Document:

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED UNLESS (i) A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL
HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS
AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.

AN INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. HOLDERS MUST
RELY ON THEIR OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF THE RISKS
INVOLVED.

Warrant to Purchase
780,000 shares

                 SECOND AMENDED WARRANT TO PURCHASE COMMON STOCK
                                       OF
                                   VALESC INC.

           THIS CERTIFIES that SWARTZ PRIVATE EQUITY, LLC, or any subsequent
holder hereof pursuant to Section 8 hereof ("Holder" or "Investor") has the
right to purchase from Valesc Inc., a Delaware corporation (the "Company"), up
to 780,000 fully paid and nonassessable shares of the Company's common stock,
$0.0001 par value per share ("Common Stock"), subject to adjustment as provided
herein, at a price equal to the Exercise Price as defined in Section 3 below, at
any time beginning on the Date of Issuance (defined below) and ending at 5:00
p.m., New York, New York time, on the date that is five (5) years after the Date
of Issuance (the "Exercise Period").

           Holder agrees with the Company that this Second Amended Warrant to
Purchase Common Stock of the Company (this "Warrant" or "Amended Warrant") is
issued and all rights hereunder shall be held subject to all of the conditions,
limitations and provisions set forth herein. This Amended Warrant amends and
replaces the original warrant to purchase 780,000 shares of Common Stock of
Valesc, Inc. originally issued on or about April 24, 2001 and amended on
September 26, 2001.

           1.        DATE OF ISSUANCE AND TERM.

           This Warrant shall be deemed to be issued on May 21, 2002 ("Date of
Issuance"). The term of this Warrant is five (5) years from the Date of
Issuance. This Warrant shall be exercisable anytime after the Date of Issuance
through the date that is five (5) years after the Date of Issuance.

           Notwithstanding anything to the contrary herein, the applicable
portion of this Warrant shall not be exercisable during any time that, and only
to the extent that, the number of shares of Common Stock to be issued to Holder
upon such exercise, when added to the number of shares of Common Stock, if any,
that the Holder otherwise beneficially owns at the time of such exercise, would
equal or exceed 4.99% of the number of shares of Common Stock then outstanding,
as determined in accordance with Section 13(d) of the Exchange Act (the "4.99%
Limitation"). The 4.99% Limitation shall be conclusively satisfied if the
applicable Exercise Notice includes a signed representation by the Holder that
the issuance of the shares in such Exercise Notice will not violate the 4.99%
Limitation, and the Company shall not be entitled to require additional
documentation of such satisfaction.

<PAGE>

           2.        EXERCISE.

           (A) MANNER OF EXERCISE. During the Exercise Period, this Warrant may
be exercised as to all or any lesser number of full shares of Common Stock
covered hereby (the "Warrant Shares") upon surrender of this Warrant, with the
Exercise Form attached hereto as EXHIBIT A (the "Exercise Form") duly completed
and executed, together with the full Exercise Price (as defined below) for each
share of Common Stock as to which this Warrant is exercised, at the office of
the Company, Valesc, Inc., 2300 Coit Road, Suite 300B, Plano, Texas 75075;
Telephone: (972) 495-3900, Facsimile: (972) 496-5135, or at such other office or
agency as the Company may designate in writing, by overnight mail, with an
advance copy of the Exercise Form sent to the Company and its Transfer Agent by
facsimile (such surrender and payment of the Exercise Price hereinafter called
the "Exercise of this Warrant").

           (B) DATE OF EXERCISE. The "Date of Exercise" of the Warrant shall be
defined as the date that the advance copy of the completed and executed Exercise
Form is sent by facsimile to the Company, provided that the original Warrant and
Exercise Form are received by the Company as soon as practicable thereafter.
Alternatively, the Date of Exercise shall be defined as the date the original
Exercise Form is received by the Company, if Holder has not sent advance notice
by facsimile.

           (C) DELIVERY OF SHARES OF COMMON STOCK UPON EXERCISE. Upon any
exercise of this Warrant, the Company shall use its reasonable best efforts to
deliver, or shall cause its transfer agent to deliver, a stock certificate or
certificates representing the number of shares of Common Stock into which this
Warrant was exercised, within three (3) trading days (the "Share Delivery
Deadline") of the date that all of the following have been received by the
Company: (i) the original completed and executed Exercise Form, (ii) the
original Warrant and (iii) the Exercise Price (if applicable)(collectively, the
"Receipt Date"). Such stock certificates shall not contain a legend restricting
transfer if a registration statement covering the resale of such shares of
Common Stock is in effect at the time of such exercise or if such shares of
Common Stock may be resold pursuant to an exemption from registration, including
but not limited to Rule 144 under the Securities Act of 1933.

           (D) ECONOMIC LOSS DUE TO LATE DELIVERY OF SHARES. If the Company
fails for any reason to deliver the requisite number of shares of Common Stock
(unlegended, if so required by the terms of this Warrant)(the "Warrant Shares")
to a Holder upon an exercise of this Warrant within fifteen (15) business days
of the Receipt Date (the "Late Delivery Deadline"), the Company shall pay such
Holder (in addition to any other remedies available to Holder) an amount equal
to ("Non-Delivery Payment"):

                     (x) the highest closing price for the Company's Common
                     Stock for any trading day during the period beginning on
                     and including the Date of Exercise and ending on the
                     earlier of (i) the date that the Holder receives from the
                     Company certificates (unlegended, if so required by the
                     terms of this Warrant) representing the Warrant Shares of
                     Common Stock issuable in conjunction with such Exercise, or
                     (ii) the date that the Holder receives the full amount of
                     the Non-Delivery Payment, whichever is earlier,

                     minus

                                      -2-
<PAGE>

                     (y) the Exercise Price per share (which, in the case of a
                     Cashless Exercise, shall be deemed to equal zero), or, if
                     the Holder has received the Warrant Shares (unlegended, if
                     so required by the terms of this Warrant) from the Company
                     prior to the payment of the Non-Delivery Payment, the
                     lowest closing price of the Company's Common Stock for the
                     five (5) trading days immediately preceding the date that
                     such Warrant Shares are delivered to the Holder.

                     Non-Delivery Payments shall be payable, in cash or cash
                     equivalent, within five (5) business days of the Late
                     Delivery Deadline.

           (E) LIQUIDATED DAMAGES. The parties hereto acknowledge and agree that
the sums payable as Non-Delivery Payments shall give rise to liquidated damages
and not penalties. The parties further acknowledge that (i) the amount of loss
or damages likely to be incurred by the Holder is incapable or is difficult to
precisely estimate, (ii) the amounts specified bear a reasonable proportion and
are not plainly or grossly disproportionate to the probable loss likely to be
incurred by the Holder, and (iii) the parties are sophisticated business parties
and have been represented by sophisticated and able legal and financial counsel
and negotiated this Agreement at arm's length.

           (F) CANCELLATION OF WARRANT. This Warrant shall be canceled upon the
Exercise of this Warrant, and, as soon as practical after the Date of Exercise,
Holder shall be entitled to receive Common Stock for the number of shares
purchased upon such Exercise of this Warrant, and if this Warrant is not
exercised in full, Holder shall be entitled to receive a new Warrant (containing
terms identical to this Warrant) representing any unexercised portion of this
Warrant in addition to such Common Stock.

           (G) HOLDER OF RECORD. Each person in whose name any Warrant for
shares of Common Stock is issued shall, for all purposes, be deemed to be the
Holder of record of such shares on the Date of Exercise of this Warrant,
irrespective of the date of delivery of the Common Stock purchased upon the
Exercise of this Warrant. Nothing in this Warrant shall be construed as
conferring upon Holder any rights as a stockholder of the Company.

           3.        PAYMENT OF WARRANT EXERCISE PRICE.

           The Exercise Price per share ("Exercise Price") shall initially equal
$1.00 (the "Initial Exercise Price").

           If the Date of Exercise is more than six (6) months after the Date of
Issuance, the Exercise Price shall be reset (each, a "Reset") to equal the
lesser of (i) the Exercise Price then in effect, or (ii) the "Lowest Reset
Price," as that term is defined below. The Company shall calculate a "Reset
Price" on each six-month anniversary date of the Date of Issuance which shall
equal the lowest Closing Price of the Company's Common Stock for the five (5)
trading days ending on such six-month anniversary date of the Date of Issuance.
The "Lowest Reset Price" shall equal the lowest Reset Price determined on any
six-month anniversary date of the Date of Issuance preceding the Date of
Exercise, taking into account, as appropriate, any adjustments made pursuant to
Section 5 hereof. Notwithstanding the above, if for any consecutive period of
twenty (20) consecutive Liquid Days (as defined below), the Closing Price (as
defined below) of the Company's Common Stock exceeds $2.00 per share (subject to
adjustments for any stock splits that occur after the original Date of Issuance
hereof), then the Exercise Price shall be reset back to $1.00 (subject to
adjustments for any stock splits that occur after the original Date of Issuance
hereof), and no further Resets shall occur. For purposes hereof, a "Liquid Day"
shall mean any trading day during which the Warrant Shares issuable upon
exercise of this Warrant are authorized and reserved, and are either (i)
registered for resale under a current and effective resale registration
statement or (ii) eligible for immediate resale, without volume limitations,
pursuant to Rule 144 under the Securities Act of 1933.

                                      -3-
<PAGE>

           For purposes hereof, the term "Closing Price" shall mean the closing
price on the Nasdaq Small Cap Market, the National Market System ("NMS"), the
New York Stock Exchange, or the O.T.C. Bulletin Board, or if no longer traded on
the Nasdaq Small Cap Market, the National Market System ("NMS"), the New York
Stock Exchange, or the O.T.C. Bulletin Board, the "Closing Price" shall equal
the closing price on the principal national securities exchange or the
over-the-counter system on which the Common Stock is so traded and, if not
available, the mean of the high and low prices on the principal national
securities exchange on which the Common Stock is so traded.

           Payment of the Exercise Price may be made by either of the following,
or a combination thereof, at the election of Holder:

           (i)       CASH EXERCISE: cash, bank or cashiers check or wire
transfer; or

           (ii) CASHLESS EXERCISE: The Holder, at its option, may exercise this
Warrant in a cashless exercise transaction. In order to effect a Cashless
Exercise, the Holder shall surrender this Warrant at the principal office of the
Company together with notice of cashless election, in which event the Company
shall issue Holder a number of shares of Common Stock computed using the
following formula:

                                  X = Y (A-B)/A

where:     X = the number of shares of Common Stock to be issued to Holder.

           Y = the number of shares of Common Stock for which this Warrant is
               being exercised.

                     A = the Market Price of one (1) share of Common Stock (for
                     purposes of this Section 3(ii), the "Market Price" shall be
                     defined as the average Closing Price of the Common Stock
                     for the five (5) trading days prior to the Date of Exercise
                     of this Warrant (the "Average Closing Price"), as reported
                     by the O.T.C. Bulletin Board, National Association of
                     Securities Dealers Automated Quotation System ("Nasdaq")
                     Small Cap Market, or if the Common Stock is not traded on
                     the Nasdaq Small Cap Market, the Average Closing Price in
                     any other over-the-counter market; provided, however, that
                     if the Common Stock is listed on a stock exchange, the
                     Market Price shall be the Average Closing Price on such
                     exchange for the five (5) trading days prior to the date of
                     exercise of the Warrants. If the Common Stock is/was not
                     traded during the five (5) trading days prior to the Date
                     of Exercise, then the closing price for the last publicly
                     traded day shall be deemed to be the closing price for any
                     and all (if applicable) days during such five (5) trading
                     day period.

                     B = the Exercise Price.

           For purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is
intended, understood and acknowledged that the Common Stock issuable upon
exercise of this Warrant in a cashless exercise transaction shall be deemed to
have been acquired at the time this Warrant was issued. Moreover, it is
intended, understood and acknowledged that the holding period for the Common
Stock issuable upon exercise of this Warrant in a cashless exercise transaction
shall be deemed to have commenced on the date this Warrant was issued.

                                      -4-
<PAGE>

           4. TRANSFER. Subject to the provisions of Section 8 of this Warrant,
this Warrant may be transferred on the books of the Company, in whole or in
part, in person or by attorney, upon surrender of this Warrant properly
completed and endorsed. This Warrant shall be canceled upon such surrender and,
as soon as practicable thereafter, the person to whom such transfer is made
shall be entitled to receive a new Warrant or Warrants as to the portion of this
Warrant transferred, and Holder shall be entitled to receive a new Warrant as to
the portion hereof retained.

           5.        ANTI-DILUTION ADJUSTMENTS.

           (a)       [Intentionally Left Blank].

           (b)       RECAPITALIZATION OR RECLASSIFICATION.

                     (i) STOCK SPLIT.  If the Company  shall at any time effect
a  recapitalization,  reclassification  or other similar  transaction  of such
character that the shares of Common Stock shall be changed into or become
exchangeable for a LARGER number of shares (a "Stock Split"), then upon the
effective date thereof, the number of shares of Common Stock which Holder shall
be entitled to purchase upon Exercise of this Warrant shall be increased in
direct proportion to the increase in the number of shares of Common Stock by
reason of such recapitalization, reclassification or similar transaction, and
the Exercise Price shall be proportionally decreased.

                     (ii) REVERSE STOCK SPLIT. If the Company shall at any time
effect a  recapitalization,  reclassification  or other similar transaction of
such character that the shares of Common Stock shall be changed into or become
exchangeable for a SMALLER number of shares (a "Reverse Stock Split"), then upon
the effective date thereof, the number of shares of Common Stock which Holder
shall be entitled to purchase upon Exercise of this Warrant shall be
proportionately decreased and the Exercise Price shall be proportionally
increased. The Company shall give Holder the same notice it provides to holders
of Common Stock of any transaction described in this Section 5(b).

           (c)       [Intentionally Left Blank].

           (d) NOTICE OF CONSOLIDATION OR MERGER AND WARRANT EXCHANGE. The
Company shall not, at any time after the date hereof, effect a merger,
consolidation, exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares of Common Stock shall be changed into
the same or a different number of shares of the same or another class or classes
of stock or securities or other assets of the Company or another entity or there
is a sale of all or substantially all the Company's assets (a "Corporate
Change"), unless the resulting successor or acquiring entity (the "Resulting
Entity") assumes by written instrument the Company's obligations under this
Warrant, including but not limited to the Exercise Price reset provisions as
provided herein during the term of the resultant warrants, and agrees in such
written instrument that this Warrant shall be exerciseable into such class and
type of securities or other assets of the Resulting Entity as Holder would have
received had Holder exercised this Warrant immediately prior to such Corporate
Change, and the Exercise Price of this Warrant shall be proportionately
increased (if this Warrant shall be changed into or become exchangeable for a
warrant to purchase a smaller number of shares of Common Stock of the Resulting
Entity) or shall be proportionately decreased (if this Warrant shall be changed
or become exchangeable for a warrant to purchase a larger number of shares of
Common Stock of the Resulting Entity); provided, however, that Company may not
affect any Corporate Change unless it first shall have given thirty (30) days
notice to Holder hereof of any Corporate Change.

                                      -5-
<PAGE>

           (e) EXERCISE PRICE ADJUSTED. As used in this Warrant, the term
"Exercise Price" shall mean the purchase price per share specified in Section 3
of this Warrant, until the occurrence of an event stated in subsection (b) or
(d) of this Section 5, and thereafter shall mean said price as adjusted from
time to time in accordance with the provisions of this Warrant. No such
adjustment under this Section 5 shall be made unless such adjustment would
change the Exercise Price at the time by $0.01 or more; provided, however, that
all adjustments not so made shall be deferred and made when the aggregate
thereof would change the Exercise Price at the time by $0.01 or more.

           (f) ADJUSTMENTS: ADDITIONAL SHARES, SECURITIES OR ASSETS. In the
event that at any time, as a result of an adjustment made pursuant to this
Section 5, Holder shall, upon Exercise of this Warrant, become entitled to
receive shares and/or other securities or assets (other than Common Stock) then,
wherever appropriate, all references herein to shares of Common Stock shall be
deemed to refer to and include such shares and/or other securities or assets;
and thereafter the number of such shares and/or other securities or assets shall
be subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section 5.

           6.        FRACTIONAL INTERESTS.

                     No fractional shares or scrip representing fractional
shares shall be issuable upon the Exercise of this Warrant, but on Exercise of
this Warrant, Holder may purchase only a whole number of shares of Common Stock.
If, on Exercise of this Warrant, Holder would be entitled to a fractional share
of Common Stock or a right to acquire a fractional share of Common Stock, such
fractional share shall be disregarded and the number of shares of Common Stock
issuable upon exercise shall be the next higher number of shares.

           7.        RESERVATION OF SHARES.

                     The Company shall at all times reserve for issuance such
number of authorized and unissued shares of Common Stock (or other securities
substituted therefor as herein above provided) as shall be sufficient for the
Exercise of this Warrant and payment of the Exercise Price. The Company
covenants and agrees that upon the Exercise of this Warrant, all shares of
Common Stock issuable upon such exercise shall be duly and validly issued, fully
paid, nonassessable and not subject to preemptive rights, rights of first
refusal or similar rights of any person or entity.

           8.        RESTRICTIONS ON TRANSFER.

                     (a) REGISTRATION OR EXEMPTION  REQUIRED.  This Warrant has
been issued in a transaction exempt from the registration  requirements of the
Act by virtue of Regulation D and exempt from state registration under
applicable state laws. The Warrant and the Common Stock issuable upon the
Exercise of this Warrant may not be pledged, transferred, sold or assigned
except pursuant to an effective registration statement or unless the Company has
received an opinion from the Company's counsel to the effect that such
registration is not required, or the Holder has furnished to the Company an
opinion of the Holder's counsel, which counsel shall be reasonably satisfactory
to the Company, to the effect that such registration is not required; the
transfer complies with any applicable state securities laws; and, if no
registration covering the resale of the Warrant Shares is effective at the time
the Warrant Shares are issued, the Holder consents to a legend being placed on
certificates for the Warrant Shares stating that the securities have not been
registered under the Securities Act and referring to such restrictions on
transferability and sale.

                                      -6-
<PAGE>

                     (b)  ASSIGNMENT.  If Holder can provide the Company with
reasonably  satisfactory  evidence that the  conditions of (a) above  regarding
registration or exemption have been satisfied, Holder may sell, transfer,
assign, pledge or otherwise dispose of this Warrant, in whole or in part. Holder
shall deliver a written notice to Company, substantially in the form of the
Assignment attached hereto as EXHIBIT B, indicating the person or persons to
whom the Warrant shall be assigned and the respective number of warrants to be
assigned to each assignee. The Company shall effect the assignment within ten
(10) days, and shall deliver to the assignee(s) designated by Holder a Warrant
or Warrants of like tenor and terms for the appropriate number of shares.

           9.        BENEFITS OF THIS WARRANT.

                     Nothing in this Warrant shall be construed to confer upon
any person other than the Company and Holder any legal or equitable right,
remedy or claim under this Warrant and this Warrant shall be for the sole and
exclusive benefit of the Company and Holder.

           10.       APPLICABLE LAW; ARBITRATION.

                     This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia applicable to agreements made
in and wholly to be performed in that jurisdiction, except for matters arising
under the Act or the Securities Exchange Act of 1934, which matters shall be
construed and interpreted in accordance with such laws. Any controversy or claim
arising out of or related to this Warrant or the breach thereof, shall be
settled by binding arbitration in Atlanta, Georgia in accordance with the
Expedited Procedures (Rules 53-57) of the Commercial Arbitration Rules of the
American Arbitration Association ("AAA"). A proceeding shall be commenced upon
written demand by Company or any Holder to the other. The arbitrator(s) shall
enter a judgment by default against any party, which fails or refuses to appear
in any properly noticed arbitration proceeding. The proceeding shall be
conducted by one (1) arbitrator, unless the amount alleged to be in dispute
exceeds two hundred fifty thousand dollars ($250,000), in which case three (3)
arbitrators shall preside. The arbitrator(s) will be chosen by the parties from
a list provided by the AAA, and if they are unable to agree within ten (10)
days, the AAA shall select the arbitrator(s). The arbitrators must be experts in
securities law and financial transactions. The arbitrators shall assess costs
and expenses of the arbitration, including all attorneys' and experts' fees, as
the arbitrators believe is appropriate in light of the merits of the parties'
respective positions in the issues in dispute. Each party submits irrevocably to
the jurisdiction of any state court sitting in Atlanta, Georgia or to the United
States District Court sitting in Georgia for purposes of enforcement of any
discovery order, judgment or award in connection with such arbitration. The
award of the arbitrator(s) shall be final and binding upon the parties and may
be enforced in any court having jurisdiction. The arbitration shall be held in
such place as set by the arbitrator(s) in accordance with Rule 55.

                     Although the parties, as expressed above, agree that all
claims, including claims that are equitable in nature, for example specific
performance, shall initially be prosecuted in the binding arbitration procedure
outlined above, if the arbitration panel dismisses or otherwise fails to
entertain any or all of the equitable claims asserted by reason of the fact that
it lacks jurisdiction, power and/or authority to consider such claims and/or
direct the remedy requested, then, in only that event, will the parties have the
right to initiate litigation respecting such equitable claims or remedies. The
forum for such equitable relief shall be in either a state or federal court
sitting in Atlanta, Georgia. Each party waives any right to a trial by jury,
assuming such right exists in an equitable proceeding, and irrevocably submits
to the jurisdiction of said Georgia court.

                                      -7-
<PAGE>

           11.       LOSS OF WARRANT.

                     Upon receipt by the Company of evidence of the loss, theft,
destruction or mutilation of this Warrant, and (in the case of loss, theft
or destruction) of indemnity or security reasonably satisfactory to the Company,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver a new Warrant of like tenor and date.

           12.       NOTICE OR DEMANDS.

                     Notices or demands pursuant to this Warrant to be given or
made by Holder to or on the Company shall be sufficiently given or made if sent
by certified or registered mail, return receipt requested, postage prepaid, and
addressed, until another address is designated in writing by the Company, to the
address set forth in Section 2(a) above. Notices or demands pursuant to this
Warrant to be given or made by the Company to or on Holder shall be sufficiently
given or made if sent by certified or registered mail, return receipt requested,
postage prepaid, and addressed, to the address of Holder set forth in the
Company's records, until another address is designated in writing by Holder.

           IN WITNESS WHEREOF, the undersigned has executed this Warrant as of
May 21, 2002.

                                           VALESC INC.

                                           By: ________________________________
                                                Samuel Cohen, President

                                      -8-
<PAGE>

                                    EXHIBIT A

                            EXERCISE FORM FOR WARRANT

                                 TO: VALESC INC.

           The undersigned hereby irrevocably exercises the right to purchase
____________ of the shares of Common Stock (the "Common Stock") of Valesc Inc. a
Delaware corporation (the "Company"), evidenced by the attached warrant (the
"Warrant"), and herewith makes payment of the exercise price with respect to
such shares in full, all in accordance with the conditions and provisions of
said Warrant.

1. The undersigned agrees not to offer, sell, transfer or otherwise dispose of
any of the Common Stock obtained on exercise of the Warrant, except in
accordance with the provisions of Section 8(a) of the Warrant.

2. The undersigned requests that stock certificates for such shares be issued
free of any restrictive legend, if appropriate, and a warrant representing any
unexercised portion hereof be issued, pursuant to the Warrant in the name of the
undersigned and delivered to the undersigned at the address set forth below:

Dated: _________

______________________________________________________________________
                                    Signature

______________________________________________________________________
                                   Print Name

______________________________________________________________________
                                     Address

______________________________________________________________________

NOTICE

The signature to the foregoing Exercise Form must correspond to the name as
written upon the face of the attached Warrant in every particular, without
alteration or enlargement or any change whatsoever.
______________________________________________________________________

                                      -9-
<PAGE>

                                    EXHIBIT B

                                   ASSIGNMENT

                    (To be executed by the registered holder
                        desiring to transfer the Warrant)

FOR VALUE RECEIVED, the undersigned holder of the attached warrant (the
"Warrant") hereby sells, assigns and transfers unto the person or persons below
named the right to purchase _______ shares of the Common Stock of Valesc Inc.,
evidenced by the attached Warrant and does hereby irrevocably constitute and
appoint _______________________ attorney to transfer the said Warrant on the
books of the Company, with full power of substitution in the premises.

Dated:                                          ______________________________
                                                          Signature

Fill in for new registration of Warrant:

 ___________________________________
                     Name

___________________________________
                     Address

___________________________________
Please print name and address of assignee
(including zip code number)

_____________________________________________________________________

NOTICE

The signature to the foregoing Assignment must correspond to the name as written
upon the face of the attached Warrant in every particular, without alteration or
enlargement or any change whatsoever.

                                      -10-
<PAGE>SHAREHOLDERS AGREEMENT

           This SHAREHOLDERS AGREEMENT (the "AGREEMENT") is dated as of May 21,
2002 by and among the persons identified as shareholders on the signature pages
attached hereto (individually, a "SHAREHOLDER" and collectively, the
"SHAREHOLDERS") and Valesc Inc., a Delaware corporation (the "COMPANY").

           WHEREAS, the parties hereto deem it in their best interests and in
the best interests of the Company to enter into this Agreement in order to set
forth their respective rights and obligations in connection with their
investment in the Company;

           WHEREAS, the parties hereto desire to restrict the sale, assignment,
transfer, encumbrance, or other disposition of Common Stock pursuant to the
terms hereof;

           NOW, THEREFORE, for and in consideration of the mutual agreements and
understandings set forth herein, the parties hereby agree as follows:

                                   ARTICLE I
                         DEFINITIONS AND RELATED MATTERS

           Section 1.1 DEFINITIONS. When used in this Agreement, the following
terms shall have the respective meanings set forth below:

           "Common Stock" means the common stock, $.0001 par value per share, of
the Company.

           "Disposition" means any (a) offer to sell, sale, contract to sell,
pledge, grant of any option to purchase, grant of a security interest in or
otherwise encumbering or directly or indirectly otherwise disposing of, any
Shares or any security or other right that represents the right to acquire or
receive any Shares, or (b) entering into any swap, hedge or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of any Shares, whether any such transaction described in clause (a)
or (b) above is to be settled by delivery of equity securities, in cash or
otherwise.

           "Offeree Shareholder" means a Shareholder entitled to receive an
Offer.

           "Person" means an individual, partnership, limited partnership,
limited liability company, foreign limited liability company, trust, estate,
corporation, association, enterprise, custodian, trustee, executor,
administrator, nominee, or entity in a representative capacity.

           "Personal Representative" means the executor, administrator,
guardian, or other personal representative of any natural person who has become
deceased or subject to Disability, or any successor or assignee thereof whether
by operation of law or otherwise.

           "Pro Rata Share" means the proportion of Shares owned by a particular
Shareholder to the number of Shares owned by all of the Shareholders having the
same right to purchase or sell at such time under this Agreement.

                                      -1-
<PAGE>

           "Qualified Public Offering" means a registered public offering of
Common Stock under the Securities Act, which public offering is made on a firm
underwritten basis pursuant to a registration statement on Form S-1 or a
successor form and which yields gross proceeds of at least $20,000,000.

           "Securities Act" means the Securities Act of 1933, as amended from
time to time and any successor statute thereto, and the rules and regulations
promulgated thereunder.

           "Shareholders" has the meaning given in the preamble to this
Agreement.

           "Shares" means the shares of Common Stock owned by the Shareholders,
and shall include the community interest, if any, of the spouse of such
Shareholder in such Common Stock.

           Section 1.2 RELATED DEFINITIONAL MATTERS. As used in this Agreement,
pronouns in masculine, feminine and neuter genders shall be construed to include
any other gender, and words in the singular form shall be construed to include
the plural and vice versa, unless the context clearly otherwise requires. As
used in this Agreement, the term "including" shall be construed to be expansive
rather than limiting in nature and to mean "including without limitation",
except where the context clearly otherwise requires.

           Section 1.3 SHARES SUBJECT TO AGREEMENT. This Agreement shall extend
and apply to all Shares now owned by each of the Shareholders and to all Shares
as may hereafter be acquired by any of the Shareholders, whether such Shares
constitute the separate property or community property of any of the individual
Shareholders, and regardless of the capacity in which title to such shares is
held or taken; EXCEPT that this Agreement shall not apply to shares of Common
Stock issuable to each of Jeremy Kraus, Samuel Cohen and Garrett Miller upon
exercise of options granted to each of these Shareholders for the purchase of
300,000 shares of Common Stock that vest in equal installments of 100,000 shares
as of December 31, 2001, 2002 and 2003. This Agreement shall also apply to all
Shares to which the spouse of any Shareholder is entitled by virtue of any
community property or any other laws.

                                   ARTICLE II
                     RESTRICTIONS ON DISPOSITIONS OF SHARES

           Section 2.1 RESTRICTIONS ON DISPOSITIONS.

           (a) GENERAL RESTRICTION. No Shareholder, any spouse of any
Shareholder, any Personal Representative of any Shareholder, or any legal
representative, agent, or assignee of any Shareholder or any spouse of any
Shareholder, as the case may be, shall make any Disposition of any Shares, or
any right or interest therein, except as provided in this Article. The parties
agree that the restrictions contained in this Agreement are fair and reasonable
and in the best interests of the Company and each of its Shareholders.

                                      -2-
<PAGE>

           (b) COMPLIANCE WITH SECURITIES LAWS. Anything in this Agreement to
the contrary notwithstanding, no Disposition of Shares otherwise permitted or
required by this Agreement shall be made unless such Disposition is in
compliance with federal and state securities laws, including without limitation
the Securities Act. In connection with any Disposition or proposed Disposition
of Shares other than a Disposition that is registered under the Securities Act,
if requested by the Company before such Disposition, the holder of such Shares
proposing to effect such Disposition shall provide to the Company a written
opinion of legal counsel who shall be reasonably satisfactory to the Company,
addressed to the Company and reasonably satisfactory in form and substance to
the Company, to the effect that the proposed Disposition of Shares may be
effected without registration under the Securities Act and applicable state
securities laws.

           (c) TRANSFEREES SUBJECT TO AGREEMENT. Except for Dispositions in
accordance with paragraph (e) below, unless otherwise agreed to in writing by
the Company, no Disposition of Shares shall be effective unless and until the
transferee shall execute and deliver to the Company an Addendum Agreement in the
form attached hereto as Exhibit B in which such transferee agrees to be bound by
this Agreement and to observe and comply with this Agreement and with all
obligations and restrictions imposed on Shareholders hereby; each person to whom
a Disposition of Shares is permitted by this Agreement who receives a
Disposition of Shares during the period when this Agreement is in effect, and
who agrees in writing to be bound by the provisions hereof, shall thereafter
become a "Shareholder" for all purposes of this Agreement.

           (d) NON-CONFORMING DISPOSITIONS VOID. Dispositions of Shares may only
be made in strict compliance with all applicable terms of this Agreement, and
any purported Disposition of Shares that does not so comply with all applicable
provisions of this Agreement shall be null and void and of no force or effect,
and the Company shall not recognize nor be bound by any such purported
Disposition and shall not effect any such purported Disposition on the stock
transfer books of the Company.

           (e) VOLUME LIMITATIONS. The following table sets forth the percentage
of a Shareholder's total shareholdings that may be disposed of, subject to the
monthly restrictions set forth below, under this Agreement during the periods
indicated.

----------------------------------------------- --------------------------------
                   Percentage of Total
                   Shareholdings that may be Disposed of by the following
                   Shareholders:
----------------------------------------------- --------------------------------
During the Year   I.  Jeremy Kraus, Samuel Cohen,    II.  Edward Kraus,
Ended June 1st:       Garrett Miller                      Harry Kraus
----------------- ---------------------------------- ------------------------
    2003                    0%                                   0%
----------------- ---------------------------------- ------------------------
    2004                   10%                                   33%
----------------- ---------------------------------- ------------------------
    2005                   15%                                   33%
----------------- ---------------------------------- ------------------------
    2006                   20%                                   33%
----------------- ---------------------------------- ------------------------
    2007                   25%
----------------- ---------------------------------- ------------------------
    2008                   30%
----------------- ---------------------------------- ------------------------

In addition, with respect to any amount of Shares that may be disposed of during
a given annual period (an "ANNUAL AMOUNT"), during any month of such annual
period no Shareholder shall dispose of more than the number of Shares calculated
by dividing the applicable Annual Amount for such Shareholder by 12.

                                      -3-
<PAGE>

           Section 2.2 RIGHTS OF REFUSAL.

           (a) Except for Dispositions in accordance with SECTION 2.1(E) above,
any Shareholder desiring to make a Disposition of Shares (the "OFFERING
SHAREHOLDER") shall first obtain a bona fide arm's length written offer from the
proposed transferee and shall then make an offer ("OFFER") to sell such Shares
as follows:

                  (i) If any Offering Shareholder desires to make a Disposition
           of Shares, such Offering Shareholder shall first Offer such Shares to
           the Company, which shall have the right to purchase all or part of
           such Shares and shall be treated as an "Offeree Shareholder" as set
           forth below.

                  (ii) The Company may, in its sole discretion, assign all or
           part of its right to purchase Shares to the Shareholders (each an
           "OFFEREE SHAREHOLDER"), each of whom shall have the right to purchase
           all or part of its Pro Rata Share of such Shares.

                  (iii) If any Offeree Shareholder elects not to purchase all of
           its Pro Rata Share of such Shares offered pursuant hereto, after the
           expiration of a 30-day period following the date of the Offer, each
           other Offeree Shareholder shall have the right, during the 10-day
           period following the date of expiration of such 30-day period, to
           purchase all or part of its Pro Rata Share of such portion.

           (b) The Offer shall be sent to the Company and to all of the Offeree
Shareholders and shall state the number of Shares involved and the names of, and
the price to be paid by, any proposed bona fide purchasers (the "FIRST OFFER
PRICE"). The date of the Offer shall be the date on which a notice containing
the Offer has been so sent to all parties entitled to receive it.

           (c) If the Offeree Shareholders do not exercise options to purchase
all of the Shares offered within the time periods specified above (the
"SHAREHOLDER OFFER PERIODS"), the Company shall have the option for 30 days
following expiration of the Shareholder Offer Periods to purchase any remaining
Shares offered. If the Company does not have sufficient surplus to permit it
lawfully to purchase all the remaining Shares offered, the Offering Shareholder
and the other Shareholders may take such action to vote their respective shares
to reduce the capital of the Company or take such other steps as may be
appropriate or necessary in order to enable the Company, if possible, lawfully
to purchase all such remaining Shares subject to the Offer.

           (d) The Offering Shareholder shall be permitted, for 120 calendar
days after the lapse of all options arising in connection with such Offer, to
sell any remaining Shares that were the subject of such Offer to the purchaser
identified in the Offer; provided, however, that no such sale shall be made at a
lower price or to any person other than as specified in such Offer; and provided
further, that the proposed transfer pursuant to this Section shall be subject to
the approval by the Board of Directors of the Company. If after the lapse of the
120-day period such Shares have not been sold, the Offering Shareholder must
make a new Offer prior to selling such Shares.

                                      -4-
<PAGE>

           (e) The price per share to be paid upon the purchase of Shares under
this Section shall be the First Offer Price.

           (f) The closing shall be within 30 days of the date the Offer was
accepted, and the Company or the Shareholder or Shareholders, as applicable,
purchasing such Shares shall pay the full amount of the purchase price in full
in cash at such closing. On full payment thereof, the selling Shareholder or
other person or persons holding such Shares shall execute and deliver the
certificates evidencing such Shares to the purchaser. The certificate(s)
evidencing the Shares shall be endorsed in blank for transfer by the selling
Shareholder or by the person acquiring such Shares pursuant to the death of or a
transfer by a Shareholder, and shall, upon notice of the exercise of the option
by the other Shareholders or the Company, be delivered to the Secretary of the
Company as agent of the selling Shareholder and the purchaser. On proof to the
Secretary of the Company that the respective portion of the purchase price has
been paid by such person purchasing such portion of the Shares, the Secretary
shall cause the Company to issue and deliver to such person a certificate
evidencing such person's ownership in such portion of the Shares. However, from
the date of initial payment for the Shares purchased hereunder, the person
purchasing such Shares shall be considered the owner thereof for all purposes,
and the seller thereof shall be treated only as holding a security interest
therein.

           (g) The Company and the Shareholders shall exercise their options to
purchase Shares hereunder by notice of intent to purchase such Shares. Upon the
exercise of an option, the purchaser shall be obligated to make payment as
provided herein.

           Section 2.3 DEATH OF A SHAREHOLDER.

           (a) The death of a Shareholder shall constitute an Offer hereunder
for such deceased Shareholder's stock (including the interest, if any, in such
stock held by such Shareholder's spouse) and the provisions of SECTION 2.2 shall
apply to such Offer. The value of the Shares being purchased shall be determined
by an appraiser knowledgeable in such matters by reason of experience mutually
selected by the Company and the executor of the deceased Shareholder's estate.
If the Company and such executor cannot agree on an appraiser, each of the
Company and such executor shall select one appraiser and the appraisers so
selected shall select a third appraiser to determine the fair market value of
the Shares so offered.

           (b) If the Company elects to purchase the Shares from a deceased
Shareholder's estate pursuant to this Section, the Company shall have the right
to issue a promissory note to the estate as the consideration for the Shares.
Such note shall be subordinated to the Company's bank and mezzanine or
subordinated debt, shall bear interest at 10% per annum and be payable in 24
monthly installments of principal and accrued interest, with payments to
commence within 60 days following final agreement or determination of the value
of the Shares. The Company shall pledge the Shares back to the estate to serve
as collateral for the payment of the note.

           (c) The Board of Directors in its sole discretion may approve the
transfer of shares to a Shareholder's heirs or decedents upon the death of such
Shareholder.

                                      -5-
<PAGE>

           Section 2.4 TERMINATION OF MARITAL RELATIONSHIP. If the marital
relationship of a Shareholder is terminated by divorce and such Shareholder does
not succeed to his or her spouse's community interest in the Shares, such
Shareholder shall have the option to purchase all of his or her spouse's
interest in the Shares, and his or her spouse shall be obligated to sell such
Shares. The price per share at which such Shares shall be purchased shall be an
amount equal to the net book value of one share of such Shares as determined
under generally accepted accounting principles. Such option must be exercised
within 90 days after such divorce. Should such Shareholder fail to exercise such
option within such 90-day period, such failure shall constitute an Offer with
respect to the spouse's community interest in the stock, and the provisions of
SECTION 2.2 shall apply with the exception that the price per share at which the
Shares shall be purchased shall be the net book value per share of Shares as
determined under generally accepted accounting principles. The date of the Offer
shall be the 91st day after such divorce. Notwithstanding the foregoing, the
Board of Directors in its sole discretion may approve the spouse retaining his
or her interest in the Shares.

           Section 2.5 BANKRUPTCY OF SHAREHOLDER. In the event a Shareholder (a)
files a voluntary petition in bankruptcy, (b) makes an assignment for the
benefit of creditors, or (c) is adjudicated bankrupt or insolvent, unless the
Board of Directors otherwise agrees, such event shall constitute an Offer and
the provisions of SECTION 2.2 shall apply.

           Section 2.6 INVOLUNTARY DISPOSITION. Prior to or upon any involuntary
Disposition of Shares (as provided for in SECTIONS 2.4 AND 2.5), the Shareholder
who owns such Shares, or his representative, shall send written notice thereof,
disclosing in full to the Company and the other Shareholders the nature and
details of such involuntary Disposition. An involuntary Disposition shall
constitute an Offer and the provisions of SECTION 2.2 hereof shall apply;
provided that the option of the Company pursuant to SECTION 2.2(C) shall be for
90 days from the later of such involuntary Disposition or the sending of such
notice.

           Section 2.7 ENDORSEMENT OF STOCK CERTIFICATES.

           (a) Conformed copies of this Agreement shall be filed with the
Secretary of the Company and kept with the records of the Company at its
principal office. An officer of the Company shall endorse each certificate
representing the shares of Common Stock heretofore or hereafter issued by the
Company by causing to be placed on the face thereof the following:

                     TRANSFER IS SUBJECT TO RESTRICTIVE STOCK LEGEND ON BACK

and by causing to be placed on the back thereof the following legend:

                     THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE
                     SUBJECT TO THE TERMS OF A SHAREHOLDERS AGREEMENT DATED AS
                     OF MAY 21, 2002, BY AND AMONG THE COMPANY AND CERTAIN OTHER
                     PERSONS, WHICH AGREEMENT CONTAINS, AMONG OTHER PROVISIONS,
                     RESTRICTIONS ON THE TRANSFER, SALE, PLEDGE, HYPOTHECATION,
                     ASSIGNMENT, OR OTHER DISPOSITION OF THE SHARES OF STOCK
                     REPRESENTED BY THIS CERTIFICATE. A COPY OF SUCH
                     SHAREHOLDERS AGREEMENT HAS BEEN FILED, AND IS AVAILABLE FOR
                     REVIEW BY THE RECORD HOLDER OF THIS CERTIFICATE, AT THE
                     PRINCIPAL OFFICE OF THE COMPANY.

                                      -6-
<PAGE>

           (b) In addition, each Shareholder agrees that, if legal counsel to
the Company deems appropriate, each certificate representing shares of Common
Stock also shall bear a legend in substantially the following form:

                     THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE
                     NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
                     AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE
                     OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED, OR OTHERWISE
                     DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE
                     REASONABLY SATISFACTORY TO THE COMPANY (WHICH, IN THE
                     DISCRETION OF THE COMPANY, MAY INCLUDE AN OPINION OF
                     COUNSEL SATISFACTORY TO THE COMPANY) THAT SUCH OFFER, SALE,
                     PLEDGE, TRANSFER, OR OTHER DISPOSITION WILL NOT VIOLATE
                     APPLICABLE FEDERAL OR STATE SECURITIES LAWS.

           Section 2.8 SPECIFIC PERFORMANCE. Each of the parties to this
Agreement acknowledges that it shall be impossible to measure in money the
damage to the Company or the Shareholder(s), if any of them or any transferee or
any legal representative of any party hereto fails to comply with any of the
restrictions or obligations imposed by this Article, that every such restriction
and obligation is material, and that in the event of any such failure, the
Company or the Shareholder(s) shall not have an adequate remedy at law or in
damages. Therefore, each party hereto consents to the issuance of an injunction
or the enforcement of other equitable remedies against him at the suit of an
aggrieved party without the posting of any bond or other security, to compel
specific performance of all of the terms of this Article and to prevent any
disposition of Shares in contravention of any terms of this Article, and waives
any defenses thereto, including, without limitation, the defenses of (i) failure
of consideration, (ii) breach of any other provision of this Agreement, and
(iii) availability of relief in damages.

                                  ARTICLE III
                                  MISCELLANEOUS

Section 3.1 MANNER OF GIVING NOTICE. All notices, requests, demands, and other
communications required or permitted to be given or made hereunder by any party
hereto shall be in writing and shall be deemed to have been duly given or made
(a) if delivered personally, at the time of such delivery, (b) if transmitted by
first class registered or certified mail, postage prepaid, return receipt
requested, three business days after the date of such mailing, (c) if sent by
prepaid overnight delivery service, the next business day after being sent, or
(d) if transmitted by cable, telegram, facsimile, or telex, at the time of such
transmission, in each case to the parties at the following addresses (or at such
other addresses as shall be specified by the parties by like notice):

                                      -7-
<PAGE>

           If to the Company:

                     Valesc Inc.
                     2300 Coit Road, Suite 300B
                     Plano, TX 75075
                     Fax:  (972) 496-5135

           With a copy to:

                     Hecht & Associates, P.C.
                     60 East 42nd Street, Suite 5101
                     New York, NY 10165
                     Attn:  Perry Nagle, Esq.
                     Fax:  (212) 490-3263

If to a Shareholder, at the address next to his or her name on signature pages
hereto or any Addendum Agreement.

           Any such notice shall, if delivered personally, be deemed received
upon delivery; shall, if delivered by telecopy, be deemed received when
confirmed; and shall, if delivered by mail, be deemed received upon the earlier
of actual receipt thereof or five business days after the date of deposit in the
United States mail.

           Section 3.2 WAIVER OF NOTICE. Whenever any notice is required to be
given to any Shareholder under the provisions of this Agreement, a waiver
thereof in writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.

           Section 3.3 COUNTERPART SIGNATURES. This Agreement may be executed in
any number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by all of
the Shareholders so long as each counterpart shall be signed by one or more of
the Shareholders and so long as each of the other Shareholders shall sign at
least one counterpart which shall be delivered to the Company.

           Section 3.4 SEVERABILITY. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid or unenforceable provision, there shall be added automatically as a part
of this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

                                      -8-
<PAGE>

           Section 3.5 ENTIRE AGREEMENT; AMENDMENTS.

           (a) This Agreement supersedes all prior agreements among the parties
with respect to the subject matter hereof. This Agreement contains the entire
agreement among the parties with respect to such subject matter and may not be
amended, supplemented, or discharged, and no provision hereof or thereof may be
modified or waived, except by an instrument in writing signed by the Company and
all persons then a party to this Agreement as Shareholders of the Company.

           (b) No waiver of any provision hereof by any party shall be deemed a
waiver by any other party nor shall any such waiver by any party be deemed a
continuing waiver of any matter by such party.

           (c) No amendment, modification, supplement, discharge or waiver
hereof or hereunder shall require the consent of any person not a party to this
Agreement as a Shareholder or as the Company.

           Section 3.6 GOVERNING LAW AND JURSIDICTION. This Agreement shall be
governed and construed in accordance with the laws of the State of New York,
without regard to the conflicts of law principles of such state. For purposes of
any dispute under this Agreement, the parties consent to the exclusive
jurisdiction of the federal district court for the Southern District of New
York.

           Section 3.7 BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the Company and each Shareholder and its
respective heirs, permitted successors, permitted assigns, permitted
distributees and legal representatives, and by their signatures hereto, the
Company and each Shareholder intends to and does hereby become bound. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person other than the parties hereto and their respective permitted
successors and assigns any legal or equitable right, remedy or claim under, in
or in respect of this Agreement or any provision herein contained.

           Section 3.8 FUTURE ACTIONS. The Company and the Shareholders shall
execute and deliver all such future instruments and take such other and further
action as may be reasonably necessary or appropriate to carry out the provisions
of this Agreement and the intention of the parties as expressed herein.

           Section 3.9 HEADINGS; EXHIBITS. All article and section headings
herein are for convenience of reference only and are not part of this Agreement,
and no construction or inference shall be derived therefrom. The Exhibits
attached hereto and referred to herein are a part of this Agreement as if fully
set forth herein. All references to Sections and Exhibits shall be deemed
references to such parts of this Agreement, unless the context shall otherwise
require.

           Section 3.10 TERMINATION OF THIS AGREEMENT. Notwithstanding any
provision of this Agreement to the contrary, but subject to the provisions of
the following sentence, this Agreement shall immediately and automatically
terminate, without any further action by any party, upon any of the following:
(a) the consummation of any merger or consolidation to which the Company is a
party and is not the surviving entity (the Company shall not be deemed to be the
surviving entity except in the case of any merger or consolidation immediately
following which a majority of the capital stock of the surviving or resulting
company shall be held by the Shareholders), or (b) consummation of a Qualified
Public Offering.

                                      -9-
<PAGE>

           IN WITNESS WHEREOF, the parties have executed this Agreement, or
caused this Agreement to be executed by their duly authorized representatives,
all as of the day and year first above written.

                                         VALESC INC.

                                         By: _________________________________
                                         Name:  Jeremy Kraus
                                         Title:  Chief Executive Officer

                                         SHAREHOLDERS:

                                         -------------------------------------
                                         Jeremy Kraus
                                         Address:____________________

                                         -------------------------------------
                                         Samuel Cohen
                                         Address:____________________

                                         -------------------------------------
                                         Garrett Miller
                                         Address:____________________

                                         -------------------------------------
                                         Harry Kraus
                                         Address:____________________

                                         -------------------------------------
                                         Edward Kraus
                                         Address:____________________

                                      -10-
<PAGE>

                                                                       EXHIBIT A

                           FORM OF ADDENDUM AGREEMENT

           This Addendum Agreement is made as of ________________________,
200__, by and among ____________________________________________ (the "NEW
SHAREHOLDER") and ____________________________________________, the New
Shareholder's spouse, and VALESC INC., a Delaware corporation (the "COMPANY"),
pursuant to that certain Shareholders Agreement dated as of May ___, 2002 (the
"AGREEMENT"), by and among the Company and certain of its Shareholders (as
defined in the Agreement).

           WHEREAS, the Company and the Shareholders entered into the Agreement
to impose certain restrictions and obligations upon themselves, and to provide
certain rights, with respect to the common stock of the Company (the "COMMON
STOCK"); and

           WHEREAS, the New Shareholder desires to become a Shareholder of the
Company; and

           WHEREAS, the Company and the Shareholders have required in the
Agreement that all persons to whom shares of Common Stock subject to the
Agreement are transferred and any other person acquiring shares of Common Stock
must enter into an Addendum Agreement binding the New Shareholder to the
Agreement to the same extent as if he was an original party thereto and imposing
the same restrictions and obligations on the New Shareholder and the shares of
Common Stock to be acquired by the New Shareholder as are imposed upon the
Shareholders under the Agreement;

           WHEREAS, the New Shareholder shall be subject to the volume
limitations set forth in the table in SECTION 2.1(E) of the Agreement, and
specifically the limitations set forth in the following column (check one):
Column I____ Column II____

           NOW, THEREFORE, in consideration of the mutual promises of the
parties and as a condition of the purchase of Common Stock, the New Shareholder
acknowledges that he has received and read the Agreement and that the New
Shareholder shall be bound by, and shall have the benefit of, all of the terms
and conditions set out in the Agreement to the same extent as if he was an
original party to the Agreement. This Addendum Agreement shall be attached to
and become a part of the Agreement.

New Shareholder

Address:

                                      -11-
<PAGE>

           AGREED TO as of the date written above by the undersigned for itself
and on behalf of the Shareholders of the Company pursuant to the Agreement:

VALESC INC.

By:
   -----------------------------------------------------------
Name:
Title:

                                      -12-
<PAGE>

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