Document:

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                                                                    Exhibit 10.2

                    PRODUCT DEVELOPMENT AND LICENSE AGREEMENT

THIS DEVELOPMENT AND LICENSE AGREEMENT (the "Agreement") is made as of February
6, 2004 (the "Effective Date"), by and between BCONNECTED SOFTWARE, INC., a
Delaware corporation, with its principal office located at 380 Interlocken
Crescent, Suite 770, Broomfield, Colorado 80021 ("bConnected") and TRAC MEDICAL
SOLUTIONS, INC., a New York corporation with its principal office located at
2165 Technology Drive, Schenectady, NY 12308 ("Trac Medical").

                                    RECITALS

         WHEREAS, bConnected has developed certain proprietary commerce,
collaboration and communication software solutions which enable bConnected's
customers to exchange documents and conduct business over the Internet with
vendors, suppliers, customers and other trading partners, which such software
solutions include without limitation the Document Viewer, Integrator, Process
Engine, and the Visual Modeling Tool;

         WHEREAS, Trac Medical is, among other things, a leader in the
electronic healthcare forms ("eDocuments") processing industry; and

         WHEREAS, bConnected and Trac Medical desire to enter into an agreement
for the development, production of, and support an enterprise version of Trac
Medical's proprietary electronic healthcare forms processing solution known as
CareCert(R), which will have the characteristics and functionality described
more fully in this Agreement.

         NOW, THEREFORE, in consideration of the mutual promises and
undertakings of the parties, and for other good and valuable consideration,
receipt of which is hereby acknowledged, bConnected and Trac Medical agree as
follows:

                                    AGREEMENT

1.       DEFINITIONS.

1.1      "AA Homecare" means the American Association for Homecare.

         1.2 "bConnected Customers" means those entities listed in Exhibit D, as
updated from time to time by bConnected during the Term, that are, or have been
customers of bConnected within the previous twelve (12) month rolling periods
during the Term and who are not Members.

         1.3 "bPIP Software" means bConnected's Business Process Integration
Platform computer software programs described in Exhibit A hereto, including
updates and new releases thereto provided to Trac Medical pursuant to this
Agreement, if any, and accompanying Documentation.

         1.4 "CareCert ES" means the enterprise version of the CareCert(R)
eDocuments processing solution, as specified in the response to the RFP
submitted by the parties [ * * * * ], to be developed by bConnected under this
Agreement and consisting of [ * * * * ] and providing at a minimum functionality
equivalent to that as provided by the CareCert Software as more particularly
defined in the Statement of Work.

         1.5 "CareCert Software" means Trac Medical's CareCert(R) electronic
forms processing computer software programs described in Exhibit B hereto,
including updates and new releases thereto provided to bConnected pursuant to
this Agreement, if any, and accompanying Documentation.

         1.6 "Confidential Information" means all information related to a
party's business, financial affairs or operations, including but not limited to
information related to business plans, technology, source code, product or
service Development Requirements, Specifications, Acceptance Criteria,
customers, pricing, techniques and methods, which is either marked or identified
as confidential or which the receiving party knew or reasonably should have
known, under the circumstances, was confidential.

         1.7 "Customer" means a person, company, or other legal entity (a)
licensed to use the CareCert Software or CareCert ES for its own internal
purposes and not for distribution to, or use on behalf of, others or (b) to whom
services are provided using the CareCert Software or CareCert ES.

         1.8 "Developments" means all Technology made, conceived or reduced to
practice by either Party or its employees in connection with the development of
CareCert ES under this Agreement and all tangible and intangible results and
items arising out of or constituting the results of the development of CareCert
ES, but excluding the [ * * * * ] or any portion thereof.

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

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         1.9 "Documentation" means all information provided by a party to the
other party which describes the form, features or operation of its software and
which is contained in a tangible medium, such as written format, tape, magnetic
or other media.

         1.10 "Executable Code" means the fully compiled version of a software
program that can be executed by a computer and used by an end user without
further compilation.

         1.11 "HA Agreement" means the definitive agreement, entered into
concurrently with or subsequent to this Agreement, between Trac Medical,
bConnected and Homecare Association regarding the development and marketing of
CareCert ES to Members. The parties agree that execution of the HA Agreement is
an express condition precedent to bConnected's obligations under this Agreement.

         1.12 "Homecare Association" means Homecare Association LLC, a party to
the HA Agreement and a limited liability company organized by AA Homecare to
carry out the transaction contemplated by the HA Agreement.

         1.13 "Intellectual Property Rights" means all present and future
worldwide intellectual property rights, including without limitation,
copyrights, trademarks, service marks, trade secrets, know how, inventions,
patents, patent applications, moral rights and all other proprietary rights,
whether registered or unregistered.

         1.14 "Malicious Code" means a computer program or piece of computer
code intentionally created to impair or corrupt computing systems, software,
and/or computer networks, including, without limitation, any so-called "worms,"
"viruses," "back doors," "time bombs," "Trojan Horses," "drop dead devices," (as
these terms are commonly used in the computer software field), or other software
routines designed to permit unauthorized access, to disable or erase software,
hardware, or data, or to perform any other similar type of function.

         1.15 "Marks" means the trademarks and trade names of Trac Medical and
bConnected listed in Exhibit A.

         1.16 "Member" means a person, company, or other legal entity that is a
member of AA Homecare.

         1.17 "RFP" means the AA Homecare request for proposal.

         1.18 "Source Code" means the human-readable version of a software
program that can be compiled into Executable Code.

         1.19 "Specifications" means the technical and other specifications for
CareCert ES, as set forth in the Statement of Work.

         1.20 "Statement of Work" shall means the statement of work attached to
this Agreement as Exhibit B as further described in Section 2.1.

         1.21 "Technology" shall mean algorithms, concepts, data, designs,
developments, discoveries, inventions or innovations, whether or not patentable;
and object models and modeling tools, HTML code, know-how, methods, Executable
Code, Source Code, procedures, programs, techniques, text and web pages, whether
or not copyrightable.

         1.22 "Trac Medical Service" means Trac Medical's proprietary eDocument
service currently marketed under the name CareCert, as currently operational and
as may be modified, upgraded or otherwise improved in the future so long as it
continues to provide the core functionality currently offered, including without
limitation, any updated version of the such service using CareCert ES, as
described in this Agreement and the HA Agreement.

2. DEVELOPMENT EFFORT

         2.1 Statement of Work. bConnected has prepared the Statement of Work
attached to this Agreement as Exhibit B, mutually agreed to by the parties, that
outlines the requirements for development of CareCert ES, as set forth in the
response to the RFP submitted by the parties on November 14, 2003. The Statement
of Work sets forth the high level functional Specification of what will be built
with specific deliverables and timetable and the estimate for the total amount
of Professional Services Fees. The Statement of Work includes, without
limitation, the following: (a) development requirements and responsibilities of
each party (the "Development Requirements"), (b) major characteristics of
performance and functionality, technical requirements and technical
specifications of CareCert ES, (c) the procedures for testing (if any) CareCert
ES and the acceptance criteria for the acceptance of CareCert ES ("Acceptance
Criteria"), (d) target dates for completion of major milestones and (e) cost &
time estimates for each major milestone. The parties agree that the Statement of
Work shall automatically, without any further action by the parties, incorporate
the terms and conditions of this Agreement. The Statement of Work may be
modified, but only if such modification is in writing and signed by both
parties. In the event of any conflict between any terms of this Agreement and
the terms set forth in the Statement of Work, the terms of this Agreement shall
govern, unless specifically stated otherwise in the Statement of Work.

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

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         2.2 Liaison. Upon the execution of the Agreement, the parties shall
commence the necessary interfacing to permit bConnected to immediately commence
development of CareCert ES. Each party agrees to appoint a principal point of
contact, identified in the Statement of Work as "Project Managers," to whom all
communications between the parties with respect to development of CareCert ES
shall be directed.

         2.3 Delivery of Trac Medical Property. Subject to Section 4.2, Trac
Medical shall deliver to bConnected such of its Trac Medical Property (as
defined below) as may be reasonably required by bConnected in order to enable it
to comply with its obligations as set forth in this Agreement, including all
necessary code and other design information related to the current version of
the CareCert Software, and any other materials or information related to the
CareCert Software and its operating system, as may be reasonably required by
bConnected in order to perform the development work required to [ * * * * ]

         2.4 Cooperation and Assistance. The parties will cooperate and assist
each other in connection with the development of CareCert ES. Such cooperation
and assistance will include, in addition to any duties or responsibilities of
the parties set forth in the Statement of Work, each party providing to the
other party in a timely manner all information reasonably necessary for the
other party to perform it obligations in connection with the development of
CareCert ES. In addition, Trac Medical shall provide the services of at least
one engineer with a high level of familiarity with the current version of the
CareCert Software overall design and specific code, and access to other Trac
Medical employees as may be reasonably required to assist bConnected in
connection with the development of CareCert ES.

         2.5 Development of CareCert ES. Subject to the terms and conditions of
this Agreement (including, without limitation payment of all applicable fees),
bConnected shall [ * * * * ] to develop and deliver CareCert ES in accordance
with the Statement of Work and the Specifications. CareCert ES shall be
delivered in such format and on such media as agreed to by the parties in the
Statement of Work. Subject to milestones set forth in the Statement of Work,
bConnected shall determine the manner and means of developing CareCert ES and
shall use its [ * * * * ] to meet any target dates set forth in the Statement of
Work; provided, however, that the target date for CareCert ES shall be extended
by one (1) day for each day of delay caused by failure of Trac Medical to
complete any of its prerequisite obligations in timely fashion. bConnected shall
have no liability for delays in the delivery of CareCert ES resulting from the
acts or omissions of Trac Medical, its agents or employees. Provided bConnected
uses its [ * * * * ] to timely develop and deliver CareCert ES in accordance
with the Statement of Work, Trac Medical acknowledges and agrees that any target
dates set forth in the Development Requirements are only estimates that may not
be obtainable and are subject to such changes as may be necessary or appropriate
during the course of the development as agreed to by the parties.

         2.6 Delivery; Acceptance.

              (a) Subject to the terms and conditions of this Agreement
(including, without limitation payment of all applicable fees that are not
disputed by Trac Medical in good faith), bConnected will deliver CareCert ES to
Trac Medical (a) in its entirety in Executable Code format and (b) in Source
Code format, excluding any Source Code for any bConnected Property (which shall
be governed by Section 11 of this Agreement). Trac Medical's access to the
Source Code prior to its acceptance of CareCert ES shall be limited solely to
the purpose of determining whether CareCert ES satisfies the Acceptance
Criteria. Upon completion of the milestones as set forth in the Statement of
Work, Trac Medical shall have the right to receive the Source Code to CareCert
ES, excluding any Source Code for any bConnected Property, for such acceptance
testing, and bConnected shall promptly deliver such Source Code to Trac Medical,
upon the reasonable request of Trac Medical's Project Manager. Trac Medical's
obligation to pay all applicable fees that are not disputed in good faith prior
to its receipt of such Source Code shall be limited to those fees which are
actually due and owing as of the date Trac Medical requests delivery of the
Source Code. In the event that CareCert ES fails to function during development
and neither Trac Medical nor bConnected can remedy the problem within a
reasonable time frame, then Trac Medical shall be entitled to review the bPIP
Source Code in the presence of the bConnected technical lead on the project on
the bConnected premises, at a time convenient to both parties. Trac Medical
acknowledges that at no time will Source Code to bConnected Property be
transferred to Trac Medical except as provided under Section 11 of this
Agreement and the Source Code Escrow Agreement between the parties.

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

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              (b) Upon delivery of CareCert ES to Trac Medical, Trac Medical
shall have the right to review and test CareCert ES for a period of three (3)
weeks following Trac Medical's receipt thereof (the "Acceptance Period") to
determine whether CareCert ES operates substantially in accordance with the
Acceptance Criteria. If Trac Medical fails to notify bConnected of its rejection
of CareCert ES by the expiration of the Acceptance Period, or if CareCert ES
operates substantially in accordance with the Acceptance Criteria, then CareCert
ES will be deemed accepted upon the expiration of the Acceptance Period. If Trac
Medical determines that CareCert ES fails to operate substantially in accordance
with the Acceptance Criteria, Trac Medical will, prior to the expiration of the
Acceptance Period, provide to bConnected a written rejection notice specifying
its reasons for rejecting CareCert ES in sufficient detail to allow bConnected
to reproduce such failure, and bConnected will use its [ * * * * ] to remedy
the failure within three (3) weeks after receipt of such rejection notice. At
the end of such three (3) week period, bConnected will submit a corrected
version of CareCert ES to Trac Medical for further review pursuant to the terms
of this Section 2.6. The procedure in this Section 2.6 will be repeated with
respect to the corrected version of CareCert ES to determine whether CareCert ES
operates substantially in accordance with the Acceptance Criteria, unless and
until Trac Medical issues a final rejection of CareCert ES after rejecting
CareCert ES on at least two (2) prior occasions. If Trac Medical issues a final
rejection of CareCert ES pursuant to this Section 2.6, the parties will submit
the dispute to Homecare Association or AA Homecare for consultation with the
parties. The parties agree that an appropriate committee of at least five (5)
persons of AA Homecare will make the final decision regarding any dispute in
connection with the acceptance of the CareCert ES. Upon final acceptance of
CareCert ES, bConnected will promptly provide Trac Medical with one (1) copy of
the Source Code for Developments created by bConnected under this Agreement. In
the event CareCert ES, as delivered by bConnected does not satisfy the
Acceptance Criteria according to the foregoing procedures, Trac Medical shall
have the right to terminate this Agreement in accordance with Section 10.2(c).
Nothing herein shall confer jurisdiction upon Homecare Association or AA
Homecare with respect to the CareCert Software.

         2.7 Change Orders; Conflicts. In the event either party requires a
material change to the Development Requirements or Specifications, such party
will provide a written change order to the other for approval, specifying the
change requested (each a "Change Order"). Each party agrees that a Change Order
may necessitate a change in the target dates and fees due under this Agreement.
No Change Order will be binding upon either party until it is signed by the
authorized representatives of both parties. Each Change Order will be governed
by the terms and conditions of this Agreement. In the event of a conflict
between the terms and conditions of this Agreement and those of a Change Order,
the terms and conditions of this Agreement will control, unless specifically
stated otherwise in the Statement of Work or applicable Change Order.

3. OWNERSHIP.

         3.1 bConnected Property. bConnected shall own and retain all right,
title and interest in and to all Technology of bConnected in existence as of the
Effective Date, including without limitation the bPIP Software, and Technology
that bConnected creates during the Term, but independent of, this Agreement,
together with all Intellectual Property Rights therein or thereto ("bConnected
Property"). The bConnected Property includes any modifications, enhancements to
or derivative works of the bConnected Property made, conceived or reduced to
practice by bConnected or its employees during the Term ("bConnected
Derivatives"). Any [ * * * * ] created by bConnected specifically for use with [
* * * * ] shall be considered part of the [ * * * * ] and [ * * * * ] under
Section 4. Except as otherwise expressly provided in Section 4, Trac Medical
shall have no right in or to any bConnected Property or license under
bConnected's Intellectual Property Rights, implied or express.

         3.2 Trac Medical Property. Trac Medical shall own and retain all right,
title and interest in and to (i) all Technology of Trac Medical in existence as
of the Effective Date, including without limitation the CareCert Software, and
Technology that Trac Medical creates during the Term, but independent of, this
Agreement, together with all Intellectual Property Rights therein or thereto and
(ii) all Developments made, conceived or reduced to practice by bConnected or
Trac Medical or their employees in the course of performing any services under
this Agreement, together with all Intellectual Property Rights therein or
thereto (the "Trac Medical Property"). Except as otherwise expressly provided in
the Statement of Work, the Trac Medical Property includes any modifications,
enhancements to or derivative works of the Trac Medical Property made, conceived
or reduced to practice solely by Trac Medical or its employees during the Term
("Trac Medical Derivatives"). Any Trac Medical Derivatives necessary for use
with CareCert ES shall be considered part of the CareCert Software and licensed
to bConnected under Section 4. Except as otherwise expressly provided in Section
4, bConnected shall have no right in or to any Trac Medical Property or license
under Trac Medical's Intellectual Property Rights, implied or express.

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

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         3.3 Assignment. Subject to the terms and conditions of this Agreement,
including the payment of all applicable fees which Trac Medical does not dispute
in good faith, bConnected hereby assigns to Trac Medical all of bConnected's
right, title, and interest in and to those Developments created by bConnected
under this Agreement, together with all Intellectual Property Rights therein or
thereto. bConnected agrees to execute such documents, render such assistance,
and take such other reasonable actions as Trac Medical may reasonably request,
at Trac Medical's expense, to apply for, register, perfect, confirm, and protect
Trac Medical's rights in such Developments.

4. LICENSES.

         4.1 Trac Medical License to bPIP Software and Developments. Subject to
the terms and conditions of this Agreement (including the restrictions set forth
in Section 4.4), bConnected grants to Trac Medical a perpetual, non-exclusive,
non-transferable (except as permitted in Section 14.3) license to:

              (a) reproduce and distribute copies of the bPIP Software and such
Developments as may be bConnected Property, in Executable Code only, as [ * * *
* ], directly to Customers pursuant to a Customer Agreement that satisfies the
requirements of Section 4.6 in the form mutually agreed to by the parties; and

              (b) use bConnected Property, in Executable Code form only, as [ *
* * * ] to provide application services directly to Customers pursuant to a
Customer Agreement that satisfies the requirements of Section 4.6 in the form
mutually agreed to by the parties.

         4.2 bConnected License to CareCert Software. Subject to the terms and
conditions of this Agreement, Trac Medical grants to bConnected a non-exclusive,
non-transferable (except as permitted under Section 14.3) license to:

              (a) use, reproduce, modify, and create derivative works of the
CareCert Software, in Source Code form, only as may be [ * * * * ] and to
otherwise [ * * * * ] with the [ * * * * ] and the [ * * * * ] to create
CareCert ES; and

              (b) market and promote the CareCert Software, in Executable Code
only, solely as integrated into CareCert ES, directly to the bConnected
Customers pursuant to a Sales Agreement (as defined below); and

              (c) use the CareCert Software, in Executable Code form only,
solely as integrated in CareCert ES to conduct demonstrations directly for the
bConnected Customers.

         4.3      Exclusivity.

              (a) During the [ * * * * ] and for [ * * * * ] after [ * * * * ],
or (ii) enter into a [ * * * * ] or any other [ * * * * ] with any [ * * * * ]
or [ * * * * ], as the case may be, pursuant to which such [ * * * * ] or [ * *
* * ], acting on behalf of such entity, will [ * * * * ] or technology
substantially [ * * * * ] for the purpose of [ * * * * ]. Nothing in this
Section 4.3 shall be construed to prevent either party from developing, using,
licensing or distributing (either directly or pursuant to an agreement wit a
third-party) any upgrade or modification to CareCert ES in order to (A) comply
with its obligations arising under Section 5 hereof, the HA Agreement or other
end user agreement or (B) otherwise maintain or enhance the functionality of
CareCert ES.

              (b) During the [ * * * * ] will have the [ * * * * ] to act as [ *
* * * ] to [ * * * * ]to the [ * * * * ]. [ * * * * ] will not, nor will it
permit any [ * * * * ] to, [ * * * * ] or provide [ * * * * ] using [ * * * * ]
to [ * * * * ] unless and until the parties execute a mutually agreed upon sales
representative or similar agreement ("Sales Agreement").

           4.4      Restrictions.

              (a) Trac Medical acknowledges that the bConnected Property and the
structure, organization, and Source Code thereof constitute valuable trade
secrets of bConnected. Accordingly, except as expressly permitted herein or as
otherwise authorized by bConnected in writing, Trac Medical will not, and will
not permit any third party to (a) modify, adapt, alter, translate, or create
derivative works from the bConnected Property; (b) sublicense, lease, rent,
loan, sell, distribute, make available or otherwise transfer the bConnected
Property to any third party, (c) reverse engineer, decompile, disassemble, or
otherwise attempt to derive the Source Code for the bConnected Property; or (d)
otherwise use or copy the bConnected Property except as expressly allowed under
Section 4.1.

[ * Certain information on this page has been omitted and filed separately with
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              (b) bConnected acknowledges that the Trac Medical Property and the
structure, organization, and Source Code thereof constitute valuable trade
secrets of Trac Medical. Accordingly, except as expressly permitted herein or as
otherwise authorized by Trac Medical in writing, bConnected will not, and will
not permit any third party to (a) modify, adapt, alter, translate, or create
derivative works from the Trac Medical Property; (b) sublicense, lease, rent,
loan, sell, distribute, make available or otherwise transfer the Trac Medical
Property to any third party, (c) reverse engineer, decompile, disassemble, or
otherwise attempt to derive the Source Code for the Trac Medical Property; or
(d) otherwise use or copy the Trac Medical Property except as expressly allowed
under Section 4.2.

              (c) Trac Medical may distribute CareCert ES or provide application
services using CareCert ES to any entity [ * * * * ], pursuant to the Sales
Agreement which shall set forth the appropriate terms and conditions as well as
the [ * * * * ] in a form and [ * * * * ].

         4.5 Trademark License; Branding. Subject to the terms and conditions of
this Agreement, each party grants to the other a non-exclusive, non-transferable
(except as permitted under Section 14.3), royalty-free license to use and
reproduce the such party's Marks solely in connection with marketing, promotion
and demonstration of CareCert ES. Each party agrees to state in appropriate
places on all materials using the other party's Marks that such party's Marks
are trademarks of such party and to include the symbol (TM) or (R) as
appropriate. Each party grants no rights in its Marks other than those expressly
granted in this Section 4.5. The parties will market and distribute CareCert ES
as "CareCert ES," unless otherwise mutually agreed in writing. Each party agrees
not to take any action inconsistent with the ownership of the other party's
Marks. Neither party will adopt, use, or attempt to register any trademarks or
trade names that are confusingly similar to the other party's Marks or in such a
way as to create combination marks with the other party's Marks. Each Party will
provide the other party with samples of all products and materials that contain
the other party's Marks prior to their public use, distribution, or display for
such party's quality assurance purposes and will obtain the other party's
written approval before such use, distribution, or display. Upon request, each
party will modify or discontinue any use of the other party's Marks if such
party determines that such use does not comply with it's then-current trademark
usage policies and guidelines.

         4.6 Customer Agreements. Before distributing CareCert ES or providing
applications services using CareCert ES to a Customer, Trac Medical will enter
into a binding, written agreement with such Customer that contains terms no less
restrictive than those set forth in this Agreement. Trac Medical will enforce
each such agreement with at least the same degree of diligence that Trac Medical
uses to enforce similar agreements for its own products or other software
products that it distributes, but in no event less than reasonable efforts. Trac
Medical will promptly notify bConnected if Trac Medical becomes aware of any
material breach of any such agreement as such breach relates to the bPIP
Software. Upon the termination of any such agreement, Trac Medical will use
reasonable efforts to obtain from the Customer all copies of CareCert ES and
Documentation that contain bConnected Property in such Customer's possession or
control.

         4.7 Required Third Party Hardware and Software. Trac Medical and/or
Customers will be responsible for obtaining and maintaining all technology
necessary to enable CareCert ES, including without limitation, [ * * * * ]
(including those licenses set forth in Exhibit A [ * * * * ]. Trac Medical shall
not be responsible for any hardware or software licenses required by bConnected
in connection with the development of CareCert ES. In the event that Trac
Medical installs redundant servers for CareCert ES or other remote equipment or
requires services to support CareCert ES redundancy, these capital and operating
expenses shall be the sole responsibility of Trac Medical.

5. SUPPORT AND MAINTENANCE SERVICES.

         5.1 Subject to the terms and conditions of this Agreement, for a period
of [ * * * * ] beginning on date of the final delivery of CareCert ES to Trac
Medical in accordance with the performance objectives and specific deliverables
set out in the Statement of Work ("Initial Support Term"), bConnected shall
provide Trac Medical with those support and maintenance services for the bPIP
Software and the Developments described in Exhibit C attached hereto ("Support
Services").

[ * Certain information on this page has been omitted and filed separately with
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         5.2 Subject to the terms and conditions of this Agreement, including
without limitation Trac Medical's payment of all applicable Support Fees, for
the remainder of the Initial Term after the end of the Initial Support Term (the
"Subsequent Support Term"), Trac Medical will pay for and obtain Support
Services from bConnected and bConnected will provide the Support Services to
Trac Medical, in accordance with Section 6.5.

6. FEES; EXPENSES; PAYMENT.

         6.1 Setup and Integration Fee. Upon Trac Medical's receipt of at least
[ * * * * ] under the [ * * * * ], Trac Medical will pay bConnected [ * * * * ]
in the form of a [ * * * * ] development payment, which will be [ * * * * ].

6.2      Professional Services Fees.

              (a) Professional Services. During the Term, Trac Medical will pay
bConnected the professional services fee ("Professional Services Fee") for the
professional services related to the customized development work to be performed
by bConnected in the creation of CareCert ES in accordance with the Statement or
Work. The hourly rate for these professional services will be as described as [
* * * * ] set in Section 6.2(b) below. Trac Medical shall pay the Professional
Service Fee as set forth in this Section 6. bConnected hereby agrees to a cap on
the total amount of Professional Services Fees equal to [ * * * * ] of the
estimated total Professional Service Fees set forth in the Statement of Work.

              (b) Discounted Consulting for Professional Services. In connection
with the customization and installation and overall implementation of CareCert
ES for each Customer, if required, bConnected shall charge Professional Services
Fees directly to each Customer utilizing the [ * * * * ]. bConnected shall
charge Customer [ * * * * ] per hour [ * * * * ] for the installation and
optional customization of CareCert ES in a Customer's network. There shall be no
limit to the aggregate Professional Services Fees billable by bConnected
hereunder, however all Professional Services Fees will be pre-authorized by each
Customer. A formal project definition and scope document shall be provided prior
to project commencement for each Customer.

         6.3 License Fees.

              (a) Homecare Association License Fees. Pursuant to the terms of
this Agreement related to the HA Agreement, Trac Medical will pay to bConnected
a [ * * * * ] fee of [ * * * * ] ("License Fee") for the license of [ * * * * ]
as an [ * * * * ] as follows:

                   (i) [ * * * * ]. Trac Medical will pay bConnected
[ * * * * ] of the License Fee in the form of a [ * * * * ] in immediately
available funds, as funds [ * * * * ]. Notwithstanding anything in this
Agreement or the Statement or Work to the contrary, bConnected will have [ * * *
* ], or any portion thereof, for Trac Medical until bConnected has received from
Trac Medical an [ * * * * ]. Trac Medical acknowledges and agrees that (A) the [
* * * * ] set forth in Section 1 of the SOW in Exhibit B, [ * * * * ], and (B)
if and when bConnected has expended resources in an amount equal to the initial
[ * * * * ], bConnected will have [ * * * * ], or any portion thereof, for Trac
Medical [ * * * * ] in the amount equal to [ * * * * ].

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                (ii) [ * * * * ]. Trac Medical will pay bConnected a [ * * * * ]
portion of the License Fee in the amount of [ * * * * ] within [ * * * * ] in
accordance with Section 2.7.

                (iii) License Fees on Transactions. The balance of the License
Fees will be paid to bConnected on an ongoing basis, in amounts equal to a [ * *
* * ] rate of (1) [ * * * * ] of the [ * * * * ] from Customer's use of the [ *
* * * ] or [ * * * * ], less the [ * * * * ] by Trac Medical under the HA
Agreement [ * * * * ] during the period beginning upon the Effective Date and [
* * * * ] after acceptance ("Initial Payment Period"), and (2) [ * * * * ] of
the [ * * * * ] after the end of the Initial Payment Period. Such License Fees
will be payable by Trac Medical until Trac Medical has paid bConnected the
balance of the License Fee in an aggregate amount of [ * * * * ], [ * * * * ]
and the [ * * * * ]. During the Initial Term, in no event will [ * * * * ] , as
applicable, for each [ * * * * ] using the [ * * * * ] or [ * * * * ],
regardless of whether such [ * * * * ] was pre-purchased or otherwise
discounted. In contemplation of the possibility that Trac Medical may alter its
revenue model during the Term, if Trac Medical charges Customers for use of the
CareCert Software or CareCert ES or for services provided using the CareCert
Software or CareCert ES other than on a [ * * * * ] basis, then Trac Medical
will pay bConnected [ * * * * ] using the [ * * * * ] as set forth in this
Section.

         6.4 License Fee Exemption. The License Fees set forth in Section
6.3(a)(iii) above and the Support Fee requirements set forth in Section 6.5
below will not apply to any [ * * * * ] already using the [ * * * * ] prior to
execution of the [ * * * * ] as listed in Exhibit D ("Existing CareCert
Customers"), unless such [ * * * * ] to [ * * * * ], in which case both the
License Fees and Support Fees will apply in the same amounts and payment
structure as set out for HA Agreement Customers. License Fees and Support Fees
payable from revenues earned from Customers who commence using the CareCert
Software after execution of the HA Agreement, but before bConnected delivers
CareCert ES, will be earned by bConnected, but payment of such License Fees
shall be due to bConnected on delivery of CareCert ES, and such payment shall be
reconciled against the advance payment set out in Section 6.3(b) above.

         6.5 Support Fees. In consideration of the Support Services to be
performed by bConnected hereunder, Trac Medical shall pay bConnected [ * * * * ]
support and maintenance fee as outlined herein ("Support Fee"). Support Services
during the Initial Support Period will be provided by bConnected to Trac Medical
[ * * * * ]. During the entire Subsequent Support Term, Trac Medical shall pay
the Support Fee in [ * * * * ], calculated as [ * * * * ] of the [ * * * * ], on
[ * * * * ] from the [ * * * * ], from use or license by Customers of the [ * *
* * ] and [ * * * * ], and reconciled each quarter, to an [ * * * * ].

         6.6 bConnected Revenue Share. For each bConnected Customer that
executes a purchase, license, service or similar agreement with the Trac
Medical, Trac Medical will [ * * * * ] as set forth in the Sales Agreement.

         6.7 Costs and Expenses. Trac Medical shall reimburse bConnected for
reasonable travel, lodging and meal expenses, and such other costs and expenses
as bConnected may incur in connection with the acceptance testing. bConnected
will invoice Trac Medical on a periodic basis, no more frequently than monthly,
for costs and expenses due hereunder, and Trac Medical shall pay all amounts
invoiced within thirty (30) days of the invoice date. bConnected shall not incur
any reimbursable expenditures in excess of $250 without first obtaining the
written consent of Trac Medical.

        6.8 Payment Terms.

              (a) Except for [ * * * * ], Trac Medical shall pay bConnected all
[ * * * * ] within thirty (30) days after the end of each calendar quarter in
which [ * * * * ].

              (b) Trac Medical shall pay bConnected all [ * * * * ] thirty (30)
days after the end of each calendar quarter in which [ * * * * ].

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

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              (c) Except for or License Fees which are due as set forth in
Section 6.8(a) and 6.8(b), and Services Fees which are due as set forth in
Section 6.5, Trac Medical shall pay all amounts set forth on bConnected's
invoices in immediately available funds within thirty (30) days after the date
of invoice. All fees due hereunder are non-refundable (except as expressly
provided herein) and not contingent on any additional services or products to be
provided. All payments must be made in U.S. dollars. Outstanding balances shall
accrue interest at a rate equal to the lesser of one and one half percent (1
1/2%) per month and the maximum rate permitted by applicable law, from due date
until paid. All fees due hereunder are exclusive of, and Trac Medical shall pay,
all sales, use and other taxes, export and import fees, customs duties and
similar charges applicable to the transactions contemplated by this Agreement,
except for taxes based upon bConnected's net income. Trac Medical agrees to
indemnify and hold bConnected harmless from and against all claims, liabilities,
costs, expenses and penalties arising out of or related to Trac Medical's
failure to timely report or pay any such taxes, fees, duties or charges.

         6.9 Records. At all times during the Term, and for at least one (1)
year after the termination of this Agreement, Trac Medical will maintain at its
principal place of business complete and accurate records with respect to Trac
Medical's activities pursuant to this Agreement, including, without limitation,
all data needed for verification of amounts to be paid to bConnected under this
Agreement.

         6.10 Audits. bConnected will have the right, during normal business
hours and upon at least ten (10) days prior notice, to have an independent audit
firm selected by bConnected, and reasonably acceptable to Trac Medical, inspect
Trac Medical's facilities and audit Trac Medical's records relating to Trac
Medical's activities pursuant to this Agreement in order determine Trac
Medical's compliance with the terms and conditions of this Agreement, including,
without limitation, to verify (i) Trac Medical's compliance with the terms and
conditions of this Agreement, and (ii) that Trac Medical has paid bConnected the
correct amounts owed under this Agreement. The audit will be conducted at
bConnected's expense, unless the audit reveals an underpayment of five percent
(5%) or more in any month, in which case Trac Medical will reimburse bConnected
for all reasonable costs and expenses incurred in connection with such audit.
Trac Medical will promptly pay any amounts shown by any such audit to be owing
plus interest as set forth in Section 6.8. Any confidential or proprietary
information disclosed in the course of the audit will be subject to the
confidentiality provisions between Trac Medical and bConnected in this
Agreement.

7. WARRANTIES; DISCLAIMER.

         7.1 Mutual Warranties. Each party represents and warrants that:

              (a) it has full right, power, and authority to enter into this
Agreement, to perform its obligations and duties under this Agreement, and to
grant the licenses granted by it in this Agreement;

              (b) its execution, delivery, and performance of this Agreement
does not and will not conflict with, violate, or result in a breach of any other
agreement, judgment, order, stipulation, or decree by which such party is bound;

              (c) it will perform its obligations under this Agreement in a
workmanlike manner, in conformity with the professional standards for comparable
services in the industry and in compliance with this Agreement; and

              (d) respectively, the bConnected Property and the Trac Medical
Property will contain no Malicious Code at the time of delivery, and prior to
delivery each party will have taken reasonable precautions to ensure that the
bConnected Property and the Trac Medical Property are free of Malicious Code.

         7.2 Warranties to Deliverables. bConnected further represents and
warrants as follows: [ * * * * ] Notwithstanding anything else set forth in this
Agreement, Trac Medical's sole and exclusive remedy for breach of the warranties
provided by Section 7.2(a) shall be [ * * * * ]. In the event that Trac Medical
notifies bConnected during the Initial Support Period of any reproducible
failure of CareCert ES to conform to the warranty, in this Section 7.2(b) due to
an error in the bPIP Software or the Developments, Trac Medical's sole and
exclusive remedy will be that bConnected shall correct and repair any such error
in the bPIP Software and Developments that prevents CareCert ES from performing
in accordance with the provisions of this Agreement and in accordance with the
Statement of Work at no additional charge to Trac Medical.

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

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         7.3 Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN SECTIONS
7.1 AND 7.2, THE BCONNECTED PROPERTY, THE TRAC MEDICAL PROPERTY AND ALL SERVICES
AND ARE PROVIDED UNDER THIS AGREEMENT "AS IS" WITHOUT REPRESENTATIONS OR
WARRANTIES OF ANY KIND AND EACH PARTY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO THE
IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE, FITNESS FOR A PARTICULAR PURPOSE,
AND ANY IMPLIED WARRANTIES ARISING OUT OF COURSE OF DEALING OR COURSE OF
PERFORMANCE. BCONNECTED DOES NOT WARRANT THAT THE BPIP SOFTWARE, THE
DEVELOPMENTS OR ANY SERVICES WILL MEET TRAC MEDICAL'S REQUIREMENTS, OR THAT THE
OPERATION OF THE BPIP SOFTWARE OR DEVELOPMENTS WILL BE UNINTERRUPTED, ERROR-FREE
OR SECURE.

8. INDEMNIFICATION.

         8.1 bConnected Indemnity Obligations. bConnected agrees to defend,
indemnify and hold harmless Trac Medical from and against any and all loss,
liability and expense (including reasonable attorneys' fees) suffered or
incurred by reason of any claims, proceedings or suits brought by a third party
against Trac Medical to the extent based on, arising out of or resulting from:
(a) any claim that the bPIP Software or Developments, when used in accordance
with such license granted in Section 4, infringes upon any U.S. patent,
copyright or trade secret rights of the third party, (b) the gross negligence or
willful misconduct of bConnected, its agents or employees in connection with the
performance of the development work hereunder, (c) bConnected's use of the Trac
Medical Deposit Materials (defined in Section 11.2(a)) or (d) [ * * * * ]. In
the event the bPIP Software or the Developments become, or in bConnected's
opinion is likely to become, the subject of a claim of infringement, bConnected
may, in addition to its obligations to defend, indemnify and hold Trac Medical
harmless, at its option and expense, (i) procure for Trac Medical the right to
continue using the bPIP Software and Developments as provided in Section 4, (ii)
replace or modify the bPIP Software and Developments, as applicable, so that
they becomes non-infringing, and remains functionally equivalent, or (iii)
terminate the license granted with respect to the bPIP Software and Developments
and refund to Trac Medical a pro-rated portion of all License Fees paid by Trac
Medical to bConnected pursuant to Section 6 of this Agreement up to an amount
not to exceed [ * * * * ]. Notwithstanding the foregoing, bConnected will have
no obligation under this Section 8.1(a) or otherwise with respect to any
infringement claim based upon (A) any use of bPIP Software or Developments not
in accordance with this Agreement, (B) any use of bPIP Software or Developments
in combination with other products, equipment, software or data not contemplated
by this Agreement, where use of the bPIP Software or Developments alone would
not have been infringing; or (C) any modification of the bPIP Software or
Developments by any person other than bConnected, unless authorized by
bConnected in writing. Notwithstanding the foregoing, bConnected will have no
obligations under Section 8.1(c) to the extent that the claim alleges that the
unmodified Trac Medical Deposit Materials infringes upon any U.S. patent,
copyright or trade secret rights of a third party.

         8.2 Trac Medical Indemnity Obligations. Trac Medical agrees to defend,
indemnify and hold harmless bConnected from and against any and all loss,
liability and expense (including reasonable attorneys' fees) suffered or
incurred by reason of any claims, proceedings or suits brought by a third party
against bConnected to the extent based on, arising out of or resulting from: (a)
any claim that the CareCert Software, when used in accordance with such license
granted in Section 4, infringes upon any U.S. patent, copyright or trade secret
rights of the third party, (b) the gross negligence or willful misconduct of
Trac Medical, its agents or employees in connection with the performance
hereunder or (c) Trac Medical's use of the bConnected Deposit Materials (defined
in Section 11.1(a)). In the event the CareCert Software becomes, or in Trac
Medical's opinion is likely to become, the subject of a claim of infringement,
Trac Medical may, at its option and expense, (i) procure for bConnected the
right to continue using the CareCert Software as provided in Section 4, (ii)
replace or modify the CareCert Software, as applicable, so that they becomes
non-infringing, and remains functionally equivalent, or (iii) terminate the
license granted with respect to the CareCert Software. Notwithstanding the
foregoing, Trac Medical will have no obligation under this Section 8.2(a) or
otherwise with respect to any infringement claim based upon (A) any use of
CareCert Software not in accordance with this Agreement, (B) any use of CareCert
Software in combination with other products, equipment, software or data, where
use of the CareCert Software alone would not have been infringing; or (C) any
modification of the CareCert Software by any person other than Trac Medical,
unless authorized by Trac Medical in writing. Notwithstanding the foregoing,
Trac Medical will have no obligations under Section 8.2(c) to the extent that
the claim alleges that the unmodified bConnected Deposit Materials infringes
upon any U.S. patent, copyright or trade secret rights of a third party.

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

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         8.3 Indemnification Procedure. The indemnified party shall: (a) give
prompt notice of any claim for which indemnification is sought to the
indemnifying party; (b) grant sole control of the defense or settlement of the
claim or action to the indemnifying party (except that the indemnified party's
prior written approval will be required for any settlement that reasonably can
be expected to require a material affirmative obligation of or result in any
ongoing material liability to the indemnified party); and (c) provide reasonable
cooperation to the indemnifying party and, at the indemnifying party's request
and expense, assistance in the defense or settlement of the claim.
Notwithstanding the foregoing, the indemnification obligations hereunder shall
not be relieved hereunder for failure to do the foregoing, or delay with so
doing, unless the indemnifying party is prejudiced thereby. In addition, the
indemnified party may, at its own expense, participate in its defense of any
claim.

9. CONFIDENTIALITY.

         9.1 Obligations. Each party agrees that it will (a) not use the
Confidential Information of the other party for any purpose not expressly
permitted by this Agreement; (b) hold the other party's Confidential Information
in confidence using the same standard of care as it uses to protect its own
confidential information of a similar nature, but in no event less than
reasonable care; (c) not disclose the Confidential Information of the other to
any third party without the other's prior written consent, except as expressly
permitted under this Agreement; and (d) limit access to the other's Confidential
Information to those of its employees or agents having a need to know who are
bound by confidentiality obligations at least as restrictive as those set forth
herein. Notwithstanding the foregoing, (i) either party may make disclosures as
required or requested by a court of law or any governmental entity or agency,
including but not limited to disclosures required by the Securities and Exchange
Commission of the United States or any similar authority in any other country,
provided that such party provides the other with reasonable prior notice to
enable such party to seek confidential treatment of such information; and (ii)
either party may disclose the terms and conditions of this Agreement solely to
potential investors, acquisition partners and its legal counsel and accountants
solely in connection with appropriate due diligence investigations in connection
with a proposed financing or acquisition, provided that each such third party is
bound by confidentiality obligations at least as restrictive as those set forth
herein.

         9.2 Exclusions. The restrictions on the use and disclosure of
Confidential Information shall not apply to any Confidential Information, or
portion thereof, which (a) is or becomes publicly known through no act or
omission of the receiving party; (b) is lawfully received from a third party
without restriction on disclosure; (c) is already known by the receiving party
at the time it is disclosed by the disclosing party without confidentiality
restriction, as shown by the receiving party's written records; or (d) is
independently developed by the receiving party without reference to the
disclosing party's Confidential Information, as shown by the receiving party's
written records.

         9.3 Injunctive Relief. Each party acknowledges that a breach or
threatened breach of this Section 9 would cause irreparable harm to the
non-breaching party, the extent of which would be difficult to ascertain.
Accordingly, each party agrees that, in addition to any other remedies to which
a party may be legally entitled, the non-breaching party shall have the right,
notwithstanding Section 14.7 hereof, to seek immediate injunctive or other
equitable relief in the event of a breach of this Section 9 by the other party
or any of its employees or agents.

10. TERM AND TERMINATION.

         10.1 Term. Unless earlier terminated pursuant to Section 10.2, the term
of this Agreement shall commence on the Effective Date and shall continue for a
period of nine (9) years (the "Initial Term"), and thereafter, shall
automatically renew for successive one (1) year renewal terms (each a "Renewal
Term"), unless either party provides the other party with written notice of its
intent not to renew at least ninety (90) days prior to the expiration of the
Initial Term or then-current Renewal Term. The Initial Term and the Renewal
Terms are collectively referred to as the "Term."

         10.2 Termination.

              (a) Either party may terminate the Agreement upon written notice
in the event (a) the other party makes any assignment for the benefit of
creditors or has any petition under bankruptcy law filed against it, which
petition is not dismissed within sixty (60) days of such filing, or has a
trustee or receiver appointed for its business or assets, or (b) the other party
is in material breach of any obligation under this Agreement, which default is
incapable of cure or which, being capable of cure, has not been cured within
thirty (30) days after receipt of notice of such default.

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              (b) Notwithstanding the foregoing, bConnected may also terminate
the Agreement immediately upon written notice in the event Trac Medical fails to
pay any undisputed amounts payable hereunder within ten (10) business days after
receiving written notice from bConnected that payment is overdue.

              (c) Subject to the acceptance criteria set forth in the Statement
of Work and in Section 2.6 of this Agreement, Trac Medical shall have the right
to terminate this Agreement immediately upon written notice in the event that
bConnected fails to deliver CareCert ES in accordance with the Statement of Work
and bConnected does not cure such failure with thirty (30) days after receiving
written notice of such failure from Trac Medical. In the event Trac Medical
terminates this Agreement pursuant to the foregoing sentence, bConnected shall
refund to Trac Medical only (i) the [ * * * * ] and (ii) any [ * * * * ];
provided that such [ * * * * ].

         10.3 Effect of Termination. Upon the expiration or termination of this
Agreement, (a) each party shall return the other's Confidential Information in
its possession or control, (b) subject to Section 10.4 below, all licenses to
any bConnected Property other than those granted in Section 4.1 or Trac Medical
Property granted to a party hereunder will immediately terminate, and each party
shall promptly discontinue all use of the bConnected Property (other than
pursuant to Section 4.1) or Trac Medical Property, as applicable, erase all
copies thereof from it's computers, and return to the owner all other copies
thereof in its possession or control, (c) all amounts not disputed in good faith
that are owed by each party to the other party under this Agreement which
accrued before such termination or expiration will be immediately due and
payable and (d) bConnected shall deliver to Trac Medical the Source Code and
Executable Code for the Developments (other than any bConnected Property, which
shall be governed by Section 11 of this Agreement) completed up to the date of
termination and Trac Medical shall have all right, title and interest thereto,
provided that Trac Medical has paid all amounts owed to bConnected under this
Agreement not disputed by Trac Medical in good faith. Sections 1, 3, 4.1
(subject to Section 10.4), 4.3, 4.4, 6, 7.2, 7.3, 8, 9, 10, 11, 12, 13 and 14
will survive the expiration or termination of this Agreement for any reason.

         10.4 Notwithstanding anything to the contrary in this Agreement, the
licenses granted to Trac Medical by bConnected under Section 4.1 will survive
termination of this Agreement [ * * * * ] in accordance with Section 6, [ * * *
* ], and all other amounts not disputed by Trac Medical in good faith and Trac
Medical has not materially breached this Agreement at the time of termination.
Notwithstanding the foregoing, upon the termination of this Agreement by
bConnected for an uncured material breach by Trac Medical or pursuant to Section
8.1, the licenses to any bConnected Property granted to Trac Medical hereunder
will immediately terminate, and Trac Medical shall promptly discontinue all use
of the bConnected Property, erase all copies thereof from it's computers, and
return to bConnected all copies thereof in its possession or control.

         11. SOURCE CODE ESCROW.

         11.1 bConnected Escrow.

              (a) Deposit. Within thirty (30) days after final acceptance by
Trac Medical, bConnected shall place in escrow with a mutually acceptable escrow
agent ("bConnected Escrow Agent"), a copy of the [ * * * * ] for the [ * * * * ]
and [ * * * * ] (collectively referred to as the "bConnected Deposit Materials")
bConnected shall enter into an escrow agreement with the bConnected Escrow
Agent, the form of which is set forth at Exhibit E to this Agreement,
identifying Trac Medical as a beneficiary thereunder ("bConnected Escrow
Agreement"). On a quarterly basis during the Term after the initial deposit,
bConnected shall deposit with the bConnected Escrow Agent any upgrades to the
bConnected Deposit Materials released during the previous fiscal quarter.

              (b) Release. The bConnected Escrow Agreement shall provide Trac
Medical with the right to obtain a copy of the bConnected Deposit Materials in
the event that, during the Term, bConnected:

                     (i) is [ * * * * ] under this Agreement;

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

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                (ii) [ * * * * ] under this Agreement;

                (iii) [ * * * * ]; or

                (iv) determines to [ * * * * ] set forth in this Agreement.

              (c) License. Upon release of the bConnected Deposit Materials to
Trac Medical, bConnected grants Trac Medical a [ * * * * ] (unless Trac Medical
commits a material breach of this Agreement), personal, nontransferable,
nonexclusive right and license to use the bConnected Deposit Materials [ * * * *
] (either directly or through a third-party that is subject to the limitations
contained herein) the [ * * * * ], as existing on the date of release from
escrow, solely for the benefit of [ * * * * ] who have properly licensed the use
of the [ * * * * ] and subject to the restrictions set forth in this Agreement.

              (d) Restrictions. The original and all copies of the bConnected
Deposit Materials, in whole or in part, are Confidential Information and are the
exclusive property of bConnected or its licensors, and shall be treated as such
by Trac Medical during or after the Term of this Agreement. Nothing herein,
however, shall be deemed as a grant or a license by bConnected to Trac Medical
to create, or have created for its benefit, any derivative works based on the
bConnected Deposit Materials other than to create or have created for the
benefit of Customers from the bConnected Deposit Materials any (A) necessary
fixes, patches and similar error corrections or (B) modifications to permit
CareCert ES to process eDocuments that have been amended by the appropriate
regulatory body.

           11.2     Trac Medical Escrow.

              (a) Deposit. Within sixty (60) days after the Effective Date, Trac
Medical shall place in escrow with a mutually acceptable escrow agent ("Trac
Medical Escrow Agent"), a copy of (i) the [ * * * * ] and the documentation
pertaining to such source code and (ii) the executable code only (and related
documentation) for software for the [ * * * * ] (the computer code and
documentation referred to in clauses (i) and (ii) shall be collectively referred
to as the "Trac Medical Deposit Materials") Trac Medical shall enter into an
escrow agreement with the Trac Medical Escrow Agent, the form of which is set
forth at Exhibit F to this Agreement, identifying bConnected as a beneficiary
thereunder ("Trac Medical Escrow Agreement"). On a quarterly basis during the
Term, Trac Medical shall deposit with the Trac Medical Escrow Agent any upgrades
to the Trac Medical Deposit Materials released during the previous fiscal
quarter.

              (b) Release. The Trac Medical Escrow Agreement shall provide
bConnected with the right to obtain a copy of the Trac Medical Deposit Materials
in the event that, during the Term, Trac Medical:

                (i)    [ * * * * ] under this Agreement;

                (ii)   [ * * * * ] under this Agreement;

                (iii)  [ * * * * ];

                (iv)   [ * * * * ]; or

                (v)    [ * * * * ] in this Agreement.

              (c) License. Upon release of the Trac Medical Deposit Materials to
bConnected, Trac Medical grants bConnected a [ * * * * ] (unless bConnected
commits a material breach of this Agreement), personal, nontransferable,
nonexclusive right and license to use the Trac Medical Deposit Materials
referred to in Section 11.2(a)(i) to [ * * * * ] (either directly or through a
third-party that is subject to the limitations contained herein) the [ * * * *
], as existing on the date of release from escrow, solely for the benefit of [ *
* * * ] who have properly licensed the [ * * * * ] and subject to the
restrictions set forth in this Agreement and (ii) to otherwise use the Trac
Medical Deposit Materials solely for the purpose of [ * * * * ].

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

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              (d) Restrictions. In the event the Trac Medical Deposit Materials
are released from escrow, bConnected acknowledges and agrees that its use of the
Trac Medical Deposit Materials referred to in Section 3.4(a)(ii) is subject to
any additional license agreement required by the licensor of such other Trac
Medical Deposit Materials. The original and all copies of the Trac Medical
Deposit Materials, in whole or in part, are Confidential Information and are the
exclusive property of Trac Medical or its licensors, and shall be treated as
such by bConnected during or after the Term of this Agreement. Nothing herein,
however, shall be deemed as a grant or a license by Trac Medical to bConnected
to create, or have created for its benefit, any derivative works based on the
Trac Medical Deposit Materials other than to create or have created for the
benefit of Customers from the Trac Medical Deposit Materials referred to in
Section 3.4(a)(i) any (A) necessary fixes, patches and similar error corrections
or (B) modifications to permit CareCert ES to process eDocuments that have been
amended by the appropriate regulatory body.

         11.3 Provision of [ * * * * ]. In the event that bConnected
obtains the Trac Medical Deposit Materials under Section 11.2, [ * * * * ].

         12. LIMITATION OF LIABILITY. EXCEPT FOR LIABILITY ARISING OUT OF A
BREACH BY EITHER PARTY OF SECTION 9 (CONFIDENTIALITY), OR LIABILITY ARISING OUT
OF OBLIGATIONS UNDER SECTION 8 (INDEMNIFICATION) IN NO EVENT WILL EITHER PARTY
BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, EXEMPLARY, SPECIAL OR INCIDENTAL
DAMAGES, INCLUDING ANY LOST DATA OR LOST PROFITS OR COSTS OF PROCUREMENT OF
SUBSTITUTE GOODS OR SERVICES, ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
USE OF OR INABILITY TO USE CARECERT ES OR ANY SERVICES PROVIDED HEREUNDER, EVEN
IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR LIABILITY ARISING OUT
OF EITHER PARTY'S OBLIGATIONS UNDER SECTION 8 (INDEMNIFICATION), OR LIABILITY
ARISING OUT OF OBLIGATIONS UNDER SECTION 9 (CONFIDENTIALITY), IN NO EVENT WILL
EITHER PARTY'S TOTAL CUMULATIVE LIABILITY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE USE OF OR INABILITY TO USE CARECERT ES OR ANY SERVICES PROVIDED
HEREUNDER, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT OR
OTHERWISE, EXCEED [ * * * * ] .

         13. MUTUAL NON-SOLICITATION. Neither party shall, during the Term, and
for one (1) year thereafter, directly or indirectly hire or attempt to hire any
employee of the other party who performed substantial work on any project
covered by this Agreement without such other party's prior written consent;
provided that the foregoing shall not prohibit either party from issuing
advertisements of a general nature not specifically directed at any such
employee and hiring any such employee so long as such party is in compliance
with this Section 13.

14. GENERAL.

         14.1 Governing Law. This Agreement shall be governed by the laws of the
State of Colorado, without regard to its principles of conflicts of law. The
parties expressly exclude the application of the 1980 United Nations Convention
on the International Sale of Goods.

         14.2 Relationship of Parties. The relationship of the parties
established under this Agreement is that of independent contractors and neither
party is a partner, employee, agent or joint venture partner of or with the
other, and neither party has the right or authority to assume or create any
obligation on behalf of the other party.

         14.3 Assignment. Neither party may assign its rights or delegate its
obligations under this Agreement without the prior written consent of the other
party, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, either party may assign its rights and
obligations under this Agreement, without consent, to a parent or subsidiary or
to a successor (other than a competitor of the other party), whether by way of
merger, sale of all or substantially all of its assets or otherwise. Any
attempted assignment of this Agreement not in accordance with this subsection
shall be null and void.

         14.4 Notices. Any notices or other communications required or permitted
to be given or delivered hereunder shall be in writing and shall be delivered
personally, by courier service, by facsimile machine or by registered or
certified mail, return receipt requested, postage pre-paid, to bConnected and to
Trac Medical as follows:

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

                                       14
<PAGE>

                  If to Trac Medical:

                           Trac Medical Solutions, Inc.
                           Attn:  CEO
                           2165 Technology Drive
                           Schenectady, NY  12308

                  If to bConnected:

                           bConnected Software, Inc.
                           Attn: President and CEO
                           380 Interlocken Crescent, Suite 770
                           Broomfield, CO  80021

or to such other addresses as a party may designate pursuant to this notice
provision. Any notice given shall be deemed to have been received on the date on
which it is delivered personally, by courier service or by facsimile, or, if
mailed, on the third business day following the mailing thereof.

         14.5 Force Majeure. Neither party shall be liable for any breach of the
Agreement, other than any default in payment obligations, for any delay or
failure of performance resulting from any cause beyond such party's reasonable
control, including but not limited to the weather, civil disturbances, acts of
civil or military authorities, or acts of God.

         14.6 Severability. If any provision of this Agreement is held by a
court of competent jurisdiction to be unenforceable, such provision will be
changed and interpreted to accomplish the objectives of such provision to the
greatest extent possible under applicable law and the remaining provisions of
this Agreement will continue in full force and effect.

         14.7 Dispute Resolution. Each party agrees to negotiate in good faith
to resolve any dispute, claim or controversy arising out of or related to this
Agreement. In the event the parties are unable to resolve the dispute within
fifteen (15) days following the commencement of negotiations, each party shall
escalate the dispute through the appropriate levels of management, up to and
including the level of vice president, until the resolution of the issue is
achieved or the respective vice presidents cannot agree to a resolution of the
dispute. Unless otherwise agreed to by both parties, in no event shall the
escalation process exceed thirty (30) days. If, pursuant to the foregoing
dispute resolution procedure, the parties are unable to resolve the dispute,
claim or controversy, either party may institute an appropriate action in a
federal or state court having jurisdiction over the parties.

         14.8 Waiver. Any waiver or failure to enforce any provision of this
Agreement on one occasion will not be deemed a waiver of any other provision or
of such provision on any other occasion.

         14.9 Marketing Plan; Press Release. The parties shall cooperate with
each other so that each party may issue a press release concerning this
Agreement to be released simultaneously with the press release for the HA
Agreement, provided that each party must approve, in writing, such press release
prior to its release.

         14.10 Headings. The headings used for the sections of this Agreement
are for information purposes and convenience only and in no way define, limit,
construe or describe the scope or extent of the sections.

         14.11 Entire Agreement. This Agreement and its exhibits constitute the
entire agreement between the parties with regard to the subject matter hereof.
No oral or written representation that is not expressly contained in this
Agreement is binding on bConnected or Trac Medical. No amendment to this
Agreement or the Development Requirements shall be binding on either party
unless in writing and signed by both parties.

         14.12 Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original and all of which shall
be deemed one and the same instrument.

                                       15
<PAGE>

         IN WITNESS WHEREOF, the duly authorized representatives of bConnected
and Trac Medical have executed this Agreement as of the Effective Date.

BCONNECTED SOFTWARE, INC.                  TRAC MEDICAL SOLUTIONS, INC.

By: __________________________________     By: _________________________________

Name: ________________________________     Name: _______________________________

Title: _______________________________     Title: ______________________________

Date: ________________________________     Date: _______________________________

                                       16
<PAGE>

                                    EXHIBIT A

                       DESCRIPTION OF SOFTWARE; TRADEMARKS

bPIP Software is bConnected's Business Process Integration Platform which
includes the [ * * * * ].

Trac Medical Trademarks:

[to be provided]

bConnected Trademarks:

[to be provided]

Third Party Licenses.  [ * * * * ]

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

                                       17
<PAGE>

                                    EXHIBIT B

                                   CARECERT ES

                                STATEMENT OF WORK

1.       Solution Architecture Services (services to commence for a period [ * *
         * * ] days when (i) the contract is signed, and (ii) receipt by [ * * *
         * ], and (iii) receipt by bConnected of the [ * * * * ], and (iv)
         receipt by bConnected of the current system functional specification
         for CareCert).

      o     Integration Plan: Developing a detailed specification and
            implementation plan for integrating with:

            o     [ * * * * ]

            o     [ * * * * ]- for the purpose of supporting digitally signed
                  information

      o     Install and Configure: Installing and configuring [ * * * * ]
            utilizing [ * * * * ]and an [ * * * * ]. Providing knowledge
            transfer for the CareCert development and support teams.

      o     Functionality: Create a functional solution for providing electronic
            form completion and for routing. [ * * * * ]

            o     [ * * * * ].

            o     [ * * * * ].

            o     [ * * * * ].

            o     [ * * * * ].

            o     [ * * * * ].

            o     [ * * * * ].

            o     [ * * * * ].

            o     [ * * * * ].

            o     [ * * * * ].

2.       Trac Medical Responsibilities

         o    Trac Medical will provide a current system functional
              specification.

         o    Trac Medical will provide documentation of the [ * * * * ]
              described in Section 1, sub section Functionality, bullet
              point 3.

         o    Trac Medical will provide electronic samples of [ * * * * ].

         o    Trac Medical will provide a list of current system
              enhancements that intended to be deployed in the current
              solution during CareCert ES development. Each enhancement will
              be described in a requirements document in enough detail as to
              allow for parallel development in CareCert ES. Any
              enhancements identified during Care Cert ES development will
              be communicated in like manner.

         o    Trac Medical will provide a [ * * * * ]

         o    Trac Medical will provide a [ * * * * ]. This interface will
              [ * * * * ].

         o    Trac Medical will provide a complete electronic copy of
              [ * * * * ]. This information will also be provided for any
              enhancements developed and deployed during development of
              CareCert ES. bConnected will also provide copies of all
              enhancements [ * * * * ].

         o    Trac Medical will provide a [ * * * * ].

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

                                       18
<PAGE>

3.       Trac Medical Personnel

Trac Medical will provide access to key personnel including but not limited to
personnel knowledgeable and experienced in the following:

         [ * * * * ]- Personnel knowledgeable in the existing solution business
         process and in the best practice process as [ * * * * ]. In addition,
         business processes involved in current system enhancements will be
         communicated. In addition, Trac Medical will provide the services of
         the lead engineer for CareCert for a period of at least 5 consecutive
         days, for meetings in Colorado at bConnected, within the first 3 weeks
         following the signing of the licensing agreement, and will deliver to
         bConnected a full description of the functional specifications for
         CareCert and CareCert ES no later than one week following the signing
         of the licensing agreement.

         Current Solution Software Expertise - Personnel knowledgeable in the
         architecture and inner workings of the existing software solution.

4.       bConnected Personnel and Software

         bConnected will provide access to key personnel in order to provide
         knowledge transfer of the CareCert ES system. Through this knowledge
         transfer, Trac Medical will be able to support and extend the CareCert
         ES system using the bConnected tools. bConnected will provide those
         tools 45 days prior to final delivery of Care Cert ES.

         bConnected will provide Trac Medical personnel with access to
         bConnected's existing Bug Tracking software at no cost during the
         development of CareCert ES.

         bConnected will provide Trac Medical personnel with access to a Q/A
         environment hosted by bConnected and will keep the Q/A environment
         up-to-date with the latest development work ready for quality assurance
         review and testing.

5.       Major Milestones and Payment Schedule

         Trac Medical will receive invoices from bConnected at the end of each
         calendar month, detailing the actual hours worked on each stage of the
         project. Trac Medical agrees to pay each invoice within thirty (30)
         days after receipt of each invoice.

         Milestone 1: At end [ * * * * ]:

         1.       [ * * * * ]

         2.       [ * * * * ]

         3.       [ * * * * ] Estimated billing for period of $100,000.
                  Estimated hours [ * * * * ]

         Milestone 2: At end of [ * * * * ], bConnected will deliver [ * * * * ]
         - Estimated billing for period of $175,000. Estimated hours [ * * * * ]

         Milestone 3: When final stage is [ * * * * ] - [ * * * * ]. - Estimated
         billing for period of $100,000. Estimated hours [ * * * * ]

6.       Additional Definitions

         (a) CareCert Software. CareCert Software shall mean the CareCert
         solution, (including but not limited to the current CareCert API),
         using the stated technical architecture in such a manner that at a
         minimum contains all current functionalities, as of the effective date
         of the Agreement, of the CareCert solution. bConnected hereby agrees
         that any reverse engineering of the current CareCert Software that it
         undertakes pursuant to this Agreement shall not be deemed in any way as
         new product development by bConnected, and any new code associated with
         the reverse engineering phase of the overall project as described in
         this Exhibit B, except for bConnected Property including bConnected
         Derivatives, shall be considered to be CareCert Software owned in its
         entirety by Trac Medical and bConnected shall make all such CareCert
         Software available to Trac Medical on an "as requested" basis.

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

                                       19
<PAGE>

         (b) CareCert ES. [ * * * * ]:

                  (i) [ * * * * ] which will mirror in functionality the
                  solution provide by the current CareCert solution including
                  but [ * * * * ].

                  (ii) [ * * * * ] current CareCert solution to [ * * * * ]
                  supplied by providers plus a [ * * * * ] to provide [ * * * *
                  ] processing and signing by physician. This [ * * * * ] with
                  the existing [ * * * * ].

         (c) It is further agreed that CareCert ES will, at a minimum, include
         the characteristics identified in Paragraph 1 (Functionality) of this
         Statement of Work.

7.       Acceptance. Upon completion of the Services provided under this
         Statement of Work, Client and Consultant shall meet on a mutually
         acceptable date to review the deliverables.

         IN WITNESS WHEREOF, pursuant and in accordance with the Development and
License Agreement between the parties hereto dated ______________________, the
parties have executed this Statement of Work as of this __the____ day of
January, 2004.

TRAC MEDICAL SOLUTIONS, INC.:              BCONNECTED SOFTWARE, INC.

By: __________________________________     By: _________________________________

Printed Name: ________________________     Printed Name: _______________________

Title: _______________________________     Title: ______________________________

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

                                       20
<PAGE>

                                    EXHIBIT C

                                SUPPORT SERVICES

1. DEFINITIONS.

         "Designated Interface" means the contact person or group designated by
Trac Medical and agreed to by bConnected who will coordinate all Support
Services requests to bConnected.

         "Error" means a reproducible defect in the Supported Program when
operated on a Supported Environment, which causes the Supported Program not to
operate substantially in accordance with the Specifications.

         "Resolution" means a modification or workaround to the Supported
Program and/or documentation therefor and/or other information provided by
bConnected to Trac Medical intended to resolve an Error.

         "Support Hours" means 8:30 a.m. to 5:00 p.m. (Eastern Time), Monday
through Friday, excluding bConnected company holidays.

         "Supported Environment" means any hardware and operating system
platform which bConnected supports for use with the Supported Program.

         "Supported Program" means the current version of the Deliverables, for
which Trac Medical has paid the then-current Support Fees.

         "Update" means a subsequent release of the Deliverables which
bConnected generally makes available for licensees of the Deliverables at no
additional license fee other than shipping and handling charges. The term Update
includes all bug fixes and Error corrections to a Deliverable but Updates does
not include any release, option or future product which bConnected licenses
separately, including but not limited to any release of the Deliverables which
contains additional features or additional functionality. bConnected may charge
additional license and support fees for any such release, option or future
product.

2. SUPPORT SERVICES.

         2.1. Generally. Subject to the terms and conditions of this Agreement,
including but not limited to payment of the Support Fees, the Support Services
to be provided by bConnected to Trac Medical hereunder shall include: (a)
support services to diagnose, verify and correct or otherwise remedy any Errors
in the Supported Program and to answer technical questions or concerns related
to the Supported Program, and (b) any Updates of the Supported Program, as and
when made generally available to other bConnected licensees in bConnected's sole
discretion. Trac Medical agrees that all requests for Support Services shall
initially be delivered to bConnected via email. bConnected will acknowledge all
email inquiries it receives from Trac Medical and will track, record and archive
such messages. For all inquiries received by bConnected during its Support
Hours, bConnected will provide an initial response acknowledging the inquiry to
Trac Medical within four (4) business hours after its receipt of the inquiry.
bConnected will provide an initial response acknowledging inquiries received
after Support Hours by 11:00 a.m. MST the following business day. Thereafter,
bConnected shall use commercially reasonable efforts to provide a Resolution to
the Supported Program.

         2.2. Travel and Other Expenses. Support Services provided hereunder
shall be provided at bConnected's principal place of business, or at Trac
Medical's headquarters or offices at Trac Medical's expense, as determined in
bConnected's sole discretion. Should Trac Medical request that bConnected send
personnel to its offices to resolve any Error in the Supported Program, Trac
Medical shall pay bConnected's reasonable travel, meals and lodging expenses.
Under such circumstances, Trac Medical shall also pay actual costs for supplies
and other expenses reasonably incurred by bConnected, which are not of the sort
normally provided or covered by bConnected, provided that Trac Medical has
approved in advance the purchase of such supplies and other expenses. If Trac
Medical so requires, bConnected shall submit written evidence of each
expenditure to Trac Medical prior to receiving reimbursement of such costs and
expenses.

                                       21
<PAGE>

         2.3. Exceptions. bConnected will provide the Support Services only for
the most current release and the immediately preceding major release of the
Support Program. bConnected shall have no responsibility under this Agreement to
fix any Errors arising out of or related to the following causes: (a) Trac
Medical's modification or combination of the Supported Program (in whole or in
part); (b) use of the Supported Program in an environment other than a Supported
Environment; or (c) accident; unusual physical, electrical or electromagnetic
stress; neglect; misuse; failure or fluctuation of electric power, air
conditioning or humidity control; failure of media not furnished by bConnected;
excessive heating; fire and smoke damage; operation of the Supported Program
with other media and hardware, software or telecommunication interfaces not
meeting or not maintained in accordance with the manufacturer's specifications;
or causes other than ordinary use. Any corrections performed by bConnected for
such Errors shall be made, in bConnected's reasonable discretion, at
bConnected's then-current time and material charges. All Support Services
requested by Trac Medical outside the Support Hours will be provided by
bConnected at an additional cost to Trac Medical based on an hourly rate to be
determined by the parties.

3. TRAC MEDICAL RESPONSIBILITIES.

         3.1. Supervision and Management. Trac Medical is responsible for
undertaking the proper supervision, control and management of its use of the
Supported Programs, including, but not limited to: (a) assuring proper Supported
Environment configuration, Supported Programs installation and operating
methods; and (b) following industry standard procedures for the security of
data, accuracy of input and output, and back-up plans, including restart and
recovery in the event of hardware or software error or malfunction.

         3.2. Training. Trac Medical is responsible for proper training of all
appropriate personnel in the operation and use of the Supported Programs and
associated equipment.

         3.3. Designated Interface. Trac Medical shall designate the following
(2) individuals to serve as the Designated Interface with bConnected for the
Support Services provided hereunder: _______________________.

         3.4. Access to Personnel and Equipment. Trac Medical shall provide
bConnected with access to Trac Medical's personnel and its equipment during
Support Hours. This access must include the ability to remotely access the
equipment on which the Supported Programs are operating and to obtain the same
access to the equipment as those of Trac Medical's employees having the highest
privilege or clearance level. bConnected will inform Trac Medical of the
specifications of the remote access methods available and associated software
needed, and Trac Medical will be responsible for the costs and use of said
equipment.

                                       22
<PAGE>

                                    EXHIBIT D

              BCONNECTED CUSTOMERS AND EXISTING CARECERT CUSTOMERS

   bConnected Customers

       [ * * * * ]

Existing CareCert Customers

[ * Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.]

                                       23EXHIBIT
        4.1

      

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

      

      COMMON
        STOCK PURCHASE WARRANT

      

      To
        Purchase __________ Shares of Common Stock of

      

      NEW
        DRAGON ASIA CORP.

      

      THIS
        COMMON STOCK PURCHASE WARRANT (the “Warrant”)
        certifies that, for value received, _____________ (the “Holder”),
        is
        entitled, upon the terms and subject to the limitations on exercise and the
        conditions hereinafter set forth, at any time on or after the date hereof
        (the
“Initial
        Exercise Date”)
        and on
        or prior to the close of business on the six (6) year anniversary of the
        Initial
        Exercise Date (the “Termination
        Date”)
        but
        not thereafter, to subscribe for and purchase from New Dragon Asia Corp.,
        a
        Florida corporation (the “Company”),
        up to
        ______ shares (the “Warrant
        Shares”)
        of
        Class A Common Stock, par value $0.0001 per share, of the Company (the
“Common
        Stock”).
        The
        purchase price of one share of Common Stock under this Warrant shall be equal
        to
        the Exercise Price, as defined in Section 2(b). 

      

      Section
        1. Definitions.
        Capitalized terms used and not otherwise defined herein shall have the meanings
        set forth in that certain Securities Purchase Agreement (the “Purchase
        Agreement”),
        dated
        December 22, 2005, among the Company and the purchasers signatory
        thereto.

      

      Section
        2. Exercise.

      

      a) Exercise
        of Warrant.
        Exercise of the purchase rights represented by this Warrant may be made,
        in
        whole or in part, at any time or times on or after the Initial Exercise Date
        and
        on or before the Termination Date by delivery to the Company of a duly executed
        facsimile copy of the Notice of Exercise Form annexed hereto (or such other
        office or agency of the Company as it may designate by notice in writing
        to the
        registered Holder at the address of such Holder appearing on the books of
        the
        Company); provided,
        however,
        within
        5 Trading Days of the date said Notice of Exercise is delivered to the Company,
        the Holder shall have surrendered this Warrant to the Company and the Company
        shall have received payment of the aggregate Exercise Price of the shares
        thereby purchased by wire transfer or cashier’s check drawn on a United States
        bank.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      b) Exercise
        Price.
        The
        exercise price of the Common Stock under this Warrant shall be $1.76
        subject
        to adjustment hereunder (the “Exercise
        Price”).

      

      c) Cashless
        Exercise.
        If at
        any time after one year from the date of issuance of this Warrant there is
        no
        effective Registration Statement registering, or no current prospectus available
        for, the resale of the Warrant Shares by the Holder, then this Warrant may
        also
        be exercised at such time by means of a “cashless exercise” in which the Holder
        shall be entitled to receive a certificate for the number of Warrant Shares
        equal to the quotient obtained by dividing [(A-B) (X)] by (A),
        where:

      

      (A)
        = the
        VWAP on the Trading Day immediately preceding the date of such
        election;

      

      (B)
        = the
        Exercise Price of this Warrant, as adjusted; and 

      

      (X)
        = the
        number of Warrant Shares issuable upon exercise of this Warrant in accordance
        with the terms of this Warrant by means of a cash exercise rather than a
        cashless exercise.

      

      Notwithstanding
        anything herein to the contrary, on the Termination Date, this Warrant shall
        be
        automatically exercised via cashless exercise pursuant to this Section
        2(c).

      

      d) Exercise
        Limitations.
        

      

      
        	 	
                i.

              	
                Holder’s
                  Restrictions.
                  The Company shall not effect any exercise of this Warrant, and
                  a Holder
                  shall not have the right to exercise any portion of this Warrant,
                  pursuant
                  to Section 2(c) or otherwise, to the extent that after giving effect
                  to
                  such issuance after exercise, such Holder (together with such Holder’s
                  affiliates, and any other person or entity acting as a group together
                  with
                  such Holder or any of such Holder’s affiliates), as set forth on the
                  applicable Notice of Exercise, would beneficially own in excess
                  of the
                  Beneficial Ownership Limitation (as defined below).  For
                  purposes of
                  the foregoing sentence, the number of shares of Common Stock beneficially
                  owned by such Holder and its affiliates shall include the number
                  of shares
                  of Common Stock issuable upon exercise of this Warrant with respect
                  to
                  which the determination of such sentence is being made, but shall
                  exclude
                  the number of shares of Common Stock which would be issuable upon
                  (A)
                  exercise of the remaining, nonexercised

              

      

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

      portion
        of this Warrant beneficially owned by such Holder or any of its affiliates
        and
        (B) exercise or conversion of the unexercised or nonconverted portion of
        any
        other securities of the Company (including, without limitation, any other
        Preferred Stock or Warrants) subject to a limitation on conversion or exercise
        analogous to the limitation contained herein beneficially owned by such Holder
        or any of its affiliates.  Except as set forth in the preceding sentence,
        for purposes of this Section 2(d), beneficial ownership shall be calculated
        in
        accordance with Section 13(d) of the Exchange Act and the rules and regulations
        promulgated thereunder, it being acknowledged by a Holder that the Company
        is
        not representing to such Holder that such calculation is in compliance with
        Section 13(d) of the Exchange Act and such Holder is solely responsible for
        any
        schedules required to be filed in accordance therewith. To the extent that
        the
        limitation contained in this Section 2(d) applies, the determination of whether
        this Warrant is exercisable (in relation to other securities owned by such
        Holder) and of which a portion of this Warrant is exercisable shall be in
        the
        sole discretion of a Holder, and the submission of a Notice of Exercise shall
        be
        deemed to be each Holder’s determination of whether this Warrant is exercisable
        (in relation to other securities owned by such Holder) and of which portion
        of
        this Warrant is exercisable, in each case subject to such aggregate percentage
        limitation, and the Company shall have no obligation to verify or confirm
        the
        accuracy of such determination. In addition, a determination as to any group
        status as contemplated above shall be determined in accordance with Section
        13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
        For purposes of this Section 2(d), in determining the number of outstanding
        shares of Common Stock, a Holder may rely on the number of outstanding shares
        of
        Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form
        10-K, as the case may be, (y) a more recent public announcement by the Company
        or (z) any other notice by the Company or the Company’s Transfer Agent setting
        forth the number of shares of Common Stock outstanding.  Upon the
        written
        or oral request of a Holder, the Company shall within two Trading Days confirm
        orally and in writing to such Holder the number of shares of Common Stock
        then
        outstanding.  In any case, the number of outstanding shares of Common
        Stock
        shall be determined after giving effect to the conversion or exercise of
        securities of the Company, including this Warrant, by such Holder or its
        affiliates since the date as of which such number of outstanding shares of
        Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99%
        of the number of shares of the Common Stock outstanding immediately after
        giving
        effect to the issuance of shares of Common Stock issuable upon exercise of
        this
        Warrant. The Beneficial Ownership Limitation provisions of this Section 2(d)
        may
        be waived by such Holder, at the election of such Holder, upon not less than
        61
        days’ prior notice to the Company to change the Beneficial Ownership Limitation
        to 9.99% of the number of shares of the Common Stock outstanding immediately
        after giving effect to the issuance of shares of Common Stock upon exercise
        of
        this Warrant, and the provisions of this Section 2(d) shall continue to apply.
        Upon such a change by a Holder of the Beneficial Ownership Limitation from
        such
        4.99% limitation to such 9.99% limitation, the Beneficial Ownership Limitation
        may not be waived by such Holder. The provisions of this paragraph shall
        be
        implemented in a manner otherwise than in strict conformity with the terms
        of
        this Section 2(d) to correct this paragraph (or any portion hereof) which
        may be
        defective or inconsistent with the intended Beneficial Ownership Limitation
        herein contained or to make changes or supplements necessary or desirable
        to
        properly give effect to such limitation. The limitations contained in this
        paragraph shall apply to a successor holder of this Warrant.

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      ii. Trading
        Market Restrictions.
        If the
        Conversion Price on the date of the Purchase Agreement is less than the closing
        bid price of the Common Stock on the Trading Market on the Trading Day
        immediately prior to the Closing Date, then, prior to the 20th
        day
        following the mailing by the Corporation to its shareholders of a Definitive
        Information Statement on Schedule 14C relating to Shareholder Approval),
        if
        required by the applicable rules and regulations of the Trading Market (or
        any
        successor entity), then the Company may not issue upon exercise of this Warrant,
        a number of shares of Common Stock, which, when aggregated with any shares
        of
        Common Stock issued (A) upon conversion of or as payment of dividends on
        the
        Preferred Stock issued pursuant to the Purchase Agreement and (B) upon prior
        exercise of this or any other Warrant issued pursuant to the Purchase Agreement,
        would exceed 19.999% of the number of shares of Common Stock outstanding
        on the
        Trading Day immediately preceding the Closing Date (such number of shares,
        the
“Issuable
        Maximum”).
        If on
        any attempted exercise of this Warrant, the issuance of Warrant Shares would
        exceed the Issuable Maximum and the Company shall not have previously obtained
        the vote of shareholders (the “Shareholder
        Approval”),
        as
        may be required by the applicable rules and regulations of the Trading Market
        (or any successor entity) to approve the issuance of shares of Common Stock
        in
        excess of the Issuable Maximum pursuant to the terms hereof, then the Company
        shall issue to the Holder requesting a exercise of this Warrant such number
        of
        Warrant Shares as may be issued below the Issuable Maximum and, with respect
        to
        the remainder of the aggregate number of Warrant Shares, this Warrant shall
        not
        be exercisable until 20th
        day
        following the mailing by the Corporation to its shareholders of an Information
        Statement on Schedule 14C relating to Shareholder Approval.

      

      e) Mechanics
        of Exercise.
        

      

      i. Authorization
        of Warrant Shares.
        The
        Company covenants that all Warrant Shares which may be issued upon the exercise
        of the purchase rights represented by this Warrant will, upon exercise of
        the
        purchase rights represented by this Warrant, be duly authorized, validly
        issued,
        fully paid and nonassessable and free from all taxes, liens and charges in
        respect of the issue thereof (other than taxes in respect of any transfer
        occurring contemporaneously with such issue). 

      

      
        
           

        

        
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      ii. Delivery
        of Certificates Upon Exercise.
        Certificates for shares purchased hereunder shall be transmitted by the transfer
        agent of the Company to the Holder by crediting the account of the Holder’s
        prime broker with the Depository Trust Company through its Deposit and
        Withdrawals at Custodian (“DWAC”)
        system
        if the Company is a participant in such system, and otherwise by physical
        delivery to the address specified by the Holder in the Notice of Exercise
        within
        three (3) Trading Days from the delivery to the Company of the Notice of
        Exercise Form, surrender of this Warrant and payment of the aggregate Exercise
        Price as set forth above (“Warrant
        Share Delivery Date”).
        This
        Warrant shall be deemed to have been exercised on the date the Exercise Price
        is
        received by the Company. The Warrant Shares shall be deemed to have been
        issued,
        and Holder or any other person so designated to be named therein shall be
        deemed
        to have become a holder of record of such shares for all purposes, as of
        the
        date the Warrant has been exercised by payment to the Company of the Exercise
        Price and all taxes required to be paid by the Holder, if any, pursuant to
        Section 2(e)(vii) prior to the issuance of such shares, have been paid.

      

      iii. Delivery
        of New Warrants Upon Exercise.
        If this
        Warrant shall have been exercised in part, the Company shall, at the time
        of
        delivery of the certificate or certificates representing Warrant Shares,
        deliver
        to Holder a new Warrant evidencing the rights of Holder to purchase the
        unpurchased Warrant Shares called for by this Warrant, which new Warrant
        shall
        in all other respects be identical with this Warrant.

      

      iv. Rescission
        Rights.
        If the
        Company fails to cause its transfer agent to transmit to the Holder a
        certificate or certificates representing the Warrant Shares pursuant to this
        Section 2(e)(iv) by the Warrant Share Delivery Date, then the Holder will
        have
        the right to rescind such exercise.

      

      
        
           

        

        
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      v. Compensation
        for Buy-In on Failure to Timely Deliver Certificates Upon
        Exercise.
        In
        addition to any other rights available to the Holder, if the Company fails
        to
        cause its transfer agent to transmit to the Holder a certificate or certificates
        representing the Warrant Shares pursuant to an exercise on or before the
        Warrant
        Share Delivery Date, and if after such date the Holder is required by its
        broker
        to purchase (in an open market transaction or otherwise) shares of Common
        Stock
        to deliver in satisfaction of a sale by the Holder of the Warrant Shares
        which
        the Holder anticipated receiving upon such exercise (a “Buy-In”),
        then
        the Company shall (1) pay in cash to the Holder the amount by which (x) the
        Holder’s total purchase price (including brokerage commissions, if any) for the
        shares of Common Stock so purchased exceeds (y) the amount obtained by
        multiplying (A) the number of Warrant Shares that the Company was required
        to
        deliver to the Holder in connection with the exercise at issue times (B)
        the
        price at which the sell order giving rise to such purchase obligation was
        executed, and (2) at the option of the Holder, either reinstate the portion
        of
        the Warrant and equivalent number of Warrant Shares for which such exercise
        was
        not honored or deliver to the Holder the number of shares of Common Stock
        that
        would have been issued had the Company timely complied with its exercise
        and
        delivery obligations hereunder. For example, if the Holder purchases Common
        Stock having a total purchase price of $11,000 to cover a Buy-In with respect
        to
        an attempted exercise of shares of Common Stock with an aggregate sale price
        giving rise to such purchase obligation of $10,000, under clause (1) of the
        immediately preceding sentence the Company shall be required to pay the Holder
        $1,000. The Holder shall provide the Company written notice indicating the
        amounts payable to the Holder in respect of the Buy-In, together with applicable
        confirmations and other evidence reasonably requested by the Company. Nothing
        herein shall limit a Holder’s right to pursue any other remedies available to it
        hereunder, at law or in equity including, without limitation, a decree of
        specific performance and/or injunctive relief with respect to the Company’s
        failure to timely deliver certificates representing shares of Common Stock
        upon
        exercise of the Warrant as required pursuant to the terms hereof.

       

      vi. No
        Fractional Shares or Scrip.
        No
        fractional shares or scrip representing fractional shares shall be issued
        upon
        the exercise of this Warrant. As to any fraction of a share which Holder
        would
        otherwise be entitled to purchase upon such exercise, the Company shall pay
        a
        cash adjustment in respect of such final fraction in an amount equal to such
        fraction multiplied by the Exercise Price.

      

      vii. Charges,
        Taxes and Expenses.
        Issuance of certificates for Warrant Shares shall be made without charge
        to the
        Holder for any issue or transfer tax or other incidental expense in respect
        of
        the issuance of such certificate, all of which taxes and expenses shall be
        paid
        by the Company, and such certificates shall be issued in the name of the
        Holder
        or in such name or names as may be directed by the Holder; provided,
        however,
        that in
        the event certificates for Warrant Shares are to be issued in a name other
        than
        the name of the Holder, this Warrant when surrendered for exercise shall
        be
        accompanied by the Assignment Form attached hereto duly executed by the Holder;
        and the Company may require, as a condition thereto, the payment of a sum
        sufficient to reimburse it for any transfer tax incidental thereto.

      

      
        
           

        

        
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      viii. Closing
        of Books.
        The
        Company will not close its stockholder books or records in any manner which
        prevents the timely exercise of this Warrant, pursuant to the terms
        hereof.

      

      Section
        3. Certain Adjustments.

      

      a) Stock
        Dividends and Splits.
        If the
        Company, at any time while this Warrant is outstanding: (A) pays a stock
        dividend or otherwise make a distribution or distributions on shares of its
        Common Stock or any other equity or equity equivalent securities payable
        in
        shares of Common Stock (which, for avoidance of doubt, shall not include
        any
        shares of Common Stock issued by the Company pursuant to this Warrant), (B)
        subdivides outstanding shares of Common Stock into a larger number of shares,
        (C) combines (including by way of reverse stock split) outstanding shares
        of
        Common Stock into a smaller number of shares, or (D) issues by reclassification
        of shares of the Common Stock any shares of capital stock of the Company,
        then
        in each case the Exercise Price shall be multiplied by a fraction of which
        the
        numerator shall be the number of shares of Common Stock (excluding treasury
        shares, if any) outstanding immediately before such event and of which the
        denominator shall be the number of shares of Common Stock outstanding
        immediately after such event and the number of shares issuable upon exercise
        of
        this Warrant shall be proportionately adjusted. Any adjustment made pursuant
        to
        this Section 3(a) shall become effective immediately after the record date
        for
        the determination of stockholders entitled to receive such dividend or
        distribution and shall become effective immediately after the effective date
        in
        the case of a subdivision, combination or re-classification.

      

      b) Subsequent
        Equity Sales.
        If the
        Company or any Subsidiary thereof, as applicable, at any time while this
        Warrant
        is outstanding, shall offer, sell, grant any option to purchase or offer,
        sell
        or grant any right to reprice its securities, or otherwise dispose of or
        issue
        any Common Stock or Common Stock Equivalents entitling any Person to acquire
        shares of Common Stock, at an effective price per share less than the then
        Exercise Price (such lower price, the “Base
        Share Price”
        and
        such issuances collectively, a “Dilutive
        Issuance”),
        as
        adjusted hereunder (if the holder of the Common Stock or Common Stock
        Equivalents so issued shall at any time, whether by operation of purchase
        price
        adjustments, reset provisions, floating conversion, exercise or exchange
        prices
        or otherwise, or due to warrants, options or rights per share which is issued
        in
        connection with such issuance, be entitled to receive shares of Common Stock
        at
        an effective price per share which is less than the Exercise Price, such
        issuance shall be deemed to have occurred for less than the Exercise Price
        on
        such date of the adjustment of the Dilutive Issuance), then, the Exercise
        Price
        shall be reduced and only reduced to equal the Base Share Price and the number
        of Warrant Shares issuable hereunder shall be increased such that the aggregate
        Exercise Price payable hereunder, after taking into account the decrease
        in the
        Exercise Price, shall be equal to the aggregate Exercise Price prior to such
        adjustment; provided,
        however,
        until
        the date that Shareholder Approval has been obtained and deemed effective,
        in no
        event shall the Exercise Price be adjusted to less than $1.52, subject to
        adjustment for reverse and forward stock splits, stock dividends, stock
        combinations and other similar transactions of the Common Stock that occur
        after
        the date of this Agreement. Such adjustment shall be made whenever such Common
        Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing,
        no
        adjustments shall be made, paid or issued under this Section 3(b) in respect
        of
        an Exempt Issuance. The Company shall notify the Holder in writing, no later
        than the Trading Day following the issuance of any Common Stock or Common
        Stock
        Equivalents subject to this section, indicating therein the applicable issuance
        price, or of applicable reset price, exchange price, conversion price and
        other
        pricing terms (such notice the “Dilutive
        Issuance Notice”).
        For
        purposes of clarification, whether or not the Company provides a Dilutive
        Issuance Notice pursuant to this Section 3(b), upon the occurrence of any
        Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
        entitled to receive a number of Warrant Shares based upon the Base Share
        Price
        regardless of whether the Holder accurately refers to the Base Share Price
        in
        the Notice of Exercise. 

      

      
        
           

        

        
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      c) Pro
        Rata Distributions.
        If the
        Company, at any time prior to the Termination Date, shall distribute to all
        holders of Common Stock (and not to Holders of the Warrants) evidences of
        its
        indebtedness or assets (including cash and cash dividends) or rights or warrants
        to subscribe for or purchase any security other than the Common Stock (which
        shall be subject to Section 3(b)), then in each such case the Exercise Price
        shall be adjusted by multiplying the Exercise Price in effect immediately
        prior
        to the record date fixed for determination of stockholders entitled to receive
        such distribution by a fraction of which the denominator shall be the VWAP
        determined as of the record date mentioned above, and of which the numerator
        shall be such VWAP on such record date less the then per share fair market
        value
        at such record date of the portion of such assets or evidence of indebtedness
        so
        distributed applicable to one outstanding share of the Common Stock as
        determined by the Board of Directors in good faith. In either case the
        adjustments shall be described in a statement provided to the Holder of the
        portion of assets or evidences of indebtedness so distributed or such
        subscription rights applicable to one share of Common Stock. Such adjustment
        shall be made whenever any such distribution is made and shall become effective
        immediately after the record date mentioned above.

      

      d) Fundamental
        Transaction.
        If, at
        any time while this Warrant is outstanding, (A) the Company effects any merger
        or consolidation of the Company with or into another Person, (B) the Company
        effects any sale of all or substantially all of its assets in one or a series
        of
        related transactions, (C) any tender offer or exchange offer (whether by
        the
        Company or another Person) is completed pursuant to which holders of Common
        Stock are permitted to tender or exchange their shares for other securities,
        cash or property, or (D) the Company effects any reclassification of the
        Common
        Stock or any compulsory share exchange pursuant to which the Common Stock
        is
        effectively converted into or exchanged for other securities, cash or property
        (in any such case, a “Fundamental
        Transaction”),
        then,
        upon any subsequent exercise of this Warrant, the Holder shall have the right
        to
        receive, for each Warrant Share that would have been issuable upon such exercise
        immediately prior to the occurrence of such Fundamental Transaction, at the
        option of the Holder, (a) upon exercise of this Warrant, the number of shares
        of
        Common Stock of the successor or acquiring corporation or of the Company,
        if it
        is the surviving corporation, and any additional consideration (the
“Alternate
        Consideration”)
        receivable upon or as a result of such reorganization, reclassification,
        merger,
        consolidation or disposition of assets by a Holder of the number of shares
        of
        Common Stock for which this Warrant is exercisable immediately prior to such
        event or (b) if the Company is acquired in an all cash transaction, cash
        equal
        to the value of this Warrant as determined in accordance with the Black-Scholes
        option pricing formula. For purposes of any such exercise, the determination
        of
        the Exercise Price shall be appropriately adjusted to apply to such Alternate
        Consideration based on the amount of Alternate Consideration issuable in
        respect
        of one share of Common Stock in such Fundamental Transaction, and the Company
        shall apportion the Exercise Price among the Alternate Consideration in a
        reasonable manner reflecting the relative value of any different components
        of
        the Alternate Consideration. If holders of Common Stock are given any choice
        as
        to the securities, cash or property to be received in a Fundamental Transaction,
        then the Holder shall be given the same choice as to the Alternate Consideration
        it receives upon any exercise of this Warrant following such Fundamental
        Transaction. To the extent necessary to effectuate the foregoing provisions,
        any
        successor to the Company or surviving entity in such Fundamental Transaction
        shall issue to the Holder a new warrant consistent with the foregoing provisions
        and evidencing the Holder’s right to exercise such warrant into Alternate
        Consideration. The terms of any agreement pursuant to which a Fundamental
        Transaction is effected shall include terms requiring any such successor
        or
        surviving entity to comply with the provisions of this Section 3(d) and insuring
        that this Warrant (or any such replacement security) will be similarly adjusted
        upon any subsequent transaction analogous to a Fundamental
        Transaction.

      

      
        
           

        

        
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      e) Calculations.
        All
        calculations under this Section 3 shall be made to the nearest cent or the
        nearest 1/100th of a share, as the case may be. For purposes of this Section
        3,
        the number of shares of Common Stock deemed to be issued and outstanding
        as of a
        given date shall be the sum of the number of shares of Common Stock (excluding
        treasury shares, if any) issued and outstanding.

      

      f) Voluntary
        Adjustment By Company.
        The
        Company may at any time during the term of this Warrant reduce the then current
        Exercise Price to any amount and for any period of time deemed appropriate
        by
        the Board of Directors of the Company.

      

      g) Notice
        to Holders.
        

      

      i. Adjustment
        to Exercise Price.
        Whenever the Exercise Price is adjusted pursuant to this Section 3, the Company
        shall promptly mail to each Holder a notice setting forth the Exercise Price
        after such adjustment and setting forth a brief statement of the facts requiring
        such adjustment. If the Company issues a variable rate security, despite
        the
        prohibition thereon in the Purchase Agreement, the Company shall be deemed
        to
        have issued Common Stock or Common Stock Equivalents at the lowest possible
        conversion or exercise price at which such securities may be converted or
        exercised in the case of a Variable Rate Transaction (as defined in the Purchase
        Agreement), to the extent ascertainable at the time of issuance. 

      

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      ii. Notice
        to Allow Exercise by Holder.
        If (A)
        the Company shall declare a dividend (or any other distribution) on the Common
        Stock; (B) the Company shall declare a special nonrecurring cash dividend
        on or
        a redemption of the Common Stock; (C) the Company shall authorize the granting
        to all holders of the Common Stock rights or warrants to subscribe for or
        purchase any shares of capital stock of any class or of any rights; (D) the
        approval of any stockholders of the Company shall be required in connection
        with
        any reclassification of the Common Stock, any consolidation or merger to
        which
        the Company is a party, any sale or transfer of all or substantially all
        of the
        assets of the Company, of any compulsory share exchange whereby the Common
        Stock
        is converted into other securities, cash or property; (E) the Company shall
        authorize the voluntary or involuntary dissolution, liquidation or winding
        up of
        the affairs of the Company; then, in each case, the Company shall cause to
        be
        mailed to the Holder at its last address as it shall appear upon the Warrant
        Register of the Company, at least 20 calendar days prior to the applicable
        record or effective date hereinafter specified, a notice stating (x) the
        date on
        which a record is to be taken for the purpose of such dividend, distribution,
        redemption, rights or warrants, or if a record is not to be taken, the date
        as
        of which the holders of the Common Stock of record to be entitled to such
        dividend, distributions, redemption, rights or warrants are to be determined
        or
        (y) the date on which such reclassification, consolidation, merger, sale,
        transfer or share exchange is expected to become effective or close, and
        the
        date as of which it is expected that holders of the Common Stock of record
        shall
        be entitled to exchange their shares of the Common Stock for securities,
        cash or
        other property deliverable upon such reclassification, consolidation, merger,
        sale, transfer or share exchange; provided,
        that
        the failure to mail such notice or any defect therein or in the mailing thereof
        shall not affect the validity of the corporate action required to be specified
        in such notice. The Holder is entitled to exercise this Warrant during the
        20-day period commencing on the date of such notice to the effective date
        of the
        event triggering such notice.

      

      Section
        4. Transfer
        of Warrant.

      

      a) Transferability.
        Subject
        to compliance with any applicable securities laws and the conditions set
        forth
        in Sections 5(a) and 4(d) hereof and to the provisions of Section 4.1 of
        the
        Purchase Agreement, this Warrant and all rights hereunder are transferable,
        in
        whole or in part, upon surrender of this Warrant at the principal office
        of the
        Company, together with a written assignment of this Warrant substantially
        in the
        form attached hereto duly executed by the Holder or its agent or attorney
        and
        funds sufficient to pay any transfer taxes payable upon the making of such
        transfer. Upon such surrender and, if required, such payment, the Company
        shall
        execute and deliver a new Warrant or Warrants in the name of the assignee
        or
        assignees and in the denomination or denominations specified in such instrument
        of assignment, and shall issue to the assignor a new Warrant evidencing the
        portion of this Warrant not so assigned, and this Warrant shall promptly
        be
        cancelled. A Warrant, if properly assigned, may be exercised by a new holder
        for
        the purchase of Warrant Shares without having a new Warrant issued.

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      b) New
        Warrants.
        This
        Warrant may be divided or combined with other Warrants upon presentation
        hereof
        at the aforesaid office of the Company, together with a written notice
        specifying the names and denominations in which new Warrants are to be issued,
        signed by the Holder or its agent or attorney. Subject to compliance with
        Section 4(a), as to any transfer which may be involved in such division or
        combination, the Company shall execute and deliver a new Warrant or Warrants
        in
        exchange for the Warrant or Warrants to be divided or combined in accordance
        with such notice.

      

      c) Warrant
        Register.
        The
        Company shall register this Warrant, upon records to be maintained by the
        Company for that purpose (the “Warrant
        Register”),
        in
        the name of the record Holder hereof from time to time. The Company may deem
        and
        treat the registered Holder of this Warrant as the absolute owner hereof
        for the
        purpose of any exercise hereof or any distribution to the Holder, and for
        all
        other purposes, absent actual notice to the contrary.

      

      d) Transfer
        Restrictions.
        If,
        at the
time
        of
        the surrender of this Warrant in connection with any transfer of this Warrant,
        the transfer of this Warrant shall not be registered pursuant to an effective
        registration
        statement under the Securities Act
        and
under
        applicable state securities or blue sky laws, the Company may require, as
        a
        condition of allowing such transfer (i) that the Holder or transferee of
        this
        Warrant, as the case may be, furnish to the Company a written opinion of
        counsel
        (which opinion shall be in form, substance and scope customary for opinions
        of
        counsel in comparable transactions) to the effect that such transfer may
        be made
        without
        registration under
        the
        Securities Act and under applicable state securities or blue sky laws, (ii)
        that
        the holder or transferee execute and deliver to the Company an investment
        letter
        in form and substance acceptable to the Company and (iii) that the transferee
        be
        an “accredited
        investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
        promulgated under the Securities Act or a qualified institutional buyer as
        defined in Rule 144A(a) under the Securities Act.

      

      Section
        5. Miscellaneous.

      

      a) Title
        to Warrant.
        Prior
        to the Termination Date and subject to compliance with applicable laws and
        Section 4 of this Warrant, this Warrant and all rights hereunder are
        transferable, in whole or in part, at the office or agency of the Company
        by the
        Holder in person or by duly authorized attorney, upon surrender of this Warrant
        together with the Assignment Form annexed hereto properly endorsed. The
        transferee shall sign an investment letter in form and substance reasonably
        satisfactory to the Company.

      

      b) No
        Rights as Shareholder Until Exercise.
        This
        Warrant does not entitle the Holder to any voting rights or other rights
        as a
        shareholder of the Company prior to the exercise hereof. Upon the surrender
        of
        this Warrant and the payment of the aggregate Exercise Price (or by means
        of a
        cashless exercise), the Warrant Shares so purchased shall be and be deemed
        to be
        issued to such Holder as the record owner of such shares as of the close
        of
        business on the later of the date of such surrender or payment.

      

      
        
           

        

        
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      c) Loss,
        Theft, Destruction or Mutilation of Warrant.
        The
        Company covenants that upon receipt by the Company of evidence reasonably
        satisfactory to it of the loss, theft, destruction or mutilation of this
        Warrant
        or any stock certificate relating to the Warrant Shares, and in case of loss,
        theft or destruction, of indemnity or security reasonably satisfactory to
        it
        (which, in the case of the Warrant, shall not include the posting of any
        bond),
        and upon surrender and cancellation of such Warrant or stock certificate,
        if
        mutilated, the Company will make and deliver a new Warrant or stock certificate
        of like tenor and dated as of such cancellation, in lieu of such Warrant
        or
        stock certificate.

      

      d) Saturdays,
        Sundays, Holidays, etc.
        If the
        last or appointed day for the taking of any action or the expiration of any
        right required or granted herein shall be a Saturday, Sunday or a legal holiday,
        then such action may be taken or such right may be exercised on the next
        succeeding day not a Saturday, Sunday or legal holiday.

      

      e) Authorized
        Shares.
        

      

      The
        Company covenants that during the period the Warrant is outstanding, it will
        reserve from its authorized and unissued Common Stock a sufficient number
        of
        shares to provide for the issuance of the Warrant Shares upon the exercise
        of
        any purchase rights under this Warrant. The Company further covenants that
        its
        issuance of this Warrant shall constitute full authority to its officers
        who are
        charged with the duty of executing stock certificates to execute and issue
        the
        necessary certificates for the Warrant Shares upon the exercise of the purchase
        rights under this Warrant. The Company will take all such reasonable action
        as
        may be necessary to assure that such Warrant Shares may be issued as provided
        herein without violation of any applicable law or regulation, or of any
        requirements of the Trading Market upon which the Common Stock may be listed.
        

      

      Except
        and to the extent as waived or consented to by the Holder, the Company shall
        not
        by any action, including, without limitation, amending its certificate of
        incorporation or through any reorganization, transfer of assets, consolidation,
        merger, dissolution, issue or sale of securities or any other voluntary action,
        avoid or seek to avoid the observance or performance of any of the terms
        of this
        Warrant, but will at all times in good faith assist in the carrying out of
        all
        such terms and in the taking of all such actions as may be necessary or
        appropriate to protect the rights of Holder as set forth in this Warrant
        against
        impairment. Without limiting the generality of the foregoing, the Company
        will
        (a) not increase the par value of any Warrant Shares above the amount payable
        therefor upon such exercise immediately prior to such increase in par value,
        (b)
        take all such action as may be necessary or appropriate in order that the
        Company may validly and legally issue fully paid and nonassessable Warrant
        Shares upon the exercise of this Warrant, and (c) use commercially reasonable
        efforts to obtain all such authorizations, exemptions or consents from any
        public regulatory body having jurisdiction thereof as may be necessary to
        enable
        the Company to perform its obligations under this Warrant.

      

      
        
           

        

        
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      Before
        taking any action which would result in an adjustment in the number of Warrant
        Shares for which this Warrant is exercisable or in the Exercise Price, the
        Company shall obtain all such authorizations or exemptions thereof, or consents
        thereto, as may be necessary from any public regulatory body or bodies having
        jurisdiction thereof.

      

      f) Jurisdiction.
        All
        questions concerning the construction, validity, enforcement and interpretation
        of this Warrant shall be determined in accordance with the provisions of
        the
        Purchase Agreement.

      

      g) Restrictions.
        The
        Holder acknowledges that the Warrant Shares acquired upon the exercise of
        this
        Warrant, if not registered, will have restrictions upon resale imposed by
        state
        and federal securities laws.

      

      h) Nonwaiver
        and Expenses.
        No
        course of dealing or any delay or failure to exercise any right hereunder
        on the
        part of Holder shall operate as a waiver of such right or otherwise prejudice
        Holder’s rights, powers or remedies, notwithstanding the fact that all rights
        hereunder terminate on the Termination Date. If the Company willfully and
        knowingly fails to comply with any provision of this Warrant, which results
        in
        any material damages to the Holder, the Company shall pay to Holder such
        amounts
        as shall be sufficient to cover any costs and expenses including, but not
        limited to, reasonable attorneys’ fees, including those of appellate
        proceedings, incurred by Holder in collecting any amounts due pursuant hereto
        or
        in otherwise enforcing any of its rights, powers or remedies
        hereunder.

      

      i) Notices.
        Any
        notice, request or other document required or permitted to be given or delivered
        to the Holder by the Company shall be delivered in accordance with the notice
        provisions of the Purchase Agreement.

      

      j) Limitation
        of Liability.
        No
        provision hereof, in the absence of any affirmative action by Holder to exercise
        this Warrant or purchase Warrant Shares, and no enumeration herein of the
        rights
        or privileges of Holder, shall give rise to any liability of Holder for the
        purchase price of any Common Stock or as a stockholder of the Company, whether
        such liability is asserted by the Company or by creditors of the
        Company.

      

      k) Remedies.
        Holder,
        in addition to being entitled to exercise all rights granted by law, including
        recovery of damages, will be entitled to specific performance of its rights
        under this Warrant. The Company agrees that monetary damages would not be
        adequate compensation for any loss incurred by reason of a breach by it of
        the
        provisions of this Warrant and hereby agrees to waive the defense in any
        action
        for specific performance that a remedy at law would be adequate.

      

      l) Successors
        and Assigns.
        Subject
        to applicable securities laws, this Warrant and the rights and obligations
        evidenced hereby shall inure to the benefit of and be binding upon the
        successors of the Company and the successors and permitted assigns of Holder.
        The provisions of this Warrant are intended to be for the benefit of all
        Holders
        from time to time of this Warrant and shall be enforceable by any such Holder
        or
        holder of Warrant Shares.

      

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      m) Amendment.
        This
        Warrant may be modified or amended or the provisions hereof waived with the
        written consent of the Company and the Holder.

      

      n) Severability.
        Wherever possible, each provision of this Warrant shall be interpreted in
        such
        manner as to be effective and valid under applicable law, but if any provision
        of this Warrant shall be prohibited by or invalid under applicable law, such
        provision shall be ineffective to the extent of such prohibition or invalidity,
        without invalidating the remainder of such provisions or the remaining
        provisions of this Warrant.

      

      o) Headings.
        The
        headings used in this Warrant are for the convenience of reference only and
        shall not, for any purpose, be deemed a part of this Warrant.

      

      

      ********************

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      

      IN
        WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
        officer thereunto duly authorized.

      

      

      Dated:
        December ___, 2005

      
        	 	 	 
	 	NEW
                DRAGON ASIA CORP.
	 
 	 
 	 
 
	 	By:  	 
	 	
                

                Name:
                  Peter Mak

              
	 	
                Title:
                  Chief Financial
                  Officer

              

      

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      NOTICE
        OF EXERCISE

      

      TO: NEW
        DRAGON ASIA CORP.

      

      (1) The
        undersigned hereby elects to purchase ________ Warrant Shares of the Company
        pursuant to the terms of the attached Warrant (only if exercised in full),
        and
        tenders herewith payment of the exercise price in full, together with all
        applicable transfer taxes, if any.

      

      (2) Payment
        shall take the form of (check applicable box):

      

      [
        ] in
        lawful money of the United States; or

      

      [
        ] the
        cancellation of such number of Warrant Shares as is necessary, in accordance
        with the formula set forth in subsection 2(c), to exercise this Warrant with
        respect to the maximum number of Warrant Shares purchasable pursuant to the
        cashless exercise procedure set forth in subsection 2(c).

      

      (3) Please
        issue a certificate or certificates representing said Warrant Shares in the
        name
        of the undersigned or in such other name as is specified below:

      

      _______________________________

      

      The
        Warrant Shares shall be delivered to the following:

      

      _______________________________

      _______________________________

      _______________________________

      

      (4)
        Accredited
        Investor.
        The
        undersigned is an “accredited investor” as defined in Regulation D promulgated
        under the Securities Act of 1933, as amended.

      

      [SIGNATURE
        OF HOLDER]

      Name
        of
        Investing Entity:
        ________________________________________________________________________

      Signature
        of Authorized Signatory of Investing Entity:
        _________________________________________________

      Name
        of
        Authorized Signatory:
        ___________________________________________________________________

      Title
        of
        Authorized Signatory:
        ____________________________________________________________________

      Date:
        ________________________________________________________________________________________

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      ASSIGNMENT
        FORM

      

      (To
        assign the foregoing warrant, execute

      this
        form
        and supply required information. 

      Do
        not
        use this form to exercise the warrant.)

      

      FOR
        VALUE
        RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
        assigned to

      

      _______________________________________________
        whose address is

      _______________________________________________________________.

      

      _______________________________________________________________

      

      Dated:
        ______________, _______

      

      Holder’s
        Signature: _____________________________

      

      Holder’s
        Address: _____________________________

                                                                                       
        _____________________________

      

      

      Signature
        Guaranteed: ___________________________________________

      

      

      NOTE:
        The
        signature to this Assignment Form must correspond with the name as it appears
        on
        the face of the Warrant, without alteration or enlargement or any change
        whatsoever, and must be guaranteed by a bank or trust company. Officers of
        corporations and those acting in a fiduciary or other representative capacity
        should file proper evidence of authority to assign the foregoing
        Warrant.

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