Document:

Investment Agreement

     

    Exhibit
      10.1

    INVESTMENT
      AGREEMENT

    

    INVESTMENT
      AGREEMENT (this "AGREEMENT"), dated as of September 12, 2005 by and between
      Seawright Holdings, Inc., a Delaware corporation (the "Company"), and Dutchess
      Private Equities Fund, LP, a Delaware limited partnership (the
      "Investor").

    

    Whereas,
      the parties desire that, upon the terms and subject to the conditions contained
      herein, the Investor shall invest up to Five Million dollars ($5,000,000) to
      purchase the Company's Common Stock, without par value per share (the "Common
      Stock");

    

    Whereas,
      such investments will be made in reliance upon the provisions of Section 4(2)
      under the Securities Act of 1933, as amended (the "1933 Act"), Rule 506 of
      Regulation D, and the rules and regulations promulgated thereunder, and/or
      upon
      such other exemption from the registration requirements of the 1933 Act as
      may
      be available with respect to any or all of the investments in Common Stock
      to be
      made hereunder; and

    

    Whereas,
      contemporaneously with the execution and delivery of this Agreement, the parties
      hereto are executing and delivering a Registration Rights Agreement
      substantially in the form attached hereto (as amended from time to time, the
      "Registration Rights Agreement") pursuant to which the Company has agreed to
      provide certain registration rights under the 1933 Act, and the rules and
      regulations promulgated thereunder, and applicable state securities
      laws.

    

    NOW
      THEREFORE, in consideration of the foregoing recitals, which shall be considered
      an integral part of this Agreement, the covenants and agreements set forth
      hereafter, and other good and valuable consideration, the receipt and
      sufficiency of which is hereby acknowledged, the Company and the Investor hereby
      agree as follows:

    

    SECTION
      1. DEFINITIONS.

    

    As
      used
      in this Agreement, the following terms shall have the following meanings
      specified or indicated below, and such meanings shall be equally applicable
      to
      the singular and plural forms of such defined terms.

    

    “1933
      Act”
      shall
      have the meaning set forth in the preamble of this agreement.

    

    “1934
      Act”
      shall
      mean the Securities Exchange Act of 1934, as it may be amended.

    

    “Affiliate”
      shall
      have the meaning specified in Section 5(h), below.

     

    “Agreement”
      shall
      mean this Investment Agreement.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      “Best
        Bid”
        shall
        mean the highest posted bid price of the Common Stock.

      

      “Buy
        In”
        shall
        have the meaning specified in Section 6, below.

      

      “Buy
        In Adjustment Amount”
        shall
        have the meaning specified in Section 6.

      

      “Closing”
        shall
        have the meaning specified in Section 2(h).

      

      “Closing
        Date”
        shall
        mean no more than seven (7) Trading Days following the Put Notice
        Date.

      

      “Common
        Stock”
        shall
        have the meaning set forth in the preamble of this Agreement.

      

      “Control”
        or
“Controls”
        shall
        have the meaning specified in Section 5(h).

       

      “Covering
        Shares” shall have the meaning specified in Section 6.

      

      “Effective
        Date”
        shall
        mean the date the SEC declares effective under the 1933 Act the Registration
        Statement covering the Securities.

      

      “Environmental
        Laws”
        shall
        have the meaning specified in Section 4(m).

      

      “Execution
        Date”
        shall
        mean the date indicated in the preamble to this Agreement.

      

      “Indemnities”
        shall
        have the meaning specified in Section 11. 

      

      “Indemnified
        Liabilities”
        shall
        have the meaning specified in Section 11.

      

      “Ineffective
        Period”
        shall
        mean any period of time that the Registration Statement or any Supplemental
        Registration Statement (as defined in the Registration Rights Agreement)
        becomes
        ineffective or unavailable for use for the sale or resale, as applicable,
        of any
        or all of the Registrable Securities (as defined in the Registration Rights
        Agreement) for any reason (or in the event the prospectus under either of
        the
        above is not current and deliverable) during any time period required under
        the
        Registration Rights Agreement.

      

      “Investor”
        shall
        have the meaning indicated in the preamble of this Agreement.

      

      “Material
        Adverse Effect”
        shall
        have the meaning specified in Section 4(a).

      

      “Maximum
        Common Stock Issuance”
        shall
        have the meaning specified in Section 2(I).

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Minimum
      Acceptable Price”
      with
      respect to any Put Notice Date shall mean seventy-five percent (75%) of the
      lowest closing bid prices for the ten (10) Trading Day period immediately
      preceding such Put Notice Date.

    

    “Open
      Period”
      shall
      mean the period beginning on and including the Trading Day immediately following
      the Effective Date and ending on the earlier to occur of (i)
      the
      date
      which is thirty-six (36) months from the Effective Date; or (ii)
      termination
      of the Agreement in accordance with Section 9, below.

    

    “Pricing
      Period”
      shall
      mean the period beginning on the Put Notice Date and ending on and including
      the
      date that is five (5) Trading Days after such Put Notice Date.

    

    “Principal
      Market”
      shall
      mean the American Stock Exchange, Inc., the National Association of Securities
      Dealers, Inc. Over-the-Counter Bulletin Board, the NASDAQ National Market System
      or the NASDAQ SmallCap Market, whichever is the principal market on which the
      Common Stock is listed.

    

    “Prospectus”
      shall
      mean the prospectus, preliminary prospectus and supplemental prospectus used
      in
      connection with the Registration Statement.

    

    “Purchase
      Amount”
      shall
      mean the total amount being paid by the Investor on a particular Closing Date
      to
      purchase the Securities.

    

    “Purchase
      Price”
      shall
      mean ninety-five percent (95%) of the lowest closing Best Bid price of the
      Common Stock during the Pricing Period.

    

    “Put
      Amount”
      shall
      have the meaning set forth in Section 2(b) hereof.

    

    “Put
      Notice”
      shall
      mean a written notice sent to the Investor by the Company stating the Put Amount
      in U.S. dollars, the Company intends to sell to the Investor pursuant to the
      terms of the Agreement and stating the current number of Shares issued and
      outstanding on such date.

    

    “Put
      Notice Date”
      shall
      mean the Trading Day immediately following the day on which the Investor
      receives a Put Notice, however a Put Notice shall be deemed delivered on
(a)
      the
      Trading Day it is received by facsimile or otherwise by the Investor if such
      notice is received prior to 9:00 am Eastern Time, or (b)
      the
      immediately succeeding Trading Day if it is received by facsimile or otherwise
      after 9:00 am Eastern Time on a Trading Day. No Put Notice may be deemed
      delivered on a day that is not a Trading Day.

    

    “Put
      Restriction”
      shall
      mean the days between the beginning of the Pricing Period and Closing Date.
      During this time, the Company shall not be entitled to deliver another Put
      Notice.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Registration
      Period”
      shall
      have the meaning specified in Section 5(c), below.

    

    “Registration
      Rights Agreement”
      shall
      have the meaning set forth in the recitals, above.

    

    “Registration
      Statement”
      means
      the registration statement of the Company filed under the 1933 Act covering
      the
      Common Stock issuable hereunder.

    

    “Related
      Party”
      shall
      have the meaning specified in Section 5(h). 

     

    “Resolution”
      shall
      have the meaning specified in Section 8(e). 

     

    “SEC”
      shall
      mean the U.S. Securities & Exchange Commission. 

     

    “SEC
      Documents”
      shall
      have the meaning specified in Section 4(f).

    

    “Securities”
      shall
      mean the shares of Common Stock issued pursuant to the terms of the
      Agreement.

    

    “Shares”
      shall
      mean the shares of the Company’s Common Stock.

     

    “Sold
      Shares”
      shall
      have the meaning specified in Section 6. 

     

    “Subsidiaries”
      shall
      have the meaning specified in Section 4(a).

    

    “Trading
      Day”
      shall
      mean any day on which the Principal Market for the Common Stock is open for
      trading, from the hours of 9:30 am until 4:00 pm.

    

    “Transaction
      Documents”
      shall
      mean this Agreement, the Registration Rights Agreement, and each of the other
      agreements entered into by the parties hereto in connection with this
      Agreement.

    

    SECTION
      2. PURCHASE AND SALE OF COMMON STOCK.

    

    (A) PURCHASE
      AND SALE OF COMMON STOCK. Subject to the terms and conditions set forth herein,
      the Company shall issue and sell to the Investor, and the Investor shall
      purchase from the Company, up to that number of Shares having an aggregate
      Purchase Price of Five Million dollars ($5,000,000).

    

    (B) DELIVERY
      OF PUT NOTICES.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (I)
      Subject to the terms and conditions of the Transaction Documents, and from
      time
      to time during the Open Period, the Company may, in its sole discretion, deliver
      a Put Notice to the Investor which states the Put Amount (designated in U.S.
      Dollars) which the Company intends to sell to the Investor on a Closing
Date.
      The
      Put Notice shall be in the form attached hereto as Exhibit F and incorporated
      herein by reference. The amount that the Company shall be entitled to Put to
      the
      Investor (the "Put Amount") shall be equal to, at the Company's election,
      either: (A) Two Hundred percent (200%) of the average daily volume (U.S. market
      only) of the Common Stock for the ten (10) Trading Days prior to the applicable
      Put Notice Date, multiplied by the average of the three (3) daily closing bid
      prices immediately preceding the Put Date, or (B) One-Hundred Thousand dollars
      ($100,000); provided that in no event will the Put Amount be more than One
      Million Dollars ($1,000,000) with respect to any single Put. During the Open
      Period, the Company shall not be entitled to submit a Put Notice until after
      the
      previous Closing has been completed. The Purchase Price for the Common Stock
      identified in the Put Notice shall be equal to ninety-five percent (95%) of
      the
      lowest closing bid price of the Common Stock during the Pricing
      Period.

    

    (II)
      If
      any closing bid price during the applicable Pricing Period with respect to
      that
      Put Notice is less than Seventy-Five percent (75%) of the any closing bid prices
      of the Common Stock for the ten (10) Trading Days prior to the Put Notice Date
      (the "Minimum Acceptable Price"), the Put Notice will terminate at the Company's
      request. In the event that the closing bid price for the applicable Pricing
      Period is less than the Minimum Acceptable Price, the Company may elect, by
      sending written notice to the Investor to cancel the Put Notice.

    

    (C) RESERVED

    

    (D) INVESTOR'S
      OBLIGATION TO PURCHASE SHARES. Subject to the conditions set forth in this
      Agreement, following the Investor's receipt of a validly delivered Put Notice,
      the Investor shall be required to purchase from the Company during the related
      Pricing Period that number of Shares having an aggregate Purchase Price equal
      to
      the lesser of (i) the Put Amount set forth in the Put Notice, and (ii) twenty
      percent (20%) of the aggregate trading volume of the Common Stock during the
      applicable Pricing Period times (x) the lowest closing bid price of the
      Company's Common Stock during the specified Pricing Period, but only if said
      Shares bear no restrictive legend, are not subject to stop transfer
      instructions, pursuant to Section 2(h), prior to the applicable Closing
      Date.

    

    (E) Reserved

    

    (F) CONDITIONS
      TO INVESTOR'S OBLIGATION TO PURCHASE SHARES. Notwithstanding anything to the
      contrary in this Agreement, the Company shall not be entitled to deliver a
      Put
      Notice and the Investor shall not be obligated to purchase any Shares at a
      Closing (as defined in Section 2(h)) unless each of the following conditions
      are
      satisfied:

    

    (I) a
      Registration Statement shall
      have been declared effective and shall remain effective and available for the
      resale of all the Registrable Securities (as defined in
      the
      Registration Rights Agreement) at all times until the Closing with respect
      to
      the subject Put Notice;

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (II) at
      all
      times during the period beginning on the related Put Notice Date and ending
      on
      and including the related Closing Date, the Common Stock shall have been listed
      on the Principal Market and shall not have been suspended from trading thereon
      for a period of two (2) consecutive Trading Days during the Open Period and
      the
      Company shall not have been notified of any pending or threatened proceeding
      or
      other action to suspend the trading of the Common Stock;

    

    (III) the
      Company has complied with its obligations and is otherwise not in breach of
      a
      material provision of, or in default under, this Agreement, the Registration
      Rights Agreement or any other agreement executed in connection herewith which
      has not been corrected prior to delivery of the Put Notice Date;

    

    (IV) no
      injunction shall have been issued and remain in force, or action commenced
      by a
      governmental authority which has not been stayed or abandoned, prohibiting
      the
      purchase or the issuance of the Securities; and

    

    (V) the
      issuance of the Securities will not violate any shareholder approval
      requirements of the Principal Market.

    

    If
      any of
      the events described in clauses (i) through (v) above occurs during a Pricing
      Period, then the Investor shall have no obligation to purchase the Put Amount
      of
      Common Stock set forth in the applicable Put Notice.

    

    (G) RESERVED

    

    (H) MECHANICS
      OF PURCHASE OF SHARES BY INVESTOR. Subject to the satisfaction of the conditions
      set forth in Sections 2(f), 7 and 8, the closing of the purchase by the Investor
      of Shares (a "Closing") shall occur on the date which is no later than seven
      (7)
      Trading Days following the applicable Put Notice Date (each a "Closing Date").
      Prior to each Closing Date, (I)
      the
      Company shall deliver to the Investor pursuant to this Agreement, certificates
      representing
      the Shares to be issued to the Investor on such date and registered in the
      name
      of the Investor; and (II)
      the
      Investor shall deliver to the Company the Purchase Price to be paid for such
      Shares, determined as set forth in Sections 2(b) and 2(d). In lieu of delivering
      physical certificates representing the Securities and provided that the
      Company's transfer agent then is participating in The Depository Trust Company
      ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of
      the
      Investor, the Company shall use its commercially reasonable efforts
      to
      cause
      its transfer agent to electronically transmit the Securities by crediting the
      account of the Investor's prime broker (which shall be specified by the Investor
      a reasonably sufficient
      time
      in
      advance) with DTC through its Deposit Withdrawal Agent Commission ("DWAC")
      system.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      Company understands that a delay in the issuance of Securities beyond the
      Closing Date could result in economic loss to the Investor. After
      the
      Effective
      Date,
      as
      compensation to the Investor for such loss, the Company agrees to pay late
      payments to the Investor for late issuance of Securities (delivery of Securities
      after
      the
      applicable Closing Date) in accordance with the following schedule (where "No.
      of Days Late" is defined as the number of trading days beyond the Closing Date.
      The Amounts are cumulative.):

     

    
      	
              LATE
                PAYMENT FOR EACH

              NO.
                OF DAYS LATE 

            	 $10,000
              OF
              COMMON STOCK
	 	
              1

            	
              $100

            
	 	
              2

            	
              $200

            
	 	
              3

            	
              $300

            
	 	
              4

            	
              $400

            
	 	
              5

            	
              $500

            
	 	
              6

            	
              $600

            
	 	
              7

            	
              $700

            
	 	
              8

            	
              $800

            
	 	
              9

            	
              $900

            
	 	
              10

            	
              $1,000

            
	 	
              Over
                10

            	
              $1,000
                + $200 for each

            
	 	 	
              Business
                Day late beyond 10 days

            

    

     

    The
      Company shall pay any payments incurred under this Section in immediately
      available funds upon demand by the Investor. Nothing herein shall limit the
      Investor's right to pursue actual damages for the Company's failure to issue
      and
      deliver the Securities to the Investor, except to the extent that such late
      payments shall constitute payment for and offset
      any
      such
      actual damages alleged by the Investor, and any Buy In Adjustment
      Amount.

    

    (I)
      OVERALL
      LIMIT ON COMMON STOCK ISSUABLE. Notwithstanding anything contained herein to
      the
      contrary, if during the Open Period the Company becomes listed on an exchange
      that limits the number of shares of Common Stock that may be issued without
      shareholder approval, then the number of Shares issuable by the Company and
      purchasable by the Investor, including the shares of Common Stock issuable
      to
      the Investors, shall not exceed that number of the shares of Common Stock that
      may be issuable without shareholder approval, subject to appropriate adjustment
      for stock splits, stock dividends, combinations or other similar
      recapitalization affecting
      the
      Common Stock (the "Maximum Common Stock Issuance"), unless the issuance of
      Shares, including any Common Stock to be issued to the Investor pursuant to
      Section 11(b), in excess of the Maximum Common Stock Issuance shall first be
      approved by the Company's shareholders in accordance with applicable law and
      the
      By-laws and Amended and Restated Certificate of Incorporation of the Company,
      if
such
      issuance of shares of Common Stock could cause a delisting on the Principal
      Market. The parties understand and agree that the Company's failure to seek
      or
      obtain such shareholder approval shall in no way adversely affect the validity
      and due authorization of the issuance and sale of Securities or the Investor's
      obligation in accordance with the terms and conditions hereof to purchase a
      number of Shares in the aggregate up to the Maximum Common Stock Issuance
      limitation, and that such approval pertains only to the applicability of the
      Maximum Common Stock Issuance limitation provided in this Section
      2(j).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECTION
      3. INVESTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS.

    

    The
      Investor represents and warrants to the Company, and covenants,
      that:

    

    (A) SOPHISTICATED
      INVESTOR. The Investor has, by reason of its business and financial experience,
      such knowledge, sophistication and experience in financial and business matters
      and in making investment decisions of this type that it is capable of (I)
      evaluating the merits and risks of an investment in the Securities and making
      an
      informed investment decision; (II) protecting its own interest; and (III)
      bearing the economic risk of such investment for an indefinite period of
      time.

    

    (B) AUTHORIZATION;
      ENFORCEMENT. This Agreement has been duly and validly authorized, executed
      and
      delivered on behalf of the Investor and is a valid and binding agreement of
      the
      Investor enforceable against the Investor in accordance with its terms, subject
      as to enforceability to general principles of equity and to applicable
      bankruptcy, insolvency, reorganization, moratorium, liquidation and other
      similar laws relating to, or affecting generally, the enforcement of applicable
      creditors' rights and remedies.

    

    (C) SECTION
      9
      OF THE 1934 ACT. During the term of this Agreement, the Investor will comply
      with the provisions of Section 9 of the 1934 Act, and the rules promulgated
      thereunder, with respect to transactions involving the Common Stock. The
      Investor agrees not to short, either directly or indirectly through its
      affiliates, principals or advisors, the Company's common stock during the term
      of this Agreement.

    

    (D) ACCREDITED
      INVESTOR. Investor is an "Accredited Investor" as that term is defined in Rule
      501(a)(3) of Regulation D of the 1933 Act.

    

    (E) NO
      CONFLICTS. The execution, delivery and performance of the Transaction Documents
      by the Investor and the consummation by the Investor of the transactions
      contemplated hereby and thereby will not result in a violation of Partnership
      Agreement or other organizational documents of the Investor.

    

    (F) OPPORTUNITY
      TO DISCUSS. The Investor has received all materials relating to the Company's
      business, finance and operations which it has requested.
      The Investor has had an opportunity to discuss the business, management and
      financial affairs of the Company with the Company's management.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (G) INVESTMENT
      PURPOSES. The Investor is purchasing the Securities for its own account for
      investment purposes and not with a view towards distribution and agrees to
      resell or otherwise dispose of the Securities solely in accordance with the
      registration provisions of the 1933 Act (or pursuant to an exemption from such
      registration provisions).

    

    (H) NO
      REGISTRATION AS A DEALER. The Investor is not and will not be required to be
      registered as a "dealer" under the 1934 Act, either as a result of its execution
      and performance of its obligations under this Agreement or
      otherwise.

    

    (I) GOOD
      STANDING The Investor is a Limited Partnership, duly organized, validly existing
      and in good standing in the State of Delaware.

    

    (J) TAX
      LIABILITIES. The Investor understands that it is liable for its own tax
      liabilities.

    

    (K) REGULATION
      M. The Investor will comply with Regulation M under the 1934 Act, if
      applicable.

    

    SECTION
      4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

    

    Except
      as
      set forth in the Schedules attached hereto, or as disclosed on the Company's
      SEC
      Documents, the Company represents and warrants to the Investor
      that:

    

    (A)
      ORGANIZATION AND QUALIFICATION. The Company is a corporation duly organized
      and
      validly existing in good standing under the laws of Delaware and has the
      requisite corporate power and authorization to own its properties and to carry
      on its business as now being conducted. Both the Company and the companies
      it owns or controls, its “Subsidiaries,” are duly qualified to do
      business
      and are
      in good standing in every jurisdiction in which its ownership of property
or
      the
      nature of the business conducted by it makes such qualification
      necessary,
      except
      to the extent that the failure to be so qualified or be in good standing would
      not have a Material Adverse Effect. As used in this Agreement, "Material Adverse
      Effect" means any material adverse effect on the business, properties, assets,
      operations, results of operations, financial condition or prospects of the
      Company and its Subsidiaries, if any, taken as a whole, or on the transactions
      contemplated hereby or by the agreements and instruments to be entered into
      in
      connection herewith, or on the authority or ability of the Company to perform
      its obligations under the Transaction Documents (as defined in Section 1 and
      4(b), below).

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (B) AUTHORIZATION;
      ENFORCEMENT;
      COMPLIANCE WITH OTHER INSTRUMENTS.

    

    (I) The
      Company has the requisite corporate power and authority to enter into and
      perform this Agreement, the Registration Rights Agreement, and each of the
      other
      agreements entered into by the parties hereto in connection with the
      transactions contemplated by this Agreement (collectively, the "Transaction
      Documents"), and to issue the Securities in accordance with the terms hereof
      and
      thereof.

    

    (II) The
      execution and delivery of the Transaction Documents by the Company and the
      consummation by it, of the transactions contemplated hereby and thereby,
      including without limitation the reservation for issuance and the issuance
      of
      the Securities pursuant to this Agreement, have been duly and validly authorized
      by the Company's Board of Directors and no further consent or authorization
      is
      required by the Company, its Board of Directors, or its
      shareholders.

    

    (III) The
      Transaction Documents have been duly and validly executed and delivered by
      the
      Company.

    

    (IV) The
      Transaction Documents constitute the valid and binding obligations of the
      Company enforceable against the Company in accordance with their terms, except
      as such enforceability may be limited by general principles of equity or
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      or
      similar laws relating to, or affecting
      generally,
      the enforcement of creditors' rights and remedies.

    

    (C)
      CAPITALIZATION. As of the date hereof, the authorized capital stock of the
      Company consists of (i) 19,900,000 shares of Common Stock, par value $.001
      per
      share, of which 8,715,476 and 8,622,978 shares are issued and outstanding (as
      of
      March 31, 2005 and December 31, 2004), and (ii) 100,000 shares of Preferred
      stock, par value $.001 per share, of which none is issued and outstanding,
      and
      (iii) 60,000,000 shares of Series A Convertible Preferred, par value $.001
      per
      share, of which none are issued and outstanding (as of March 31, 2005); and
      no
      shares reserved for issuance pursuant to options, warrants and other convertible
      securities. All of such outstanding shares have been, or upon issuance will
      be,
      validly issued and are fully paid and nonassessable. Except as disclosed in
      the
      Company's publicly available filings with Periodic Filings, 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (I)
      no
      shares of the Company's capital stock are subject to preemptive rights or any
      other similar rights or any liens or encumbrances suffered
      or
      permitted by the Company; (II)
      there
      are
      no outstanding debt securities; (III) there are no outstanding shares of capital
      stock, options, warrants, scrip, rights to subscribe to, calls or commitments
      of
      any character whatsoever relating to, or securities or rights convertible into,
      any shares of capital stock of the Company or any of its Subsidiaries,
      or contracts, commitments, understandings or arrangements by which the Company
      or any of its Subsidiaries is or may become bound to issue additional shares
      of
      capital stock of the Company or any of its Subsidiaries or options, warrants,
      scrip, rights to subscribe to, calls or commitments of any character whatsoever
      relating to, or securities or rights convertible into, any shares of capital
      stock of the Company or any of its Subsidiaries; (IV) there are no agreements
      or
      arrangements under which the Company or any of its Subsidiaries is obligated
      to
      register the sale of any of their securities under the 1933 Act (except the
      Registration Rights Agreement), (V) there are no outstanding securities of
      the
      Company or any of its Subsidiaries which contain any redemption or similar
      provisions, and there are no contracts, commitments, understandings or
      arrangements by which the Company or any of its Subsidiaries is or may become
      bound to redeem a security of the Company or any of its Subsidiaries; (VI)
      there
      are no securities or instruments containing anti-dilution or similar provisions
      that will be triggered by the issuance of the Securities as described in this
      Agreement; (VII) the Company does not have any stock appreciation rights or
      "phantom stock" plans or agreements or any similar plan or agreement; and (VIII)
      there is no dispute as to the classification of any shares of the Company's
      capital stock. The Company has furnished to the Investor, or the Investor has
      had access through EDGAR to, true and correct copies of the Company's Amended
      and Restated Certificate of Incorporation, as in effect on the date hereof
      (the
      "Certificate of Incorporation"), and the Company's By-laws, as in effect on
      the
      date hereof (the "By-laws"), and the terms of all securities convertible into
      or
      exercisable for Common Stock and the material rights of the holders thereof
      in
      respect thereto.

    

    (D) ISSUANCE
      OF SHARES. The Company’s reservation Shares for issuance pursuant to this
      Agreement has been duly authorized and reserved for issuance (subject to
      adjustment pursuant to the Company's covenant set forth in Section 5(f) below)
      pursuant to this Agreement. Upon issuance in accordance with this Agreement,
      the
      Securities will be validly issued, fully paid and non-assessable and free from
      all taxes, liens and charges with respect to the issue thereof. In the event
      the
      Company cannot register a sufficient number of Shares for issuance pursuant
      to
      this Agreement, the Company will use its best efforts to authorize and reserve
      for issuance the number of Shares required for the Company to perform its
      obligations hereunder as soon as reasonably practicable.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (E) NO
      CONFLICTS. The execution, delivery and performance of the Transaction Documents
      by the Company and the consummation by the Company of the transactions
      contemplated hereby and thereby will not (I) result in a violation of the
      Certificate of Incorporation, any Certificate of Designations, Preferences
      and
      Rights of any outstanding series of preferred stock of the Company or the
      By-laws; or (II) conflict with, or constitute a material default (or an event
      which with notice or lapse of time or both would become a material default)
      under, or give to others any rights of termination, amendment, acceleration
      or
      cancellation of, any material agreement, contract, indenture mortgage,
      indebtedness or instrument to which the Company or any of its Subsidiaries
      is a party, or to the Company's knowledge result in a violation of any law,
      rule, regulation, order, judgment or decree (including United States federal
      and
      state securities laws and regulations and the rules and regulations of the
      Principal Market or principal securities exchange or trading market on which
      the
      Common Stock is traded or listed) applicable to the Company or any of its
      Subsidiaries or by which any property or asset of the Company or any of its
      Subsidiaries is bound or affected. Except as disclosed in Schedule 4(e), neither
      the Company nor its Subsidiaries is in violation of any term of, or in default
      under, the Certificate of Incorporation, any Certificate of Designations,
      Preferences and Rights of any outstanding series of preferred stock of the
      Company or the By-laws or their organizational charter or by-laws, respectively,
      or any contract, agreement, mortgage, indebtedness, indenture, instrument,
      judgment, decree or order or any statute, rule or regulation applicable to
      the
      Company or its Subsidiaries, except for possible conflicts, defaults,
      terminations, amendments, accelerations, cancellations and violations that
      would
      not individually or in the aggregate have a Material Adverse Effect. The
      business of the Company and its Subsidiaries is not being conducted, and shall
      not be conducted, in violation of any law, statute, ordinance, rule, order
      or
      regulation of any governmental authority or agency, regulatory or
      self-regulatory agency, or court, except for possible violations the sanctions
      for which either individually or in the aggregate would not have a Material
      Adverse Effect. Except as specifically contemplated by this Agreement and as
      required under the 1933 Act to the Company's knowledge, the Company is not
      required to obtain any consent, authorization, permit or order of, or make
      any
      filing or registration (except the filing of a registration statement) with,
      any
      court, governmental authority or agency, regulatory or self-regulatory agency
      or
      other third party in order for it to execute, deliver or perform any of its
      obligations under, or contemplated by, the Transaction Documents in accordance
      with the terms hereof or thereof. All consents, authorizations, permits, orders,
      filings and registrations which the Company is required to obtain pursuant
      to
      the preceding sentence have been obtained or effected on or prior to the date
      hereof and are in full force and effect as of the date hereof. Except as
      disclosed in Schedule 4(e), the Company and its Subsidiaries are unaware of
      any
      facts or circumstances which might give rise to any of the foregoing. The
      Company is not, and will not be, in violation of the listing requirements of
      the
      Principal Market as in effect on the date hereof and on each of the Closing
      Dates and is not aware of any facts which would reasonably lead to delisting
      of
      the Common Stock by the Principal Market in the foreseeable future.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (F)
      SEC
      DOCUMENTS; FINANCIAL STATEMENTS. As of June 21, 2005, the Company has filed
      all
      reports, schedules, forms, statements and other documents required to be filed
      by it with the SEC pursuant to the reporting requirements of the 1934 Act (all
      of the foregoing filed prior to the date hereof and all exhibits included
      therein and financial statements and schedules thereto and documents
      incorporated by reference therein being hereinafter referred to as the "SEC
      Documents"). The Company has delivered to the Investor or its representatives,
      or they have had access through EDGAR to, true and complete copies
      of
      the SEC Documents. As of their respective dates, the SEC Documents complied
      in
      all material respects with the requirements of the 1934 Act and the rules and
      regulations of the SEC promulgated thereunder applicable to the SEC Documents,
      and none of the SEC Documents, at the time they were filed with the SEC,
      contained any untrue statement of a material fact or omitted to state a material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading. As
      of
      their respective dates, the financial statements of the Company included in
      the
      SEC Documents complied as to form in all material respects with applicable
      accounting requirements and the published rules and regulations of the SEC
      with
      respect thereto. Such financial statements have been prepared in accordance
      with
      generally accepted accounting principles, by a firm that is a member of the
      Public Companies Accounting Oversight Board ("PCAOB") consistently applied,
      during the periods involved (except (I) as may be otherwise indicated in such
      financial statements or the notes thereto, or (II) in the case of unaudited
      interim statements, to the extent they may exclude footnotes or may be condensed
      or summary statements) and fairly present in all material respects the financial
      position of the Company as of the dates thereof and the results of its
      operations and cash flows for the periods then ended (subject, in the case
      of
      unaudited statements, to normal year-end audit adjustments). No other written
      information provided by or on behalf of the Company to the Investor which is
      not
      included in the SEC Documents, including, without limitation, information
      referred to in Section 4(d) of this Agreement, contains any untrue statement
      of
      a material fact or omits to state any material fact necessary to make the
      statements therein, in the light of the circumstance under which they are or
      were made, not misleading. Neither the Company nor any of its Subsidiaries
      or
      any of their officers, directors, employees or agents have provided the Investor
      with any material, nonpublic information which was not publicly disclosed prior
      to the date hereof and any material, nonpublic information provided to the
      Investor by the Company or its Subsidiaries or any of their officers, directors,
      employees or agents prior to any Closing Date shall be publicly disclosed by
      the
      Company prior to such Closing Date.

    

    (G) ABSENCE
      OF CERTAIN CHANGES. Except as set forth in the SEC Documents, the Company does
      not intend to change the business operations of the Company in any material
      way.
      The Company has not taken any steps, and does not currently expect to take
      any
      steps, to seek protection pursuant to any bankruptcy law nor does the Company
      or
      its Subsidiaries have any knowledge or reason to believe that its creditors
      intend to initiate involuntary bankruptcy proceedings.

    

    (H) ABSENCE
      OF LITIGATION. Except as set forth in the SEC Documents, there is no action,
      suit, proceeding, inquiry or investigation before or by any court, public board,
      government agency, self-regulatory organization or body pending or, to the
      knowledge of the executive officers of Company or any of its Subsidiaries,
      threatened against or affecting the Company, the Common Stock or any of the
      Company's Subsidiaries or any of the Company's or the Company's Subsidiaries'
      officers or directors in their capacities as such, in which an adverse decision
      could have a Material Adverse Effect.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (I) ACKNOWLEDGMENT
      REGARDING INVESTOR'S PURCHASE OF SHARES. The Company acknowledges and agrees
      that the Investor is acting solely in the capacity of arm's length purchaser
      with respect to the Transaction Documents and the transactions contemplated
      hereby and thereby. The Company further acknowledges that the Investor is not
      acting as a financial advisor or fiduciary of the Company (or in any similar
      capacity) with respect to the Transaction Documents and the transactions
      contemplated hereby and thereby and any advice given by the Investor or any
      of
      its respective representatives or agents in connection with the Transaction
      Documents and the transactions contemplated hereby and thereby is merely
      incidental to the Investor's purchase of the Securities. The Company further
      represents to the Investor that the Company's decision to enter into the
      Transaction Documents has been based solely on the independent evaluation by
      the
      Company and its representatives.

     

    (J) NO
      UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES. Except as set
      forth in the SEC Documents, since May 17, 2005, no event, liability, development
      or circumstance has occurred or exists, or to the Company's knowledge is
      contemplated to occur, with respect to the Company or its Subsidiaries or their
      respective business, properties, assets, prospects, operations or financial
      condition, that would be required to be disclosed by the Company under
      applicable securities laws on a registration statement filed with the SEC
      relating to an issuance and sale by the Company of its Common Stock and which
      has not been publicly announced.

     

    (K) EMPLOYEE
      RELATIONS. Neither the Company nor any of its Subsidiaries is involved in any
      union labor dispute nor, to the knowledge of the Company or any of its
      Subsidiaries, is any such dispute threatened. Neither the Company nor any of
      its
      Subsidiaries is a party to a collective bargaining agreement, and the Company
      and its Subsidiaries believe that relations with their employees are good.
      No
      executive officer (as defined in Rule 501(f) of the 1933 Act) has notified
      the
      Company that such officer intends to leave the Company's employ or otherwise
      terminate such officer's employment with the Company.

     

    (L) INTELLECTUAL
      PROPERTY RIGHTS. The Company and its Subsidiaries own or possess adequate rights
      or licenses to use all trademarks, trade names, service marks, service mark
      registrations, service names, patents, patent rights, copyrights, inventions,
      licenses, approvals, governmental authorizations, trade secrets and rights
      necessary to conduct their respective businesses as now conducted. Except as
      set
      forth in the SEC Documents, none of the Company's trademarks, trade names,
      service marks, service mark registrations, service names, patents, patent
      rights, copyrights, inventions, licenses, approvals, government authorizations,
      trade secrets or other intellectual property rights necessary to conduct its
      business as now or as proposed to be conducted have expired
      or terminated, or are expected to expire or terminate within two (2) years
      from
      the date of this Agreement. The Company and its Subsidiaries do not have any
      knowledge of any infringement by the Company or its Subsidiaries of trademark,
      trade name rights, patents, patent rights, copyrights, inventions, licenses,
      service names, service marks, service mark registrations, trade secret or other
      similar rights of others, or of any such development of similar or identical
      trade secrets or technical information by others and, except as set forth in
      the
      SEC Documents, there is no claim, action or proceeding being made or brought
      against, or to the Company's knowledge, being threatened against, the Company
      or
      its Subsidiaries regarding trademark, trade name, patents, patent rights,
      invention, copyright, license, service names, service marks, service mark
      registrations, trade secret or other infringement; and the Company and its
      Subsidiaries are unaware of any facts or circumstances which might give rise
      to
      any of the foregoing. The Company and its Subsidiaries have taken commercially
      reasonable security measures to protect the secrecy, confidentiality and value
      of all of their intellectual properties.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (M) ENVIRONMENTAL
      LAWS. The Company and its Subsidiaries (I)
      are,
      to
      the knowledge of management of the Company, in compliance with any and all
      applicable foreign, federal, state and local laws and regulations relating
      to
      the protection of human health and safety, the environment or hazardous or
      toxic
      substances or wastes, pollutants or contaminants ("Environmental Laws");
(II)
      have,
      to
      the knowledge of management of the Company, received all permits, licenses
      or
      other approvals required of them under applicable Environmental Laws to conduct
      their respective businesses; and (III) are in compliance, to the knowledge
      of
      the Company, with all terms and conditions of any such permit, license or
      approval where, in each of the three (3) foregoing cases, the failure to so
      comply would have, individually or in the aggregate, a Material Adverse
Effect.

    

    (N) TITLE.
      The Company and its Subsidiaries have good and marketable title to all personal
      property owned by them which is material to the business of the Company and
      its
      Subsidiaries, in each case free and clear of all liens, encumbrances and defects
      except such as are described in the SEC Documents or such as do not materially
      affect
      the
      value
      of such property and do not interfere with the use made and proposed to be
      made
      of such property by the Company or any of its Subsidiaries. Any real property
      and facilities held under lease by the Company or any of its Subsidiaries are
      held by them under valid, subsisting and enforceable leases with such exceptions
      as are not material and do not interfere with the use made and proposed to
      be
      made of such property and buildings by the Company and its
      Subsidiaries.

    

    (O) INSURANCE.
      Each of the Company's Subsidiaries are insured by insurers of recognized
financial
      responsibility
      against such losses and risks and in such amounts as management of the Company
      reasonably believes to be prudent and customary in the businesses in which
      the
      Company and its Subsidiaries are engaged. Neither the Company nor any such
      Subsidiary has been refused any insurance coverage sought or applied for and
      neither the Company nor any such 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
      at a
      cost that would not have a Material Adverse Effect.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (P) REGULATORY
      PERMITS. The Company and its Subsidiaries have in full force and effect all
      certificates, approvals, authorizations and permits from the appropriate
      federal, state, local or foreign regulatory authorities and comparable foreign
      regulatory agencies, necessary to own, lease or operate their respective
      properties and assets and conduct their respective businesses, and neither
      the
      Company nor any such Subsidiary has received any notice of proceedings relating
      to the revocation or modification of any such certificate, approval,
      authorization or permit, except for such certificates, approvals, authorizations
      or permits which if not obtained, or such revocations or modifications which,
      would not have a Material Adverse Effect.

    

    (Q) INTERNAL
      ACCOUNTING CONTROLS. The Company and each of its Subsidiaries maintain a system
      of internal accounting controls sufficient to provide reasonable assurance
      that
      (I) transactions are executed in accordance with management's general or
      specific authorizations; (II) transactions are recorded as necessary to permit
      preparation of financial statements in conformity with generally accepted
      accounting principles by a firm with membership to the PCAOB 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.

    

    (R) NO
      MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Company nor any of its
      Subsidiaries is subject to any charter, corporate or other legal restriction,
      or
      any judgment, decree, order, rule or regulation which in the judgment of the
      Company's officers has or is expected in the future to have a Material Adverse
      Effect. Neither the Company nor any of its Subsidiaries is a party to any
      contract or agreement which in the judgment of the Company's officers has or
      is
      expected to have a Material Adverse Effect.

    

    (S) TAX
      STATUS. The Company and each of its Subsidiaries has made or filed all United
      States federal and state 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 provision 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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (T) CERTAIN
      TRANSACTIONS. Except as set forth in the SEC Documents filed at least ten (10)
      days prior to the date hereof and except for arm's length transactions pursuant
      to which the Company makes payments in the ordinary course of business upon
      terms no less favorable than the Company could obtain from third parties and
      other than the grant of stock options disclosed in the SEC Documents, none
      of
      the officers, directors, or employees of the Company is presently a party to
      any
      transaction with the Company or any of its Subsidiaries (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 corporation, partnership, trust or other entity in which
      any
      officer, director, or any such employee has a substantial interest or is an
      officer, director, trustee or partner.

     

    (U) DILUTIVE
      EFFECT. The Company understands and acknowledges that the number of shares
      of
      Common Stock issuable upon purchases pursuant to this Agreement will increase
      in
      certain circumstances including, but not necessarily limited to, the
      circumstance wherein the trading price of the Common Stock declines during
      the
      period between the Effective Date and the end of the Open Period. The Company's
      executive officers and directors have studied and fully understand the nature
      of
      the transactions contemplated by this Agreement and recognize that they have
      a
      potential dilutive effect. The Board of Directors of the Company has concluded,
      in its good faith business judgment, that such issuance is in the best interests
      of the Company. The Company specifically acknowledges that, subject to such
      limitations as are expressly set forth in the Transaction Documents, its
      obligation to issue shares of Common Stock upon purchases pursuant to this
      Agreement is absolute and unconditional regardless of the dilutive effect that
      such issuance may have on the ownership interests of other shareholders of
      the
      Company.

     

    (V) RIGHT
      OF
      FIRST REFUSAL. The Company shall not, directly or indirectly, without the prior
      written consent of Investor which will not be unreasonably withheld, offer,
      sell, grant any option to purchase, or otherwise dispose of (or announce any
      offer, sale, grant or any option to purchase or other disposition) any of its
      Common Stock or securities convertible into Common Stock at a price that is
      less
      than the market price of the Common Stock at the time of issuance of such
      security or investment (a "Subsequent Financing") for a period of one (1) year
      after the Effective Date, except (I) the granting of options or warrants to
      employees, officers, directors and consultants, and the issuance of shares
      upon
      exercise of options granted, under any stock option plan heretofore or hereafter
      duly adopted by the Company or for services rendered or to be rendered; (II)
      shares issued upon exercise of any currently outstanding warrants or options
      and
      upon conversion of any currently outstanding convertible debenture
      or convertible
      preferred stock, in each case disclosed pursuant to Section 4(c); (III)
      securities issued in connection with the capitalization or creation of a joint
      venture with a strategic partner; (IV) shares issued to pay part or all of
      the
      purchase price for the acquisition by the Company of another entity (which,
      for
      purposes of this clause (iv), shall not include an individual or group of
      individuals); and (V) shares issued in a bona fide public offering by the
      Company of its securities, unless (A) the Company delivers to Investor a written
      notice (the "Subsequent Financing Notice") of its intention to effect such
      Subsequent Financing, which Subsequent Financing Notice shall describe in
      reasonable detail the proposed terms of such Subsequent Financing, the amount
      of
      proceeds intended to be raised thereunder, the person with whom such Subsequent
      Financing shall be effected, and attached to which shall be a term sheet or
      similar document relating thereto; and (B) Investor shall not have notified
      the
      Company by 5:00 p.m. (Eastern Time) on the fifth Trading Day after its receipt
      of the Subsequent Financing Notice of its willingness to provide, subject to
      completion of mutually acceptable documentation, financing to the Company on
      substantially the terms set forth in the Subsequent Financing Notice; (VI)
      to
      enter into a loan, credit or lease facility with a bank or financing
      institution. If Investor shall fail to notify the Company of its intention
      to
      enter into such negotiations within such time period, then the Company may
      effect the Subsequent Financing substantially upon the terms set forth in the
      Subsequent Financing Notice; provided that the Company shall provide Investor
      with a second Subsequent Financing Notice, and Investor shall again have the
      right of first refusal set forth above in this Section, if the Subsequent
      Financing subject to the initial Subsequent Financing Notice shall not have
      been
      consummated for any reason on the terms set forth in such Subsequent Financing
      Notice within thirty Trading Days after the date of the initial Subsequent
      Financing Notice. The rights granted to Investor in this Section are not subject
      to any prior right of first refusal given to any other person disclosed on
      Schedule 4(c).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (W) LOCK-UP.
      The Company shall cause its officers, insiders, directors, and affiliates or
      other related parties under control of the Company, to refrain from selling
      Common Stock during each Pricing Period.

    

    (X) NO
      GENERAL SOLICITATION. Neither the Company, nor any of its affiliates, nor any
      person acting on its behalf, has engaged in any form of general solicitation
      or
      general advertising (within the meaning of Regulation D) in connection with
      the
      offer or sale of the Common Stock offered hereby.

    

    (Y) NO
      BROKERS, FINDERS OR FINANCIAL ADVISORY FEES OR COMMISSIONS will be payable
      by
      the Company with respect to the transactions contemplated by this Agreement,
      other than disclosed in this Agreement.

    

    SECTION
      5. COVENANTS OF THE COMPANY

     

    (A) BEST
      EFFORTS. The Company shall use commercially reasonable efforts
      timely
      to
      satisfy each of the conditions to be satisfied by it as provided in Section
      7 of
      this Agreement.

     

    (B) BLUE
      SKY.
      The Company shall, at its sole cost and expense, on or before each of the
      Closing Dates, take such action as the Company shall reasonably determine is
      necessary to qualify the Securities for, or obtain exemption for the Securities
      for, sale to the Investor at each of the Closings pursuant to this Agreement
      under applicable securities or "Blue Sky" laws of such states of the United
      States, as reasonably specified by Investor, and shall provide evidence of
      any
      such action so taken to the Investor on or prior to the Closing
      Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (C) REPORTING
      STATUS. Until the earlier to occur of (I)
      the
      first
      date which is after
      the
      date
      this Agreement is terminated pursuant to Section 9 and on which the Holders
      (as
      that term is defined in the Registration Rights Agreement) may sell all of
      the
      Securities without restriction pursuant to Rule 144(k) promulgated under the
      1933 Act (or successor thereto); and (II)
      the
      date
      on which (A) the Holders shall have sold all the Securities; and (B) this
      Agreement has been terminated pursuant to Section 9 (the "Registration Period"),
      the Company shall file all reports required to be filed with the SEC pursuant
      to
      the 1934 Act, and the Company shall not terminate its status as a reporting
      company under the 1934 Act.

     

    (D) USE
      OF
      PROCEEDS. The Company will use the proceeds from the sale of the Shares
      (excluding amounts paid by the Company for fees as set forth in the Transaction
      Documents) for general corporate and working capital purposes and acquisitions
      or assets, businesses or operations or for other purposes that the Board of
      Directors deem to be in the best interest of the Company.

     

    (E) FINANCIAL
      INFORMATION. The Company agrees to make available to the Investor via EDGAR
      or
      other electronic means the following to the Investor during the Registration
      Period: (I)
      within
      five (5) Trading Days after
      the
      filing thereof with the SEC, a copy of its Annual Reports on Form 10-KSB, its
      Quarterly Reports on Form 10-QSB, any Current Reports on Form 8-K and any
      Registration Statements or amendments filed pursuant to the 1933 Act;
(II)
      on
      the
      same day as the release thereof, facsimile copies of all press releases issued
      by the Company or any of its Subsidiaries; (III) copies of any notices and
      other
      information made available or given to the shareholders of the Company
      generally, contemporaneously with the making available or giving thereof to
      the
      shareholders; and (IV) within two (2) calendar days of filing or delivery
      thereof, copies of all documents filed with, and all correspondence sent to,
      the
      Principal Market, any securities exchange or market, or the National Association
      of Securities Dealers, Inc., unless such information is material nonpublic
      information.

     

    (F) RESERVATION
      OF SHARES. Subject to the following sentence, the Company shall take all action
      necessary to at all times have authorized, and reserved
      for the purpose of issuance, a sufficient number of shares of Common Stock
      to
      provide for the issuance of the Securities hereunder. In the event that the
      Company determines that it does not have a sufficient number of authorized
      shares of Common Stock to reserve and keep available for issuance as described
      in this Section 5(f), the Company shall use its best efforts to increase the
      number of authorized shares of Common Stock by seeking shareholder approval
      for
      the authorization of such additional shares.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (G) LISTING.
      The Company shall promptly secure and maintain the listing of all of the
      Registrable Securities (as defined in the Registration Rights Agreement) upon
      the Principal Market and each other national securities exchange and automated
      quotation system, if any, upon which shares of Common Stock are then listed
      (subject to official notice of issuance) and shall maintain, such listing of
      all
      Registrable Securities from time to time issuable under the terms of the
      Transaction Documents. Neither the Company nor any of its Subsidiaries shall
      take any action which would be reasonably expected to result in the delisting
      or
      suspension of the Common Stock on the Principal Market (excluding suspensions
      of
      not more than one (1) trading day resulting from business announcements by
      the
      Company). The Company shall promptly provide to the Investor copies of any
      notices it receives from the Principal Market regarding the continued
      eligibility of the Common Stock for listing on such automated quotation system
      or securities exchange. The Company shall pay all fees and expenses in
      connection with satisfying its obligations under this Section 5(g).

    

    (H) TRANSACTIONS
      WITH AFFILIATES. The Company shall not, and shall cause each of its Subsidiaries
      not to, enter into, amend, modify or supplement, or permit any Subsidiary to
      enter into, amend, modify or supplement, any agreement, transaction, commitment
      or arrangement with any of its or any Subsidiary's officers, directors, persons
      who were officers or directors at any time during the previous two (2) years,
      shareholders who beneficially own 5% or more of the Common Stock, or affiliates
      or with any individual related by blood, marriage or adoption to any such
      individual or with any entity in which any such entity or individual owns a
      5%
      or more beneficial interest (each a "Related Party"),
      except for (I) customary employment arrangements and benefit
      programs
      on
      reasonable terms, (II) any agreement, transaction, commitment or arrangement
      on
      an arms-length basis on terms no less favorable than terms which would have
      been
      obtainable from a person other than such Related Party, or (III) any agreement,
      transaction, commitment or arrangement which is approved by a majority of the
      disinterested directors of the Company. For purposes hereof, any director who
      is
      also an officer of the Company or any Subsidiary of the Company shall not be
      a
      disinterested director with respect to any such agreement, transaction,
      commitment or arrangement. "Affiliate" for purposes hereof means, with respect
      to any person or entity, another person or entity that, directly or indirectly,
      (I) has a 5% or more equity interest in that person or entity, (II) has 5%
      or
      more common ownership with that person or entity, (III) controls that person
      or
      entity, or (IV) is under common control with that person or entity. "Control"
      or
      "Controls" for purposes hereof means that a person or entity has
      the
      power, direct or indirect, to conduct or govern the policies of another person
      or entity.

     

    (I) FILING
      OF
      FORM 8-K. On or before the date which is three (3) Trading Days after the
      Execution Date, the Company shall file a Current Report on Form 8-K with the
      SEC
      describing the terms of the transaction contemplated by the Transaction
      Documents in the form required by the 1934 Act, if such filing is
      required.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (J) CORPORATE
      EXISTENCE. The Company shall use its best efforts to preserve and continue
      the
      corporate existence of the Company.

     

    (K) NOTICE
      OF
      CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO MAKE A PUT. The
      Company shall promptly notify Investor upon the occurrence of any of the
      following events in respect of a Registration Statement or related prospectus
      in
      respect of an offering of the Securities: (I) receipt of any request for
      additional information by the SEC or any other federal or state governmental
      authority during the period of effectiveness of the Registration Statement
      for
      amendments or supplements to the Registration Statement or related prospectus;
      (II) the issuance by the SEC or any other federal or state governmental
      authority of any stop order suspending the effectiveness of any Registration
      Statement or the initiation of any proceedings for that purpose; (III) receipt
      of any notification with respect to the suspension of the qualification or
      exemption from qualification of any of the Securities for sale in any
      jurisdiction or the initiation or notice of any proceeding for such purpose;
      (IV) the happening of any event that makes any statement made in such
      Registration Statement or related prospectus or any document incorporated or
      deemed to be incorporated therein by reference untrue in any material respect
      or
      that requires the making of any changes in the Registration Statement, related
      prospectus or documents so that, in the case of a Registration Statement, it
      will not contain any untrue statement of a material fact or omit to state any
      material fact required to be stated therein or necessary to make the statements
      therein not misleading, and that in the case of the related prospectus, it
      will
      not contain any untrue statement of a material fact or omit to state any
      material fact required to be stated therein or necessary to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading; and (V) the Company's reasonable determination that a post-effective
      amendment to the Registration Statement would be appropriate, and the Company
      shall promptly make available to Investor any such supplement or amendment
      to
      the related prospectus. The Company shall not deliver to Investor any Put Notice
      during the continuation of any of the foregoing events.

     

    (L) REIMBURSEMENT.
      If (I) Investor becomes involved in any capacity in any action, proceeding
      or
      investigation brought by any shareholder of the Company, in connection with
      or
      as a result of the consummation of the transactions contemplated by the
      Transaction Documents, or if Investor is impleaded in any such action,
      proceeding or investigation by any person (other than as a result of
a
      breach
      of the Investor’s representations and warranties set forth in this Agreement);
      or (II)Investor becomes involved in any capacity in any action, proceeding
      or
      investigation brought by the SEC against or involving the Company or in
      connection with or as a result of the consummation of the transactions
      contemplated by the Transaction Documents (other than as a result of a breach
      of
      the Investor’s representations and warranties set forth in this Agreement), or
      if Investor is impleaded in any such action, proceeding or investigation by
      any
      person, then in any such case, the Company will reimburse Investor for its
      reasonable legal and other expenses (including the cost of any investigation
      and
      preparation) incurred in connection therewith, as such expenses are incurred.
      In
      addition, other than with respect to any matter in which Investor is a named
      party, the Company will pay to Investor the charges, as reasonably determined
      by
      Investor, for the time of any officers or employees of Investor devoted to
      appearing and preparing to appear as witnesses, assisting in preparation for
      hearings, trials or pretrial matters, or otherwise with respect to inquiries,
      hearing, trials, and other proceedings relating to the subject matter of this
      Agreement. The reimbursement obligations of the Company under this section
      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 that
      are
      actually named in such action, proceeding or investigation, and partners,
      directors, agents, employees, attorneys, accountants, auditors 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 of the Company,
      Investor and any such affiliate and any such person.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (M)
      TRANSFER AGENT. Upon effectiveness of the Registration Statement, the Company
      shall deliver instructions to its transfer agent to issue shares of Common
      Stock
      to the Investor free of restrictive legends for any Puts completed by the
      Company.

    

    SECTION
      6. COVER.

    

    If
      the
      number of Shares represented by any Put Notice (s) become restricted or are
      no
      longer freely trading for any reason, and after the applicable Closing Date,
      the
      Investor purchases, in an open market transaction or otherwise, the Company's
      Common Stock (the "Covering Shares") in order to make delivery in satisfaction
      of a sale of Common Stock by the Investor (the "Sold Shares"), which delivery
      such Investor anticipated to make using the Shares represented by the Put Notice
      (a "Buy-In"), the Company shall pay to the Investor the Buy-In Adjustment Amount
      (as defined below). The "Buy-In Adjustment Amount" is the amount equal to the
      excess, if any, of (A) the Investor's total purchase price (including brokerage
      commissions, if any) for the Covering Shares over (B) the net proceeds (after
      brokerage commissions, if any) received by the Investor from the sale of the
      Sold Shares. The Company shall pay the Buy-In Adjustment Amount to the Investor
      in immediately available funds immediately upon demand by the Investor. By
      way
      of illustration and not in limitation of the foregoing, if the Investor
      purchases Common Stock having a total purchase price (including brokerage
      commissions) of $11,000 to cover a Buy-In with respect to the Common Stock
      it
      sold for net proceeds of $10,000, the Buy-In Adjustment Amount which the Company
      will be required to pay to the Investor will be $1,000.

    

    SECTION
      7. CONDITIONS OF THE COMPANY'S OBLIGATION TO SELL.

    

    The
      obligation hereunder of the Company to issue and sell the Securities to the
      Investor is further subject to the satisfaction, at or before each Closing
      Date,
      of each of the following conditions set forth below. These conditions are for
      the Company's sole benefit and may be waived by the Company at any time in
      its
      sole discretion.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (A) The
      Investor shall have executed each of this Agreement and the Registration Rights
      Agreement and delivered the same to the Company.

    

    (B) The
      Investor shall have delivered to the Company the Purchase Price for the
      Securities being purchased by the Investor between the end of the Pricing Period
      and the Closing Date via a Put Settlement Sheet (hereto attached as Exhibit
      G)
After
      receipt
      of confirmation of delivery of such Securities to the Investor, the Investor,
      by
      wire transfer of immediately available funds pursuant to the wire instructions
      provided by the Company will disburse the funds constituting the Purchase
      Amount.

    

    (C) No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction which prohibits the consummation of any
      of
      the transactions contemplated by this Agreement.

    

    SECTION
      8. FURTHER CONDITIONS OF THE INVESTOR'S OBLIGATION TO PURCHASE.

    

    The
      obligation of the Investor hereunder to purchase Shares is subject to the
      satisfaction, on or before each Closing Date, of each of the following
      conditions set forth below.

    

    (A) The
      Company shall have executed each of the Transaction Documents and delivered
      the
      same to the Investor.

    

    (B) The
      Common Stock shall be authorized for quotation on the Principal Market and
      trading in the Common Stock shall not have been suspended by the Principal
      Market or the SEC, at any time beginning on the date hereof and through and
      including the respective Closing Date (excluding suspensions of not more than
      one (1) Trading Day resulting from business announcements by the Company,
      provided that such suspensions occur prior to the Company's delivery of the
      Put
      Notice related to such Closing).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (C) The
      representations and warranties of the Company shall be true and correct as
      of
      the date when made and as of the applicable Closing Date as though made at
      that
      time (except for (I) representations and warranties that speak as of a specific
      date and (II) with respect to the representations made in Sections 4(g),
(h)
      and
      (j) and the third sentence of Section 4(k) hereof, events which occur on
      or
      after
      the date of this Agreement and are disclosed in SEC filings made by the Company
      at least ten (10) Trading Days prior to the applicable Put Notice Date) and
      the
      Company shall have performed, satisfied and complied with the covenants,
      agreements and conditions required by the Transaction Documents to be performed,
      satisfied or complied with by the Company on or before such Closing Date. The
      Investor may request an update as of such Closing Date regarding the
      representation contained in Section 4(c) above.

     

    (D) The
      Company shall have executed and delivered to the Investor the certificates
      representing, or have executed electronic book-entry transfer of, the Securities
      (in such denominations as such Investor shall request) being purchased by the
      Investor at such Closing.

     

    (E) The
      Board
      of Directors of the Company shall have adopted resolutions consistent with
      Section 4(b)(ii) above (the "Resolutions") and such Resolutions shall not have
      been amended or rescinded prior to such Closing Date.

     

    (F) reserved

     

    (G) No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction which prohibits the consummation of any
      of
      the transactions contemplated by this Agreement.

     

    (H) The
      Registration Statement shall be effective on each Closing Date and no stop
      order
      suspending the effectiveness of the Registration statement shall be in effect
      or
      to the Company's knowledge shall be pending or threatened. Furthermore, on
      each
      Closing Date (I) neither the Company nor Investor shall have received notice
      that the SEC has issued or intends to issue a stop order with respect to such
      Registration Statement or that the SEC otherwise has suspended or withdrawn
      the
      effectiveness of such Registration Statement, either temporarily or permanently,
      or intends or has threatened to do so (unless the SEC's concerns have been
      addressed and Investor is reasonably satisfied that the SEC no longer is
      considering or intends to take such action), and (II) no other suspension of
      the
      use or withdrawal of the effectiveness of such Registration Statement or related
      prospectus shall exist.

     

    (I) At
      the
      time of each Closing, the Registration Statement (including information or
      documents incorporated by reference therein) and any amendments or supplements
      thereto shall not contain any untrue statement of a material fact or omit to
      state any material fact required to be stated therein or necessary to
      make the
      statements therein not misleading or which would require public disclosure
      or an
      update supplement to the prospectus.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (J) If
      applicable, the shareholders of the Company shall have approved the issuance
      of
      any Shares in excess of the Maximum Common Stock Issuance in accordance with
      Section 2(i) or the Company shall have obtained appropriate approval pursuant
      to
      the requirements of Delaware law and the Company’s Articles of Incorporation and
      By-laws.

    

    (K) The
      conditions to such Closing set forth in Section 2(f) shall have been satisfied
      on or before such Closing Date.

    

    (L) The
      Company shall have certified to the Investor the number of Shares of Common
      Stock outstanding when a Put Notice is given to the Investor.

    

    SECTION
      9. TERMINATION. This Agreement shall terminate upon any of the following
      events:

    

    (I) when
      the
      Investor has purchased an aggregate of Five Million dollars ($5,000,000) in
      the
      Common Stock of the Company pursuant to this Agreement;

    

    (II) on
      the
      date which is thirty-six (36) months after the Effective Date; 

     

    SECTION
      10. SUSPENSION

    

    This
      Agreement shall be suspended upon any of the following events, and shall remain
      suspended until such event is rectified:

    

    (I) the
      trading of the Common Stock is suspended by the SEC, the Principal Market or
      the
      NASD for a period of two (2) consecutive Trading Days during the Open
      Period;

    

    (II) The
      Common Stock ceases to be registered under the 1934 Act or listed or traded
      on
      the Principal Market. Upon the occurrence of one (1) of the above-described
      events, the Company shall send written notice of such event to the
      Investor.

    

    SECTION
      11. INDEMNIFICATION.

    

    In
      consideration of the parties mutual obligations set forth In the Transaction
      Documents, each of the parties (in such capacity, an "Indemnitor") shall defend,
      protect, indemnify and hold harmless the other and all of the other party's
      shareholders, officers, directors, employees, counsel, and direct or indirect
      investors and any of the foregoing person's agents or other representatives
      (including, without limitation, those retained in connection with the
      transactions contemplated by this Agreement) (collectively, the "Indemnitees")
      from and against any and all actions, causes of action, suits, claims, losses,
      costs, penalties,
      fees, liabilities and damages, and reasonable expenses in connection therewith
      (irrespective of whether any such Indemnitee is a party to the action for which
      indemnification hereunder is sought), and including reasonable attorneys' fees
      and disbursements (the "Indemnified Liabilities"), incurred by any Indemnitee
      as
      a result of, or arising out of, or relating to (I) any misrepresentation or
      breach of any representation or warranty made by the Indemnitor or any other
      certificate, instrument or document contemplated hereby or thereby; (II) any
      breach of any covenant, agreement or obligation of the Indemnitor contained
      in
      the Transaction Documents or any other certificate, instrument or document
      contemplated hereby or thereby; or (III) any cause of action, suit or claim
      brought or made against such Indemnitee by a third party and arising out of
      or
      resulting from the execution, delivery, performance or enforcement of the
      Transaction Documents or any other certificate, instrument or document
      contemplated hereby or thereby, except insofar as any such misrepresentation,
      breach or any untrue statement, alleged untrue statement, omission or alleged
      omission is made in reliance upon and in conformity with information furnished
      to Indemnitor which is specifically intended for use in the preparation of
      any
      such Registration Statement, preliminary prospectus, prospectus or amendments
      to
      the prospectus. To the extent that the foregoing undertaking by the Indemnitor
      may be unenforceable for any reason, the Indemnitor shall make the maximum
      contribution to the payment and satisfaction of each of the Indemnified
      Liabilities which is permissible under applicable law. The indemnity provisions
      contained herein shall be in addition to any cause of action or similar rights
      Indemnitor may have, and any liabilities the Indemnitor or the Indemnitees
      may
      be subject to.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECTION
      12. GOVERNING LAW; MISCELLANEOUS.

    

    (A)
      GOVERNING LAW. This Agreement shall be governed by and interpreted in accordance
      with the laws of the Commonwealth of Massachusetts without regard to the
      principles of conflict of laws. Each party hereby irrevocably submits to the
      exclusive jurisdiction of the state and federal courts sitting in the City
      of
      Boston, County of Suffolk, for the adjudication of any dispute hereunder or
      in
      connection herewith or with any transaction contemplated hereby or discussed
      herein, and hereby irrevocably waives, and agrees not to assert in any suit,
      action or proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, that such suit, action or proceeding is brought
      in an inconvenient forum or that the venue of such suit, action or proceeding
      is
      improper. Each party hereby irrevocably waives personal service of process
      and
      consents to process being served in any such suit, action or proceeding by
      mailing a copy thereof to such party at the address for such notices to it
      under
      this Agreement and agrees that such service shall constitute good and sufficient
      service of process and notice thereof. Nothing contained herein shall be deemed
      to limit in any way any right to serve process in any manner permitted by law.
      If any provision of this Agreement shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the validity
      or enforceability of the remainder of this Agreement in that jurisdiction or
      the
      validity or enforceability of any provision of this Agreement in any other
      jurisdiction.

     

    (B) LEGAL
      FEES; AND MISCELLANEOUS FEES. Except as otherwise set forth in the Transaction
      Documents, each party shall pay the fees and expenses of its advisers, counsel,
      the accountants and other experts, if any, and all other expenses incurred
      by
      such party incident to the negotiation, preparation, execution, delivery and
      performance of this Agreement. Any attorneys' fees and expenses incurred by
      either the Company or by the Investor in connection with the preparation,
      negotiation, execution and delivery of any amendments to this Agreement or
      relating to the enforcement of the rights of any party, after the occurrence
      of
      any breach of the terms of this Agreement by another party or any default by
      another party in respect of the transactions contemplated hereunder, shall
      be
      paid on demand by the party which breached the Agreement and/or defaulted,
      as
      the case may be. The Company shall pay all stamp and other taxes and duties
      levied in connection with the issuance of any Securities.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (C) COUNTERPARTS.
      This Agreement may be executed in two or more identical counterparts, all of
      which 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; provided that a facsimile signature shall be considered due execution
      and
      shall be binding upon the signatory thereto with the same force and effect
      as if
      the signature were an original, not a facsimile signature.

     

    (D) HEADINGS;
      SINGULAR/PLURAL. The headings of this Agreement are for convenience of reference
      and shall not form part of, or affect the interpretation of, this Agreement.
      Whenever required by the context of this Agreement, the singular shall include
      the plural and masculine shall include the feminine.

     

    (E) SEVERABILITY.
      If any provision of this Agreement shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the validity
      or enforceability of the remainder of this Agreement in that jurisdiction or
      the
      validity or enforceability of any provision of this Agreement in any other
      jurisdiction.

     

    (F) ENTIRE
      AGREEMENT; AMENDMENTS. This Agreement supersedes all other prior oral or written
      agreements between the Investor, the Company, their affiliates and persons
      acting on their behalf with respect to the matters discussed herein, and this
      Agreement and the instruments referenced herein (including the other Transaction
      Documents) contain the entire understanding of the parties with respect to
      the
      matters covered herein and therein and, except as specifically set forth herein
      or therein, neither the Company nor the Investor makes any representation,
      warranty, covenant or undertaking with respect to such matters. No provision
      of
      this Agreement may be amended other than by an instrument in writing signed
      by
      the Company and the Investor, and no provision hereof may be waived other than
      by an instrument in writing signed by the party against whom enforcement is
      sought.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

    

    If
      to the Company:

    

    Seawright
      Holdings, Inc. 

    600
      Cameron Street

    Alexandria,
      VA 22314

    Telephone:
      703-340-1629 

    Facsimile: 703-340-1642

    

    If
      to the Investor:

    

    Dutchess
      Private Equities Fund, LP

    50
      Commonwealth Ave, Suite 

    Boston,
      MA 02116

    Telephone:
      617-301-4700 

    Facsimile:
      617-249-0947

    

    

    Each
      party shall provide five (5) days' prior written notice to the other party
      of
      any change in address or facsimile number.

    

    (H) NO
      ASSIGNMENT. This Agreement may not be assigned.

    

    (I) NO
      THIRD
      PARTY BENEFICIARIES. This Agreement is intended for the benefit of the parties
      hereto and is not for the benefit of, nor may any provision hereof be enforced
      by, any other person.

    

    (J) SURVIVAL.
      The representations and warranties of the Company and the Investor contained
      in
      Sections 2 and 3, the agreements and covenants set forth in Sections 4 and
      5,
      and the indemnification provisions set forth in Section 10, shall survive each
      of the Closings and the termination of this Agreement.

    

    (K) PUBLICITY.
      The Company and Investor shall consult with each other in issuing any press
      releases or otherwise making public statements with respect to the transactions
      contemplated hereby and no party shall issue any such press release or otherwise
      make any such public statement without the prior consent of the other parties,
      which consent shall not be unreasonably withheld or delayed, except that no
      prior consent shall be required if such disclosure is required by law,
      in
      which such case the disclosing party shall provide the other parties with prior
      notice of such public statement. Notwithstanding the foregoing, the Company
      shall not publicly disclose the name of Investor without the prior consent
      of
      such Investor, except to the extent required by law. Investor acknowledges
      that
      this Agreement and all or part of the Transaction Documents may be deemed to
      be
      "material contracts" as that term is defined by Item 601(b)(10) of Regulation
      S-B, and that the Company may therefore be required to file such documents
      as
      exhibits to reports or registration statements filed under the 1933 Act or
      the
      1934 Act. Investor further agrees that the status of such documents and
      materials as material contracts shall be determined solely by the Company,
      in
      consultation with its counsel.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

    (M) PLACEMENT
      AGENT. The Company agrees to pay Jones, Byrd and Attkisson , a registered broker
      dealer one percent ( 1%) of the Put Amount on each draw toward the fee. The
      Investor shall have no obligation with respect to any fees or with respect
      to
      any claims made by or on behalf of other persons or entities for fees of a
      type
      contemplated in this Section that may be due in connection with the transactions
      contemplated by the Transaction Documents. The Company shall indemnify and
      hold
      harmless the Investor, their employees, officers,
      directors,
      agents, and partners, and their respective affiliates,
      from
      and
      against all claims, losses, damages, costs (including the costs of preparation
      and attorney's fees) and expenses incurred in respect of any such claimed or
      existing fees, as such fees and expenses are incurred.

    

    (N) NO
      STRICT
      CONSTRUCTION. 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.

    

    (O) REMEDIES.
      The Investor and each holder of the Shares shall have all rights and remedies
      set forth in this Agreement and the Registration Rights Agreement and all rights
      and remedies which such holders have been granted at any time under any other
      agreement or contract and all of the rights which such holders have under any
      law. Any person having any rights under any provision of this Agreement shall
      be
      entitled to enforce such rights specifically
      (without
      posting a bond or other security), to recover damages by reason of any default
      or breach of any provision of this Agreement, including the recovery of
      reasonable attorneys fees and costs, and to exercise all other rights granted
      by
      law.

    

    (P) PAYMENT
      SET ASIDE. To the extent that the Company makes a payment or payments to the
      Investor hereunder or under the Registration Rights Agreement or
      the
      Investor enforces or exercises its rights hereunder or 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.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (Q)
      PRICING OF COMMON STOCK. For purposes of this Agreement, the bid price of the
      Common Stock in this Agreement shall be as reported on Bloomberg.

    

    SECTION
      13. Non-Disclosure of Non-Public Information.

    

    (a) The
      Company shall not disclose non-public information to the Investor, its advisors,
      or its representatives, unless prior to disclosure of such information the
      Company identifies such information, in writing, as being non-public information
      and provides the Investor, such advisors and representatives with the
      opportunity to accept or refuse to accept such non-public information for
      review. The Company may, as a condition to disclosing any non-public information
      hereunder, require the Investor's advisors and representatives to enter into
      a
      confidentiality agreement in form reasonably satisfactory to the Company and
      the
      Investor.

    

    (b) Nothing
      herein shall require the Company to disclose non-public information to the
      Investor or its advisors or representatives, and the Company represents that
      it
      does not disseminate non-public information to any investors who purchase stock
      in the Company in a public offering, to money managers or to securities
      analysts, provided, however, that notwithstanding anything herein to the
      contrary, the Company will, as hereinabove provided, immediately notify the
      advisors and representatives of the Investor and, if any, underwriters, of
      any
      event or the existence of any circumstance (without any obligation to disclose
      the specific event or circumstance) of which it becomes aware, constituting
      non-public information (whether or not requested of the Company specifically
      or
      generally during the course of due diligence by such persons or entities),
      which, if not disclosed in the prospectus included in the Registration Statement
      would cause such prospectus to include a material misstatement or to omit a
      material fact required to be stated therein in order to make the statements,
      therein, in light of the circumstances in which they were made, not misleading.
      Nothing contained in this Section 13 shall be construed to mean that such
      persons or entities other than the Investor (without the written consent of
      the
      Investor prior to disclosure of such information) may not obtain non-public
      information in the course of conducting due diligence in accordance with the
      terms of this Agreement and nothing herein shall prevent any such persons or
      entities from notifying the Company of their opinion that based on such due
      diligence by such persons
      or entities, that the Registration Statement contains an untrue statement of
      material fact or omits a material fact required to be stated in the Registration
      Statement or necessary to make the statements contained therein, in light of
      the
      circumstances in which they were made, not misleading.

     

    *
      *
      *

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SIGNATURE
      PAGE OF INVESTMENT AGREEMENT

    

    Your
      signature on this Signature Page evidences your agreement to be bound by the
      terms and conditions of the Investment Agreement and the Registration Rights
      Agreement as of the date first written above.

    

    The
      undersigned signatory hereby certifies that he has read and understands the
      Investment Agreement, and the representations made by the undersigned in this
      Investment Agreement are true and accurate, and agrees to be bound by its
      terms.

    

    DUTCHESS
      PRIVATE EQUITIES FUND, L.P. 

    BY
      ITS GENERAL PARTNER, 

    DUTCHESS
      CAPITAL MANAGEMENT, LLC

    

    By:
      /s/
      Douglas H. Leighton

      
        

      

    

    Douglas
      H. Leighton, Managing Member 

     

     

    SEAWRIGHT
      HOLDINGS, INC.

    

    By:
      /s/
      Joel Sens

      
        

      

    

    Joel
      Sens, Chief Executive Officer

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    LIST OF EXHIBITS

     

    
      	
              EXHIBIT
A

            	
              Registration
                Rights Agreement

            
	
              EXHIBIT
                B

            	
              Opinion
                of Company's Counsel

            
	
              EXHIBIT
                C

            	
              [reserved]

            
	
              EXHIBIT
                D

            	
              Broker
                Representation Letter

            
	
              EXHIBIT
                E

            	
              Board
                Resolution

            
	
              EXHIBIT
                F

            	
              Put
                Notice

            
	
              EXHIBIT
                G

            	
              Put
                Settlement Sheet

            

    

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       
LIST
      OF SCHEDULES

     

     

    Schedule
      4(a)
      SubsidiariesRegistration Rights Agreement

    Exhibit
      10.2

     

    REGISTRATION RIGHTS AGREEMENT

    

    Registration
      Rights Agreement (the “Agreement”), dated as of September 12, 2005, by
      and between Seawright Holdings, Inc., a corporation organized under the laws
      of
      State of Delaware, with its principal executive office at, 600 Cameron Street,
      Alexandria, VA 22314 (the “Company”), and Dutchess Private Equities Fund,
      L.P., a Delaware limited partnership with its principal office at 312 Stuart
      Street, Boston, MA 02116 (the “Holder”).

    

    Whereas, in
      connection with the Investment Agreement by and between the Company and the
      Investor of even date herewith (the “Investment Agreement”), the Company
      has agreed to issue and sell to the Investor an indeterminate number of shares
      of the Company’s Common Stock, $0.001 par value per share (the “Common
      Stock”), to be purchased pursuant to the terms and subject to the conditions
      set forth in the Investment Agreement; and

    

    Whereas,
      to
      induce
      the Investor to execute and deliver the Investment Agreement, the Company has
      agreed to provide certain registration rights under the Securities Act of 1933,
      as amended, and the rules and regulations thereunder, or any similar successor
      statute (collectively, the “1933 Act”), and applicable state securities
      laws, with respect to the shares of Common Stock issuable pursuant to the
      Investment Agreement.

    

    Now
      therefore, in consideration of the foregoing premises and the mutual covenants
      contained hereinafter
      and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Company and the Investor hereby agree as
      follows:

    

    

    Section
      1. DEFINITIONS.

    

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

     

    “Execution
      Date” means the date first written above.

    

    “Investor”
      means Dutchess Private Equities Fund, L.P., a Delaware limited
      partnership.

    

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

    

    “Potential
      Material
      Event” means any of the following: (i)
      the
      possession by the Company of material information not ripe for disclosure in
      a
      Registration Statement, which shall be evidenced by determinations in good
      faith
      by the Board of Directors of the Company that disclosure of such information
      in
      the Registration Statement would be detrimental to the business and affairs
      of
      the Company, or (ii)
      any
      material engagement or activity by the Company which would, in the good faith
      determination of the Board of Directors of the Company, be adversely affected
      by
      disclosure in a Registration Statement at such time, which determination shall
      be accompanied by a good faith determination by the Board of Directors of the
      Company that the Registration Statement would be materially misleading absent
      the inclusion of such information.

    

    “Principal
      Market” shall mean The American Stock Exchange, National Association of
      Securities Dealer’s, Inc. Over-the-Counter electronic bulletin board, the Nasdaq
      National Market or The Nasdaq SmallCap Market whichever is the principal market
      on which the Common Stock is listed.

    

    “Register,”“Registered,”
      and “Registration” refer to a registration effected by preparing and
      filing one (1) or more Registration Statements in compliance with the 1933
      Act
      and pursuant to Rule 415 under the 1933 Act or any successor rule providing
      for
      offering securities on a continuous basis (“Rule 415”), and the
      declaration or ordering of effectiveness of such Registration Statement(s)
      by
      the United States Securities and Exchange Commission (the
“SEC”).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Registrable
      Securities” means (i)
      the
      shares of Common Stock issued or issuable pursuant to the Investment Agreement,
      and (ii)
      any
      shares of capital stock issued or issuable with respect to such shares of Common
      Stock, if any, as a result of any stock split, stock dividend, recapitalization,
      exchange or similar event or otherwise, which have not been (x)
      included
      in a Registration Statement that has been declared effective by the SEC or
      (y)
      sold
      under circumstances meeting all of the applicable conditions of Rule 144 (or
      any
      similar provision then in force) under the 1933 Act.

    

    “Registration
      Statement” means a registration statement of the Company filed under the
      1933 Act covering the Registrable Securities.

    

    All
      capitalized terms used in this Agreement and not otherwise defined herein shall
      have the same meaning ascribed to them as in the Investment
      Agreement.

    

    

    Section
      2. REGISTRATION.

    

    (a) On
      or
      before the execution of this Agreement, the Company shall have provided a draft
      of the Registration Statement covering the Registrable Securities to the
      Investor. The Company shall, as soon as practicable, but not later than thirty
      (30) calendar days following the Execution of this agreement, file with the
      SEC
      a Registration Statement or Registration Statements (as is necessary) on Form
      SB-2 (or, if such form is unavailable for such a registration, on such other
      form as is available for such a registration), covering the resale of all of
      the
      Registrable Securities, which Registration Statement(s) shall state that, in
      accordance with Rule 416 promulgated under the 1933 Act, such Registration
      Statement also covers such indeterminate number of additional shares of Common
      Stock as may become issuable upon stock splits, stock dividends or similar
      transactions. The Company shall initially register for resale such number of
      shares of Common Stock to perform its obligations under the Investment Agreement
      and this Agreement which would be issuable on the date preceding the filing
      of
      the Registration Statement based on the closing bid price of the Company’s
      Common Stock on such date and the amount reasonably calculated that represents
      Common Stock issuable to other parties as set forth in the Investment Agreement
      except to the extent that the SEC requires the share amount to be reduced as
      a
      condition of effectiveness..

    

    (b) The
      Company shall use commercially reasonable efforts to have the Registration
      Statement(s) declared effective by the SEC within ninety (90) calendar days
      after the Execution Date.

     

    (c) The
      Company agrees not to include any other securities in the Registration Statement
      covering the Registrable Securities without Investor’s prior written consent
      which Investor may withhold in its sole discretion. Furthermore, the Company
      agrees that it will not file any other Registration Statement for other
      securities, until thirty calendar days after the Registration Statement for
      the
      Registrable Securities is declared effective by the SEC.

    

    

    Section
      3. RELATED OBLIGATIONS.

    

    At
      such
      time as the Company is obligated to prepare and file a Registration Statement
      with the SEC pursuant to Section 2(a), the Company will effect the registration
      of the Registrable Securities in accordance with the intended method of
      disposition thereof and, with respect thereto, the Company shall have the
      following obligations:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a)
      The
      Company shall use commercially reasonable efforts to cause such Registration
      Statement relating to the Registrable Securities to become effective within
      ninety (90) days after the Execution Date and shall keep such Registration
      Statement effective until the earlier to occur of (i)
      the
      date
      on which (A)
      the
      Investor shall have sold all the Registrable Securities; and (B)
      the
      Investor has no right to acquire any additional shares of Common Stock under
      the
      Investment Agreement (the "Registration
      Period”). The Registration Statement (including any amendments or
      supplements thereto and prospectuses contained therein) shall not contain any
      untrue statement of a material fact or omit to state a material fact required
      to
      be stated therein, or necessary to make the statements therein, in light of
      the
      circumstances in which they were made, not misleading. The Company shall use
      its
      best efforts to respond to all SEC comments within seven (7) business days
      from
      receipt of such comments by the Company. The Company shall use its best efforts
      to cause the Registration Statement relating to the Registrable Securities
      to
      become effective no later than three (3) business days after notice from the
      SEC
      that the Registration Statement may be declared effective. The Investor agrees
      to provide all information which it is required by law to provide to the
      Company, including the intended method of disposition of the Registrable
      Securities, and the Company’s obligations set forth above shall be conditioned
      on the receipt of such information.

    

    (b) 
      The
      Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to a Registration Statement and
      the
      prospectus used in connection with such Registration Statement, which prospectus
      is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may
      be
      necessary to keep such Registration Statement effective during the Registration
      Period, and, during such period, comply with the provisions of the 1933 Act
      with
      respect to the disposition of all Registrable Securities of the Company covered
      by such Registration Statement until such time as all of such Registrable
      Securities shall have been disposed of in accordance with the intended methods
      of disposition by the Investor thereof as set forth in such Registration
      Statement. In the event the number of shares of Common Stock covered by a
      Registration Statement filed pursuant to this Agreement is at any time
      insufficient to cover all of the Registrable Securities, the Company shall
      amend
      such Registration Statement, or file a new Registration Statement (on the short
      form available therefor, if applicable), or both, so as to cover all of the
      Registrable Securities, in each case, as soon as practicable, but in any event
      within thirty (30) calendar days after the necessity therefor arises (based
      on
      the then Purchase Price of the Common Stock and other relevant factors on which
      the Company reasonably elects to rely), assuming the Company has sufficient
      authorized shares at that time, and if it does not, within thirty (30) calendar
      days after such shares are authorized. The Company shall use commercially
      reasonable efforts to cause such amendment and/or new Registration Statement
      to
      become effective as soon as practicable following the filing
      thereof.

    

    (c) The
      Company shall make available to the Investor whose Registrable Securities are
      included in any Registration Statement and its legal counsel without charge
      (i)
      promptly
      after the same is prepared and filed with the SEC at least one (1) copy of
      such
      Registration Statement and any amendment(s) thereto, including financial
      statements and schedules, all documents incorporated therein by reference and
      all exhibits, the prospectus included in such Registration Statement (including
      each preliminary prospectus) and, with regards to such Registration
      Statement(s), any correspondence by or on behalf of the Company to the SEC
      or
      the staff of the SEC and any correspondence from the SEC or the staff of the
      SEC
      to the Company or its representatives; (ii)
      upon
      the
      effectiveness of any Registration Statement, the Company shall make available
      copies of the prospectus, via EDGAR, included in such Registration Statement
      and
      all amendments and supplements thereto; and (iii)
      such
      other documents, including copies of any preliminary or final prospectus, as
      the
      Investor may reasonably request from time to time in order to facilitate the
      disposition of the Registrable Securities.

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e) As
      promptly as practicable after becoming aware of such event, the Company shall
      notify Investor in writing of the happening of any event as a result of which
      the prospectus included in a Registration Statement, as then in effect, includes
      an untrue statement of a material fact or omission to state a material fact
      required to be stated therein or necessary to make the statements therein,
      in
      light of the circumstances under which they were made, not misleading
      (“Registration Default”) and use all diligent efforts to promptly prepare
      a supplement or amendment to such Registration Statement and take any other
      necessary steps to cure the Registration Default, (which, if such Registration
      Statement is on Form S-3, may consist of a document to be filed by the Company
      with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act
      (as
      defined below) and to be incorporated by reference in the prospectus) to correct
      such untrue statement or omission, and make available copies of such supplement
      or amendment to each Investor. The Company shall also promptly notify Investor
      (i)
      when
      a
      prospectus or any prospectus supplement or post-effective amendment has been
      filed, and when a Registration Statement or any post-effective amendment has
      become effective (the Company will prepare notification of such effectiveness
      which shall be delivered to the Investor on the same day of such effectiveness
      and by overnight mail), additionally, the Company will promptly provide to
      the
      Investor, a copy of the effectiveness order prepared by the SEC once it is
      received by the Company; (ii)
      of
      any
      request by the SEC for amendments or supplements to a Registration Statement
      or
      related prospectus or related information, (iii)
      of
      the
      Company’s reasonable determination that a post-effective amendment to a
      Registration Statement would be appropriate, (iv)
      in
      the
      event the Registration Statement is no longer effective, or (v)
      if
      Registration Statement is stale as a result of the Company’s failure to timely
      file its financials or otherwise. The Company acknowledges that its failure
      to
      cure the Registration Default within ten (10) business days will cause the
      Investor to suffer damages in an amount that will be difficult to ascertain.
      Accordingly, the parties agree that it is appropriate to include a provision
      for
      liquidated damages. The parties acknowledge and agree that the liquidated
      damages provision set forth in this section represents the parties’ good faith
      effort to quantify such damages and, as such, agree that the form and amount
      of
      such liquidated damages are reasonable and will not constitute a penalty. It
      is
      the intention of the parties that interest payable under any of the terms of
      this Agreement shall not exceed the maximum amount permitted under any
      applicable law. If a law, which applies to this Agreement which sets the maximum
      interest amount, is finally interpreted so that the interest in connection
      with
      this Agreement exceeds the permitted limits, then: (1)
      any
      such
      interest shall be reduced by the amount necessary to reduce the interest to
      the
      permitted limit; and (2)
      any
      sums
      already collected (if any) from the Company which exceed the permitted limits
      will be refunded to the Company. The Investor may choose to make this refund
      by
      reducing the amount that the Company owes under this Agreement or by making
      a
      direct payment to the Company. If a refund reduces the amount that the Company
      owes the Investor, the reduction will be treated as a partial payment. In case
      any provision of this Agreement is held by a court of competent jurisdiction
      to
      be excessive in scope or otherwise invalid or unenforceable, such provision
      shall be adjusted rather than voided, if possible, so that it is enforceable
      to
      the maximum extent possible, and the validity and enforceability of the
      remaining provisions of this Agreement will not in any way be affected or
      impaired thereby.

     

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

     

    (g) The
      Company shall permit the Investor and one (1) legal counsel, designated by
      the
      Investor, to review and comment upon a Registration Statement and all amendments
      and supplements thereto at least seven (7) business days prior to their filing
      with the SEC, and not file any document in a form to which such counsel
      reasonably objects. The Company may request to shorten the Investor’s review
period
      and the Investor will, if possible, attempt to comply with the accelerated
      review period. The Company shall not submit to the SEC a request for
      acceleration of the effectiveness of a Registration Statement or file with
      the
      SEC a Registration Statement or any amendment or supplement thereto without
      the
      prior approval of such counsel or the Investor, which approval shall not be
      unreasonably withheld.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (h) At
      the
      request of the Investor, the Company shall cause to be furnished to Investor,
      on
      the date of the effectiveness of a Registration Statement, a legal opinion,
      in
      form and substance reasonably acceptable to Investor’s counsel, dated as of such
      date, of counsel representing the Company for purposes of such Registration
      Statement.

    

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

    

    (j) The
      Company shall use commercially reasonable efforts to maintain designation and
      quotation of all the Registrable Securities covered by any Registration
      Statement on the Principal Market. If, despite the Company’s best efforts, the
      Company is unsuccessful in satisfying the preceding sentence, it shall use
      commercially reasonable efforts to cause all the Registrable Securities covered
      by any Registration Statement to be listed on each other national securities
      exchange and automated quotation system, if any, on which securities of the
      same
      class or series issued by the Company are then listed, if any, if the listing
      of
      such Registrable Securities is then permitted under the rules of such exchange
      or system. The Company shall pay all fees and expenses in connection with
      satisfying its obligation under this Section 3(j).

    

    (k) The
      Company shall cooperate with the Investor to facilitate the prompt preparation
      and delivery of certificates (not bearing any restrictive legend) representing
      the Registrable Securities to be offered pursuant to a Registration Statement
      and enable such certificates to be in such denominations or amounts, as the
      case
      may be, as the Investor may reasonably request.

    

    (l) The
      Company shall provide a transfer agent for all the Registrable Securities not
      later than the effective date of the first Registration Statement filed pursuant
      hereto.

    

    (m) If
      requested by the Investor, the Company shall (i)
      as
      soon
      as reasonably practical incorporate in a prospectus supplement or post-effective
      amendment such information as such Investor reasonably determines should be
      included therein relating to the sale and distribution of Registrable
      Securities, including, without limitation, information with respect to the
      offering of the Registrable Securities to be sold in such offering; (ii)
      make
      all
      required filings of such prospectus supplement or post-effective amendment
      as
      soon as reasonably possible after being notified of the matters to be
      incorporated in such prospectus supplement or post-effective amendment; and
      (iii)
      supplement
      or make amendments to any Registration Statement if reasonably requested by
      such
      Investor.

    

    (n) The
      Company shall use commercially reasonable efforts to cause the Registrable
      Securities covered by the applicable Registration Statement to be registered
      with or approved by such other governmental agencies or authorities as may
      be
      necessary to consummate the disposition of such Registrable
      Securities.

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (p) Within
      one (1) business day after the Registration Statement which includes Registrable
      Securities is declared effective by the SEC, the Company shall deliver to the
      transfer agent for such Registrable Securities, with copies to the Investor,
      confirmation that such Registration Statement has been declared effective by
      the
      SEC.

    

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

     

    Section
      4. OBLIGATIONS OF THE INVESTOR.

    

    (a) At
      least
      five (5) calendar days prior to the first anticipated filing date of a
      Registration Statement the Company shall notify the Investor in writing of
      the
      information the Company requires from Investor if Investor elects to have any
      of
      the Registrable Securities included in such Registration Statement. It shall
      be
      a condition precedent to the obligations of the Company to complete the
      registration pursuant to this Agreement with respect to the Registrable
      Securities of the Investor and Investor shall furnish in writing to the Company
      such information regarding itself, the Registrable Securities held by it and
      the
      intended method of disposition of the Registrable Securities held by it as
      shall
      reasonably be required to effect the registration of such Registrable Securities
      and shall execute such documents in connection with such registration as the
      Company may reasonably request. Investor covenants and agrees that, in
      connection with any sale of Registrable Securities by it pursuant to a
      Registration Statement, it shall comply with the “Plan of Distribution” section
      of the current prospectus relating to such Registration Statement.

    

    (b) The
      Investor, by Investor’s acceptance of the Registrable Securities, agrees to
      cooperate with the Company as reasonably requested by the Company in connection
      with the preparation and filing of any Registration Statement hereunder, unless
      Investor has notified the Company in writing of an election to exclude all
      Investor’s Registrable Securities from such Registration Statement.

    

    (c) The
      Investor agrees that, upon receipt of written notice from the Company of the
      happening of any event of the kind described in Section 3(f) or the first
      sentence of 3(e), such Investor will immediately discontinue disposition of
      Registrable Securities pursuant to any Registration Statement(s) covering such
      Registrable Securities until Investor’s receipt of the copies of the
      supplemented or amended prospectus contemplated by Section 3(f) or the first
      sentence of 3(e)

    

    

    Section
      5. EXPENSES OF REGISTRATION.

    

    All
      expenses, other than underwriting discounts and commissions and other than
      as
      set forth in the Investment Agreement, incurred in connection with registrations
      including comments, filings or qualifications pursuant to Sections 2 and 3,
      including, without limitation, all registration, listing and qualifications
      fees, printing and accounting fees, and fees and disbursements of counsel for
      the Company or for the Investor shall be paid by the Company.

    

    

    Section
      6. INDEMNIFICATION.

    

    In
      the
      event any Registrable Securities are included in a Registration Statement under
      this Agreement:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a)
      To
      the
      fullest extent permitted by law, the Company will, and hereby does, indemnify,
      hold harmless and defend Investor who holds Registrable Securities, the
      directors, officers, partners, employees, counsel, agents, representatives
      of,
      and each Person, if any, who controls, any Investor within
      the meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended
      (the “1934 Act”) (each, an “Indemnified Person”), against any
      losses, claims, damages, liabilities, judgments, fines, penalties, charges,
      costs, attorneys’ fees, amounts paid in settlement or expenses, joint or several
      (collectively, “Claims”), incurred in investigating, preparing or
      defending any action, claim, suit, inquiry, proceeding, investigation or appeal
      taken from the foregoing by or before any court or governmental, administrative
      or other regulatory agency, body or the SEC, whether pending or threatened,
      whether or not an indemnified party is or may be a party thereto
      (“Indemnified Damages”), to which any of them may become subject insofar
      as such Claims (or actions or proceedings, whether commenced or threatened,
      in
      respect thereof) arise out of or are based upon: (i)
      any
      untrue statement or alleged untrue statement of a material fact in a
      Registration Statement or any post-effective amendment thereto or in any filing
      made in connection with the qualification of the offering under the securities
      or other “blue sky” laws of any jurisdiction in which the Investor has requested
      in writing that the Company register or qualify the Shares (“Blue
Sky
      Filing”), or the omission or alleged omission to state a material fact
      required to be stated therein or necessary to make the statements therein,
      in
      light of the circumstances under which the statements therein were made, not
      misleading, (ii)
      any
      untrue statement or alleged untrue statement of a material fact contained in
      the
      final prospectus (as amended or supplemented, if the Company files any amendment
      thereof or supplement thereto with the SEC) or the omission or alleged omission
      to state therein any material fact necessary to make the statements made
      therein, in light of the circumstances under which the statements therein were
      made, not misleading, or (iii)
      any
      violation or alleged violation by the Company of the 1933 Act, the 1934 Act,
      any
      other law, including, without limitation, any state securities law, or any
      rule
      or regulation thereunder relating to the offer or sale of the Registrable
      Securities pursuant to a Registration Statement (the matters in the foregoing
      clauses (i) through (iii) being, collectively, “Violations”). Subject to
      the restrictions set forth in Section 6(c) the Company shall reimburse the
      Investor and each such controlling person, promptly as such expenses are
      incurred and are due and payable, for any reasonable legal fees or other
      reasonable expenses incurred by them in connection with investigating or
      defending any such Claim. Notwithstanding anything to the contrary contained
      herein, the indemnification agreement contained in this Section 6(a):
(i)
      shall
      not
      apply to a Claim arising out of or based upon a Violation which is due to the
      inclusion in the Registration Statement of the information furnished to the
      Company by any Indemnified Person expressly for use in connection with the
      preparation of the Registration Statement or any such amendment thereof or
      supplement thereto; (ii)
      shall
      not
      be available to the extent such Claim is based on (a)
      a
      failure
      of the Investor to deliver or to cause to be delivered the prospectus made
      available by the Company or (b)
      the
      Indemnified Person’s use of an incorrect prospectus despite being promptly
      advised in advance by the Company in writing not to use such incorrect
      prospectus; (iii)
      any
      claims based on the manner of sale of the Registrable Securities by the Investor
      or of the Investor’s failure to register as a dealer under applicable securities
      laws; (iv)
      any
      omission of the Investor to notify the Company of any material fact that should
      be stated in the Registration Statement or prospectus relating to the Investor
      or the manner of sale; and (v)
      any
      amounts paid in settlement of any Claim if such settlement is effected without
      the prior written consent of the Company, which consent shall not be
      unreasonably withheld. Such indemnity shall remain in full force and effect
      regardless of any investigation made by or on behalf of the Indemnified Person
      and shall survive the resale of the Registrable Securities by the Investor
      pursuant to the Registration Statement.

    

    (b)
      In
      connection with any Registration Statement in which Investor is participating,
      Investor agrees to severally and jointly indemnify, hold harmless and defend,
      to
      the same extent and in the same manner as is set forth in Section 6(a), the
      Company, each of its directors, each of its officers who signs the Registration
      Statement, each Person, if any, who controls the Company within the meaning
      of
      the 1933 Act or the 1934 Act and the Company’s agents (collectively and together
      with an Indemnified Person, an “Indemnified Party”), against any Claim or
      Indemnified Damages to which any of them may become subject, under the 1933
      Act,
      the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise
      out of or are based upon any Violation, in each case to the extent, and only
      to
      the extent, that such Violation is due to the inclusion in the Registration
      Statement of the written information furnished to the Company by such Investor
      expressly for use in connection with such Registration Statement; and, subject
      to Section 6(c), such Investor will reimburse any legal or other expenses
      reasonably incurred by them in connection with investigating or defending any
      such Claim; provided,
      however, that
      the
      indemnity agreement contained in this Section 6(b) and the agreement with
      respect to contribution contained in Section 7 shall not apply to amounts paid
      in settlement of any Claim if such settlement
      is effected without the prior written consent of such Investor, which consent
      shall not be unreasonably withheld; provided, further, however, that the
      Investor shall be liable under this Section 6(b) for only that amount of a
      Claim
      or Indemnified Damages as does not exceed the net proceeds to such Investor
      as a
      result of the sale of Registrable Securities pursuant to such Registration
      Statement. Such indemnity shall remain in full force and effect regardless
      of
      any investigation made by or on behalf of such Indemnified Party and shall
      survive the resale of the Registrable Securities by the Investor pursuant to
      the
      Registration Statement. Notwithstanding anything to the contrary contained
      herein, the indemnification agreement contained in this Section 6(b) with
      respect to any preliminary prospectus shall not inure to the benefit of any
      Indemnified Party if the untrue statement or omission of material fact contained
      in the preliminary prospectus were corrected on a timely basis in the
      prospectus, as then amended or supplemented. This indemnification provision
      shall apply separately to each Investor and liability hereunder shall not be
      joint and several.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

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

     

    Section
      7. CONTRIBUTION.

     

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Section
      8. REPORTS
      UNDER THE 1934 ACT.

    

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

    

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

    

    (b) file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the 1933 Act and the 1934 Act so long as the Company remains
      subject to such requirements (it being understood that nothing herein shall
      limit the Company’s obligations under Section 5(c) of the Investment Agreement)
      and the filing of such reports and other documents is required for the
      applicable provisions of Rule 144; and

    

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

    

    

    Section
      9.  NO ASSIGNMENT OF REGISTRATION RIGHTS. 

     

    The
      rights under this Agreement shall not be assignable. 

     

    Section
      10.  AMENDMENT OF REGISTRATION RIGHTS.

    

    Provisions
      of this Agreement may be amended only with the written consent of the Company
      and Investor.

    

    Section
      11.  MISCELLANEOUS.

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    If
      to the
      Company:

     

    Seawright
      Holdings, Inc.

    600
      Cameron Street 

    Alexandria,
      VA 22314

    Telephone:703-340-1629

    Facsimile:703-340-1642

    

    

    If
      to the
      Investor:

    

    Dutchess
      Private Equities Fund, LP

    50
      Commonwealth Ave, Suite 

    Boston,
      MA 02116

    Telephone:617-301-4700

    Facsimile:617-249-0947

    

    Each
      party shall provide five (5) business days prior notice to the other party
      of
      any change in address, phone number or facsimile number.

    

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

    

    (c) The
      laws
      of the Commonwealth of Massachusetts shall govern all issues arising from or
      related to this Agreement without regard to the principles of conflict of laws.
      Each party hereby irrevocably submits to the exclusive jurisdiction of the
      state
      and federal courts sitting in the City of Boston, County of Suffolk, for the
      adjudication of any dispute hereunder or in connection herewith or with any
      transaction contemplated hereby or discussed herein, and hereby irrevocably
      waives, and agrees not to assert in any suit, action or proceeding, any claim
      that it is not personally subject to the jurisdiction of any such court, that
      such suit, action or proceeding is brought in an inconvenient forum or that
      the
      venue of such suit, action or proceeding is improper. Each party hereby
      irrevocably waives personal service of process and consents to process being
      served in any such suit, action or proceeding by mailing a copy thereof to
      such
      party at the address for such notices to it under this Agreement and agrees
      that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing contained herein shall be deemed to limit in any way any right
      to serve process in any manner permitted by law. If any provision of this
      Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
      or unenforceability shall not affect the validity or enforceability of the
      remainder of this Agreement in that jurisdiction or the validity or
      enforceability of any provision of this Agreement in any other
      jurisdiction.

    

    (d) This
      Agreement and the Transaction Documents constitute the entire agreement among
      the parties hereto with respect to the subject matter hereof and thereof. There
      are no restrictions, promises, warranties or undertakings, other than those
      set
      forth or referred to herein and therein.

    

    (e) This
      Agreement and the Transaction Documents supersede all prior agreements and
      understandings among the parties hereto with respect to the subject matter
      hereof and thereof.

    

    (f) The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof. Whenever required by the context
      of this Agreement, the singular shall include the plural and masculine shall
      include the feminine. This Agreement shall not be construed as if it had been
      prepared by one of the parties, but rather as if all the parties had prepared
      the same.

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    *
      * *

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SIGNATURE
      PAGE OF REGISTRATION RIGHTS AGREEMENT

     

    Your
      signature on this Signature Page evidences your agreement to be bound by the
      terms and conditions of the Investment Agreement and the Registration Rights
      Agreement as of the date first
      written
      above.

     

    The
      undersigned signatory hereby certifies
      that
      he
      has read and understands the Registration Rights Agreement, and the
      representations made by the undersigned in this Registration Rights Agreement
      are true and accurate, and agrees to be bound by its terms.

     

    DUTCHESS
      PRIVATE EQUITIES FUND, L.P., 

    BY
      ITS
      GENERAL PARTNER, 

    DUTCHESS
      CAPITAL MANAGEMENT, LLC

     

     

    By:/s/
      Douglas H. Leighton

      
        

      
Douglas
      H. Leighton, Managing Member

     

    SEAWRIGHT
      HOLDINGS, INC.

     

    
       

      By:
        /s/
        Joel Sens

        
          

        

      

      Joel
        Sens, Chief Executive Officer

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