Document:

SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (together with all amendments, supplements,
changes, schedules and exhibits hereto, collectively, this “Agreement”)
is dated as of January 10, 2007 by and among Janel World Trade, Inc., a Nevada
corporation with its principal place of business at 150-14 132nd Avenue,
Jamaica, NY 11434 (the “Company”),
and the persons set forth on Schedule
1 annexed hereto (each a “Purchaser,”
and, collectively, the “Purchasers”).

     

    WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to Section 4(2) of
the Securities Act of 1933, as amended (the “Securities
Act”) and Rule 506 promulgated thereunder, the Company desires to issue
and sell to Purchasers, and Purchasers desire to purchase from the Company,
1,000,000 shares of the Company’s 3% Series A Convertible Preferred Stock at a
purchase price of $0.50 per share ($500,000 in the aggregate).

     

    NOW, THEREFORE, in
consideration of the mutual covenants contained in this Agreement, and for other
good and valuable consideration the receipt and adequacy of which are hereby
acknowledged, the Company and each of the Purchasers agree as
follows:

     

    ARTICLE
I.

    DEFINITIONS

     

    1.1 Definitions. In
addition to the terms defined elsewhere in this Agreement the following
terms have the meanings indicated in this Section 1.1:

     

    “Action”
shall have the meaning ascribed to such term in Section 3.1(j).

     

    “Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144.

    

    “Board”
shall mean the Company’s Board of Directors.

     

    “Business
Day” means any day except Saturday, Sunday, any day which shall be a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

     

    “Certificate
of Designation” means the Company’s Certificate of Designation of
Preferences, Rights and Limitations of its Series A Convertible Preferred
Stock.

    

    “Closing”
means the closing of the purchase and sale of the Shares pursuant to Section 2.1.

     

    “Closing
Date” means the Business Day when all of the Transaction Documents
needing to be executed have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’
obligations to pay the Purchase Price and (ii) the Company’s obligations to
deliver the Shares have been satisfied or waived.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    “Common
Stock” means the common stock of the Company, par value $.001 per share,
and any other class of securities into which such securities may hereafter be
reclassified or changed into.

     

    “Company
Counsel” means Scheichet & Davis, P.C., the Company’s legal counsel,
767 Third Avenue, 24th Floor,
New York, NY 10017.

    

    “Director”
shall mean a member of the Company’s Board of Directors.

      

    “Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.

     

    “Effective
Date” means the date that the Registration Statement filed by the Company
pursuant to the Registration Rights Agreement is first declared effective by the
SEC.

     

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

    

    “Exhibits”
shall mean the following exhibits attached hereto and made a part of this
Agreement:

    

    Exhibit A
–         Certificate of
Designation

    Exhibit B
-          Registration Rights
Agreement

    Exhibit C
–         Legal Opinion of Company
Counsel

    

    “GAAP”
shall have the meaning ascribed to such term in Section 3.1(i).

    

     “Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(n).

     

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

     

    “Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

     

    “Material
Permits” shall have the meaning ascribed to such term in Section 3.1(l).

    

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

      

    "Purchase
Price" means $0.50 per Share ($500,000 in the aggregate for all 1,000,000
Shares) in United States dollars and in immediately available
funds.

    
      
         

      

      
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    “Registration
Rights Agreement” means the Registration Rights Agreement, dated the date
hereof, among the Company and the Purchasers, in the form of Exhibit B attached
hereto.

     

    “Registration
Statement” means a registration statement meeting the requirements set
forth in the Registration Rights Agreement and covering the resale of the Shares
the by Purchasers as provided for in the Registration Rights
Agreement.

     

    “Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

     

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

     

    “SEC”
means the Securities and Exchange Commission.

    

    “SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).

     

    “Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated hereunder.

    

    "Shares"
means the shares of the Company’s 3% Series A Convertible Preferred Stock being
issued and sold by the Company to the Purchasers at the Closing, pursuant to
this Agreement..

     

     “Subsidiaries”
means The Janel Group of Georgia, Inc., The Janel Group of Illinois, Inc. and
the Janel Group of Los Angeles, Inc.

     

    “Termination
Date” shall mean the earlier of (i) the sale of all of the Shares; (ii)
mutual written termination of this Agreement by the Company and the Purchasers,
and (iii) January 31, 2007, subject to a 30-day extension.

    

    “Transaction
Documents” means this Agreement, the Certificate of Designation, the
certificates for the Shares, certificates for the Underlying Shares and the
Registration Rights Agreement.

    

    “Underlying
Shares” means the shares of Common Stock issuable upon conversion of the
Shares.

     

    ARTICLE
II.

    PURCHASE
AND SALE

     

    2.1           Closing. At the
Closing, upon the terms and subject to the conditions set forth herein,
Purchasers shall purchase and the Company shall issue and sell to the Purchasers
1,000,000 Shares for the Purchase Price ($500,000 in the
aggregate).  The Company may hold the Closing at any time after the
conditions to Closing as specified herein have been satisfied.  The
Closing (the “Closing”)
shall occur on or before the Termination Date at the offices of counsel to the
Purchasers at 12:00 p.m. or such other time and/or location as the parties shall
mutually agree.

    
      
         

      

      
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    2.2           Deliveries.

     

    (a) At
the Closing, the Company shall deliver or cause to be delivered to Purchasers
the following:

     

    (i) this
Agreement duly executed by the Company;

     

    (ii) the
duly executed Certificate of Designation with official evidence from the
Secretary of State of the State of Nevada (the “Secretary”),
that such Certificate of Designation has been filed with the
Secretary;

    

    (iii) a
legal opinion of Company Counsel, in the form of Exhibit C attached
hereto;

     

    (iv)
stock certificates for the Purchasers representing the Shares so purchased by
such Purchasers, registered in the name of such Purchasers;

     

    (v) the
Registration Rights Agreement duly executed by the Company;

    

    (vi) an
Officer’s Certificate in a form reasonably acceptable to
Purchasers;

    

    (vii) a
Secretary’s Certificate in a form reasonably acceptable to Purchasers, with good
standing certificates of the Company and each Subsidiary; and

    

    (viii) Board of Director Resolutions
authorizing the Transaction Documents and all transactions contemplated
hereunder and thereunder.

     

    (b) At
the Closing, Purchasers shall deliver or cause to be delivered to the Company
the following:

     

    (i) this
Agreement duly executed by each Purchaser;

     

    (ii) the
Purchase Price, in United States dollars, by wire or check of the Purchasers
(less the fees and expenses provided elsewhere  herein);
and

     

    (iii) the
Registration Rights Agreement duly executed by Purchasers.

    

    (iv) an
LLC Officer’s Certificate for each Purchaser in a form reasonably acceptable to
Company; and

    

    (v) an
LLC Secretary’s Certificate for each Purchaser in a form reasonably acceptable
to Company, with good standing certificates of each of the
Purchasers.

    
      
         

      

      
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    2.3 Closing
Conditions.

     

    (a) The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:

     

    (i) the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Purchasers contained herein;

     

    (ii) all
obligations, covenants and agreements of the Purchasers required to be performed
at or prior to the Closing Date shall have been performed; and

     

    (iii) the
delivery by the Purchasers of the items set forth in Section 2.2(b)
of this Agreement.

     

    (b) The
respective obligations of the Purchasers hereunder in connection with each
Closing are subject to the following conditions being met:

     

    (i) the
accuracy in all material respects on the Closing Date of the representations and
warranties of the Company contained herein;

    

    (ii) all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed;

    

    (iii)  the
delivery by the Company of the items set forth in Section 2.2(a)
of this Agreement; and

    

    (iv)
there shall have been no Material Adverse Effect with respect to the Company
since the date hereof.

    

    ARTICLE
III.

    REPRESENTATIONS
AND WARRANTIES

     

    3.1 Representations and
Warranties of the Company. The Company hereby makes the representations
and warranties set forth below to Purchasers.

     

    (a) Subsidiaries. The
Company owns, directly or indirectly, all of the capital stock or other equity
interests of each Subsidiary free and clear of any and all Liens, and all the
issued and outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities.  The Company has no
other direct or indirect subsidiaries other than the
Subsidiaries.

    
      
         

      

      
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    (b) Organization and
Qualification.

    

    (i)           The
Company is duly incorporated, validly existing and in good standing under the
laws of the state of Nevada, with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted. The Company is duly qualified to conduct business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not have a material adverse effect on the results of
operations, assets, business or condition (financial or otherwise) of the
Company and its Subsidiaries (a “Material
Adverse Effect”).

    

    (ii)           Each
of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Each of the Subsidiaries is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, would not have a
Material Adverse Effect.

     

    (c) Authorization;
Enforcement. The Company has the requisite corporate power and authority
to enter into and to consummate the transactions contemplated by each of the
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of each of the Transaction Documents by
the Company and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, its Board or its
stockholders in connection therewith. Each Transaction Document has been (or
upon delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof and thereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be limited
by applicable law.

     

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

    
      
         

      

      
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    (e) Filings, Consents and
Approvals. The Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) the filing with the SEC of the Registration Statement, (ii) the filing
of the Certificate of Designation with the Secretary of State of Nevada and
(iii) the filing of Form D with the SEC and such filings as are required to
be made under applicable state securities laws (collectively, the “Required
Approvals”).

     

    (f) Issuance of
Securities. The Shares and Underlying Shares are duly authorized and,
when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents (including restrictions under
federal and state securities laws).

     

    (g) Capitalization. The
capitalization (including warrants, options, exchangeable and/or convertible
securities) of the Company as of September 30, 2006 is as set forth in the Form
10-K Report filed by the Company with the SEC on December 29, 2006, which
remains true and correct as of and through the Closing Date. The Company has not
issued any capital stock since its most recently filed periodic report under the
Exchange Act except as set forth on Schedule
3.1(g).  No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents.  All of the
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable.

    

    (h) SEC Reports. The
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the one year
preceding the date hereof (or such shorter period as the Company was required by
law or regulation to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC
Reports”). As of their respective dates, the SEC Reports (including the
financial statements, exhibits and schedules thereto) complied in all material
respects with the requirements of the Securities Act and the Exchange Act and
the rules and regulations of the SEC promulgated thereunder, as applicable and
did not at the time they were filed (or if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing) contain
any untrue statement of material fact or omit to state a material fact required
to be stated therein or necessary in order to made the statements therein, in
light of the circumstances they were made, not misleading.

    
      
         

      

      
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    Each of
the financial statements (including, in each case, any related notes thereto)
contained in the SEC Reports (the "Company
Financials"), including any SEC Reports filed after the date hereof until
the Closing, as of their respective dates, (i) complied as to form in all
material respects with the published rules and regulations of the SEC with
respect thereto, (ii) was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited interim financial statements, as
may be permitted by the SEC on Form 10-Q under the Exchange Act) and (iii)
fairly presented the financial position of the Company at the respective dates
thereof and the consolidated results of its operations and cash flows for the
periods indicated, except that the unaudited interim financial statements were
or are subject to normal and recurring year-end adjustments which were not, or
are not expected to be, material in amount. The balance sheet of the Company as
of September 30, 2006 is hereinafter referred to as the "Company
Balance Sheet."  Except as disclosed in the Company Financials,
the Company does not have any liabilities (absolute, accrued, contingent or
otherwise) of a nature required to be disclosed on a balance sheet or in the
related notes to the consolidated financial statements prepared in accordance
with GAAP which are, individually or in the aggregate, material to the business,
results of operations or financial condition of the Company, except liabilities
(i) provided for in the Company Balance Sheet, or (ii) incurred since the date
of the Company Balance Sheet in the ordinary course of business consistent with
past practices and which would not reasonably be expected to have a Material
Adverse Effect.

    

    (i) Material Changes.
Since the date of the Company Balance Sheet, except as specifically disclosed in
or contemplated by a subsequent SEC Report, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and
accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP United States generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”)
or disclosed in filings made with the SEC, (iii) the Company has not declared or
made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock, (iv) the Company has not issued any equity securities to
any officer, director or Affiliate except as set forth on Schedule
3.1(i) and (v) the Company has not made any changes to its
accounting principals, practices or methods, its disclosure controls and
procedures or its internal control over financial reporting. The Company does
not have pending before the SEC any request for confidential treatment of
information.

    

    (j) Litigation. Except
as set forth on Schedule 3.1(j),
there is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) (collectively,
an “Action”)
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Shares or
(ii) would, if there were an unfavorable decision, result in a Material
Adverse Effect.

      

    (k) Compliance. Neither
the Company nor any Subsidiary (i) is in default under or in violation of
(and no event has occurred that has not been waived that, with notice or lapse
of time or both, would result in a default by the Company or any Subsidiary
under), any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound), (ii) is in violation of any order of any court, arbitrator or
governmental body, or (iii) is in violation of any statute, rule or regulation
of any governmental authority, except in each case as would not result in a
Material Adverse Effect.

    
      
         

      

      
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    (l) Regulatory Permits.
The Company and each Subsidiary possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as described in the
SEC Reports, except where the failure to possess such permits would not result
in a Material Adverse Effect (“Material
Permits”). 

    

    (m) Title to Assets. The
Company and each Subsidiary have good and marketable title in fee simple to all
real property (if any) owned by them that is material to the business of the
Company and the Subsidiary and good and marketable title in all personal
property owned by them that is material to the business of the Company and each
Subsidiary, in each case free and clear of all Liens, except for Liens as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
each Subsidiary and Liens for the payment of federal, state or other taxes, the
payment of which is neither delinquent nor subject to penalties.

     

    (n) Patents and
Trademarks. The Company and each Subsidiary have, or have rights to use,
all patents, patent applications, trademarks, trademark applications, service
marks, trade names, trade secrets, inventions, copyrights, licenses and other
intellectual property rights and similar rights necessary or material for use in
connection with their respective businesses as described in the SEC Reports and
which the failure to so would not result in a Material Adverse Effect
(collectively, the “Intellectual
Property Rights”). Neither the Company nor any Subsidiary has received a
notice (written or otherwise) that the Intellectual Property Rights used by the
Company or any Subsidiary violates or infringes upon the rights of any Person.
To the best knowledge of the Company, all such Intellectual Property Rights are
enforceable and there is no existing infringement by another Person of any of
the Intellectual Property Rights. The Company and its Subsidiaries each have
used their respective best efforts using security measures to protect the
secrecy, confidentiality and value of all of their Intellectual Property Rights
and Intellectual Property, except where failure to do so would not have a
Material Adverse Effect.

     

    (o) Insurance. The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as it believes
are prudent and customary in the businesses in which the Company and the
Subsidiaries are engaged, including, but not limited to, directors and officers
insurance coverage. Neither the Company nor any Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in
cost.

     

    (p) Private Placement.
Assuming the accuracy of the Purchaser’s representations and warranties set
forth in Section 3.2, no
registration under the Securities Act is required for the offer and sale of the
Shares by the Company to the Purchaser as contemplated hereby.

    
      
         

      

      
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    (q) No General
Solicitation. Neither the Company nor any person acting on behalf of the
Company has offered or sold any of the Shares by any form of general
solicitation or general advertising. The Company has offered the Shares for sale
only to the Purchaser, an “accredited investor” within the meaning of Rule 501
under the Securities Act.

     

    3.2 Representations and
Warranties of the Purchaser. The Purchasers each hereby represent and
warrant as of the date hereof and as of the Closing Date to the Company as
follows:

     

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

    

    (b) Own Account.
Purchaser understands that the Shares are “restricted securities” and have not
been registered under the Securities Act or any applicable state securities law,
and is acquiring the Shares as principal for its own account and not with a view
to or for distributing or reselling such Shares or any part thereof in violation
of the Securities Act or any applicable state securities law, has no present
intention of distributing any of such Shares in violation of the Securities Act
or any applicable state securities law, and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding
the distribution of such Shares (this representation and warranty not limiting
Purchaser’s right to sell the Shares pursuant to the Registration Statement or
otherwise in compliance with applicable federal and state securities laws) in
violation of the Securities Act or any applicable state securities
law.  Purchaser is acquiring the Shares hereunder in the ordinary
course of its business.

    

    (c) Purchaser Status. At
the time such Purchaser was offered the Shares, it was, and at the date hereof
it is, an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3),
(a)(7) or (a)(8) under the Securities Act.

     

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

    
      
         

      

      
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    ARTICLE
IV.

    OTHER
AGREEMENTS OF THE PARTIES

     

    4.1 Transfer
Restrictions.

    

    (a) The
Shares and the Conversion Shares (collectively, the “Securities”)
may only be disposed of in compliance with state and federal securities laws. In
connection with any transfer of Securities other than pursuant to an effective
registration statement or Rule 144, or to the Company or to an affiliate of
Purchasers, the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company (the cost of which will be borne by the transferor),
the form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act. As a condition of transfer, any
such transferee shall agree in writing to be bound by the terms of this
Agreement and shall have the rights of a Purchaser under this Agreement and the
Registration Rights Agreement.

     

    (b) The
Purchasers agree to the imprinting, so long as is required by this Section 4.1, of
a legend on any of the Securities in the following form:

     

    THESE
SECURITIES  HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION NOR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    (c)
Certificates evidencing the Securities shall not be required to bear any legend
(including the legend set forth in Section 4.1(b)
hereof): (i) while a registration statement (including the Registration
Statement) covering the resale of such Securities is effective under the
Securities Act, or (ii) following any sale of such Securities pursuant to
Rule 144, or (iii) if such Securities are eligible for sale under Rule
144(k). If requested by a Person holding the Securities, the Company shall take
action reasonably requested by the Purchasers (including, but not limited to,
causing Company counsel to issue a legal opinion to the Company’s transfer
agent) after the Effective Date if required by the Company’s transfer agent to
effect the removal of the legend hereunder, provided that the Person requesting
the removal of such legend shall have provided to such counsel such documents as
it may reasonably request and are normally provided in accordance with industry
standards.

    

    (d)  Purchasers
agree that the removal of the restrictive legend from certificates representing
Securities as set forth in this Section 4.1 is
predicated upon the Company’s reliance that the Purchaser will sell any
Securities pursuant to either the registration requirements of the Securities
Act, including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a Registration Statement,
they will be sold in compliance with the plan of distribution set forth
therein.

    

    4.2           Board and Stockholder
Meetings.  The Company agrees that the Board shall meet at
least quarterly and it shall hold an annual meeting of its stockholders on an
annual basis.

    

    4.3           SEC Filings. As long
as Shares are outstanding, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act.

    

    4.4           Lock-up.  Without
the express prior written consent of the Purchasers owning no less than a
majority of the Stated Value (as defined in the Certificate of Designation) of
the then issued and outstanding Shares, none of the Company’s or the
Subsidiary’s current or future respective officers or directors will offer,
sell, contract to sell or grant any option to purchase or otherwise dispose of,
directly or indirectly, conduct or announce the offering of, any shares of
capital stock of the Company, or any securities convertible into, or
exchangeable for or containing rights to purchase, shares of capital stock of
the Company, during the period beginning on the date hereof and ending nine (9)
months after the Effective Date (the “Lock-up
Period”).

     

    4.5           Use of Proceeds. The
Company shall use the net proceeds from the sale of the Shares for its general
working capital purposes.

    

    4.6           Information
Rights.  For so long as any Shares are issued and outstanding,
Purchasers and/or their respective representatives will be granted reasonable
access to Company facilities and personnel during normal business hours,
provided however that such access does not result in the disruption of normal
business operations, and with reasonable advance notification.  The
Company will deliver to each Purchaser annual, quarterly financial statements
and copies of other financial and other documents and/or information reasonably
requested by each Purchaser to monitor the Company and Purchasers’ investment in
the Shares.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

                   
4.7         Form D; Blue Sky
Filings. The Company agrees to timely file a Form D with respect to the
Shares as required under Regulation D and to provide a copy thereof, promptly
upon request of any Purchaser. The Company shall take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for, or
to qualify the Shares for, sale to the Purchaser at the Closing under applicable
securities or “Blue Sky” laws of the states of the United States, and shall
provide evidence of such actions promptly upon request of any
Purchaser.

     

    4.8           Public Disclosure.
Except for the timely filing of reports required by applicable SEC rules and
regulations, the Company shall not issue any press release or otherwise make any
public statement with respect to this Agreement and will not issue any such
press release or make any such public statement without the prior consent of
Purchaser, which shall not be unreasonably withheld.

     

    ARTICLE
V.

    MISCELLANEOUS

     

    5.1           Termination. On
the Termination Date, this Agreement shall be automatically
terminated.

     

    5.2           Fees and Expenses.
Other than as set forth in Section 5.14 hereof,
this Section
5.2 and in the Registration Rights Agreement, each party shall pay all of
its own fees and expenses in connection with the sale of the
Shares.  The parties acknowledge that the Company shall pay (which
amount shall be automatically deducted from the Purchase Price and paid directly
to the Purchasers’ legal counsel) legal fees of up to $10,000 (based upon time
and charges including all actual and accountable expenses) in connection with
such legal representation of Purchasers in the Offering.  The Company
shall pay all transfer agent fees, stamp taxes and other taxes and duties levied
in connection with the delivery of the Shares to the Purchasers.

    

    5.3           Entire Agreement. The
Transaction Documents together with the exhibits and schedules hereto and
thereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.

     

    5.4           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission (accompanied by
confirmation of receipt of transmission), if such notice or communication is
delivered via facsimile at the facsimile number or via e-mail at the e-mail
address respectively set forth on the signature pages attached hereto prior to
5:30 p.m. (New York City time) on a Business Day, (b) the next Business Day
after the date of transmission (accompanied by confirmation of receipt of
transmission), if such notice or communication is delivered via facsimile at the
facsimile number or via e-mail at the e-mail address respectively set forth on
the signature pages attached hereto on a day that is not a Business Day or later
than 5:30 p.m. (New York City time) on any Business Day, (c) the 2nd
Business Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the
party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached
hereto.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

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

     

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

     

    5.7           Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of
the parties and their successors and permitted assigns. The Company may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of Purchaser (other than by merger). Purchaser may assign any or
all of its rights under this Agreement to any Person to whom Purchaser assigns
or transfers any Shares, provided such transferee agrees in writing to be bound,
with respect to the transferred Shares, by the provisions of this Agreement and
the Transaction Documents that apply to the Purchaser.

     

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

    

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

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    5.10           Survival. The
representations, warranties, covenants and other agreements contained herein
shall survive the Closing and the delivery, exercise and/or conversion of the
Shares, as applicable for the applicable statue of limitations.

     

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

     

    5.12           Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

    

    5.13           Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto.

    

    5.14           Advisory
Fee.  The Company shall pay to the Purchasers (and/or their
designees) an advisory fee of $2,000 per month for twelve (12) consecutive
months, $24,000 in the aggregate (the “Advisory
Fee”), on the first day of each month, with the first $2,000 payment
being due and payable March 1, 2007.

     

    (Signature
Pages Follow)

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

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

    

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                JANEL
      WORLD TRADE, LTD.

                              	 
      	
                                Address for Notice:

                              
	 
      	 
      	 
      	 
      	 
      
	

                                By:

                              	 	/s/
      James N. Jannello	 	 150-14
      132nd
      Avenue
	
                                 

                              	 
      	
                                Name:
      James N. Jannello

                                Title:
      Executive Vice President and Chief 

                                Executive
      Officer

                              	 
      	
                                Jamaica,
      NY 11434

                                Fax:
      718 527-1689

                                Email:
      jjannello@janelgroup.net

                              

                      

                    

                  

                

              

            

          

        

      

    

    

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

    

    William
J. Davis, Esq.

    Scheichet
& Davis, P.C.

    767 Third
Avenue – 24th
Floor

    New York,
NY 10017

    

    Fax: 212
371-7634

    Email:
william@scheichetdavis.com

    

    [SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    [PURCHASER
SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

     

    IN
WITNESS WHEREOF, the undersigned has caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          Sands
      Brothers Venture Capital I, LLC

                                        	 
      	
                                          Aggregate
      Purchase Price:  $75,000.00

                                        
	
                                          By:
      /s/ Scott
      Baily

                                        	 
      	
                                          Shares:
      150,000

                                        
	
                                          Name:
      Scott Baily

                                        	 
      	 
      
	
                                          Title:
      Chief Operating Officer

                                        	 
      	 
      
	
                                          Address:
      90 Park Avenue, 31st Floor

                                        	 
      	 
      
	
                                          New
      York, NY 10016

                                        	 
      	 
      
	
                                          Email:
      sbaily@sandsbros.com

                                        	 
      	 
      
	 
      	 
      	 
      
	
                                          Sands
      Brothers Venture Capital II, LLC

                                        	 
      	
                                          Aggregate
      Purchase Price:  $75,000.00

                                        
	
                                          By:
      /s/ Scott
      Baily

                                        	 
      	
                                          Shares:
      150,000

                                        
	
                                          Name:
      Scott Baily

                                        	 
      	 
      
	
                                          Title:
      Chief Operating Officer

                                        	 
      	 
      
	
                                          Address:
      90 Park Avenue, 31st Floor

                                        	 
      	 
      
	
                                          New
      York, NY 10016

                                        	 
      	 
      
	
                                          Email:
      sbaily@sandsbros.com

                                        	 
      	 
      
	 
      	 
      	 
      
	
                                          Sands
      Brothers Venture Capital III, LLC

                                        	 
      	
                                          Aggregate
      Purchase Price:  $225,000.00

                                        
	
                                          By:
      /s/ Scott
      Baily

                                        	 
      	
                                          Shares:
      450,000

                                        
	
                                          Name:
      Scott Baily

                                        	 
      	 
      
	
                                          Title:
      Chief Operating Officer

                                        	 
      	 
      
	
                                          Address:
      90 Park Avenue, 31st Floor

                                        	 
      	 
      
	
                                          New
      York, NY 10016

                                        	 
      	 
      
	
                                          Email:
      sbaily@sandsbros.com

                                        	 
      	 
      
	 
      	 
      	 
      
	
                                          Sands
      Brothers Venture Capital IV, LLC

                                        	 
      	
                                          Aggregate
      Purchase Price:  $125,000.00

                                        
	
                                          By:
      /s/ Scott
      Baily

                                        	 
      	
                                          Shares:
      250,000

                                        
	
                                          Name:
      Scott Baily

                                        	 
      	 
      
	
                                          Title:
      Chief Operating Officer

                                        	 
      	 
      
	
                                          Address:
      90 Park Avenue, 31st Floor

                                        	 
      	 
      
	
                                          New
      York, NY 10016

                                        	 
      	 
      
	
                                          Email:
      sbaily@sandsbros.com

                                        	 
      	 
      

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    SCHEDULE
1

    

    
      
        
          
            	 
      	
                    Name of Purchaser

                  	 	
                    No. of Shares Being Purchased

                  	 	 	
                    Purchase Price

                  	 
	 
      	 
      	 	 	 	 	 	 
	
                    1.  

                  	
                    Sands
      Brothers Venture Capital LLC

                  	 	 	150,000	 	 	$	75,000	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                    2.  

                  	
                    Sands
      Brothers Venture Capital II LLC

                  	 	 	150,000	 	 	$	75,000	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                    3.  

                  	
                    Sands
      Brothers Venture Capital III LLC

                  	 	 	450,000	 	 	$	225,000	 
	 
      	 
      	 	 	 	 	 	 	 	 
	
                    4.  

                  	
                    Sands
      Brothers Venture Capital IV LLC

                  	 	 	250,000	 	 	$	125,000	 
	 
      	 
      	 	 	 	 	 	 	 	 
	 
      	
                    Totals

                  	 	 	1,000,000	 	 	$	500,000	 

          

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    SCHEDULE
3.1(g)

    

    Capitalization

    

    The
Company has previously committed to issue an aggregate of 950,000 shares to
three employees in the event of the Company’s securities being listed on the AIM
or a domestic exchange, and to execute a transaction by which James N. Jannello
will cash-out a portion of his shareholdings in the Company.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

    SCHEDULE
3.1(j)

    

    LitigationREGISTRATION
RIGHTS AGREEMENT

     

    This
Registration Rights Agreement (this “Agreement”)
is made and entered into as of January 10, 2007, by and among Janel World Trade,
Ltd., a Nevada corporation (the “Company”)
and each Holder of shares of Series A Convertible Preferred Stock (the “A
Shares”) of the Company pursuant to a Securities Purchase Agreement,
dated as of the date hereof, by and between each Investor and the Company (the
“SPA”).

     

    The
Underlying Shares shall have the registration rights as set forth
herein.

     

    The
Company and the Investors hereby agree as follows:

     

    1.           Definitions.  Capitalized
terms used and not otherwise defined herein that are defined in the Term Sheet
shall have the meanings given such terms in the Term Sheet. As used in this
Agreement, the following terms shall have the following meanings:

     

    “Certificate
of Designation” means the Certificate of Designation for the A
Shares.

     

    “Closing
Date” means the date of the closing of the Financing.

     

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

     

    “Common
Stock” means the Company’s common stock par value $0.001 per
share.

     

    “Conversion
Shares” means all shares of
Common Stock issuable upon conversion of the A Shares.

     

    “Dividend
Shares” means any shares of Common Stock issuable as dividend payments in
respect of the A Shares as provided in the Certificate of Designation (including
the Conversion Shares if dividend payments are made in A Shares).

     

    “Effectiveness
Period” shall mean from the date hereof until the earlier to occur of the
date when all Registrable Securities covered by a Registration Statement either
(a) have been sold pursuant to a Registration Statement or an exemption from the
registration requirements of the Securities Act, and (b) pursuant to a written
opinion of Company counsel acceptable to the Company’s transfer agent and the
legal counsel for the Holders, may be sold pursuant to Rule 144(k).

     

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

     

    “Holder”
or “Holders”
means the holder or holders, as the case may be, from time to time of
Registrable Securities (including any permitted assignee).

     

    “Indemnified
Party” shall have the meaning set forth in Section 5(c).

     

    “Indemnifying
Party” shall have the meaning set forth in Section 5(c).

     

    “Investor”
shall mean each purchaser of A Shares pursuant to the SPA.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Investors”
shall mean, collectively, each Investor.

     

    “Losses”
shall have the meaning set forth in Section 5(a).

     

    “Mandatory
Effectiveness Date” means, with respect to the Mandatory Registration
Statement required to be filed pursuant to Section 2(a) of this
Agreement.

     

    “Mandatory
Filing Date” shall
have the meaning set forth in Section 2(a).

     

    “Mandatory
Registration Date” shall have the meaning set forth in Section 2(a).

     

    “Mandatory
Registration Statement” shall have the meaning set forth in Section 2(a).

     

    “Offering”
means the sale by the Company of the A Shares pursuant to the SPA.

     

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

     

     “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

     

    “Prospectus”
means the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by any prospectus supplement, with respect to the terms of the offering of any
portion of the Conversion Registrable Securities or Exchange Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

     

    “Registrable
Securities” means (i) the Underlying Shares, (ii) Dividend Shares; and
(iii) any shares of Common Stock issued or issuable upon any stock split,
dividend or other distribution, recapitalization, anti-dilution adjustment or
similar event with respect to the foregoing or in connection with any provisions
of the Certificate of Designation.

     

    “Registration
Statement” means any registration statement required to be filed
hereunder (which, at the Company's option, may be an existing registration
statement of the Company previously filed with the Commission, but not declared
effective), including (in each case) the Prospectus, amendments and supplements
to the registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in the registration
statement.

     

    “Rule 415”
means Rule 415 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar
Rule or regulation hereafter adopted by the Commission having substantially
the same effect as such Rule.

     

    
      
        
        

      

      
        - 2
-

        
          

        

      

      
        
        

      

    

     

    “Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar
Rule or regulation hereafter adopted by the Commission having substantially
the same effect as such Rule.

     

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

     

    “Stated
Value” shall have the meaning set forth in the Certificate of
Designation.

     

    “Trading
Day” means (a) a day on which the Common Stock is traded on a
Trading Market, or (b) if the Common Stock is not quoted on a Trading
Market, a day on which the Common Stock is quoted in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting price);
provided, that in the event that the Common Stock is not listed or quoted as set
forth in (a), and (b) hereof, then Trading Day shall mean a Business
Day;

     

    “Trading
Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the OTC Bulletin
Board, the American Stock Exchange, the New York Stock Exchange, the Nasdaq
National Market or the Nasdaq SmallCap Market.

     

    
      2.           Registration.

    

     

    (a)           Mandatory
Registration.  On the date nine (9) months from the date of the
initial closing of the Offering (the “Mandatory
Registration Date”), the Company shall file with the Commission a
Registration Statement (the “Mandatory
Registration Statement”), covering the resale of all of the Registrable
Securities for an offering to be made on a continuous basis pursuant to
Rule 415. The Mandatory Registration Statement required hereunder shall be
on Form S-1, Form SB-2 or Form S-3 (except if the Company is not then eligible
to register for resale the Registrable Securities on Form S-1, Form SB-2 or Form
S-3, in which case the Mandatory Registration Statement shall be on another
appropriate form in accordance herewith). The Mandatory Registration Statement
required hereunder shall contain the Plan of Distribution, attached hereto as
Annex
A (which may be modified to respond to comments, if any, received from
the Commission staff). The Company shall cause the Mandatory Registration
Statement to become effective, no later than ninety (90) days after the
Mandatory Filing Date (the “”Mandatory
Effectiveness Date”), and remain effective as provided herein. The
Company shall use its best efforts to cause the Mandatory Registration Statement
to be declared effective under the Securities Act and shall keep the Mandatory
Registration Statement continuously effective under the Securities Act for the
entire Effectiveness Period.

     

    (b)           Filing Default
Damages.  If the Mandatory Registration Statement is not filed
on or prior to the Mandatory Filing Date, then the Company shall pay to the
Holders of the Underlying Shares, for each thirty (30) day period of such
failure and until the date a Mandatory Registration Statement is filed or the
Registrable Securities may be sold pursuant to Rule 144(k), whichever comes
first, an amount in cash, as partial liquidated damages and not as a penalty,
equal to two (2%) percent of the Stated Value for each A Share. If the Company
fails to pay any partial liquidated damages pursuant to this Section 2(b) in full
within five (5) days of the date payable, the Company shall pay interest thereon
at a rate of 18% per annum (or such lesser maximum amount that is permitted to
be paid by applicable law) to the Holders, accruing daily from the date such
partial liquidated damages are due until such amounts, plus all such interest
thereon, are paid in full.

     

    
      
        
        

      

      
        - 3
-

        
          

        

      

      
        
        

      

       

    

    (c)           Effectiveness, Etc. Default
Damages.  If the Mandatory Registration Statement is not
declared effective by the Commission on or prior to the Mandatory Effectiveness
Date, or the Commission declares any such Registration Statement effective, but
the Holders of Registrable Securities cannot sell such Registrable Securities
thereunder, for any reason relating to the Company which is not cured within
sixty (60) days after its receipt of written notice of the reason, then the
Company shall pay to the Holder, for each thirty (30) day period until the
Registration Statement is declared effective (or the Holders of Registrable
Securities can sell thereunder, as the case may be), an amount in cash equal to
two (2%) percent of the Stated Value of each A Share.

     

    (d)           Piggyback Registrations
Rights. If, at any time following the date hereof, and there is not an
effective Registration Statement covering the Registrable Securities and
the Company shall determine to prepare and file with the Commission a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans, then the Company shall send to each Holder a written notice of such
determination at least twenty (20) days prior to the filing of any such
registration statement and shall automatically include in such
registration statement all Registrable Securities; provided, however, that (i) if,
at any time after giving written notice of is intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company determines for any reason not
to proceed with such registration, the Company will be relieved of its
obligation to register any Registrable Securities in connection with such
registration, and (ii) in case of a determination by the Company to delay
registration of its securities, the Company will be permitted to delay the
registration of Registrable Securities for the same period as the delay in
registering such other securities.

     

    3.           Registration
Procedures.  In connection with the Company's registration
obligations hereunder, and during the Effectiveness Period, the Company
shall:

     

    (a)           Not
less than five (5) business days prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto, the
Company shall furnish to Holders, a draft of the Registration Statement, or any
related Prospectus or any amendment or supplement thereto.

     

    (b)           (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep the Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period; (ii) cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement, and as so supplemented or amended to be filed
pursuant to Rule 424; and (iii) respond to any comments received from the
Commission staff with respect to the Registration Statement or any amendment
thereto.

     

    
      
        
        

      

      
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    (c)           Notify
as promptly as reasonably possible, but no later than three (3) business days,
each Holder of Registrable Securities included in the Registration Statement:
(i) (A) when a Prospectus or any Prospectus supplement or post-effective
amendment to the Registration Statement has been filed, provided such Holder
has previously requested in writing to receive notice of such filing; (B) when
the Commission notifies the Company whether there will be a “review” of the
Registration Statement and whenever the Commission staff comments in writing on
the Registration Statement, provided such Holder
has previously requested in writing to receive notice of such notification; and
(C) when the Registration Statement or any post-effective amendment has become
effective; (ii) of any request by the Commission staff 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 Prospectus or for additional information; (iii) of the issuance by
the Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation of
any Proceeding for such purpose; and (v) of the occurrence of any event or
passage of time that makes the financial statements included in the Registration
Statement ineligible for inclusion therein or any statement made in the
Registration Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, 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 light of the circumstances under which they were
made, not misleading.

     

    (d)           Use
its best efforts to avoid the issuance of, or if issued, obtain the withdrawal
of (i) any order suspending the effectiveness of the Registration Statement, or
(ii) any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.

     

    (e)           Promptly
deliver to each Holder no later than three (3) business days after the
Effectiveness Date, without charge, two (2) copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto (and, upon the request of the Holder such additional copies
as such Persons may reasonably request in connection with resales by the Holder
of Registrable Securities). The Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by the Holder in connection
with the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto, except after the giving of
any notice pursuant to Section 3(c).

     

    (f)           Prior
to any resale of Registrable Securities by a Holder, use its best efforts to
register or qualify or cooperate with the selling Holders in connection with the
registration or qualification (or exemption from the registration or
qualification) of such Registrable Securities for the resale by the Holder under
the securities or Blue Sky laws of such jurisdictions within the United States
as any Holder reasonably requests in writing, to keep such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things reasonably necessary to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided, however, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction.

     

    
      
        
        

      

      
        - 5
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    (g)           Upon
the occurrence of any event contemplated by Section 3(c)(v),
as promptly as reasonably possible, prepare a supplement or amendment, including
a post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an 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 under which they were made, not
misleading.

     

    (h)           Use
its best efforts to comply with all applicable rules and regulations of the
Commission relating to the registration of the Registrable Securities pursuant
to the Registration Statement or otherwise.

     

    (i)           The
Company agrees that the Selling Shareholder Questionnaire attached hereto as
Exhibit
A,
satisfies all of the information required to be provided by each Holder in
connection with the Registration Statement.  The Company shall not be
required to include any Holder that does not complete, date and execute a
Selling Shareholder Questionnaire.

     

    (j)           The
Company shall either (a) cause all the Registrable Securities covered by a
Registration Statement to be listed on each securities exchange on which
securities of the same class or series issued by the Company are then listed, if
any, if the listing of such Registrable Securities is then permitted under the
rules of such exchange, or (b) secure designation and quotation of all the
Registrable Securities covered by the Registration Statement on the Nasdaq
National Market or the Nasdaq SmallCap Market, or, (c) if the Company is
unsuccessful in satisfying the preceding clauses (a) or (b), the Company
shall secure the inclusion for quotation on The American Stock Exchange, Inc. or
if it is unable to, the NASD Bulletin Board for such Registrable Securities and,
without limiting the generality of the foregoing, to arrange for at least two
(2) market makers to register with the National Association of Securities
Dealers, Inc. (“NASD”)
as such with respect to such Registrable Securities. Notwithstanding the
requirements of Sections 3(j) (a) through (c) above, the Company may cause all
Company securities and the Registrable Securities covered by a Registration
Statement to be listed on the London Stock Exchange Alternative Investment
Market (“AIM”). The Company shall pay
all fees and expenses in connection with satisfying its obligation under this
Section 3(j).

     

    (k)           The
Company covenants that it shall file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC. thereunder so long as the Holder owns any Registrable
Securities, but in no event longer than two (2) years; provided, however, the Company
may delay any such filing but only pursuant to Rule 12b-25 under the
Exchange Act, and the Company shall take such further reasonable action as the
Holder may reasonably request (including, without limitation, promptly obtaining
any required legal opinions from Company counsel necessary to effect the sale of
Registrable Securities under Rule 144 and paying the related fees and
expenses of such counsel), all to the extent required from time to time to
enable such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by
(a) Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission. Moreover, if Company securities are listed on the
AIM, it shall file all reports required to be filed pursuant to the applicable
law, rules and regulations applying to companies whose securities are listed on
the AIM. Upon the request of any Holder of Registrable Securities, the Company
will deliver to such Holder a written statement as to whether it has complied
with such requirements.

     

    
      
        
        

      

      
        - 6
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    4.           Registration
Expenses.  All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to the Registration
Statement, other than fees and expenses of counsel or any other advisor retained
by the Holders and discounts and commissions with respect to the sale of any
Registrable Securities by the Holders. The fees and expenses referred to in the
foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect
to filings required to be made with the Trading Market on which the Common Stock
is then listed for trading, and (B) in compliance with applicable state
securities or Blue Sky laws), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of
printing prospectuses if the printing of prospectuses is reasonably requested by
the holders of a majority of the Registrable Securities included in the
Registration Statement), (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company, (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees and
expenses of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement.

     

    5.           Indemnification

     

    (a)           Indemnification by the
Company. The Company shall, notwithstanding any termination of this
Agreement, indemnify and hold harmless the Holder, the officers, directors,
agents and employees of it, each Person who controls the Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable attorneys' fees) and expenses (including the cost
(including without limitation, reasonable attorneys’ fees) and expenses relating
to an Indemnified Party’s actions to enforce the provisions of this Section 5)
(collectively, “Losses”),
as incurred, to the extent arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to
the extent, that (1) such untrue statements or omissions are based solely
upon information regarding such Holder furnished (or in the case of an omission,
not furnished) in writing to the Company by or on behalf of such Holder
expressly for use therein, or to the extent that such information relates
to such Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto (it being understood that
the Holder has approved Annex A hereto for this purpose), (2) in the case of an
occurrence of an event of the type specified in Section 3(c)(ii)-(v),
the use by such Holder of an outdated or defective Prospectus after the Company
has notified such Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of the Advice contemplated in Section 6(b), or (3) the failure
of the Holder to deliver a prospectus prior to the confirmation of a
sale.  The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding of which the Company is aware
in connection with the transactions contemplated by this Agreement.

     

    
      
        
        

      

      
        - 7
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    (b)           Indemnification by
Holder. The Holder shall indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from and
against all Losses, as incurred, to the extent arising out of or based upon: (x)
the Holder's failure to comply with the prospectus delivery requirements of the
Securities Act or (y) any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading (i) to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so
furnished (or in the case of an omission, not furnished) in writing by or on
behalf of such Holder to the Company specifically for inclusion in the
Registration Statement or such Prospectus or (ii) to the extent that (1) such
untrue statements or omissions are based solely upon information regarding such
Holder furnished (or in the case of an omission, not furnished) in writing to
the Company by or on behalf of such Holder expressly for use therein, or to the
extent that such information relates to such Holder or such Holder's proposed
method of distribution of Registrable Securities, such Prospectus or such form
of Prospectus or in any amendment or supplement thereto, or (2) in the case of
an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use
by such Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice contemplated in Section 6(b), or (3) the failure
of the Holder to deliver a Prospectus prior to the confirmation of a sale. In no
event shall the liability of any selling Holder hereunder be greater in amount
than the dollar amount of the Subscription Amount paid by the Holder in the
Purchase Agreement.

     

    (c)           Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against any
Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from
whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall have the right to
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof; provided, that the
failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that such failure shall have materially
prejudiced the Indemnifying Party.

     

    
      
        
        

      

      
        - 8
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    An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume
the defense of such Proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in any such Proceeding; or (3) the named parties to any
such Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense
thereof and the reasonable fees and expenses of one separate counsel for all
Indemnified Parties in any matters related on a factual basis shall be at the
expense of the Indemnifying Party). The Indemnifying Party shall not be liable
for any settlement of any such Proceeding affected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.

     

    All
reasonable fees and expenses of the Indemnified Party (including reasonable fees
and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten (10)
Trading Days of written notice thereof to the Indemnifying Party; provided, that the
Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is not entitled to indemnification hereunder, determined based
upon the relative faults of the parties.

     

    (d)           Contribution. If a
claim for indemnification under Section 5(a) or
Section 5(b) is
unavailable to an Indemnified Party (by reason of public policy or otherwise),
then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c),
any reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its
terms.

     

    
      
        
        

      

      
        - 9
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    6.           Miscellaneous.

     

    (a)           Compliance. The
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.

     

    (b)           Amendments and
Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
same shall be in writing and signed by the Company and each Holder of the then
outstanding Registrable Securities.

     

    (c)           Notices. Any and all
notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the Trading Day following the date of delivery to the
courier service, if sent by nationally recognized overnight courier service,
(ii) the third Trading Day following the date of mailing, if sent by
first-class, registered or certified mail, postage prepaid, (iii) the Trading
Day following transmission by electronic mail with receipt confirmed or
acknowledged, or (iv) upon actual receipt by the party to whom such notice is
required to be given.  The address for such notices and communications
shall be delivered and addressed as set forth in the Purchase Agreement or to
such other address as shall be designated in writing from time to time by a
party hereto.

     

    (d)           Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of each of the parties and shall inure to
the benefit of the Holder.

     

    (e)           Execution and
Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

     

    (f)           Governing Law. This
Agreement shall be governed by and construed exclusively in accordance with the
internal laws of the State of New York without regard to the conflicts of laws
principles thereof. The parties hereto hereby irrevocably agree that any suit or
proceeding arising directly and/or indirectly pursuant to or under this
Agreement, shall be brought solely in a federal or state court located in the
City, County and State of New York. By its execution hereof, the parties hereby
covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City, County and State of New
York and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City. The parties hereto waive any claim
that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in personam jurisdiction with
respect thereto. In the event of any such action or proceeding, the party
prevailing therein shall be entitled to payment from the other party hereto of
its reasonable counsel fees and disbursements.

     

    
      
        
        

      

      
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    (g)           Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     

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

    

    [Remainder
of page intentionally left blank]

     

    
      
        
        

      

      
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    IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first
written above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                JANEL
      WORLD TRADE, LTD.

                              
	 
      
	
                                By:

                              	 
      
	 
      	Name:	
                                James
      N. Jannello

                              
	 	Title:	
                                Executive
      Vice President and

                                Chief
      Executive
Officer 

                              

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
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    INVESTOR’S
SIGNATURE PAGE

    

    
      
        
          
            
              
                
                  	
                          NAME REDACTED

                        
	 
      	 
      
	
                          By:

                        	
                           /s/NAME REDACTED

                        
	 
      	
                           
      Name: NAME
      REDACTED

                        
	 
      	
                           
      Title: Chief Operating Officer

                        
	
                          Address:
      Address
  Redacted

                        

                

              

            

          

        

      

    

    

    Facsimile
Number: Number
Redacted

     

    
      
        
        

      

      
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    ANNEX A

     

    Plan of
Distribution

    

    The
Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed
or negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:

     

    
      	
               
      

            	
              ·

            	
              ordinary
      brokerage transactions and transactions in which the broker/dealer
      solicits purchasers;

            

    

     

    
      	
               
      

            	
              ·

            	
              block
      trades in which the broker/dealer will attempt to sell the shares as agent
      but may position and resell a portion of the block as principal to
      facilitate the transaction;

            

    

     

    
      	
               
      

            	
              ·

            	
              purchases
      by a broker/dealer as principal and resale by the broker/dealer for its
      account;

            

    

     

    
      	
               
      

            	
              ·

            	
              an
      exchange distribution in accordance with the Rules of the applicable
      exchange;

            

    

     

    
      	
               
      

            	
              ·

            	
              privately
      negotiated transactions;

            

    

     

    
      	
               
      

            	
              ·

            	
              settlement
      of short sales;

            

    

     

    
      	
               
      

            	
              ·

            	
              broker/dealers
      may agree with the Selling Stockholders to sell a specified number of such
      shares at a stipulated price per
share;

            

    

     

    
      	
               
      

            	
              ·

            	
              a
      combination of any such methods of sale;
and

            

    

     

    
      	
               
      

            	
              ·

            	
              any
      other method permitted pursuant to applicable
  law.

            

    

     

    The
Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

     

    Broker/dealers
engaged by the Selling Stockholders may arrange for other brokers/dealers to
participate in sales. Broker/dealers may receive commissions from the Selling
Stockholders (or, if any broker/dealer acts as agent for the purchaser of
shares, from the purchaser) in amounts to be negotiated. The Selling
Stockholders do not expect these commissions to exceed what is customary in the
types of transactions involved.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    The
Selling Stockholders may from time to time pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time under this
prospectus, or under an amendment to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act of 1933
amending the list of Selling Stockholders to include the pledgee, transferee or
other successors in interest as Selling Stockholders under this
prospectus.

     

    The
Selling Stockholders and any broker/dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker/dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions under the
Securities Act. The Selling Stockholders have informed the Company that it does
not have any agreement or understanding, directly or indirectly, with any person
to distribute the Common Stock.

     

    The
Company is required to pay all fees and expenses incident to the registration of
the shares. The Company has agreed to indemnify the Selling Stockholders against
certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

     

    SELLING
STOCKHOLDER QUESTIONNAIRE

    

    Janel
World Trade

    

    Ladies
and Gentlemen:

    

    I acknowledge that I am a holder of
securities of Janel World Trade, Ltd.  (the “Company”).  I
understand that I will be named as a selling stockholder in the prospectus that
forms a part of the registration statement on Form S-1 (or other applicable
form) that the Company will file with the Securities and Exchange Commission to
register under the Securities Act of 1933, as amended, the securities I expect
to sell. The Company will use the information that I provide in this
Questionnaire to ensure the accuracy of the registration statement and the
prospectus.

     

    
      	
              Please
      answer every question.

              If
      the answer to any question is “none” or “not applicable,” please so
      state.

            

    

     

    
      
        
          
            	
                    1.

                  	
                    Name. Type
      or print your name exactly as it should appear in the Registration
      Statement.

                  
	 	 	
                     

                  

          

        

      

    

    

    
      	
              2.

            	
              Manner
      of Ownership of Shares:

            

    

    

       Individual
_______     Community Property
________      Tenants in Common
_______

    

       Joint Tenants with
Rights of Survivorship
________         Corporate
________

    

       Partnership
______         Trust
________     Other
___________________________

    

    

    
      	
              3.

            	
              Contact
      Information. Provide the
      address, telephone number and fax number where you can be reached during
      business hours.

            

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                  	
                                    Address:

                                  	
                                     
      

                                  
	 	 	  
      

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
          
            
              
                
                  	 	  	 
      
	 	
                          Phone:

                        	
                                         
                  
                                                                                                             

                        

                

              

            

          

        

      

    

    
      
        
          
            
              
                
                  
                    
                      	 	 	 
	 	
                              Fax:

                            	
                                                
      

                            

                    

                  

                

              

            

          

        

      

    

     

    
      
        	
                4.

              	
                Relationship
      with the Company. Describe the
      nature of any position, office or other material relationship you have had
      with the Company during the past three years.

              
	 	  
      
	 	  
      

      

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              5.

            	
              Organizational
      Structure.  Please
      indicate or (if applicable) describe how you are
  organized.

            

    

    
      
        
          
            
              
                
                  
                    
                      
                        	 	 
	
                                (a)Are
      you a natural
      person?

                                (if so, please mark the box
      and skip to Question 5)

                              	
                                o Yes  o
  No

                              
	 	 
	
                                (b)Are
      you a reporting
      company under the 1934 Act?

                                (if so, please mark the box
      and skip to Question 5)

                              	
                                o Yes  o
  No

                              
	 	 
	
                                (c)Are
      you a majority-owned
      subsidiary of a reporting company under the 1934 Act?

                                (if so, please mark the box
      and skip to Question 5)

                              	
                                o Yes  o
      No

                              
	 	 
	
                                (d)Are
      you a registered
      investment fund under the 1940 Act?

                                (if so, please mark the box
      and skip to Question 5)

                              	
                                o
      Yes  o
      No

                              

                      

                    

                  

                

              

            

          

        

      

    

    

    If you
have answered "no" to all of the foregoing questions, please describe: (i) the
exact legal description of your entity (e.g., corporation, partnership, limited
liability company, etc.); (ii) whether the legal entity so described is managed
by another entity and the exact legal description of such entity (repeat this
step until the last entity described is managed by a person or persons, each of
whom is described in any one of (a) through (d) above), (iii) the names of each
person or persons having voting and investment control over the Company's
securities that the entity owns (e.g., director(s), general partner(s), managing
member(s), etc.).

     

    
      
        	
                Legal Description of Entity:

              	
                 
      

              

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Name of Entity(ies) Managing Such Entity (if any):

                              	
                                 

                              
	 	 
	 
       	  
      
	 	 
	 
       	 
      

                      

                    

                  

                

              

            

          

        

      

    

    
       

      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Name of Entity(ies) Managing such Entity(ies) (if any): 

                                	
                                    
      

                                
	 	 
	 
       	  
      
	 	 
	 
       	  
      

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Name(s)
of Natural Persons Having Voting or Investment

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            Control Over the Shares Held by such Entity(ies):

                                          	
                                             
      

                                          
	 	 
	  	 
      
	 	 
	  	 
      
	 	 
	  	 
      

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
       

      
        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

      

    

    

    
      	
              6.

            	
              Ownership
      of the Company’s Securities.  This question covers your
      beneficial ownership of the Company’s securities.  Please
      consult the Appendix A to
      this Questionnaire for information as to the meaning of “beneficial
      ownership.”  State the number of shares of the Company’s common
      stock that you beneficially owned as of the date this Questionnaire is
      signed:

            

    

     

    
      
        
          	
                	
                  No. of Shares of Stock 

                	
                   

                

        

      

       

    

    
      	
              7.

            	
              Acquisition
      of Shares.  Please
      describe below the manner in which you acquired your shares of Common
      Stock of the Company including, but not limited to, the date, the name and
      address of the seller(s), the purchase price and pursuant to which
      documents (the “Acquisition
      Documents”).  Please forward such documents used to
      acquire your shares as provided
below.

            

    

     

    
      	
              8.

            	
              Plan
      of Distribution.  I have reviewed the proposed “Plan of
      Distribution” attached to this Registration Rights Agreement as Annex
      A, and agree that the statements contained therein reflect my
      intended method(s) of distribution or, to the extent these statements are
      inaccurate or incomplete, I have communicated in writing to one of the
      parties listed above my signature to any changes to the proposed “Plan of
      Distribution” that are required to make these statements accurate and
      complete.   ̈ (Please check
      the box if you have made any changes to Appendix
  B)

            

    

     

    
      	
              9.

            	
              Reliance
      on Responses. I acknowledge and agree that the Company and its
      legal counsel shall be entitled to rely on my responses in this
      Questionnaire in all matters pertaining to the registration statement and
      the sale of any shares of common stock of the Company pursuant to the
      registration statement.

            

    

     

    
      	
              10.

            	
              NASD.  The
      National Association of Securities Dealers, Inc. (“NASD”)
      may request, in connection with their review of the Registration Statement
      and Prospectus under the Securities Act of 1933, as amended, that the
      Company inform them of the names of all persons who purchased securities
      from the Company, together with any affiliations with the NASD of such
      purchasers. In order to aid the Company in responding to such request, the
      undersigned furnishes the following
information:

            

    

    

    PART
A: DETERMINATION OF RESTRICTED PERSON STATUS:

    

    Please check all appropriate
categories.

    

    The undersigned is:

    

    
      
        ___
(i)        a
broker-dealer;

        ___
(ii)       an
officer, director, general partner, associated person1
or employee of a broker-dealer (other than a limited business
broker-dealer)2;

      

       

      
        

      

      
        
          1  A person “associated with” a
broker-dealer includes any natural person engaged in the investment banking or
securities business who is directly or indirectly controlling or controlled by a
broker-dealer, any partner, director, officer or sole proprietor of a
broker-dealer.

        

         

      

      
        
          2  A limited business broker-dealer is any
broker-dealer whose authorization to engage in the securities business is
limited solely to the purchase and sale of investment company/variable contracts
securities and direct participation program securities.

        

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

    

    
      ___
(iii)          an agent
of a broker-dealer (other than a limited business broker-dealer) that is engaged
in the investment banking or securities business;

    

    

    
      ___
(iv)         an
immediate family member3
of a person described in (ii) or (iii) above. Under certain circumstances, if
the undersigned checks this category, he/she/it may be able to participate in
New Issue investments.  The Company may request additional information
in order to determine the eligibility of the undersigned under
this Restricted Person category;

    

    

    
      ___
(v)          a finder
or any person acting in a fiduciary capacity to a managing underwriter,
including, but not limited to, attorneys, accountants and financial
consultants;

    

    

    
      ___
(vi)         a person
who has authority to buy or sell securities for a bank, savings and loan
institution, insurance company, investment company, investment advisor or
collective investment account4
(including a private investment vehicle such as a hedge fund or an offshore
fund);

    

    

    
      ___
(vii)        an
immediate family member of a person described in (v) or (vi) above who
materially supports5,
or receives material support from, the undersigned;

    

    

    
      ___
(viii)       a person
listed or required to be listed in Schedule A, B or C of a Form BD (other than
with respect to a limited business broker-dealer), except persons whose listing
on Schedule A, B or C is related to a person identified by an ownership code of
less than 10% on Schedule A;

    

    

    
      ___
(ix)          a person
that (A) directly or indirectly owns 10% or more of a public reporting company
listed, or required to be listed, in Schedule A of a Form BD or (B) directly or
indirectly owns 25% or more of a public reporting company listed, or required to
be listed in Schedule B of a Form BD, in each case (A) or (B), other than a
reporting company that is listed on a national securities exchange or is traded
on the Nasdaq National Market, or other than with respect to a limited business
broker/dealer;

    

    

    
      ___
(x)           an
immediate family member of a person described in (viii) or (ix)
above.  Under certain circumstances, if the undersigned places a check
next to this category, he/she/it  may be able to participate in New
Issue investments.  The Company may request additional information in
order to determine the eligibility of the undersigned under this Restricted
Person category;

    

    

    
      ___
(xi)          any
entity (including a corporation, partnership, limited liability company, trust
or other entity) in which any person or persons listed in (i)-(x) above has a
beneficial interest6;
or

    

     

    
      ___
None of
the above categories apply and the undersigned is eligible to participate in New
Issue securities.

    

     

    
      
        
          

        

        3  The term "Immediate family" includes the
investor’s: (i) parents, (ii) mother-in-law or father-in-law. (iii) husband or
wife, (iv) brother or sister, (v) brother-in-law or sister-in-law, (vi)
son-in-law or daughter-in-law, (vii) children, and (viii) any other person who
is supported, directly or indirectly, to a material extent by an officer,
director, general partner, employee, agent of a broker-dealer or person
associated with a broker-dealer.

      

      

      4  A
"collective investment account" is any hedge fund, investment corporation, or
any other collective investment vehicle that is engaged primarily in the
purchase and/or sale of securities. investment clubs (groups of individuals who
pool their money to invest in stock or other securities and who are collectively
responsible for making investment decisions) and family investment vehicles
(legal entities that are beneficially owned solely by immediate family members
(as defined above)) are not considered
collective investment accounts.

      

      5  The
term “material” support” means directly or indirectly providing more than 25% of
a person’s income in the prior calendar year or living in the same household
with a member of one’s Immediate family.

      

      6  The term ‘beneficial interest” means any
economic interest such as the right to share in gains or losses. The receipt of
a management or performance based fee for operating a collective investment
account, or other fee for acting in a fiduciary capacity, is not considered a
beneficial interest in the account; however, if such fee is subsequently
invested into the account (as a deferred fee arrangement or otherwise), it is
considered a beneficial interest in that account.

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    PART
B:  DETERMINATION OF EXEMPTED ENTITY STATUS:

    

    The
undersigned  is:

    

    
       
___
(i) a
publicly-traded entity (other than a broker-dealer or an affiliate of a
broker-dealer, where such broker-dealer is authorized to engage in the public
offering of New Issues either as a selling group member or underwriter) that is
listed on a national securities exchange or traded on the Nasdaq National Market
or is a foreign issuer whose securities meet the quantitative designation
criteria for listing on a national securities exchange or trading on the Nasdaq
National Market;

    

    

    
      ____
(ii)        an
investment company registered under the Investment Company Act of 1940, as
amended;

    

    

    
      ____
(iii)       a
corporation, partnership, limited liability company, trust or any other entity
(including a private investment vehicle such as a hedge fund or an offshore
fund, or a broker-dealer organized as an investment partnership)
and

    

    

    
      (A)           the
beneficial interests of Restricted Persons do not exceed in the aggregate 10% of
such entity; or

    

    

    (B)           such
entity limits participation by Restricted Persons to not more than 10% of the
profits and losses of New Issues;

    

    ____
(iv)       an investment company organized
under the laws of a foreign jurisdiction and

    

    (A)           the
investment company is listed on a foreign exchange or authorized for sale to the
public by a foreign regulatory authority; and

    

    (B)           no
person owning more than 5% of the shares of the investment company is a
Restricted Person;

    

    
      ____ (v)
(A) an
employee benefits plan under the U.S. Employee Retirement Income Security Act of
1974, as amended, that is qualified under Section 401(a) of the Internal Revenue
Code of 1986, as amended (the “Code”)
and such plan is not sponsored solely by a broker-dealer, (B) a state or
municipal government benefits plan that is subject to state and/or municipal
regulation or (C) a church plan under Section 414(e) of the
Code;

    

    

    ___(vi)          a
tax exempt charitable organization under Section 501(c)(3) of the
Code;

    

    
      ___
(vii)        a common
trust fund or similar fund as described in Section 3(a)(12)(A)(iii) of the
Securities Exchange Act of 1934, as amended, and the Company

    

    

    (A)           has
investments from 1,000 or more accounts, and

    

    (B)           does
not limit beneficial interests in the Company principally to trust accounts of
Restricted Persons; or

    

    ___(viii)        an
insurance company general, separate or investment account, and

    

    (A)           the
account is funded by premiums from 1,000 or more policyholders, or, if a general
account, the insurance company has 1,000 or more policyholders, and

    

    (B)           the
insurance company does not limit the policyholders whose premiums are used to
fund the account principally to Restricted Persons, or, if a general account,
the insurance company does not limit its policyholders principally to Restricted
Persons.

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    Please
acknowledge that your answers to the foregoing questions are true and correct to
the best of your information and belief by signing and dating this Questionnaire
where indicated below.  Please return the completed executed
questionnaire via fax to
___________
at ( )-____-  ____ as soon as
possible.

    

    If at any time you discover that your
answer to a question was inaccurate, or if any event occurring after your
completion hereof would require a change in your answer to any questions, please
immediately contact ________________ at ( )-____-  _____.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        Date:

                                      	
                                                                                 
       , 200

                                      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                        (Print
      name of selling stockholder)

                                      
	 	 	 	 	 
	 
      	 
      	 
      	
                                        By:

                                      	 
      
	 
      	 
      	 
      	 
      	
                                        (Signature)

                                      
	 	 	 	 	 
	 
      	 
      	 
      	
                                        Name:

                                      	 
      
	 
      	 
      	 
      	 
      	
                                        (Print
      name)

                                      
	 	 	 	 	 
	 
      	 
      	 
      	
                                        Title:

                                      	 
      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
APPENDIX
A

    

    
      	
              1.

            	
              Definition
      of “Beneficial Ownership”

            

    

    

    
      	
               
      

            	
              (a)

            	
              A
      “Beneficial
      Owner” of a security includes any person who, directly or
      indirectly, through any contract, arrangement, understanding, relationship
      or otherwise has or shares:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Voting
      power which includes the power to vote, or to direct the voting of, such
      security; and/or

            

    

    

    
      	
               
      

            	
              (2)

            	
              Investment
      power which includes the power to dispose, or direct the disposition of,
      such security.f

            

    

    

    Please
note that either voting power
or investment
power, or both,
is sufficient for you to be considered the beneficial owner of
shares.

    

    
      	
               
      

            	
              (b)

            	
              Any
      person who, directly or indirectly, creates or uses a trust, proxy, power
      of attorney, pooling arrangement or any other contract, arrangement or
      device with the purpose or effect of divesting such person of beneficial
      ownership of a security or preventing the vesting of such beneficial
      ownership as part of a plan or scheme to evade the reporting requirements
      of the federal securities acts shall be deemed to be the beneficial owner
      of such security.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Notwithstanding
      the provisions of paragraph (a), a person is deemed to be the “beneficial
      owner” of a security, if that person has the right to acquire beneficial
      ownership of such security within 60 days, including but not limited to
      any right to acquire:  (A) through the exercise of any
      option, warrant or right; (B) through the conversion of a security;
      (C) pursuant to the power to revoke a trust, discretionary account or
      similar arrangement; or (D) pursuant to the automatic termination of
      a trust, discretionary account or similar arrangement; provided, however,
      any person who acquires a security or power specified in paragraphs (A),
      (B) or (C) above, with the purpose or effect of changing or influencing
      the control of the issuer, or in connection with or as a participant in
      any transaction having such purpose or effect, immediately upon such
      acquisition shall be deemed to be the beneficial owner of the securities
      which may be acquired through the exercise or conversion of such security
      or power.

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