Document:

WARRANT
        AGREEMENT

      

      Agreement
        made as of  , 2005 between Key Hospitality Acquisition Corporation,
        a
        Delaware corporation, with offices at 1775 Broadway, Suite 604, New York,
        NY
        10019 (“Company”), and Continental Stock Transfer & Trust Company, a New
        York corporation, with offices at 17 Battery Place, New York, New York 10004
        (“Warrant Agent”).

      

      WHEREAS,
        the Company is engaged in a public offering (“Public Offering”) of Units
        (“Units”) and, in connection therewith, has determined to issue and deliver up
        to 11,500,000 Warrants (“Public Warrants”) to the investors in the Public
        Offering, and (ii) 500,000 Warrants to Maxim Group LLC (“Maxim”) or its
        designees (“Representative's Warrants” and, together with the Public Warrants,
        the “Warrants”), each of such Public Warrants evidencing the right of the holder
        thereof to purchase one share of common stock, par value $.001 per share,
        of the
        Company (“Common Stock”) for $6.00, subject to adjustment as described herein;
        and

      

      WHEREAS,
        the Company has filed with the Securities and Exchange Commission a Registration
        Statement, File No. 333-125009 on Form S-1 (as the same may be amended from
        time
        to time, the “Registration Statement”) for the registration, under the
        Securities Act of 1933, as amended (“Act”) of, among other securities, the
        Warrants and the Common Stock issuable upon exercise of the Warrants;
        and

      

      WHEREAS,
        the Company desires the Warrant Agent to act on behalf of the Company, and
        the
        Warrant Agent is willing to so act, in connection with the issuance,
        registration, transfer, exchange, redemption and exercise of the Warrants;
        and

      

      WHEREAS,
        the Company desires to provide for the form and provisions of the Warrants,
        the
        terms upon which they shall be issued and exercised, and the respective rights,
        limitation of rights, and immunities of the Company, the Warrant Agent, and
        the
        holders of the Warrants; and

      

      WHEREAS,
        all acts and things have been done and performed which are necessary to make
        the
        Warrants, when executed on behalf of the Company and countersigned by or
        on
        behalf of the Warrant Agent, as provided herein, the valid, binding and legal
        obligations of the Company, and to authorize the execution and delivery of
        this
        Agreement.

      

      NOW,
        THEREFORE, in consideration of the mutual agreements herein contained, the
        parties hereto agree as follows:

      

      1. Appointment
        of Warrant Agent.
        The
        Company hereby appoints the Warrant Agent to act as agent
        for the
        Company for the Warrants, and the Warrant Agent hereby accepts such appointment
        and agrees to perform the same in accordance with the terms and conditions
        set
        forth in this Agreement.

      

      2. Warrants.

      

      2.1 Form
        of Warrant.
        Each
        Warrant shall be issued in registered form only, shall be in substantially
        the
        form of Exhibit A hereto, the provisions of which are incorporated herein,
        and
        shall be signed by, or bear the facsimile signature of, the Chairman of the
        Board or President and Treasurer, Secretary or Assistant Secretary of the
        Company and shall bear a facsimile of the Company’s seal. In the event the
        person whose facsimile signature has been placed upon any Warrant shall have
        ceased to serve in the capacity in which such person signed the Warrant before
        such Warrant is issued, it may be issued with the same effect as if he or
        she
        had not ceased to be such at the date of issuance.

      

      
        
           

        

        
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      2.2 Effect
        of Countersignature.
        Unless
        and until countersigned by the Warrant Agent pursuant to this Agreement,
        a
        Warrant shall be invalid and of no effect and may not be exercised by the
        holder
        thereof.

      

      2.3 Registration.

      

      2.3.1 Warrant
        Register.
        The
        Warrant Agent shall maintain books (“Warrant Register”), for the registration of
        original issuance and the registration of transfer of the Warrants. Upon
        the
        initial issuance of the Warrants, the Warrant Agent shall issue and register
        the
        Warrants in the names of the respective holders thereof in such denominations
        and otherwise in accordance with instructions delivered to the Warrant Agent
        by
        the Company.

      

      2.3.2 Registered
        Holder.
        Prior
        to due presentment for registration of transfer of any Warrant, the Company
        and
        the Warrant Agent may deem and treat the person in whose name such Warrant
        shall
        be registered upon the Warrant Register (“registered holder”), as the absolute
        owner of such Warrant and of each Warrant represented thereby (notwithstanding
        any notation of ownership or other writing on the Warrant Certificate made
        by
        anyone other than the Company or the Warrant Agent), for the purpose of any
        exercise thereof, and for all other purposes, and neither the Company nor
        the
        Warrant Agent shall be affected by any notice to the contrary.

      

      2.4 Detachability
        of Warrants.
        The
        securities comprising the Units will not be separately transferable until
        90
        days after the date hereof unless Maxim informs the Company of its decision
        to
        allow earlier separate trading, but in no event will Maxim allow separate
        trading of the securities comprising the Units until the Company files a
        Current
        Report on Form 8-K which includes an audited balance sheet reflecting the
        receipt by the Company of the gross proceeds of the Public Offering including
        the proceeds received by the Company from the exercise of the Underwriter’s
        over-allotment option, if the over-allotment option is exercised prior to
        the
        filing of the Form 8-K.

      

      2.5 Warrants
        and Representative’s Warrants.
        The
        Representative's Warrants shall have the same terms and be in the same form
        as
        the Public Warrants except with respect to the Warrant Price as set forth
        below
        in Section 3.1.

      

      3. Terms
        and Exercise of Warrants.

      

      3.1 Warrant
        Price.
        Each
        Public Warrant shall, when countersigned by the Warrant Agent, entitle the
        registered holder thereof, subject to the provisions of such Public Warrant
        and
        of this Warrant Agreement, to purchase from the Company the number of shares
        of
        Common Stock stated therein, at the price of $6.00 per whole share, subject
        to
        the adjustments provided in Section 4 hereof and in the last sentence
        of
        this Section 3.1. Each Representative’s Warrant shall, when countersigned
        by the Warrant Agent, entitle the registered holder thereof, subject to the
        provisions of such Representative's Warrant and of this Warrant Agreement,
        to
        purchase from the Company the number of shares of Common Stock stated therein,
        at the price of $7.50 per whole share, subject to the adjustments provided
        in
        Section 4 hereof and in the last sentence of this Section 3.1. The
        term
“Warrant Price” as used in this Warrant Agreement refers to the price per share
        at which Common Stock may be purchased at the time a Warrant is exercised.
        The
        Company in its sole discretion may lower the Warrant Price at any time prior
        to
        the Expiration Date.

      

      3.2 Duration
        of Warrants.
        A
        Warrant may be exercised only during the period (“Exercise Period”) commencing
        on the later of the consummation by the Company of a merger, capital stock
        exchange, asset acquisition or other similar business combination (“Business
        Combination”) (as described more fully in the Company’s Registration Statement)
        or             ,
        2006 and terminating at 5:00 p.m., New York City time on the earlier to occur
        of
        (i)             ,
        2009 or (ii) the date fixed for redemption of the Warrants as provided
        in
        Section 6 of this Agreement (“Expiration Date”). Except with respect to the
        right to receive the Redemption Price (as set forth in Section 6
        hereunder), each Warrant not exercised on or before the Expiration Date shall
        become void, and all rights thereunder and all rights in respect thereof
        under
        this Agreement shall cease at the close of business on the Expiration Date.
        The
        Company in its sole discretion may extend the duration of the Warrants by
        delaying the Expiration Date.

      

      
        
           

        

        
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      3.3 Exercise
        of Warrants.

      

      3.3.1 Payment.
        Subject
        to the provisions of the Warrant and this Warrant Agreement, a Warrant, when
        countersigned by the Warrant Agent, may be exercised by the registered holder
        thereof by surrendering it, at the office of the Warrant Agent, or at the
        office
        of its successor as Warrant Agent, in the Borough of Manhattan, City and
        State
        of New York, with the subscription form, as set forth in the Warrant, duly
        executed, and by paying in full, in lawful money of the United States, in
        cash,
        good certified check or good bank draft payable to the order of the Company
        (or
        as otherwise agreed to by the Company), the Warrant Price for each full share
        of
        Common Stock as to which the Warrant is exercised and any and all applicable
        taxes due in connection with the exercise of the Warrant, the exchange of
        the
        Warrant for the Common Stock, and the issuance of the Common Stock.

      

      3.3.2 Issuance
        of Certificates.
        As soon
        as practicable after the exercise of any Warrant and the clearance of the
        funds
        in payment of the Warrant Price, the Company shall issue to the registered
        holder of such Warrant a certificate or certificates for the number of full
        shares of Common Stock to which he is entitled, registered in such name or
        names
        as may be directed by him, her or it, and if such Warrant shall not have
        been
        exercised in full, a new countersigned Warrant for the number of shares as
        to
        which such Warrant shall not have been exercised. Notwithstanding the foregoing,
        the Company shall not be obligated to deliver any securities pursuant to
        the
        exercise of a Warrant unless (i) a registration statement under the Act with
        respect to the Common Stock is effective or (ii) in the opinion of counsel
        to
        the Company, the exercise of the Warrants is exempt from the registration
        requirements of the Act and such securities are qualified for sale or exempt
        from qualification under applicable securities laws of the states or other
        jurisdictions in which the registered holders reside. Warrants may not be
        exercised by, or securities issued to, any registered holder in any state
        in
        which such exercise would be unlawful.

      

      3.3.3 Valid
        Issuance.
        All
        shares of Common Stock issued upon the proper exercise of a Warrant in
        conformity with this Agreement shall be validly issued, fully paid and
        nonassessable.

      

      3.3.4 Date
        of Issuance.
        Each
        person in whose name any such certificate for shares of Common Stock is issued
        shall for all purposes be deemed to have become the holder of record of such
        shares on the date on which the Warrant was surrendered and payment of the
        Warrant Price was made, irrespective of the date of delivery of such
        certificate, except that, if the date of such surrender and payment is a
        date
        when the stock transfer books of the Company are closed, such person shall
        be
        deemed to have become the holder of such shares at the close of business
        on the
        next succeeding date on which the stock transfer books are open.

      

      3.3.5 Warrant
        Solicitation and Warrant Solicitation Fee.

      

      (a) The
        Company has engaged Maxim, on an exclusive basis, as its agent for the
        solicitation of the exercise of the Warrants. The Company, at its cost, will:
        (i) assist Maxim with respect to such solicitation, if requested by Maxim,
        and
        (ii) provide Maxim, and direct the Company’s transfer agent and the Warrant
        Agent to deliver to Maxim, lists of the record and, to the extent known,
        beneficial owners of the Company’s Warrants. The Company hereby instructs the
        Warrant Agent to cooperate with Maxim in every respect in connection with
        Maxim’s solicitation activities, including, but not limited to, providing to
        Maxim, at the Company’s cost, a list of record and beneficial holders of the
        Warrants and circulating a prospectus or offering circular disclosing the
        compensation arrangements referenced in Section 3.3.5(b) below to
        holders
        of the Warrants at the time of exercise of the Warrants. In addition to the
        conditions set forth in Section 3.3.5(b), Maxim shall accept payment
        of the
        warrant solicitation fee provided in Section 3.3.5(b) only if it has
        provided services to the Company in connection with the exercise of the Warrants
        and only to the extent that an investor who exercises his Warrants specifically
        designates, in writing, that Maxim solicited his exercise. In addition to
        soliciting, either orally or in writing, the exercise of Warrants by a Warrant
        holder, such services may also include disseminating information, either
        orally
        or in writing, to Warrant holders about the Company or the market for the
        Company’s securities, or assisting in the processing of the exercise of
        Warrants.

      

      
        
           

        

        
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      (b) In
        each
        instance in which a Warrant is exercised, the Warrant Agent shall promptly
        give
        written notice of such exercise to the Company and Maxim (“Warrant Agent’s
        Exercise Notice”). If, upon the exercise of any Warrant more than one year from
        the effective date of the Registration Statement, (i) the market price
        of
        the Company’s Common Stock is greater than the Warrant Price, (ii) disclosure of
        compensation arrangements between the Company and Maxim with respect to the
        solicitation of the exercise of the Warrants was made both at the time of
        the
        Public Offering and at the time of exercise (by delivery of the Prospectus
        or as
        otherwise required by applicable law, rule or regulation), (iii) the holder
        of
        the Warrant confirms in writing that the exercise of the Warrant was solicited
        by Maxim, (iv) the Warrant was not held in a discretionary account, and (v)
        the
        solicitation of the exercise of the Warrant was not in violation of Regulation
        M
        (as such rule or any successor rule may be in effect as of such time of
        exercise) promulgated under the Securities Exchange Act of 1934, as amended,
        then the Warrant Agent, simultaneously with the distribution of the Common
        Stock
        underlying the Warrants so exercised in accordance with the instructions
        from
        the Company following receipt of the proceeds to the Company received upon
        exercise of such Warrant(s), shall, on behalf of the Company, pay a fee of
        3% of
        the Warrant Price to Maxim, provided that Maxim delivers to the Warrant Agent
        within ten (10) business days from the date on which Maxim has received the
        Warrant Agent’s Exercise Notice, a certificate that the conditions set
        forth in
        the preceding clauses (iii), (iv) and (v) have been satisfied. Notwithstanding
        the foregoing, no fee will be paid to Maxim with respect to the exercise
        by the
        Underwriters or their affiliates or the Company’s officers or directors of
        Warrants purchased by it or them and still held by them for its or their
        own
        account. Maxim and the Company may at any time during business hours, examine
        the records of the Warrant Agent, including its ledger of original Warrant
        certificates returned to the Warrant Agent upon exercise of
        Warrants.

      

      (c) The
        provisions of this Section 3.3.5 may not be modified, amended or deleted
        without the prior written consent of Maxim.

      

      4. Adjustments.

      

      4.1 Stock
        Dividends - Split-Ups.
        If
        after the date hereof, and subject to the provisions of Section 4.6
        below,
        the number of outstanding shares of Common Stock is increased by a stock
        dividend payable in shares of Common Stock, or by a split-up of shares of
        Common
        Stock, or other similar event, then, on the effective date of such stock
        dividend, split-up or similar event, the number of shares of Common Stock
        issuable on exercise of each Warrant shall be increased in proportion to
        such
        increase in outstanding shares of Common Stock.

      

      4.2 Aggregation
        of Shares.
        If
        after the date hereof, and subject to the provisions of Section 4.6,
        the
        number of outstanding shares of Common Stock is decreased by a consolidation,
        combination, reverse stock split or reclassification of shares of Common
        Stock
        or other similar event, then, on the effective date of such consolidation,
        combination, reverse stock split, reclassification or similar event, the
        number
        of shares of Common Stock issuable on exercise of each Warrant shall be
        decreased in proportion to such decrease in outstanding shares of Common
        Stock.

      

      
        
           

        

        
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      4.3 Adjustments
        in Exercise Price.
        Whenever the number of shares of Common Stock purchasable upon the exercise
        of
        the Warrants is adjusted, as provided in Section 4.1 and 4.2 above,
        the
        Warrant Price shall be adjusted (to the nearest cent) by multiplying such
        Warrant Price immediately prior to such adjustment by a fraction (x) the
        numerator of which shall be the number of shares of Common Stock purchasable
        upon the exercise of the Warrants immediately prior to such adjustment, and
        (y)
        the denominator of which shall be the number of shares of Common Stock so
        purchasable immediately thereafter.

      

      4.4 Replacement
        of Securities upon Reorganization, etc.
        In case
        of any reclassification or reorganization of the outstanding shares of Common
        Stock (other than a change covered by Section 4.1 or 4.2 hereof or
        that
        solely affects the par value of such shares of Common Stock), or in the case
        of
        any merger or consolidation of the Company with or into another corporation
        (other than a consolidation or merger in which the Company is the continuing
        corporation and that does not result in any reclassification or reorganization
        of the outstanding shares of Common Stock), or in the case of any sale or
        conveyance to another corporation or entity of the assets or other property
        of
        the Company as an entirety or substantially as an entirety in connection
        with
        which the Company is dissolved, the Warrant holders shall thereafter have
        the
        right to purchase and receive, upon the basis and upon the terms and conditions
        specified in the Warrants and in lieu of the shares of Common Stock of the
        Company immediately theretofore purchasable and receivable upon the exercise
        of
        the rights represented thereby, the kind and amount of shares of stock or
        other
        securities or property (including cash) receivable upon such reclassification,
        reorganization, merger or consolidation, or upon a dissolution following
        any
        such sale or transfer, that the Warrant holder would have received if such
        Warrant holder had exercised his, her or its Warrant(s) immediately prior
        to
        such event; and if any reclassification also results in a change in shares
        of
        Common Stock covered by Section 4.1 or 4.2, then such adjustment shall
        be
        made pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4.
        The
        provisions of this Section 4.4 shall similarly apply to successive
        reclassifications, reorganizations, mergers or consolidations, sales or other
        transfers.

      

      4.5 Notices
        of Changes in Warrant.
        Upon
        every adjustment of the Warrant Price or the number of shares issuable upon
        exercise of a Warrant, the Company shall give written notice thereof to the
        Warrant Agent, which notice shall state the Warrant Price resulting from
        such
        adjustment and the increase or decrease, if any, in the number of shares
        purchasable at such price upon the exercise of a Warrant, setting forth in
        reasonable detail the method of calculation and the facts upon which such
        calculation is based. Upon the occurrence of any event specified in Sections
        4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall give written
        notice to the Warrant holder, at the last address set forth for such holder
        in
        the warrant register, of the record date or the effective date of the event.
        Failure to give such notice, or any defect therein, shall not affect the
        legality or validity of such event.

      

      4.6 No
        Fractional Shares.
        Notwithstanding any provision contained in this Warrant Agreement to the
        contrary, the Company shall not issue fractional shares upon exercise of
        Warrants. If, by reason of any adjustment made pursuant to this Section 4,
        the holder of any Warrant would be entitled, upon the exercise of such Warrant,
        to receive a fractional interest in a share, the Company shall, upon such
        exercise, round up to the nearest whole number the number of the shares of
        Common Stock to be issued to the Warrant holder.

      

      4.7 Form
        of Warrant.
        The
        form of Warrant need not be changed because of any adjustment pursuant to
        this
        Section 4, and Warrants issued after such adjustment may state the
        same
        Warrant Price and the same number of shares as is stated in the Warrants
        initially issued pursuant to this Agreement. However, the Company may at
        any
        time in its sole discretion make any change in the form of Warrant that the
        Company may deem appropriate and that does not affect the substance thereof,
        and
        any Warrant thereafter issued or countersigned, whether in exchange or
        substitution for an outstanding Warrant or otherwise, may be in the form
        as so
        changed.

      

      
        
           

        

        
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      5. Transfer
        and Exchange of Warrants.

      

      5.1 Registration
        of Transfer.
        The
        Warrant Agent shall register the transfer, from time to time, of any outstanding
        Warrant upon the Warrant Register, upon surrender of such Warrant for transfer,
        properly endorsed with signatures properly guaranteed and accompanied by
        appropriate instructions for transfer. Upon any such transfer, a new Warrant
        representing an equal aggregate number of Warrants shall be issued and the
        old
        Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled
        shall
        be delivered by the Warrant Agent to the Company from time to time upon
        request.

      

      5.2 Procedure
        for Surrender of Warrants.
        Warrants may be surrendered to the Warrant Agent, together with a written
        request for exchange or transfer, and thereupon the Warrant Agent shall issue
        in
        exchange therefor one or more new Warrants as requested by the registered
        holder
        of the Warrants so surrendered, representing an equal aggregate number of
        Warrants; provided, however, that in the event that a Warrant surrendered
        for
        transfer bears a restrictive legend, the Warrant Agent shall not cancel such
        Warrant and issue new Warrants in exchange therefor until the Warrant Agent
        has
        received an opinion of counsel for the Company stating that such transfer
        may be
        made and indicating whether the new Warrants must also bear a restrictive
        legend.

      

      5.3 Fractional
        Warrants.
        The
        Warrant Agent shall not be required to effect any registration of transfer
        or
        exchange which will result in the issuance of a warrant certificate for a
        fraction of a warrant.

      

      5.4 Service
        Charges.
        No
        service charge shall be made for any exchange or registration of transfer
        of
        Warrants.

      

      5.5 Warrant
        Execution and Countersignature.
        The
        Warrant Agent is hereby authorized to countersign and to deliver, in accordance
        with the terms of this Agreement, the Warrants required to be issued pursuant
        to
        the provisions of this Section 5, and the Company, whenever required
        by the
        Warrant Agent, will supply the Warrant Agent with Warrants duly executed
        on
        behalf of the Company for such purpose.

      

      1) Redemption.

      

      6.1 Redemption.
        Subject
        to Section 6.4 hereof, not less than all of the outstanding Warrants
        may be
        redeemed, at the option of the Company, at any time after they become
        exercisable and prior to their expiration, at the office of the Warrant Agent,
        upon the notice referred to in Section 6.2., at the price of $.01
        per
        Warrant (“Redemption Price”), provided that the last sales price of the Common
        Stock has been at least $11.50 per share, on each of twenty (20) trading
        days
        within any thirty (30) trading day period ending on the third business day
        prior
        to the date on which notice of redemption is given. The provisions of this
        Section 6.1 may not be modified, amended or deleted without the prior
        written consent of Maxim.

      

      6.2 Date
        Fixed for, and Notice of, Redemption.
        In the
        event the Company shall elect to redeem all of the Warrants, the Company
        shall
        fix a date for the redemption. Notice of redemption shall be mailed by first
        class mail, postage prepaid, by the Company not less than 30 days prior to
        the
        date fixed for redemption to the registered holders of the Warrants to be
        redeemed at their last addresses as they shall appear on the registration
        books.
        Any notice mailed in the manner herein provided shall be conclusively presumed
        to have been duly given whether or not the registered holder received such
        notice.

      

      
        
           

        

        
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      6.3 Exercise
        After Notice of Redemption.
        The
        Warrants may be exercised in accordance with Section 3 of this Agreement
        at
        any time after notice of redemption shall have been given by the Company
        pursuant to Section 6.2. hereof and prior to the time and date fixed
        for
        redemption. On and after the redemption date, the record holder of the Warrants
        shall have no further rights except to receive, upon surrender of the Warrants,
        the Redemption Price.

      

      6.4 Outstanding
        Warrants Only.
        The
        Company understands that the redemption rights provided for by this
        Section 6 apply only to outstanding Warrants. To the extent a person
        holds
        rights to purchase Warrants, such purchase rights shall not be extinguished
        by
        redemption. However, once such purchase rights are exercised, the Company
        may
        redeem the Warrants issued upon such exercise provided that the criteria
        for
        redemption is met. The provisions of this Section 6.4 may not be modified,
        amended or deleted without the prior written consent of Maxim.

      

      7. Other
        Provisions Relating to Rights of Holders of Warrants.

      

      7.1 No
        Rights as Stockholder.
        A
        Warrant does not entitle the registered holder thereof to any of the rights
        of a
        stockholder of the Company, including, without limitation, the right to receive
        dividends, or other distributions, exercise any preemptive rights to vote
        or to
        consent or to receive notice as stockholders in respect of the meetings of
        stockholders or the election of directors of the Company or any other
        matter.

      

      7.2 Lost,
        Stolen, Mutilated, or Destroyed Warrants.
        If any
        Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant
        Agent may on such terms as to indemnity or otherwise as they may in their
        discretion impose (which shall, in the case of a mutilated Warrant, include
        the
        surrender thereof), issue a new Warrant of like denomination, tenor, and
        date as
        the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant
        shall
        constitute a substitute contractual obligation of the Company, whether or
        not
        the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any
        time
        enforceable by anyone.

      

      7.3 Reservation
        of Common Stock.
        The
        Company shall at all times reserve and keep available a number of its authorized
        but unissued shares of Common Stock that will be sufficient to permit the
        exercise in full of all outstanding Warrants issued pursuant to this
        Agreement.

      

      7.4 Registration
        of Common Stock.
        The
        Company agrees that prior to the commencement of the Exercise Period, it
        shall
        file with the Securities and Exchange Commission a post-effective amendment
        to
        the Registration Statement, or a new registration statement, for the
        registration, under the Act, of, and it shall take such action as is necessary
        to qualify for sale, in those states in which the Warrants were initially
        offered by the Company, the Common Stock issuable upon exercise of the Warrants.
        In either case, the Company will use its best efforts to cause the same to
        become effective and to maintain the effectiveness of such registration
        statement until the expiration of the Warrants in accordance with the provisions
        of this Agreement. The provisions of this Section 7.4 may not be modified,
        amended or deleted without the prior written consent of Maxim.

      

      8. Concerning
        the Warrant Agent and Other Matters.

      

      8.1 Payment
        of Taxes.
        The
        Company will from time to time promptly pay all taxes and charges that may
        be
        imposed upon the Company or the Warrant Agent in respect of the issuance
        or
        delivery of shares of Common Stock upon the exercise of Warrants, but the
        Company shall not be obligated to pay any transfer taxes in respect of the
        Warrants or such shares.

      

      
        
           

        

        
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      8.2 Resignation,
        Consolidation, or Merger of Warrant Agent.

      

      8.2.1 Appointment
        of Successor Warrant Agent.
        The
        Warrant Agent, or any successor to it hereafter appointed, may resign its
        duties
        and be discharged from all further duties and liabilities hereunder after
        giving
        sixty (60) days’ notice in writing to the Company. If the office of the Warrant
        Agent becomes vacant by resignation or incapacity to act or otherwise, the
        Company shall appoint in writing a successor Warrant Agent in place of the
        Warrant Agent. If the Company shall fail to make such appointment within
        a
        period of 30 days after it has been notified in writing of such resignation
        or
        incapacity by the Warrant Agent or by the holder of the Warrant (who shall,
        with
        such notice, submit his Warrant for inspection by the Company), then the
        holder
        of any Warrant may apply to the Supreme Court of the State of New York for
        the
        County of New York for the appointment of a successor Warrant Agent at the
        Company’s cost. Any successor Warrant Agent, whether appointed by the Company or
        by such court, shall be a corporation organized and existing under the laws
        of
        the State of New York, in good standing and having its principal office in
        the
        Borough of Manhattan, City and State of New York, and authorized under such
        laws
        to exercise corporate trust powers and subject to supervision or examination
        by
        federal or state authority. After appointment, any successor Warrant Agent
        shall
        be vested with all the authority, powers, rights, immunities, duties, and
        obligations of its predecessor Warrant Agent with like effect as if originally
        named as Warrant Agent hereunder, without any further act or deed; but if
        for
        any reason it becomes necessary or appropriate, the predecessor Warrant Agent
        shall execute and deliver, at the expense of the Company, an instrument
        transferring to such successor Warrant Agent all the authority, powers, and
        rights of such predecessor Warrant Agent hereunder; and upon request of any
        successor Warrant Agent the Company shall make, execute, acknowledge, and
        deliver any and all instruments in writing for more fully and effectually
        vesting in and confirming to such successor Warrant Agent all such authority,
        powers, rights, immunities, duties, and obligations.

      

      8.2.2 Notice
        of Successor Warrant Agent.
        In the
        event a successor Warrant Agent shall be appointed, the Company shall give
        notice thereof to the predecessor Warrant Agent and the transfer agent for
        the
        Common Stock not later than the effective date of any such
        appointment.

      

      8.2.3 Merger
        or Consolidation of Warrant Agent.
        Any
        corporation into which the Warrant Agent may be merged or with which it may
        be
        consolidated or any corporation resulting from any merger or consolidation
        to
        which the Warrant Agent shall be a party shall be the successor Warrant Agent
        under this Agreement without any further act.

      

      8.3 Fees
        and Expenses of Warrant Agent.

      

      8.3.1 Remuneration.
        The
        Company agrees to pay the Warrant Agent the fees set forth on Exhibit
        A
        hereto
        for its services as Warrant Agent hereunder and will reimburse the Warrant
        Agent
        upon demand for all documented expenditures that the Warrant Agent may
        reasonably incur in the execution of its duties hereunder.

      

      8.3.2 Further
        Assurances.
        The
        Company agrees to perform, execute, acknowledge, and deliver or cause to
        be
        performed, executed, acknowledged, and delivered all such further and other
        acts, instruments, and assurances as may reasonably be required by the Warrant
        Agent for the carrying out or performing of the provisions of this
        Agreement.

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

         

      

      8.4 Liability
        of Warrant Agent.

      

      8.4.1 Reliance
        on Company Statement.
        Whenever in the performance of its duties under this Warrant Agreement, the
        Warrant Agent shall deem it necessary or desirable that any fact or matter
        be
        proved or established by the Company prior to taking or suffering any action
        hereunder, such fact or matter (unless other evidence in respect thereof
        be
        herein specifically prescribed) may be deemed to be conclusively proved and
        established by a statement signed by the President or Chairman of the Board
        of
        the Company and delivered to the Warrant Agent. The Warrant Agent may rely
        upon
        such statement for any action taken or suffered in good faith by it pursuant
        to
        the provisions of this Agreement.

      

      8.4.2 Indemnity.
        The
        Warrant Agent shall be liable hereunder only for its own negligence, willful
        misconduct or bad faith. The Company agrees to indemnify the Warrant Agent
        and
        save it harmless against any and all liabilities, including judgments, costs
        and
        reasonable counsel fees, for anything done or omitted by the Warrant Agent
        in
        the execution of this Agreement except as a result of the Warrant Agent’s
        negligence, willful misconduct, or bad faith.

      

      8.4.3 Exclusions.
        The
        Warrant Agent shall have no responsibility with respect to the validity of
        this
        Agreement or with respect to the validity or execution of any Warrant (except
        its countersignature thereof); nor shall it be responsible for any breach
        by the
        Company of any covenant or condition contained in this Agreement or in any
        Warrant; nor shall it be responsible to make any adjustments required under
        the
        provisions of Section 4 hereof or responsible for the manner, method,
        or
        amount of any such adjustment or the ascertaining of the existence of facts
        that
        would require any such adjustment; nor shall it by any act hereunder be deemed
        to make any representation or warranty as to the authorization or reservation
        of
        any shares of Common Stock to be issued pursuant to this Agreement or any
        Warrant or as to whether any shares of Common Stock will when issued be valid
        and fully paid and nonassessable.

      

      8.5 Acceptance
        of Agency.
        The
        Warrant Agent hereby accepts the agency established by this Agreement and
        agrees
        to perform the same upon the terms and conditions herein set forth and among
        other things, shall account promptly to the Company with respect to Warrants
        exercised and concurrently account for, and pay to the Company, all moneys
        received by the Warrant Agent for the purchase of shares of the Company’s Common
        Stock through the exercise of Warrants.

      

      9. Miscellaneous
        Provisions.

      

      9.1 Successors.
        All the
        covenants and provisions of this Agreement by or for the benefit of the Company
        or the Warrant Agent shall bind and inure to the benefit of their respective
        successors and assigns.

      

      9.2 Notices.
        Any
        notice, statement or demand authorized by this Warrant Agreement to be given
        or
        made by the Warrant Agent or by the holder of any Warrant to or on the Company
        shall be sufficiently given when so delivered if by hand, overnight delivery
        or
        facsimile transmission (followed by delivery by regular mail) or if sent
        by
        certified mail or private courier service within five days after deposit
        of such
        notice, postage prepaid, addressed (until another address is filed in writing
        by
        the Company with the Warrant Agent), as follows:

      

      Key
        Hospitality Acquisition Corporation

      1775
        Broadway, Suite 604

      New
        York,
        NY 10019

      Attn:
        Chairman

      Fax
        No.:
        __________________

      

      
        
           

        

        
          9

          
            

          

        

        
           

        

         

      

      Any
        notice, statement or demand authorized by this Agreement to be given or made
        by
        the holder of any Warrant or by the Company to or on the Warrant Agent shall
        be
        sufficiently given when so delivered if by hand or overnight delivery or
        if sent
        by certified mail or private courier service within five days after deposit
        of
        such notice, postage prepaid, addressed (until another address is filed in
        writing by the Warrant Agent with the Company), as follows:

      

      Continental
        Stock Transfer & Trust Company

      17
        Battery Place

      New
        York,
        New York 10004

      Attn:
        Compliance Department

      Fax
        No.:
        __________________

      

      with
        a
        copy in each case to:

      

      Ellenoff
        Grossman & Schole LLP

      370
        Lexington, 19th
        Floor

      New
        York,
        NY 10017

      Attn:
        Douglas S. Ellenoff, Esq.

      Fax
        No.:
        (212) 370-7889

      

      and

      

      Mintz,
        Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

      666
        Third
        Avenue

      New
        York,
        New York 10017

      Attn:
        Kenneth R. Koch, Esq.

      Fax
        No.:
        (212) 983-3115

      

      and

      

      Maxim
        Group LLC

      405
        Lexington Ave.

      New
        York,
        NY 10174

      Attn:
        Clifford A. Teller

      Fax
        No.:
        (212) 895-3783

      

      9.3 Applicable
        law.
        The
        validity, interpretation, and performance of this Agreement and of the Warrants
        shall be governed in all respects by the laws of the State of New York, without
        giving effect to conflict of laws. The Company hereby agrees that any action,
        proceeding or claim against it arising out of or relating in any way to this
        Agreement shall be brought and enforced in the courts of the State of New
        York
        located in New York County or the United States District Court for the Southern
        District of New York, and irrevocably submits to such jurisdiction, which
        jurisdiction shall be exclusive. The Company hereby waives any objection
        to such
        exclusive jurisdiction and that such courts represent an inconvenience forum.
        Any such process or summons to be served upon the Company may be served by
        transmitting a copy thereof by registered or certified mail, return receipt
        requested, postage prepaid, addressed to it at the address set forth in
        Section 9.2 hereof. Such mailing shall be deemed personal service
        and shall
        be legal and binding upon the Company in any action, proceeding or
        claim.

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

         

      

      9.4 Persons
        Having Rights under this Agreement.
        Nothing
        in this Agreement expressed and nothing that may be implied from any of the
        provisions hereof is intended, or shall be construed, to confer upon, or
        give
        to, any person or entity other than the parties hereto and the registered
        holders of the Warrants (who shall, for all purposes hereunder, be deemed
        third
        party beneficiaries of this Agreement) and, for the purposes of
        Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof, Maxim, any right, remedy,
        or
        claim under or by reason of this Warrant Agreement or of any covenant,
        condition, stipulation, promise, or agreement hereof. It is specifically
        agreed
        that Maxim shall be deemed to be a third-party beneficiary of this Agreement
        with respect to Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof. All covenants,
        conditions, stipulations, promises, and agreements contained in this Warrant
        Agreement shall be for the sole and exclusive benefit of the parties hereto
        (and
        Maxim with respect to the Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof) and
        their successors and assigns and of the registered holders of the
        Warrants.

      

      9.5 Examination
        of the Warrant Agreement.
        A copy
        of this Agreement shall be available at all reasonable times at the office
        of
        the Warrant Agent in the Borough of Manhattan, City and State of New York,
        for
        inspection by the registered holder of any Warrant. The Warrant Agent may
        require any such holder to submit his Warrant for inspection by it.

      

      9.6 Counterparts.
        This
        Agreement may be executed in any number of counterparts and each of such
        counterparts may be delivered by facsimile transmission and shall for all
        purposes be deemed to be an original, and all such counterparts shall together
        constitute but one and the same instrument.

      

      9.7 Effect
        of Headings.
        The
        Section headings herein are for convenience only and are not part
        of this
        Warrant Agreement and shall not affect the interpretation thereof.

      

      IN
        WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
        as
        of the day and year first above written.

      
        	
                 

                Attest

                 

                 

                                                                     
                  

              	
                 

                KEY
                  HOSPITALITY ACQUISITION CORPORATION

                 

                 

                By:
                                                                                             
                  

                Name: 

                Title: 

              
	 	 
	
                Attest

                 

                 

                 

                
                                                                       
                    

                

              	
                CONTINENTAL
                  STOCK TRANSFER

                  &
                  TRUST COMPANY

                 

                 

                By:                                                                            

                Name: Steven
                  Nelson

                Title: Chairman

              

      

      

      
        
           

        

        
          11

          
            

          

        

        
           

          
          

        

      

      

      Exhibit
        A

      

      Warrant
        Agent Fees

      

      

      

      

      
        
           

        

        
          1UNIT
      PURCHASE OPTION

    

    FOR
      THE PURCHASE OF

    

    500,000
      UNITS

    

    OF

    

    KEY
      HOSPITALITY ACQUISITION CORPORATION 

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
      OF
      CONTENTS

    

    Page

    

      
        	
                1.

              	PURCHASE
                OPTION.	
                1

              
	
                2.

              	EXERCISE.	
                2

              
	 	
                2.1

              	EXERCISE
                FORM	
                2

              
	 	
                2.2

              	LEGEND	
                2

              
	 	
                2.3

              	CASHLESS
                EXERCISE.	
                2

              
	 	 	
                2.3.1

              	
                DETERMINATION
                  OF AMOUNT

              	
                2

              
	 	 	
                2.3.2

              	
                MECHANICS
                  OF CASHLESS EXERCISE

              	
                3

              
	
                3.

              	TRANSFER.	
                3

              
	 	
                3.1

              	GENERAL
                RESTRICTIONS	
                3

              
	 	
                3.2

              	RESTRICTIONS
                IMPOSED BY THE ACT	
                3

              
	
                4.

              	NEW
                PURCHASE OPTIONS TO BE ISSUED.	
                3

              
	 	
                4.1

              	PARTIAL
                EXERCISE OR TRANSFER	
                3

              
	 	
                4.2

              	LOST
                CERTIFICATE	
                3

              
	
                5.

              	REGISTRATION
                RIGHTS.	
                4

              
	 	
                5.1

              	DEMAND
                REGISTRATION.	
                4

              
	 	 	
                5.1.1

              	
                GRANT
                  OF RIGHT

              	
                4

              
	 	 	
                5.1.2

              	
                TERMS

              	
                4

              
	 	
                5.2

              	“PIGGY-BACK”
                REGISTRATION.	
                4

              
	 	 	
                5.2.1

              	
                GRANT
                  OF RIGHT

              	
                4

              
	 	 	
                5.2.2

              	
                TERMS

              	
                5

              
	 	
                5.3

              	DAMAGES	
                5

              
	 	
                5.4

              	GENERAL
                TERMS.	
                5

              
	 	 	
                5.4.1

              	
                INDEMNIFICATION

              	
                5

              
	 	 	
                5.4.2

              	
                EXERCISE
                  OF PURCHASE OPTIONS

              	
                6

              
	 	 	
                5.4.3

              	
                DOCUMENTS
                  DELIVERED TO HOLDERS

              	
                6

              
	 	 	
                5.4.4

              	
                UNDERWRITING
                  AGREEMENT

              	
                6

              
	 	 	
                5.4.5

              	
                RULE
                  144 SALE

              	
                7

              
	 	 	
                5.4.6

              	
                SUPPLEMENTAL
                  PROSPECTUS

              	
                7

              
	
                6.

              	ADJUSTMENTS.	
                7

              
	 	
                6.1

              	ADJUSTMENTS
                TO EXERCISE PRICE AND NUMBER OF SECURITIES	
                7

              
	 	 	
                6.1.1

              	
                STOCK
                  DIVIDENDS - SPLIT-UPS

              	
                7

              
	 	 	
                6.1.2

              	
                AGGREGATION
                  OF SHARES

              	
                8

              
	 	 	
                6.1.3

              	
                REPLACEMENT
                  OF SECURITIES UPON REORGANIZATION, ETC

              	
                8

              
	 	 	
                6.1.4

              	
                CHANGES
                  IN FORM OF PURCHASE OPTION

              	
                8

              
	 	
                6.2

              	SUBSTITUTE
                PURCHASE OPTION	
                8

              
	 	
                6.3

              	ELIMINATION
                OF FRACTIONAL INTERESTS	
                9

              

         

        
          
             

          

          
             

            
              

            

          

          
             

          

           

        

        
          	
                  7.

                	RESERVATION
                  AND LISTING	
                  9

                
	
                  8.

                	CERTAIN
                  NOTICE REQUIREMENTS.	
                  9

                
	 	
                  8.1

                	HOLDER’S
                  RIGHT TO RECEIVE NOTICE	
                  9

                
	 	
                  8.2

                	EVENTS
                  REQUIRING NOTICE	
                  9

                
	 	
                  8.3

                	NOTICE
                  OF CHANGE IN EXERCISE PRICE	
                  10

                
	 	
                  8.4

                	TRANSMITTAL
                  OF NOTICES	
                  10

                
	
                  9.

                	MISCELLANEOUS.	
                  10

                
	 	
                  9.1

                	AMENDMENTS	
                  10

                
	 	
                  9.2

                	HEADINGS	
                  10

                
	
                  10.

                	ENTIRE
                  AGREEMENT	
                  10

                
	 	
                  10.1

                	BINDING
                  EFFECT	
                  10

                
	 	
                  10.2

                	GOVERNING
                  LAW; SUBMISSION TO JURISDICTION	
                  10

                
	 	
                  10.3

                	WAIVER,
                  ETC	
                  11

                
	 	
                  10.4

                	EXCHANGE
                  AGREEMENT	
                  11

                
	 	
                  10.5

                	UNDERLYING
                  WARRANTS	
                  11

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

      THE
        REGISTERED HOLDER OF THIS PURCHASE OPTION, BY ITS ACCEPTANCE HEREOF, AGREES
        THAT
        IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION, EXCEPT AS HEREIN
        PROVIDED, AND THE REGISTERED HOLDER OF THIS PURCHASE OPTION AGREES THAT IT
        WILL
        NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE OPTION FOR
        A
        PERIOD OF ONE YEAR FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE
        OTHER
        THAN (I) MAXIM GROUP LLC OR ITS AFFILIATES (“MAXIM”) OR AN UNDERWRITER OR A
        SELECTED DEALER IN CONNECTION WITH THE OFFERING (DEFINED HEREIN), OR (II)
        A BONA
        FIDE OFFICER, PARTNER OR EMPLOYEE OF MAXIM OR OF ANY SUCH UNDERWRITER OR
        SELECTED DEALER.

      

      THIS
        PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF (I) ______________,
        2006 AND (II) THE CONSUMMATION BY KEY HOSPITALITY ACQUISITION CORPORATION
        (“COMPANY”) OF A MERGER, CAPITAL STOCK EXCHANGE, ASSET ACQUISITION OR OTHER
        SIMILAR BUSINESS COMBINATION (“BUSINESS COMBINATION”) (AS DESCRIBED MORE FULLY
        IN THE COMPANY’S REGISTRATION STATEMENT (DEFINED HEREIN)). THIS PURCHASE OPTION
        SHALL BE VOID AFTER 5:00 P.M, NEW YORK CITY TIME, ON _____________,
        2010.

      

      UNIT
        PURCHASE OPTION

      

      FOR
        THE
        PURCHASE OF

      

      500,000
        UNITS

      

      OF

      

      KEY
        HOSPITALITY ACQUISITION CORPORATION

       

      1. Purchase
        Option.

      

      THIS
        CERTIFIES THAT, in consideration of $100 duly paid by or on behalf of Maxim
        Partners LLC (collectively, with its successors and permitted assigns and/or
        transferees, the “Holder”), as registered owner of this Purchase Option (the
“Purchase Option”), to Key Hospitality Acquisition Corporation (“Company”),
        Holder is entitled, at any time or from time to time upon the later of (i)
        ___________, 2006 and (ii) the consummation of a Business Combination
        (“Commencement Date”), and at or before 5:00 p.m., New York City Time,
        _____________, 2010 (“Expiration Date”), but not thereafter, to subscribe for,
        purchase and receive, in whole or in part, up to Five Hundred Thousand (500,000)
        units (“Units”) of the Company, with each Unit consisting of one share of common
        stock of the Company, par value $.001 per share (“Common Stock”), and one
        warrant (“Warrant(s)”) expiring four years from the effective date (“Effective
        Date”) of the registration statement (“Registration Statement”) pursuant to
        which Units are offered for sale to the public (“Offering”). Each Warrant is the
        same as the warrants included in the Units being registered for sale to the
        public by way of the Registration Statement (“Public Warrants”), except that the
        Warrants underlying the Units comprising this Purchase Option have an exercise
        price of $7.50 per share. If the Expiration Date is a day on which banking
        institutions are authorized by law to close, then this Purchase Option may
        be
        exercised on the next succeeding day which is not such a day in accordance
        with
        the terms herein. During the period ending on the Expiration Date, the Company
        agrees not to take any action that would terminate the Purchase Option. This
        Purchase Option is initially exercisable at $8.80 per Unit so purchased;
        provided, however, that upon the occurrence of any of the events specified
        in
        Section 6 hereof, the rights granted by this Purchase Option, including the
        exercise price per Unit and the number of Units (and shares of Common Stock
        and
        Warrants) to be received upon such exercise, shall be adjusted as therein
        specified. The term “Exercise Price” shall mean the initial exercise price or
        the adjusted exercise price, as the context requires.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      2. Exercise.

       

      2.1 Exercise
        Form.
        In
        order to exercise this Purchase Option, the exercise form attached hereto
        must
        be duly executed and completed and delivered to the Company, together with
        this
        Purchase Option and payment of the Exercise Price for the Units being purchased
        payable in cash or by certified check or official bank check. If the
        subscription rights represented hereby shall not be exercised at or before
        5:00
        p.m., New York City Time, on the Expiration Date, this Purchase Option shall
        become and be void without further force or effect, and all rights represented
        hereby shall cease and expire.

       

      2.2 Legend.
        If
        necessary, each certificate for the securities purchased under this Purchase
        Option shall bear a legend as follows unless such securities have been
        registered under the Securities Act of 1933, as amended (“Act”):

      

      “The
        securities represented by this certificate have not been registered under
        the
        Securities Act of 1933, as amended (“Act”) or applicable state law. The
        securities may not be offered for sale, sold or otherwise transferred except
        pursuant to an effective registration statement under the Act, or pursuant
        to an
        exemption from registration under the Act and applicable state
        law.”

       

      2.3 Cashless
        Exercise.

       

      2.3.1 Determination
        of Amount.
        In lieu
        of the payment of the Exercise Price multiplied by the number of Units for
        which
        this Purchase Option is exercisable (and in lieu of being entitled to receive
        Common Stock and Warrants) in the manner required by Section 2.1, the Holder
        shall have the right (but not the obligation) to convert any exercisable
        but
        unexercised portion of this Purchase Option into Units (“Cashless Exercise
        Right”) as follows: upon exercise of the Cashless Exercise Right, the Company
        shall deliver to the Holder (without payment by the Holder of any of the
        Exercise Price in cash) that number of shares of Common Stock and Warrants
        comprising that number of Units equal to the quotient obtained by dividing
        (x)
        the “Value” (as defined below) of the portion of the Purchase Option being
        converted by (y) the Current Market Value (as defined below). The “Value” of the
        portion of the Purchase Option being converted shall equal the remainder
        derived
        from subtracting (a) (i) the Exercise Price multiplied by (ii) the number
        of
        Units underlying the portion of this Purchase Option being converted from
        (b)
        the Current Market Value of a Unit multiplied by the number of Units underlying
        the portion of the Purchase Option being converted. As used herein, the term
        “Current Market Value” per Unit at any date means the remainder derived from
        subtracting (x) the exercise price of the Warrants multiplied by the number
        of
        shares of Common Stock issuable upon exercise of the Warrants underlying
        one
        Unit from (y) (i) the Current Market Price of the Common Stock multiplied
        by
        (ii) the number of shares of Common Stock underlying one Unit, which shall
        include the shares of Common Stock underlying the Warrants included in such
        Unit. The “Current Market Price” of a share of Common Stock shall mean (i) if
        the Common Stock is listed on a national securities exchange or quoted on
        the
        Nasdaq National Market, Nasdaq SmallCap Market or NASD OTC Bulletin Board
        (or
        successor trading market), the average last sale price of the Common Stock
        in
        the principal trading market for the Common Stock as reported by the exchange,
        Nasdaq or the NASD, as the case may be, for the 5 trading days prior to
        exercise; (ii) if the Common Stock is not listed on a national securities
        exchange or quoted on the Nasdaq National Market, Nasdaq SmallCap Market
        or the
        NASD OTC Bulletin Board (or successor trading market), but is traded in the
        residual over-the-counter market, the average closing sale price for the
        Common
        Stock for the 5 trading days preceding the date of exercise for which such
        quotations are reported by the Pink Sheets, LLC or similar publisher of such
        quotations; and (iii) if the fair market value of the Common Stock cannot
        be
        determined pursuant to clause (i) or (ii) above, such price as the Board
        of
        Directors of the Company shall determine, in good faith, with reference to
        industry standard methods of evaluating fair market value.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

         

      

      2.3.2 Mechanics
        of Cashless Exercise.
        The
        Cashless Exercise Right may be exercised by the Holder on any business day
        on or
        after the Commencement Date and not later than the Expiration Date by delivering
        the Purchase Option with the duly executed exercise form attached hereto
        with
        the cashless exercise section completed to the Company, exercising the Cashless
        Exercise Right and specifying the total number of Units the Holder will purchase
        pursuant to such Cashless Exercise Right.

       

      3. Transfer.

       

      3.1 General
        Restrictions.
        The
        registered Holder of this Purchase Option, by its acceptance hereof, agrees
        that
        it will not sell, transfer, assign, pledge or hypothecate this Purchase Option
        for a period of one year following the Effective Date to anyone other than
        (i)
        Maxim or its affiliates or an underwriter or a selected dealer in connection
        with the Offering, or (ii) a bona fide officer, partner or employee of Maxim
        or
        of any such underwriter or selected dealer. On and after the first anniversary
        of the Effective Date, transfers to others may be made subject to compliance
        with or exemptions from applicable securities laws. In order to make any
        permitted assignment, the Holder must deliver to the Company the assignment
        form
        attached hereto duly executed and completed, together with the Purchase Option
        and payment of all transfer taxes, if any, payable in connection therewith.
        The
        Company shall, within five business days of its receipt of such assignment,
        transfer this Purchase Option on the books of the Company and shall execute
        and
        deliver a new Purchase Option or Purchase Options of like tenor to the
        appropriate assignee(s) expressly evidencing the right to purchase the aggregate
        number of Units purchasable hereunder or such portion of such number as shall
        be
        contemplated by any such assignment.

       

      3.2 Restrictions
        Imposed by the Act.
        The
        securities evidenced by this Purchase Option shall not be transferred unless
        and
        until (i) the Company has received the opinion of counsel for the Holder
        that
        the securities may be transferred pursuant to an exemption from registration
        under the Act and applicable state securities laws, the availability of which
        is
        established to the reasonable satisfaction of the Company (the Company hereby
        agreeing that the opinion of Ellenoff Grossman & Schole LLP shall be deemed
        satisfactory evidence of the availability of an exemption), or (ii) the
        Registration Statement (which shall register all Registrable Securities (as
        defined below), and including any post-effective amendment thereto) or another
        registration statement relating to such securities has been filed by the
        Company
        and declared effective by the Securities and Exchange Commission and compliance
        with applicable state securities law has been established.

       

      4. New
        Purchase Options to be Issued.

       

      4.1 Partial
        Exercise or Transfer.
        Subject
        to the restrictions in Section 3 hereof, this Purchase Option may be exercised
        or assigned in whole or in part, in the discretion of the Holder. In the
        event
        of the exercise or assignment hereof in part only, upon surrender of this
        Purchase Option for cancellation, together with the duly executed exercise
        or
        assignment form and, except in the case of an exercise of this Purchase Option
        contemplated by Section 2.3 hereof, funds sufficient to pay any Exercise
        Price
        and/or transfer tax, the Company shall cause to be delivered to the Holder
        without charge a new Purchase Option of like tenor to this Purchase Option
        in
        the name of the Holder evidencing the right of the Holder to purchase the
        number
        of Units purchasable hereunder as to which this Purchase Option has not been
        exercised or assigned.

       

      4.2 Lost
        Certificate.
        Upon
        receipt by the Company of evidence satisfactory to it of the loss, theft,
        destruction or mutilation of this Purchase Option and of reasonably satisfactory
        indemnification or the posting of a bond, the Company shall execute and deliver
        a new Purchase Option of like tenor and date. Any such new Purchase Option
        executed and delivered as a result of such loss, theft, mutilation or
        destruction shall constitute a substitute contractual obligation on the part
        of
        the Company.

       

      
        
           

        

        
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      5. Registration
        Rights.

       

      5.1 Demand
        Registration.

       

      5.1.1 Grant
        of Right.
        The
        Company, upon written demand (“Initial Demand Notice”) of the Holder(s) of at
        least 51% of the Purchase Options and/or the underlying Units and/or the
        underlying securities (“Majority Holders”), register, on one occasion, all or
        any portion of the Purchase Options requested by the Majority Holders in
        the
        Initial Demand Notice and all of the securities underlying such Purchase
        Options, including the Units, Common Stock, the Warrants and the Common Stock
        underlying the Warrants (collectively, the “Registrable Securities”). On such
        occasion, the Company will file a registration statement or a post-effective
        amendment to the Registration Statement covering the Registrable Securities
        within thirty days after receipt of the Initial Demand Notice and use its
        best
        efforts to have such registration statement or post-effective amendment declared
        effective as soon as possible thereafter. The demand for registration may
        be
        made at any time during a period of five years beginning on the Effective
        Date.
        The Company covenants and agrees to give written notice of its receipt of
        any
        Initial Demand Notice by any Holder(s) to all other registered Holders of
        the
        Purchase Options and/or the Registrable Securities within ten days from the
        date
        of the receipt of any such Initial Demand Notice.

       

      5.1.2 Terms.
        The
        Company shall bear all fees and expenses attendant to registering the
        Registrable Securities, including the expenses of any legal counsel selected
        by
        the Holders to represent them in connection with the sale of the Registrable
        Securities, but the Holders shall pay any and all underwriting commissions,
        if
        any. The Company agrees, at its sole expenses, to use its reasonable best
        efforts to qualify or register the Registrable Securities in such States
        as are
        reasonably requested by the Majority Holder(s); provided, however, that in
        no
        event shall the Company be required to register the Registrable Securities
        in a
        State in which such registration would cause (i) the Company to be obligated
        to
        qualify to do business in such State, or would subject the Company to taxation
        as a foreign corporation doing business in such jurisdiction or (ii) the
        principal stockholders of the Company to be obligated to escrow their shares
        of
        capital stock of the Company. The Company shall cause any registration statement
        or post-effective amendment filed pursuant to the demand rights granted under
        Section 5.1.1 to remain effective for a period of twelve consecutive months
        from
        the effective date of such registration statement or post-effective
        amendment.

       

      5.2 “Piggy-Back”
        Registration.

       

      5.2.1 Grant
        of Right.
        In
        addition to the demand right of registration provided for in Section 5.1,
        the
        Holders of the Purchase Options shall have the right, for a period of seven
        years commencing on the Effective Date, and to the extent that the Registrable
        Securities are not registered with the Registration Statement for any reason,
        to
        include the Registrable Securities as part of any other registration of
        securities filed by the Company (other than in connection with a transaction
        contemplated by Rule 145(a) promulgated under the Act or pursuant to Form
        S-8);
        provided, however, that if, in the written opinion of the Company’s managing
        underwriter or underwriters, if any, for such offering, the inclusion of
        the
        Registrable Securities, when added to the securities being registered by
        the
        Company or the selling stockholder(s), will exceed the maximum amount of
        the
        Company’s securities which can be marketed (i) at a price reasonably related to
        their then current market value, and (ii) without materially and adversely
        affecting the entire offering, then the Company will still be required to
        include the Registrable Securities, but may require the Holders to agree,
        in
        writing, to delay the sale of all or any portion of the Registrable Securities
        for a period of 90 days from the effective date of the offering, provided,
        further, that if the sale of any Registrable Securities is so delayed, then
        the
        number of securities to be sold by all stockholders in such public offering
        during such 90 day period shall be apportioned pro rata among all such selling
        stockholders, including all holders of the Registrable Securities, according
        to
        the total amount of securities of the Company owned by said selling
        stockholders, including all holders of the Registrable Securities.

       

      
        
           

        

        
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      5.2.2 Terms.
        The
        Company shall bear all fees and expenses attendant to registering the
        Registrable Securities, including the expenses of any legal counsel selected
        by
        the Holders to represent them in connection with the sale of the Registrable
        Securities but the Holders shall pay any and all underwriting commissions
        related to the Registrable Securities. In the event of such a proposed
        registration, the Company shall furnish the then Holders of outstanding
        Registrable Securities with not less than fifteen days written notice prior
        to
        the proposed date of filing of such registration statement. Such notice to
        the
        Holders shall continue to be given for each applicable registration statement
        filed (during the period in which the Purchase Option is exercisable) by
        the
        Company until such time as all of the Registrable Securities have been
        registered and sold. The holders of the Registrable Securities shall exercise
        the “piggy-back” rights provided for herein by giving written notice, within ten
        days of the receipt of the Company’s notice of its intention to file a
        registration statement. The Company shall cause any registration statement
        filed
        pursuant to the above “piggyback” rights to remain effective for at least nine
        months from the date that the Holders of the Registrable Securities are first
        given the opportunity to sell all of such securities.
        The
        Company agrees, at its sole expenses, to use its reasonable best efforts
        to
        qualify or register the Registrable Securities in such States as are reasonably
        requested by the Majority Holder(s); provided, however, that in no event
        shall
        the Company be required to register the Registrable Securities in a State
        in
        which such registration would cause (i) the Company to be obligated to qualify
        to do business in such State, or would subject the Company to taxation as
        a
        foreign corporation doing business in such jurisdiction or (ii) the principal
        stockholders of the Company to be obligated to escrow their shares of capital
        stock of the Company. 

       

      5.3 Damages.
        Should
        the registration or the effectiveness thereof required by Sections 5.1 and
        5.2
        hereof be delayed by the Company or the Company otherwise fails to comply
        with
        such provisions, the Company shall, in addition to any other equitable or
        other
        relief available to the Holder(s), be liable for any and all incidental,
        special
        and consequential damages sustained by the Holder(s), including, but not
        limited
        to, the loss of any profits that might have been received by the holder upon
        the
        sale of shares of Common Stock or Warrants (and shares of Common Stock
        underlying the Warrants) underlying this Purchase Option.

       

      5.4 General
        Terms.

       

      5.4.1 Indemnification.
        The
        Company shall indemnify the Holder(s) of the Registrable Securities to be
        sold
        pursuant to the Registration Statement or any other registration statement
        contemplated hereunder and each person, if any, who controls such Holders
        within
        the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
        Act of 1934, as amended (“Exchange Act”), and any of their respective heirs,
        successors, permitted assigns and transfers, and agents and representatives,
        against all loss, claim, damage, expense or liability (including all reasonable
        attorneys’ fees and other expenses reasonably incurred in investigating,
        preparing or defending against litigation, commenced or threatened, or any
        claim
        whatsoever whether arising out of any action between the underwriter and
        the
        Company or between the underwriter and any third party or otherwise) to which
        any of them may become subject under the Act, the Exchange Act or otherwise,
        arising from such registration statement but only to the same extent and
        with
        the same effect as the provisions pursuant to which the Company has agreed
        to
        indemnify the underwriters contained in Section 5 of the Underwriting Agreement
        between the Company, Maxim and the other underwriters named therein dated
        the
        Effective Date. The Holder(s) of the Registrable Securities to be sold pursuant
        to such registration statement, and their successors and assigns, shall
        severally, and not jointly, indemnify the Company, its officers and directors
        and each person, if any, who controls the Company within the meaning of Section
        15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
        damage, expense or liability (including all reasonable attorneys’ fees and other
        expenses reasonably incurred in investigating, preparing or defending against
        any claim whatsoever) to which they may become subject under the Act, the
        Exchange Act or otherwise, arising from information furnished by or on behalf
        of
        such Holders, or their successors or assigns, in writing, for specific inclusion
        in such registration statement to the same extent and with the same effect
        as
        the provisions contained in Section 5 of the Underwriting Agreement pursuant
        to
        which the underwriters have agreed to indemnify the Company.

       

      
        
           

        

        
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      5.4.2 Exercise
        of Purchase Options.
        Nothing
        contained in this Purchase Option shall be construed as requiring the Holder(s)
        to exercise their Purchase Options or Warrants underlying such Purchase Options
        prior to or after the initial filing of any registration statement or the
        effectiveness thereof.

       

      5.4.3 Documents
        Delivered to Holders.
        The
        Company shall furnish Maxim, as representative of the Holders participating
        in
        any of the foregoing offerings, a signed counterpart, addressed to the
        participating Holders, of:
        (i)
        an opinion of counsel to the Company, dated the effective date of such
        registration statement (and, if such registration includes an underwritten
        public offering, an opinion dated the date of the closing under any underwriting
        agreement related thereto), and (ii) a “cold comfort” letter dated the effective
        date of such registration statement (and, if such registration includes an
        underwritten public offering, a letter dated the date of the closing under
        the
        underwriting agreement) signed by the independent public accountants who
        have
        issued a report on the Company’s financial statements included in such
        registration statement, in each case covering substantially the same matters
        with respect to such registration statement (and the prospectus included
        therein) and, in the case of such accountants’ letter, with respect to events
        subsequent to the date of such financial statements, as are customarily covered
        in opinions of issuer’s counsel and in accountants’ letters delivered to
        underwriters in underwritten public offerings of securities. The Company
        shall
        also deliver promptly to Maxim, as representative of the Holders participating
        in any of the foregoing offerings, the correspondence and memoranda described
        below and copies of all correspondence between the Commission and the Company,
        its counsel or auditors and all memoranda relating to discussions with the
        Commission or its staff with respect to the registration statement and permit
        Maxim, as representative of the Holders, to do such investigation, upon
        reasonable advance notice, with respect to information contained in or omitted
        from the registration statement as it deems reasonably necessary to comply
        with
        applicable securities laws or rules of the National Association of Securities
        Dealers, Inc (“NASD”). Such investigation shall include access to books, records
        and properties and opportunities to discuss the business of the Company with
        its
        officers and independent auditors, all to such reasonable extent and at such
        reasonable times and as often as Maxim, as representative of the Holders,
        shall
        reasonably request. The Company shall not be required to disclose any
        confidential information or other records to Maxim, as representative of
        the
        Holders, or to any other person, until and unless such persons shall have
        entered into reasonable confidentiality agreements (in form and substance
        reasonably satisfactory to the Company), with the Company with respect
        thereto.

       

      5.4.4 Underwriting
        Agreement.
        The
        Company shall enter into an underwriting agreement with the managing
        underwriter(s), if any, selected by any Holders whose Registrable Securities
        are
        being registered pursuant to this Section 5, which managing underwriter shall
        be
        reasonably acceptable to the Company. Such agreement shall be reasonably
        satisfactory in form and substance to the Company, each Holder and such managing
        underwriters, and shall contain such representations, warranties and covenants
        by the Company and such other terms as are customarily contained in agreements
        of that type used by the managing underwriter. The Holders shall be parties
        to
        any underwriting agreement relating to an underwritten sale of their Registrable
        Securities and may, at their option, require that any or all the
        representations, warranties and covenants of the Company to or for the benefit
        of such underwriters shall also be made to and for the benefit of such Holders.
        Such Holders shall not be required to make any representations or warranties
        to
        or agreements with the Company or the underwriters except as they may relate
        to
        such Holders and their intended methods of distribution. Such Holders, however,
        shall agree to such covenants and indemnification and contribution obligations
        for selling stockholders as are customarily contained in agreements of that
        type
        used by the managing underwriter. Further, such Holders shall execute
        appropriate custody agreements and otherwise cooperate fully in the preparation
        of the registration statement and other documents relating to any offering
        in
        which they include securities pursuant to this Section 5. Each Holder shall
        also
        furnish to the Company such information regarding itself, the Registrable
        Securities held by it, and the intended method of disposition of such securities
        as shall be reasonably required to effect the registration of the Registrable
        Securities.

       

      
        
           

        

        
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      5.4.5 Rule
        144 Sale.
        Notwithstanding anything contained in this Section 5 to the contrary, the
        Company shall have no obligation pursuant to Sections 5.1 or 5.2 for the
        registration of Registrable Securities held by any Holder (i) where such
        Holder
        would then be entitled to sell under Rule 144 within any three-month period
        (or
        such other period prescribed under Rule 144 as may be provided by amendment
        thereof) all of the Registrable Securities then held by such Holder, and
        (ii)
        where the number of Registrable Securities held by such Holder is within
        the
        volume limitations under paragraph (e) of Rule 144 (calculated as if such
        Holder
        were an affiliate within the meaning of Rule 144).

       

      5.4.6 Supplemental
        Prospectus.
        Each
        Holder agrees, that upon receipt of any notice from the Company of the happening
        of any event as a result of which the prospectus included in the Registration
        Statement or any other applicable registration statement, as then in effect,
        includes an untrue statement of a material fact or omits to state a material
        fact required to be stated therein or necessary to make the statements therein
        not misleading in light of the circumstances then existing, such Holder will
        immediately discontinue disposition of Registrable Securities pursuant to
        the
        Registration Statement covering such Registrable Securities until such Holder’s
        receipt of the copies of a supplemental or amended prospectus, and, if so
        desired by the Company, such Holder shall deliver to the Company (at the
        expense
        of the Company) or destroy (and deliver to the Company a certificate of such
        destruction) all copies, other than permanent file copies then in such Holder’s
        possession, of the prospectus covering such Registrable Securities current
        at
        the time of receipt of such notice.

       

      6. Adjustments.

       

      6.1 Adjustments
        to Exercise Price and Number of Securities.
        The
        Exercise Price and the number of Units underlying the Purchase Option shall
        be
        subject to adjustment from time to time as hereinafter set forth:

       

      6.1.1 Stock
        Dividends - Split-Ups.
        If
        after the date hereof, and subject to the provisions of Section 6.4 below,
        the
        number of outstanding shares of Common Stock is increased by a stock dividend
        payable in shares of Common Stock or by a split-up of shares of Common Stock
        or
        other similar event, then, on the effective date thereof, the number of shares
        of Common Stock underlying each of the Units purchasable hereunder shall
        be
        increased in proportion to such increase in outstanding shares. In such case,
        the number of shares of Common Stock, and the exercise price applicable thereto,
        underlying the Warrants underlying each of the Units purchasable hereunder
        shall
        be adjusted in accordance with the terms of the Warrants. For example, if
        the
        Company declares a two-for-one stock dividend and at the time of such dividend
        this Purchase Option is for the purchase of one Unit at $8.80 per whole Unit
        (each Warrant underlying the Units is exercisable for $6.00 per share), upon
        effectiveness of the dividend, this Purchase Option will be adjusted to allow
        for the purchase of one Unit at $8.80 per Unit, each Unit entitling the holder
        to receive two shares of Common Stock and two Warrants (each Warrant exercisable
        for $3.00 per share).

       

      
        
           

        

        
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      6.1.2 Aggregation
        of Shares.
        If
        after the date hereof, and subject to the provisions of Section 6.4, the
        number
        of outstanding shares of Common Stock is decreased by a consolidation,
        combination or reclassification of shares of Common Stock or other similar
        event, then, on the effective date thereof, the number of shares of Common
        Stock
        underlying each of the Units purchasable hereunder shall be decreased in
        proportion to such decrease in outstanding shares. In such case, the number
        of
        shares of Common Stock, and the exercise price applicable thereto, underlying
        the Warrants underlying each of the Units purchasable hereunder shall be
        adjusted in accordance with the terms of the Warrants.

       

      6.1.3 Replacement
        of Securities upon Reorganization, etc.
        In case
        of any reclassification or reorganization of the outstanding shares of Common
        Stock other than a change covered by Section 6.1.1 or 6.1.2 hereof or that
        solely affects the par value of such shares of Common Stock, or in the case
        of
        any merger or consolidation of the Company with or into another corporation
        (other than a consolidation or merger in which the Company is the continuing
        corporation and that does not result in any reclassification or reorganization
        of the outstanding shares of Common Stock), or in the case of any sale or
        conveyance to another corporation or entity of the property of the Company
        as an
        entirety or substantially as an entirety in connection with which the Company
        is
        dissolved, the Holder of this Purchase Option shall have the right thereafter
        (until the expiration of the right of exercise of this Purchase Option) to
        receive upon the exercise hereof, for the same aggregate Exercise Price payable
        hereunder immediately prior to such event, the kind and amount of shares
        of
        stock or other securities or property (including cash) receivable upon such
        reclassification, reorganization, merger or consolidation, or upon a dissolution
        following any such sale or transfer, by a Holder of the number of shares
        of
        Common Stock of the Company obtainable upon exercise of this Purchase Option
        and
        the underlying Warrants immediately prior to such event; and if any
        reclassification also results in a change in shares of Common Stock covered
        by
        Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections
        6.1.1, 6.1.2 and this Section 6.1.3 The provisions of this Section 6.1.3
        shall
        similarly apply to successive reclassifications, reorganizations, mergers
        or
        consolidations, sales or other transfers.

       

      6.1.4 Changes
        in Form of Purchase Option.
        This
        form of Purchase Option need not be changed because of any change pursuant
        to
        this Section, and Purchase Options issued after such change may state the
        same
        Exercise Price and the same number of Units as are stated in the Purchase
        Options initially issued pursuant to this Agreement. The acceptance by any
        Holder of the issuance of new Purchase Options reflecting a required or
        permissive change shall not be deemed to waive any rights to an adjustment
        occurring after the Commencement Date or the computation thereof.

       

      6.2 Substitute
        Purchase Option.
        In case
        of any consolidation of the Company with, or merger of the Company with,
        or
        merger of the Company into, another corporation (other than a consolidation
        or
        merger which does not result in any reclassification or change of the
        outstanding Common Stock), the corporation formed by such consolidation or
        merger shall execute and deliver to the Holder a supplemental Purchase Option
        providing that the holder of each Purchase Option then outstanding or to
        be
        outstanding shall have the right thereafter (until the stated expiration
        of such
        Purchase Option) to receive, upon exercise of such Purchase Option, the kind
        and
        amount of shares of stock and other securities and property receivable upon
        such
        consolidation or merger, by a holder of the number of shares of Common Stock
        of
        the Company for which such Purchase Option might have been exercised immediately
        prior to such consolidation, merger, sale or transfer. Such supplemental
        Purchase Option shall provide for adjustments which shall be identical to
        the
        adjustments provided in Section 6. The above provision of this Section shall
        similarly apply to successive consolidations or mergers.

       

      
        
           

        

        
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      6.3 Elimination
        of Fractional Interests.
        The
        Company shall not be required to issue certificates representing fractions
        of
        shares of Common Stock or Warrants upon the exercise of the Purchase Option,
        nor
        shall it be required to issue scrip or pay cash in lieu of any fractional
        interests, it being the intent of the parties that all fractional interests
        shall be eliminated by rounding any fraction up to the nearest whole number
        of
        Warrants, shares of Common Stock or other securities, properties or
        rights.

       

      7. Reservation
        and Listing.
        The
        Company shall at all times reserve and keep available out of its authorized
        shares of Common Stock, solely for the purpose of issuance upon exercise
        of the
        Purchase Options or the Warrants underlying the Purchase Option, such number
        of
        shares of Common Stock or other securities, properties or rights as shall
        be
        issuable upon the exercise thereof. The Company covenants and agrees that,
        upon
        exercise of the Purchase Options and payment of the Exercise Price therefor,
        all
        shares of Common Stock and other securities issuable upon such exercise shall
        be
        duly and validly issued, fully paid and non-assessable and not subject to
        preemptive rights of any stockholder. The Company further covenants and agrees
        that upon exercise of the Warrants underlying the Purchase Options and payment
        of the respective Warrant exercise price therefor, all shares of Common Stock
        and other securities issuable upon such exercise shall be duly and validly
        issued, fully paid and non-assessable and not subject to preemptive rights
        of
        any stockholder. As long as the Purchase Options shall be outstanding, the
        Company shall use its best efforts to cause all (i) Units and shares of Common
        Stock issuable upon exercise of the Purchase Options, (iii) Warrants issuable
        upon exercise of the Purchase Options and (iv) shares of Common Stock issuable
        upon exercise of the Warrants included in the Units issuable upon exercise
        of
        the Purchase Option to be listed (subject to official notice of issuance)
        on all
        securities exchanges (or, if applicable on the Nasdaq National Market, SmallCap
        Market, OTC Bulletin Board or any successor trading market) on which the
        Units,
        the Common Stock or the Public Warrants issued to the public in connection
        herewith may then be listed and/or quoted.

       

      8. Certain
        Notice Requirements.

       

      8.1 Holder’s
        Right to Receive Notice.
        Nothing
        herein shall be construed as conferring upon the Holders the right to vote
        or
        consent as a stockholder for the election of directors or any other matter,
        or
        as having any rights whatsoever as a stockholder of the Company. If, however,
        at
        any time prior to the expiration of the Purchase Options and their exercise,
        any
        of the events described in Section 8.2 shall occur, then, in one or more
        of said
        events, the Company shall give written notice of such event at least fifteen
        days prior to the date fixed as a record date or the date of closing the
        transfer books for the determination of the stockholders entitled to such
        dividend, distribution, conversion or exchange of securities or subscription
        rights, or entitled to vote on such proposed dissolution, liquidation, winding
        up or sale. Such notice shall specify such record date or the date of the
        closing of the transfer books, as the case may be. Notwithstanding the
        foregoing, the Company shall deliver to each Holder a copy of each notice
        given
        to the other stockholders of the Company at the same time and in the same
        manner
        that such notice is given to the stockholders.

       

      8.2 Events
        Requiring Notice.
        The
        Company shall be required to give the notice described in this Section 8
        upon
        one or more of the following events: (i) if the Company shall take a record
        of
        the holders of its shares of Common Stock for the purpose of entitling them
        to
        receive a dividend or distribution payable otherwise than in cash, or a cash
        dividend or distribution payable otherwise than out of retained earnings,
        as
        indicated by the accounting treatment of such dividend or distribution on
        the
        books of the Company, or (ii) the Company shall offer to all the holders
        of its
        Common Stock any additional shares of capital stock of the Company or securities
        convertible into or exchangeable for shares of capital stock of the Company,
        or
        any option, right or warrant to subscribe therefor, or (iii) a dissolution,
        liquidation or winding up of the Company or a sale of all or substantially
        all
        of its property, assets and business or a merger of the Company wherein the
        separate existence of the Company shall cease shall be proposed.

       

      
        
           

        

        
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      8.3 Notice
        of Change in Exercise Price.
        The
        Company shall, promptly after an event requiring a change in the Exercise
        Price
        pursuant to Section 6 hereof, send notice to the Holders of such event and
        change (“Price Notice”). The Price Notice shall describe the event causing the
        change and the method of calculating same and shall be certified as being
        true
        and accurate by the Company’s President and Chief Financial
        Officer.

       

      8.4 Transmittal
        of Notices.
        All
        notices, requests, consents and other communications under this Purchase
        Option
        shall be in writing and shall be deemed to have been duly made when hand
        delivered, mailed by express mail or private courier service, or sent by
        facsimile transmission, with confirmation of receipt: (i) If to the registered
        Holder of the Purchase Option, to the address and/or fax number of such Holder
        as shown on the books of the Company, or (ii) if to the Company, to the
        following address and/or fax number or to such other address or and fax number
        as the Company may designate by notice to the Holders:

      

      Key
        Hospitality Acquisition Corporation

      1775
        Broadway, Suite 604

      New
        York,
        New York 10019

      Attn:
        Chairman

      Fax
        No.:
        _______________________________

      

      9. Miscellaneous.

       

      9.1 Amendments.
        The
        Company and Maxim may from time to time supplement or amend this Purchase
        Option
        without the approval of any of the Holders in order to cure any ambiguity,
        to
        correct or supplement any provision contained herein that may be defective
        or
        inconsistent with any other provisions herein, or to make any other provisions
        in regard to matters or questions arising hereunder that the Company and
        Maxim
        may deem necessary or desirable and that the Company and Maxim deem shall
        not
        adversely affect the interest of the Holders. All other modifications or
        amendments shall require the written consent of and be signed by the party
        against whom enforcement of the modification or amendment is
        sought.

       

      9.2 Headings.
        The
        headings contained herein are for the sole purpose of convenience of reference,
        and shall not in any way limit or affect the meaning or interpretation of
        any of
        the terms or provisions of this Purchase Option.

       

      10. Entire
        Agreement.
        This
        Purchase Option (together with the other agreements and documents being
        delivered pursuant to or in connection with this Purchase Option) constitutes
        the entire agreement of the parties hereto with respect to the subject matter
        hereof, and supersedes all prior agreements and understandings of the parties,
        oral and written, with respect to the subject matter hereof.

       

      10.1 Binding
        Effect.
        This
        Purchase Option shall inure solely to the benefit of and shall be binding
        upon,
        the Holder and the Company and their permitted assignees, respective successors,
        legal representative and assigns, and no other person shall have or be construed
        to have any legal or equitable right, remedy or claim under or in respect
        of or
        by virtue of this Purchase Option or any provisions herein
        contained.

       

      10.2 Governing
        Law; Submission to Jurisdiction.
        This
        Purchase Option shall be governed by and construed and enforced in accordance
        with the laws of the State of New York, without giving effect to conflict
        of
        laws. The Company hereby agrees that any action, proceeding or claim against
        it
        arising out of, or relating in any way to this Purchase Option shall be brought
        and enforced in the courts of the State of New York located in New York County
        or of the United States of America for the Southern District of New York,
        and
        irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
        The Company hereby waives any objection to such exclusive jurisdiction and
        that
        such courts represent an inconvenient forum. Any process or summons to be
        served
        upon the Company may be served by transmitting a copy thereof by registered
        or
        certified mail, return receipt requested, postage prepaid, addressed to it
        at
        the address set forth in Section 8 hereof. Such mailing shall be deemed personal
        service and shall be legal and binding upon the Company in any action,
        proceeding or claim. The Company and the Holder agree that the prevailing
        party(ies) in any such action shall be entitled to recover from the other
        party(ies) all of its reasonable attorneys’ fees and expenses relating to such
        action or proceeding and/or incurred in connection with the preparation
        therefor.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

         

      

      10.3 Waiver,
        Etc.
        The
        failure of the Company or the Holder to at any time enforce any of the
        provisions of this Purchase Option shall not be deemed or construed to be
        a
        waiver of any such provision, nor to in any way affect the validity of this
        Purchase Option or any provision hereof or the right of the Company or any
        Holder to thereafter enforce each and every provision of this Purchase Option.
        No waiver of any breach, non-compliance or non-fulfillment of any of the
        provisions of this Purchase Option shall be effective unless set forth in
        a
        written instrument executed by the party or parties against whom or which
        enforcement of such waiver is sought; and no waiver of any such breach,
        non-compliance
        or non-fulfillment shall be construed or deemed to be a waiver of any other
        or
        subsequent breach, non-compliance or non-fulfillment.

       

      10.4 Exchange
        Agreement.
        As a
        condition of the Holder’s receipt and acceptance of this Purchase Option, Holder
        agrees that, at any time prior to the complete exercise of this Purchase
        Option
        by Holder, if the Company and Maxim enter into an agreement (“Exchange
        Agreement”) pursuant to which they agree that all outstanding Purchase Options
        will be exchanged for securities or cash or a combination of both, then Holder
        shall agree to such exchange and become a party to the Exchange
        Agreement.

       

      10.5 Underlying
        Warrants.
        At any
        time after exercise by the Holder of this Purchase Option, the Holder may
        exchange his Warrants (with a $7.50 exercise price) for Public Warrants (with
        a
        $6.00 exercise price) upon payment to the Company of the difference between
        the
        exercise price of his Warrant and the exercise price of the Public
        Warrants.

      

      IN
        WITNESS WHEREOF, the Company has caused this Purchase Option to be signed
        by its
        duly authorized officer as of the ____ day of __________, 2005.

      

      
        	 	
                KEY
                  HOSPITALITY ACQUISITION CORPORATION

                

                

                By:
                                                                                                          
                  

                Name:

                Title:

              

      

      

      
        
           

        

        
          11

          
            

          

        

        
           

          
          

        

      

      Form
        to
        be used to exercise Purchase Option:

      

      Key
        Hospitality Acquisition Corporation

      1775
        Broadway, Suite 604

      New
        York
        , New York

      

      Date:_________________,
        200__

      

      The
        undersigned hereby elects irrevocably to exercise all or a portion of the
        within
        Purchase Option and to purchase ____ Units of Key Hospitality Acquisition
        Corporation and hereby makes payment of $____________ (at the rate of $_________
        per Unit) in payment of the Exercise Price pursuant thereto. Please issue
        the
        Common Stock and Warrants as to which this Purchase Option is exercised in
        accordance with the instructions given below.

      

      or

      

      The
        undersigned hereby elects irrevocably to convert its right to purchase _________
        Units purchasable under the within Purchase Option by surrender of the
        unexercised portion of the attached Purchase Option (with a “Value” based of
        $_______ based on a “Market Price” of $_______). Please issue the securities
        comprising the Units as to which this Purchase Option is exercised in accordance
        with the instructions given below.

      

      
        	 	
                 

                                                                                                                  
                  

                Signature

                 

                
                                                                                                  
                  

                Signature
                  Guaranteed

              

      

      
         

         

      

      INSTRUCTIONS
        FOR REGISTRATION OF SECURITIES

      

      Name                                                                                                     
        

      (Print
        in
        Block Letters)

      

      Address
                                                                                                    
           

      

      NOTICE:
        THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
        THE
        FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT ALTERATION
        OR
        ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER
        THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING MEMBERSHIP
        ON A
        REGISTERED NATIONAL SECURITIES EXCHANGE.

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Form
        to
        be used to assign Purchase Option:

      

      ASSIGNMENT

      

      (To
        be
        executed by the registered Holder to effect a transfer of the within Purchase
        Option):

      

      FOR
        VALUE
        RECEIVED,___________________________________________ does hereby sell, assign
        and transfer unto______________________________________ the right to purchase
        __________ Units of Key Hospitality Acquisition Corporation (“Company”)
        evidenced by the within Purchase Option and does hereby authorize the Company
        to
        transfer such right on the books of the Company.

      

      Dated:___________________,
        200_

       

      
        	 	
                 

                                                                                                                  
                  

                Signature

                 

                
                                                                                                  
                  

                Signature
                  Guaranteed

              

      

       

      NOTICE:
        THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
        THE
        FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT ALTERATION
        OR
        ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER
        THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING MEMBERSHIP
        ON A
        REGISTERED NATIONAL SECURITIES EXCHANGE.

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