to other adjustments specified
      herein, the Exercise Price of this Warrant and the number of shares of
      Common Stock issuable upon exercise shall be adjusted as follows:
    

    
           1.2.1  Exercise Price.  The
      “Exercise Price” per share of Common Stock underlying this Warrant,
      subject to further adjustment as provided herein, shall be as follows:
      (i) with respect to the portion of this Warrant issued on the Effective
      Date and until the first Tranche Notice Date, the amount per Warrant
      Share set forth on the face of this Warrant, which is equal to Closing
      Bid Price for the Common Stock on the Trading Day prior to the Effective
      Date, and (ii) with respect to the portion of this Warrant that becomes
      exercisable on any Tranche Notice Date (including the first Tranche
      Notice Date), an amount per Warrant Share equal to the Closing Bid Price
      of a share of Common Stock on such Tranche Notice Date.
    

    
           1.2.2  Number of Shares.  The
      number of Warrant Shares underlying this Warrant and each Warrant
      Tranche, subject to further adjustment as provided herein, shall be as
      follows: (i) with respect to the portion of this Warrant issued on the
      Effective Date and until the first Tranche Notice Date, the number of
      shares set forth on the face of this Warrant, which is a number of
      shares of Common Stock equal to the Maximum Placement multiplied by
      135%, with the resulting sum divided by the Closing Bid Price of a share
      of Common Stock on the Trading Day prior to the Effective Date, and (ii)
      with respect to the portion of this Warrant issued on any Tranche Notice
      Date including the first Tranche Notice Date, a number of shares equal
      to the Tranche Purchase Price set forth in the applicable Tranche Notice
      multiplied by 135%, with the resulting sum divided by the Closing Bid
      Price of a share of Common Stock on the Tranche Notice Date.  For
      example, if the Tranche Purchase Price is $1,000,000 and the Closing Bid
      Price is $0.50, then the number of Warrant Shares underlying that
      Warrant Tranche shall be $1,000,000 x 135% = $1,350,000 divided by $0.50
      = 2,700,000 shares of Common Stock.  On each Tranche Notice Date, the
      number of Warrant Shares underlying the related Warrant Tranche shall
      vest and become exercisable, and the aggregate number of Warrant Shares
      underlying this Warrant that are currently exercisable shall
      automatically adjust up or down to account for the change in the number
      of Warrant Shares covered by the new Warrant Tranche and for any Warrant
      Shares issued upon any prior or simultaneous exercise of this
      Warrant.  If at any time the Holder reasonably believes that the number
      of Warrant Shares included in the Registration Statement is not
      sufficient to cover all exercises under this Warrant, then the Company
      shall amend such Registration Statement to include the additional number
      of Warrant Shares that may be required to provide such coverage.
    

    
      
        

        

      

      
        
          3
        

        
          

        

      

      
        

        

      

    

    
         1.3  Cashless Exercise.  Notwithstanding
      anything contained herein to the contrary, if at any time there is not a
      current, valid and effective registration statement covering the Warrant
      Shares that are the subject of the Exercise Notice (the “Unavailable
      Warrant Shares”), the Holder may, in its sole discretion, exercise
      this Warrant in whole or in part and, in lieu of making the cash payment
      otherwise contemplated to be made to the Company upon such exercise in
      payment of the Aggregate Exercise Price, elect instead to receive upon
      such exercise the “Net Number” of shares of Common Stock determined
      according to the following formula (a “Cashless Exercise”):
    

    
    	
           
        	
          
            Net Number =
          

        	
          
            (B-C) x A
          

        	

        
	

        	
          
             
          

        	
          
            B
          

        	

        
	

        	

        	

        	
           
        
	

        	
          
            For purposes of the foregoing formula:
          

        
	

        	

        	

        	
           
        
	

        	
          
            A = the total number of shares with respect to which this Warrant
            is then being exercised.
          

        
	

        	

        	

        	
           
        
	

        	
          
            B = the average of the Closing Bid Prices of the shares of Common
            Stock (as reported by Bloomberg) for the five (5) consecutive
            Trading Days ending on the date immediately preceding the date of
            the Exercise Notice.
          

        
	

        	
           
        
	

        	
          
            C = the Exercise Price then in effect for the applicable Warrant
            Shares at the time of such exercise.
          

        

    

    
      
        

        

      

      
        
          4
        

        
          

        

      

      
        

        

      

    

    
         1.4  Company’s Failure to Timely
      Deliver Securities.  If the Company shall fail for any reason or
      for no reason to credit to the Holder’s balance account with DTC, by
      4:00 p.m. Eastern time on the Trading Day following the Exercise
      Delivery Date, the number of shares of Common Stock to which the Holder
      is entitled upon the Holder’s exercise of this Warrant, then, in
      addition to all other remedies available to the Holder, the Company
      shall pay in cash to the Holder on each day after such Trading Day that
      the issuance of such shares of Common Stock is not timely effected an
      amount equal to 0.5% of the product of (A) the sum of the number of
      shares of Common Stock not issued to the Holder on a timely basis and to
      which the Holder is entitled and (B) the Closing Bid Price of the shares
      of Common Stock on the Trading Day immediately preceding the last
      possible date which the Company could have issued such shares of Common
      Stock to the Holder without violating Section 1.1.  In addition
      to the foregoing, (A) notwithstanding the foregoing 4:00 p.m. deadline,
      if the Warrant Shares are not credited to the Holder’s balance account
      with DTC by 12:00 p.m. Eastern Time on the Trading Day following the
      Exercise Delivery Date, then the Tranche Closing Date applicable to the
      Exercise Notice shall be extended by one Trading Day for each Trading
      Day that timely credit of DWAC Shares is not made, and (B) if after the
      Company’s receipt of an Exercise Notice the Company shall fail to timely
      (pursuant to Section 1.1.3 hereof) credit the Holder’s balance account
      with DTC for the number of shares of Common Stock to which the Holder is
      entitled upon the Holder’s exercise hereunder, and the Holder purchases
      (in an open market transaction or otherwise) shares of Common Stock to
      deliver in satisfaction of a sale by the Holder of shares of Common
      Stock issuable upon such exercise that the Holder anticipated receiving
      from the Company, then the Company shall, within one Trading Day after
      the Holder’s request and in the Holder’s discretion, either (i) pay cash
      to the Holder in an amount equal to the Holder’s total purchase price
      (including brokerage commissions, if any) for the shares of Common Stock
      so purchased (the “Buy-In Price”), at which point the
      Company’s obligation to credit such Holder’s balance account with DTC
      for the number of Warrant Shares to which the Holder is entitled upon
      the Holder’s exercise hereunder and to issue such Warrant Shares shall
      terminate, or (ii) promptly honor its obligation to credit such Holder’s
      balance account with DTC for the number of Warrant Shares to which the
      Holder is entitled upon the Holder’s exercise hereunder and pay cash to
      the Holder in an amount equal to the excess (if any) of the Buy-In Price
      over the product of (A) such number of shares of Common Stock sold by
      Holder in satisfaction of its obligations, times (B) the Closing Bid
      Price on the date of exercise.
    

    
         1.5  Exercise Limitation.  Notwithstanding
      any other provision, at no time may the Holder (a) exercise this Warrant
      such that the number of Warrant Shares to be received pursuant to such
      exercise exceeds 135.0% of the aggregate of all Tranche Purchase Prices
      under and in connection with all Tranche Notices delivered pursuant to
      the Purchase Agreement prior to the date of exercise; or (b) exercise
      this Warrant such that the number of Warrant Shares to be received
      pursuant to such exercise, aggregated with all other shares of Common
      Stock then owned, or deemed beneficially owned, by the Holder and its
      affiliates, would result in the Holder and its affiliates owning more
      than 4.99% of all of such Common Stock as would be outstanding on the
      date of exercise, as determined in accordance with Section 13(d) of the
      Exchange Act and the rules and regulations promulgated thereunder.  In
      addition, as of any date, the aggregate number of shares of Common Stock
      into which this Warrant is exercisable within 61 days, together with all
      other shares of Common Stock then beneficially owned (as such term is
      defined in Rule 13(d) under the Exchange Act) by Holder and its
      affiliates, shall not exceed 9.99% of the total outstanding shares of
      Common Stock as of such date.
    

    
      
        

        

      

      
        
          5
        

        
          

        

      

      
        

        

      

    

    
         1.6  Activity Restrictions.  For
      so long as Holder or any of its affiliates holds this Warrant or any
      Warrant Shares, neither Holder nor any affiliate will:  (i) vote any
      shares of Common Stock owned or controlled by it, solicit any proxies,
      or seek to advise or influence any Person with respect to any voting
      securities of the Company; (ii) engage or participate in any actions,
      plans or proposals which relate to or would result in (a) acquiring
      additional securities of the Company, alone or together with any other
      Person, which would result in beneficially owning or controlling more
      than 9.99% of the total outstanding Common Stock or other voting
      securities of the Company, (b) an extraordinary corporate transaction,
      such as a merger, reorganization or liquidation, involving Company or
      any of its subsidiaries, (c) a sale or transfer of a material amount of
      assets of the Company or any of its subsidiaries, (d) any change in the
      present board of directors or management of the Company, including any
      plans or proposals to change the number or term of directors or to fill
      any existing vacancies on the board, (e) any material change in the
      present capitalization or dividend policy of the Company, (f) any other
      material change in the Company’s business or corporate structure,
      including but not limited to, if the Company is a registered closed-end
      investment company, any plans or proposals to make any changes in its
      investment policy for which a vote is required by Section 13 of the
      Investment Company Act of 1940, (g) changes in the Company’s charter,
      bylaws or instruments corresponding thereto or other actions which may
      impede the acquisition of control of the Company by any Person, (h)
      causing a class of securities of the Company to be delisted from a
      national securities exchange or to cease to be authorized to be quoted
      in an inter-dealer quotation system of a registered national securities
      association, (i) a class of equity securities of the Company becoming
      eligible for termination of registration pursuant  to Section 12(g)(4)
      of the Act, or (j) any action, intention, plan or arrangement similar to
      any of those enumerated above; or (iii) request the Company or its
      directors, officers, employees, agents or representatives to amend or
      waive any provision of this Section 1.6.  
    

    
         1.7  Disputes.  In the case of
      a dispute as to the determination of the Exercise Price or the
      arithmetic calculation of the Warrant Shares, the Company shall promptly
      issue to the Holder the number of Warrant Shares that are not disputed
      and resolve such dispute in accordance with Section 12.
    

    
         1.8  Insufficient Authorized Shares.  If
      at any time while any portion of this Warrant remains outstanding the
      Company does not have a sufficient number of authorized and unreserved
      shares of Common Stock to satisfy its obligation to reserve for issuance
      upon exercise of this Warrant at least a number of shares of Common
      Stock equal to 110% of the number of shares of Common Stock as shall
      from time to time be necessary to effect the exercise of the portion of
      the Warrant then outstanding (the “Required Reserve Amount”)
      (an “Authorized Share Failure”), then the Company shall
      immediately take all action necessary to increase the Company’s
      authorized shares of Common Stock to an amount sufficient to allow the
      Company to reserve the Required Reserve Amount for the portion of the
      Warrant then outstanding.  Without limiting the generality of the
      foregoing sentence, as soon as practicable after the date of the
      occurrence of an Authorized Share Failure, but in no event later than 90
      days after the occurrence of such Authorized Share Failure, the Company
      shall hold a meeting of its stockholders for the approval of an increase
      in the number of authorized shares of Common Stock.  In connection with
      such meeting, the Company shall provide each stockholder with a proxy
      statement and shall use its best efforts to solicit its stockholders’
      approval of such increase in authorized shares of Common Stock and to
      cause its board of directors to recommend to the stockholders that they
      approve such proposal.
    

    
      
        

        

      

      
        
          6
        

        
          

        

      

      
        

        

      

    

    
      ARTICLE 2
ADJUSTMENT UPON SUBDIVISION OR
      COMBINATION OF COMMON STOCK

    

    
      If the Company at any time on or after the Issuance Date subdivides (by
      any stock split, stock dividend, recapitalization or otherwise) one or
      more classes of its outstanding shares of Common Stock into a greater
      number of shares, the Exercise Price in effect immediately prior to such
      subdivision will be proportionately reduced and the number of Warrant
      Shares will be proportionately increased.  If the Company at any time on
      or after the Issuance Date combines (by combination, reverse stock split
      or otherwise) one or more classes of its outstanding shares of Common
      Stock into a smaller number of shares, the Exercise Price in effect
      immediately prior to such combination will be proportionately increased
      and the number of Warrant Shares will be proportionately decreased.  Any
      adjustment under this ARTICLE 2 shall become effective at the close of
      business on the date the subdivision or combination becomes effective.
    

    
      ARTICLE 3
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS

    

    
         3.1  Purchase Rights.  In
      addition to any adjustments pursuant to ARTICLE 2 above, if at any time
      the Company grants, issues or sells any Options, Convertible Securities
      or rights to purchase stock, warrants, securities or other property pro
      rata to the record holders of any class of shares of Common Stock (the “Purchase
      Rights”), then the Holder will be entitled to acquire, upon the
      terms applicable to such Purchase Rights, the aggregate Purchase Rights
      which the Holder could have acquired if the Holder had held the number
      of shares of Common Stock acquirable upon complete exercise of this
      Warrant (without regard to any limitations on the exercise of this
      Warrant) immediately before the date on which a record is taken for the
      grant, issuance or sale of such Purchase Rights, or, if no such record
      is taken, the date as of which the record holders of shares of Common
      Stock are to be determined for the grant, issue or sale of such Purchase
      Rights.
    

    
         3.2  Subsequent Equity Sales.
      In addition to any adjustments made pursuant to ARTICLE 2 above, except
      as in connection with subsequent subscriptions for shares of Common
      Stock not to exceed $1,000,000 in aggregate additional capital
      investment into the Company following the Effective Date (as defined in
      the Purchase Agreement), if the Company or any Subsidiary thereof, as
      applicable, at any time while this Warrant is outstanding, shall sell or
      grant any option to purchase, or sell or grant any right to reprice, or
      otherwise dispose of or issue (or announce any offer, sale, grant or any
      option to purchase or other disposition) any Common Stock or Common
      Stock Equivalents entitling any Person to acquire shares of Common
      Stock, at an effective price per share less than the then Exercise Price
      (such lower price, the “Base Share Price” and such
      issuances, collectively, a “Dilutive Issuance”), then the
      Exercise Price shall be reduced and only reduced to equal the Base Share
      Price and the number of Warrant Shares issuable hereunder shall be
      increased such that the aggregate Exercise Price payable hereunder,
      after taking into account the decrease in the Exercise Price, shall be
      equal to the aggregate Exercise Price prior to such adjustment.  Such
      adjustment shall be made whenever such Common Stock or Common Stock
      Equivalents are issued.  If the holder of the Common Stock or Common
      Stock Equivalents so issued shall at any time, whether by operation of
      purchase price adjustments, reset provisions, floating conversion,
      exercise or exchange prices or otherwise, or due to warrants, options or
      rights per share which are issued in connection with such issuance, be
      entitled to receive shares of Common Stock at an effective price per
      share which is less than the Exercise Price, such issuance shall be
      deemed to have occurred for less than the Exercise Price on such date of
      the Dilutive Issuance.  Notwithstanding the foregoing, no adjustments
      shall be made, paid or issued under this Section 3.2 in respect
      of an Exempt Issuance, subject to adjustment for reverse and forward
      stock splits, stock dividends, stock combinations and other similar
      transactions of the Common Stock that occur after the date of the
      Purchase Agreement. The Company shall notify the Holder in writing, no
      later than the Trading Day following the issuance of any Common Stock or
      Common Stock Equivalents subject to this Section 3.2, indicating
      therein the applicable issuance price, or applicable reset price,
      exchange price, conversion price and other pricing terms (such notice
      the “Dilutive Issuance Notice”).  For purposes of
      clarification, whether or not the Company provides a Dilutive Issuance
      Notice pursuant to this Section 3.2, upon the occurrence of any
      Dilutive Issuance, after the date of such Dilutive Issuance the Holder
      is entitled to receive a number of Warrant Shares based upon the Base
      Share Price regardless of whether the Holder accurately refers to the
      Base Share Price in the Notice of Exercise.
    

    
      
        

        

      

      
        
          7
        

        
          

        

      

      
        

        

      

    

    
         3.3  Fundamental Transactions.  The
      Company shall not enter into or be party to a Fundamental Transaction
      unless the Successor Entity assumes in writing all of the obligations of
      the Company under this Warrant in accordance with the provisions of this Section
      3.3 pursuant to written agreements in form and substance
      satisfactory to the Required Holders and approved by the Required
      Holders prior to such Fundamental Transaction, including agreements to
      deliver to each Holder of this Warrant in exchange for such Warrant a
      security of the Successor Entity evidenced by a written instrument
      substantially similar in form and substance to this Warrant, including,
      without limitation, an adjusted exercise price equal to the value for
      the shares of Common Stock reflected by the terms of such Fundamental
      Transaction, and exercisable for a corresponding number of shares of
      capital stock equivalent to the shares of Common Stock acquirable and
      receivable upon exercise of this Warrant (without regard to any
      limitations on the exercise of this Warrant) prior to such Fundamental
      Transaction, and satisfactory to the Required Holders.  Upon the
      occurrence of any Fundamental Transaction, the Successor Entity shall
      succeed to, and be substituted for (so that from and after the date of
      such Fundamental Transaction, the provisions of this Warrant referring
      to the “Company” shall refer instead to the Successor Entity), and may
      exercise every right and power of the Company and shall assume all of
      the obligations of the Company under this Warrant with the same effect
      as if such Successor Entity had been named as the Company herein.  Upon
      consummation of the Fundamental Transaction, the Successor Entity shall
      deliver to the Holder confirmation that there shall be issued upon
      exercise of this Warrant at any time after the consummation of the
      Fundamental Transaction, in lieu of the shares of the Common Stock (or
      other securities, cash, assets or other property) purchasable upon the
      exercise of this Warrant prior to such Fundamental Transaction, such
      shares of stock, securities, cash, assets or any other property
      whatsoever (including warrants or other purchase or subscription rights)
      which the Holder would have been entitled to receive upon the happening
      of such Fundamental Transaction had this Warrant been converted
      immediately prior to such Fundamental Transaction, as adjusted in
      accordance with the provisions of this Warrant.  In addition to and not
      in substitution for any other rights hereunder, prior to the
      consummation of any Fundamental Transaction pursuant to which holders of
      shares of Common Stock are entitled to receive securities or other
      assets with respect to or in exchange for shares of Common Stock (a “Corporate
      Event”), the Company shall make appropriate provision to insure that
      the Holder will thereafter have the right to receive upon an exercise of
      this Warrant at any time after the consummation of the Fundamental
      Transaction, in lieu of the shares of the Common Stock (or other
      securities, cash, assets or other property) purchasable upon the
      exercise of this Warrant prior to such Fundamental Transaction, such
      shares of stock, securities, cash, assets or any other property
      whatsoever (including warrants or other purchase or subscription rights)
      which the Holder would have been entitled to receive upon the happening
      of such Fundamental Transaction had this Warrant been exercised
      immediately prior to such Fundamental Transaction; provided, however,
      that in the event the Fundamental Transaction involves the issuance of
      cash or freely tradable securities by an issuer listed on the New York
      Stock Exchange or the Nasdaq Stock Market, then the ability to exercise
      this Warrant shall expire on the consummation of that Fundamental
      Transaction.  Provision made pursuant to the preceding sentence shall be
      in a form and substance reasonably satisfactory to the Required
      Holders.  The provisions of this Section 3.3 shall
      apply similarly and equally to successive Fundamental Transactions and
      Corporate Events and shall be applied without regard to any limitations
      on the exercise of this Warrant.
    

    
      
        

        

      

      
        
          8
        

        
          

        

      

      
        

        

      

    

    
         3.4  Notwithstanding the foregoing Section
      3.3, in the event of a Fundamental Transaction other than one in
      which the Successor Entity is a Public Successor Entity that assumes
      this Warrant such that this Warrant shall be exercisable for the
      publicly traded common stock of such Public Successor Entity, at the
      request of the Holder delivered before the 90th day after the effective
      date of such Fundamental Transaction, the Company (or the Successor
      Entity) shall purchase this Warrant from the Holder by paying to the
      Holder, within five (5) Trading Days after such request (or, if later,
      on the effective date of the Fundamental Transaction), cash in an amount
      equal to the value of the remaining unexercised portion of this Warrant
      on the date of such consummation, which value shall be determined by use
      of the Black Scholes Option Pricing Model using a volatility equal to
      the 100 day average historical price volatility prior to the date of the
      public announcement of such Fundamental Transaction.
    

    

    

    
      
        

        

      

      
        
          9
        

        
          

        

      

      
        

        

      

    

    
      ARTICLE 4
NONCIRCUMVENTION

    

    
      The Company hereby covenants and agrees that the Company will not, by
      amendment of its certificate or articles of incorporation, articles of
      association, bylaws, or any other organization documents, or through any
      reorganization, transfer of assets, consolidation, merger, scheme of
      arrangement, dissolution, issue or sale of securities, or any other
      voluntary action, avoid or seek to avoid the observance or performance
      of any of the terms of this Warrant, and will at all times in good faith
      carry out all the provisions of this Warrant and take all action as may
      be required to protect the rights of the Holder.  Without limiting the
      generality of the foregoing, the Company (i) shall not increase the par
      value of any shares of Common Stock receivable upon the exercise of this
      Warrant above the Exercise Price then in effect, (ii) shall take all
      such actions as may be necessary or appropriate in order that the
      Company may validly and legally issue fully paid and nonassessable
      shares of Common Stock upon the exercise of this Warrant, and (iii)
      shall, so long as any portion of this Warrant remains outstanding, take
      all action necessary to reserve and keep available out of its authorized
      and unissued shares of Common Stock, solely for the purpose of effecting
      the exercise of this Warrant, 110% of the number of shares of Common
      Stock as shall from time to time be necessary to effect the exercise of
      this Warrant then outstanding (without regard to any limitations on
      exercise).
    

    
      ARTICLE 5
WARRANT HOLDER NOT DEEMED A STOCKHOLDER

    

    
      Except as otherwise specifically provided herein, the Holder, solely in
      such Person’s capacity as a holder of this Warrant, shall not be
      entitled to vote or receive dividends or be deemed the holder of share
      capital of the Company for any purpose, nor shall anything contained in
      this Warrant be construed to confer upon the Holder, solely in such
      Person’s capacity as the Holder of this Warrant, any of the rights of a
      stockholder of the Company or any right to vote, give or withhold
      consent to any corporate action (whether any reorganization, issue of
      stock, reclassification of stock, consolidation, merger, conveyance or
      otherwise), receive notice of meetings, receive dividends or
      subscription rights, or otherwise, prior to the issuance to the Holder
      of the Warrant Shares which such Person is then entitled to receive upon
      the due exercise of this Warrant.  In addition, nothing contained in
      this Warrant shall be construed as imposing any liabilities on the
      Holder to purchase any securities (upon exercise of this Warrant or
      otherwise) or as a stockholder of the Company, whether such liabilities
      are asserted by the Company or by creditors of the
      Company.  Notwithstanding this ARTICLE 5, the Company shall provide the
      Holder with copies of the same notices and other information given to
      the stockholders of the Company generally, contemporaneously with the
      giving thereof to the stockholders.
    

    
      ARTICLE 6
REISSUANCE OF WARRANTS

    

    
         6.1  Transfer of Warrant.  If
      this Warrant is to be transferred, the Holder shall surrender this
      Warrant to the Company, whereupon the Company will forthwith issue and
      deliver upon the order of the Holder a new Warrant (in accordance with
      Section 6.4), registered as the Holder may request, representing the
      right to purchase the number of Warrant Shares being transferred by the
      Holder and, if less then the total number of Warrant Shares then
      underlying this Warrant is being transferred, a new Warrant (in
      accordance with Section 6.4) to the Holder representing the right to
      purchase the number of Warrant Shares not being transferred.
    

    
      
        

        

      

      
        
          10
        

        
          

        

      

      
        

        

      

    

    
         6.2  Lost, Stolen or Mutilated Warrant.  Upon
      receipt by the Company of evidence reasonably satisfactory to the
      Company of the loss, theft, destruction or mutilation of this Warrant,
      and, in the case of loss, theft or destruction, of any indemnification
      undertaking by the Holder to the Company in customary form and, in the
      case of mutilation, upon surrender and cancellation of this Warrant, the
      Company shall execute and deliver to the Holder a new Warrant (in
      accordance with Section 6.4) representing the right to purchase the
      Warrant Shares then underlying this Warrant.
    

    
         6.3  Exchangeable for Multiple Warrant.  This
      Warrant is exchangeable, upon the surrender hereof by the Holder at the
      principal office of the Company, for a new Warrant or Warrants (in
      accordance with Section 6.4) representing in the aggregate the right to
      purchase the number of Warrant Shares then underlying this Warrant, and
      each such new Warrant will represent the right to purchase such portion
      of such Warrant Shares as is designated by the Holder at the time of
      such surrender; provided, however, that no Warrant for fractional shares
      of Common Stock shall be given.
    

    
         6.4  Issuance of New Warrant.  Whenever
      the Company is required to issue a new Warrant pursuant to the terms of
      this Warrant, such new Warrant (i) shall be of like tenor with this
      Warrant, (ii) shall represent, as indicated on the face of such new
      Warrant, the right to purchase the Warrant Shares then underlying this
      Warrant (or in the case of a new Warrant being issued pursuant to
      Section 6.1 or Section 6.3, the Warrant Shares designated by the Holder
      which, when added to the number of shares of Common Stock underlying the
      other new Warrant issued in connection with such issuance, does not
      exceed the number of Warrant Shares then underlying this Warrant), (iii)
      shall have an issuance date, as indicated on the face of such new
      Warrant which is the same as the Issuance Date, and (iv) shall have the
      same rights and conditions as this Warrant.
    

    
      ARTICLE 7
NOTICES

    

    
      Whenever notice is required to be given under this Warrant, unless
      otherwise provided herein, such notice shall be given in accordance with
      Section 6.2 of the Purchase Agreement.  The Company shall provide the
      Holder with prompt written notice of all actions taken pursuant to this
      Warrant, including in reasonable detail a description of such action and
      the reason therefore.  Without limiting the generality of the foregoing,
      the Company will give written notice to the Holder (i) immediately upon
      any adjustment of the Exercise Price, setting forth in reasonable
      detail, and certifying, the calculation of such adjustment and (ii) at
      least ten (10) days prior to the date on which the Company closes its
      books or takes a record (A) with respect to any dividend or distribution
      upon the shares of Common Stock, (B) with respect to any grants,
      issuances or sales of any Options, Convertible Securities or rights to
      purchase stock, warrants, securities or other property to holders of
      shares of Common Stock as such or (C) for determining rights to vote
      with respect to any Fundamental Transaction, dissolution or liquidation,
      provided in each case that such information shall be made known to the
      public prior to or in conjunction with such notice being provided to the
      Holder.
    

    
      
        

        

      

      
        
          11
        

        
          

        

      

      
        

        

      

    

    
      ARTICLE 8
AMENDMENT AND WAIVER

    

    
      Except as otherwise provided herein, the provisions of this Warrant may
      be amended and the Company may take any action herein prohibited, or
      omit to perform any act herein required to be performed by it, only if
      the Company has obtained the written consent of the Required Holders;
      provided that except as set forth in this Warrant no such action may
      increase the exercise price of any Warrant or decrease the number of
      shares or class of stock obtainable upon exercise of any Warrant without
      the written consent of the Holder.  No such amendment shall be effective
      to the extent that it applies to less than all of the holders of this
      Warrant.
    

    
      ARTICLE 9
  GOVERNING LAW

    

    
      This Warrant shall be governed by and construed and enforced in
      accordance with, and all questions concerning the construction,
      validity, interpretation and performance of this Warrant shall be
      governed by, the internal laws of the State of New York, without giving
      effect to any choice of law or conflict of law provision or rule
      (whether of the State of New York or any other jurisdictions) that would
      cause the application of the laws of any jurisdictions other than the
      State of New York.
    

    
      ARTICLE 10
CONSTRUCTION; HEADINGS

    

    
      This Warrant shall be deemed to be jointly drafted by the Company and
      the Holder and shall not be construed against any person as the drafter
      hereof.  The headings of this Warrant are for convenience of reference
      and shall not form part of, or affect the interpretation of, this
      Warrant.
    

    
      ARTICLE 11
 DISPUTE RESOLUTION

    

    
      In the case of a dispute as to the determination of the Exercise Price
      or the arithmetic calculation of the Warrant Shares, the Company shall
      submit the disputed determinations or arithmetic calculations via
      facsimile within three (3) Trading Days of receipt of the Exercise
      Notice giving rise to such dispute, as the case may be, to the
      Holder.  If the Holder and the Company are unable to agree upon such
      determination or calculation of the Exercise Price or the Warrant Shares
      within three (3) Trading Days of such disputed determination or
      arithmetic calculation being submitted to the Holder, then the Company
      shall, within 2 Trading Days submit via facsimile (a) the disputed
      determination of the Exercise Price or arithmetic calculation to an
      independent, reputable investment bank or independent registered public
      accounting firm selected by Holder subject to Company’s approval, which
      may not be unreasonably withheld or delayed, or (b) the disputed
      arithmetic calculation of the Warrant Shares to the Company’s
      independent registered public accounting firm.  The Company shall cause
      at its expense the investment bank or the accountant, as the case may
      be, to perform the determinations or calculations and notify the Company
      and the Holder of the results no later than 3 Trading Days from the time
      it receives the disputed determinations or calculations.  Such
      investment bank’s or accountant’s determination or calculation, as the
      case may be, shall be binding upon all parties absent demonstrable error.
    

    
      
        

        

      

      
        
          12
        

        
          

        

      

      
        

        

      

    

    
      ARTICLE 12
REMEDIES, OTHER OBLIGATIONS, BREACHES
      AND INJUNCTIVE RELIEF

    

    
      The remedies provided in this Warrant shall be cumulative and in
      addition to all other remedies available under this Warrant, at law or
      in equity (including a decree of specific performance and/or other
      injunctive relief), and nothing herein shall limit the right of the
      Holder right to pursue actual damages for any failure by the Company to
      comply with the terms of this Warrant.  The Company acknowledges that a
      breach by it of its obligations hereunder will cause irreparable harm to
      the Holder and that the remedy at law for any such breach may be
      inadequate.  The Company therefore agrees that, in the event of any such
      breach or threatened breach, the holder of this Warrant shall be
      entitled, in addition to all other available remedies, to an injunction
      restraining any breach, without the necessity of showing economic loss
      and without any bond or other security being required.
    

    
      ARTICLE 13
DEFINITIONS

    

    
      For purposes of this Warrant, in addition to the terms defined elsewhere
      herein, the following terms shall have the following meanings:
    

    
        13.1  “Bloomberg” means
      Bloomberg Financial Markets.
    

    
        13.2  “Closing Bid Price” and
      “Closing Sale Price” means, for any security as of any date, the last
      closing bid price and last closing trade price, respectively, for such
      security on the Trading Market, as reported by Bloomberg, or, if the
      Trading Market begins to operate on an extended hours basis and does not
      designate the closing bid price or the closing trade price, as the case
      may be, then the last bid price or last trade price, respectively, of
      such security prior to 4:00 p.m., Eastern time, as reported by
      Bloomberg, or, if the Trading Market is not the principal securities
      exchange or trading market for such security, the last closing bid price
      or last trade price, respectively, of such security on the principal
      securities exchange or trading market where such security is listed or
      traded as reported by Bloomberg, or if the foregoing do not apply, the
      last closing bid price or last trade price, respectively, of such
      security in the over-the-counter market on the electronic bulletin board
      for such security as reported by Bloomberg, or, if no closing bid price
      or last trade price, respectively, is reported for such security by
      Bloomberg, the average of the bid prices, or the ask prices,
      respectively, of any market makers for such security as reported in the
      “pink sheets” by Pink Sheets LLC (formerly the National Quotation
      Bureau, Inc.).  If the Closing Bid Price or the Closing Sale Price
      cannot be calculated for a security on a particular date on any of the
      foregoing bases, the Closing Bid Price or the Closing Sale Price, as the
      case may be, of such security on such date shall be the fair market
      value as mutually determined by the Company and Holder.  If the Company
      and Holder are unable to agree upon the fair market value of such
      security, then such dispute shall be resolved pursuant to ARTICLE
      11.  All such determinations to be appropriately adjusted for any stock
      dividend, stock split, stock combination or other similar transaction
      during the applicable calculation period.
    

    
      
        

        

      

      
        
          13
        

        
          

        

      

      
        

        

      

    

    
        13.3  “Common Stock” means (i)
      the Company’s shares of Common Stock, par value $0.0001 per share, and
      (ii) any share capital into which such Common Stock shall have been
      changed or any share capital resulting from a reclassification of such
      Common Stock.
    

    
        13.4  “Common Stock Deemed
      Outstanding” means, at any given time, the number of shares of
      Common Stock actually outstanding at such time, plus the number of
      shares of Common Stock deemed to be outstanding pursuant to Section 3.1
      hereof regardless of whether the Options or Convertible Securities are
      actually exercisable at such time, but excluding any shares of Common
      Stock owned or held by or for the account of the Company or issuable
      upon exercise of this Warrant.
    

    
        13.5  “Common Stock Equivalents”
      means any securities of the Company or the Subsidiaries which would
      entitle the holder thereof to acquire at any time Common Stock,
      including, without limitation, any debt, preferred stock, rights,
      options, warrants or other instrument that is at any time convertible
      into or exercisable or exchangeable for, or otherwise entitles the
      holder thereof to receive, Common Stock.
    

    
        13.6  “Convertible Securities”
      means any stock or securities (other than Options) directly or
      indirectly convertible into or exercisable or exchangeable for shares of
      Common Stock.
    

    
        13.7  “DWAC Shares” means all
      Warrant Shares issued or issuable to Holder or any Affiliate, successor
      or assign of Holder pursuant to this Warrant, all of which shall be (a)
      issued in electronic form, (b) freely tradable and without restriction
      on resale, and (c) timely credited by Company to the specified
      Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast
      Automated Securities Transfer (FAST) Program or any similar program
      hereafter adopted by DTC performing substantially the same function, in
      accordance with instructions issued to and countersigned by the Transfer
      Agent of the Company.
    

    
        13.8  “Eligible Market” means
      the Trading Market, The New York Stock Exchange, Inc., The NASDAQ Global
      Select Market, The NASDAQ Global Market, The NASDAQ Capital Market, the
      NYSE Amex or the OTC Bulletin Board, but does not include the Pink
      Sheets.
    

    
        13.9  “Exempt Issuance” means
      the issuance of (a) shares of Common Stock or options to employees,
      officers, or directors of the Company pursuant to any stock or option
      plan duly adopted for such purpose, by a majority of the non-employee
      members of the Board of Directors or a majority of the members of a
      committee of non-employee directors established for such purpose, (b)
      securities upon the exercise or exchange of or conversion of any
      Securities issued hereunder and/or other securities exercisable or
      exchangeable for or convertible into shares of Common Stock issued and
      outstanding on the date of this Agreement, provided that such securities
      have not been amended since the date of this Agreement to increase the
      number of such securities or to decrease the exercise price, exchange
      price or conversion price of such securities (except as a result of
      anti-dilution provisions therein), and (c) securities issued pursuant to
      acquisitions or strategic transactions approved by a majority of the
      disinterested directors of the Company, provided that any such issuance
      shall only be to a Person (or to the equity holders of a Person) which
      is, itself or through its subsidiaries, an operating company or an asset
      in a business synergistic with the business of the Company and shall
      provide to the Company additional benefits in addition to the investment
      of funds, but shall not include a transaction in which the Company is
      issuing securities primarily for the purpose of raising capital or to an
      entity whose primary business is investing in securities.
    

    
      
        

        

      

      
        
          14
        

        
          

        

      

      
        

        

      

    

    
      13.10  “Fundamental Transaction” has the
      meaning set forth in the Purchase Agreement.
    

    
      13.11  “Maximum Placement” has the meaning
      set forth in the Purchase Agreement.
    

    
      13.12  “Options” means any rights,
      warrants or options to subscribe for or purchase shares of Common Stock
      or Convertible Securities.
    

    
      13.13  “Parent Entity” of a Person means
      an entity that, directly or indirectly, controls the applicable Person
      and whose common stock or equivalent equity security is quoted or listed
      on an Eligible Market, or, if there is more than one such Person or
      Parent Entity, the Person or Parent Entity with the largest public
      market capitalization as of the date of consummation of the Fundamental
      Transaction.
    

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

    
      13.15  “Public Successor Entity” means a
      Successor Entity that is a publicly traded corporation whose stock is
      quoted or listed for trading on an Eligible Market.
    

    
      13.16  “Required Holders” means the
      Holders of this Warrant representing at least a majority of shares of
      Common Stock underlying this Warrant as then outstanding.
    

    
      13.17  “Successor Entity” means the Person
      (or, if so elected by the Required Holders, the Parent Entity) formed
      by, resulting from or surviving any Fundamental Transaction or the
      Person (or, if so elected by the Required Holders, the Parent Entity)
      with which such Fundamental Transaction shall have been entered into.
    

    
      
        

        

      

      
        
          15
        

        
          

        

      

      
        

        

      

    

    

    

    
      13.18  “Trading Day” means any day on
      which the Common Stock is traded on an Eligible Market; provided that it
      shall not include any day on which the Common Stock (a) is suspended
      from trading, or (b) is scheduled to trade on such exchange or market
      for less than 5 hours.
    

    
      13.19  “Trading Market” means the OTC
      Bulletin Board, the NASDAQ Capital Market, the NASDAQ Global Market, the
      NASDAQ Global Select Market, the NYSE Amex, or the New York Stock
      Exchange, whichever is at the time the principal trading exchange or
      market for the Common Stock, but does not include the Pink Sheets
      inter-dealer electronic quotation and trading system.
    

    
      13.20  “Tranche Closing Date” has the
      meaning set forth in the Purchase Agreement.
    

    
      13.21  “Tranche Notice” has the meaning
      set forth in the Purchase Agreement.
    

    
      13.22  “Tranche Notice Date” has the
      meaning set forth in the Purchase Agreement.
    

    
      13.23  “Tranche Purchase Price” has the
      meaning set forth in the Purchase Agreement.
    

    
      
        

        

      

      
        
          16
        

        
          

        

      

      
        

        

      

    

    

    

    
      IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase
      Common Stock to be duly executed as of the Issuance Date set out above.
    

    

    

    
    	
           
        	
           
        	
          
            PURESPECTRUM, INC.
          

        	

        
	

        	

        	

        	
           
        
	

        	

        	

        	
           
        
	

        	

        	
          
            By:/Lee Vanatta/
          

        	

        
	

        	

        	
          
            Name: Lee Vanatta
          

        	

        
	

        	

        	
          
            Title:  President and CEO
          

        	

        

    

    
      17

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