Document:

SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE

                                    AGREEMENT

                          Dated as of October 12, 2006

                                      among

                           ASTRATA GROUP INCORPORATED

                                       and

                       THE PURCHASERS LISTED ON EXHIBIT A

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                                TABLE OF CONTENTS
                                -----------------

<TABLE>
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                                                                                                   PAGE
                                                                                                   ----
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ARTICLE I Purchase and Sale of Preferred Stock........................................................1

         Section 1.1       Purchase and Sale of Stock.................................................1
         Section 1.2       Warrants...................................................................1
         Section 1.3       Conversion Shares..........................................................2
         Section 1.4       Purchase Price and Closing.................................................2

ARTICLE II Representations and Warranties.............................................................3

         Section 2.1       Representations and Warranties of the Company..............................3
         Section 2.2       Representations and Warranties of the Purchasers..........................13

ARTICLE III Covenants................................................................................16

         Section 3.1       Securities Compliance.....................................................16
         Section 3.2       Registration and Listing..................................................16
         Section 3.3       Inspection Rights.........................................................16
         Section 3.4       Compliance with Laws......................................................17
         Section 3.5       Keeping of Records and Books of Account...................................17
         Section 3.6       Reporting Requirements....................................................17
         Section 3.7       Amendments................................................................17
         Section 3.8       Other Agreements..........................................................17
         Section 3.9       Distributions.............................................................17
         Section 3.10      Status of Dividends.......................................................17
         Section 3.11      Use of Proceeds...........................................................18
         Section 3.12      Reservation of Shares.....................................................18
         Section 3.13      Transfer Agent Instructions...............................................19
         Section 3.14      Disposition of Assets.....................................................19
         Section 3.15      Reporting Status..........................................................19
         Section 3.16      Disclosure of Transaction ................................................19
         Section 3.17      Disclosure of Material Information........................................19
         Section 3.18      Pledge of Securities......................................................20
         Section 3.19      Form SB-2 Eligibility.....................................................20
         Section 3.20      Lock-Up Agreement.........................................................20
         Section 3.21      Investor Relations Firm...................................................20
         Section 3.22      Increase in Authorized Shares ............................................20
         Section 3.23      Subsequent Financings.....................................................20

ARTICLE IV Conditions............................................................................... 23

         Section 4.1       Conditions Precedent to the Obligation of the Company to Sell the
                           Shares....................................................................23

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         Section 4.2       Conditions Precedent to the Obligation of the Purchasers to Purchase
                           the Shares................................................................24

ARTICLE V Stock Certificate Legend...................................................................26

         Section 5.1       Legend....................................................................27

ARTICLE VI Indemnification...........................................................................28

         Section 6.1       General Indemnity.........................................................28
         Section 6.2       Indemnification Procedure.................................................28

ARTICLE VII Miscellaneous............................................................................29

         Section 7.1       Fees and Expenses.........................................................29
         Section 7.2       Specific Enforcement, Consent to Jurisdiction.............................29
         Section 7.3       Entire Agreement; Amendment...............................................30
         Section 7.4       Notices...................................................................30
         Section 7.5       Waivers...................................................................31
         Section 7.6       Headings..................................................................31
         Section 7.7       Successors and Assigns....................................................31
         Section 7.8       No Third Party Beneficiaries..............................................32
         Section 7.9       Governing Law.............................................................32
         Section 7.10      Survival..................................................................32
         Section 7.11      Counterparts..............................................................32
         Section 7.12      Publicity.................................................................32
         Section 7.13      Severability..............................................................32
         Section 7.14      Further Assurances........................................................32
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                                       ii

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      SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

      This SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (the
"Agreement") is dated as of October 12, 2006 by and among Astrata Group
Incorporated, a Nevada corporation (the "Company"), and each of the Purchasers
of shares of Series A Convertible Preferred Stock of the Company whose names are
set forth on Exhibit A hereto (individually, a "Purchaser" and collectively, the
"Purchasers").

         The parties hereto agree as follows:

                                   ARTICLE I
                      Purchase and Sale of Preferred Stock

      Section 1.1 Purchase and Sale of Stock. Upon the following terms and
conditions, the Company shall issue and sell to the Purchasers and each of the
Purchasers shall purchase from the Company, the number of shares of the
Company's Series A Convertible Preferred Stock, par value $0.0001 per share and
at a purchase price of $1.00 per share (the "Preferred Shares"), convertible
into shares of the Company's common stock, par value $0.0001 per share (the
"Common Stock"), in the amounts set forth opposite such Purchaser's name on
Exhibit A hereto. The designation, rights, preferences and other terms and
provisions of the Series A Convertible Preferred Stock are set forth in the
Certificate of Designation of the Relative Rights and Preferences of the Series
A Convertible Preferred Stock attached hereto as Exhibit B (the "Certificate of
Designation"). The minimum purchase price hereunder shall be an amount not less
than $2,000,000 in the aggregate and the maximum purchase price shall be an
amount up to $5,500,000. The Company and the Purchasers are executing and
delivering this Agreement in accordance with and in reliance upon the exemption
from securities registration afforded by Rule 506 of Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act") or Section 4(2) of the Securities Act.

      Section 1.2 Warrants. Upon the following terms and conditions and for no
additional consideration, each of the Purchasers shall be issued (i) Series A
Warrants, in substantially the form attached hereto as Exhibit C-1 (the "Series
A Warrants"), to purchase the number of shares of Common Stock equal to
seventy-five percent (75%) of the number of Conversion Shares (as defined in
Section 1.3 hereof) issuable upon conversion of the Preferred Shares purchased
by each Purchaser pursuant to the terms of this Agreement, as set forth opposite
such Purchaser's name on Exhibit A hereto, (ii) Series B Warrants, in
substantially the form attached hereto as Exhibit C-2 (the "Series B Warrants"),
to purchase the number of shares of Common Stock equal to seventy-five percent
(75%) of the number of Conversion Shares issuable upon conversion of the
Preferred Shares purchased by each Purchaser pursuant to the terms of this
Agreement, as set forth opposite such Purchaser's name on Exhibit A hereto,
(iii) Series J Warrants, in substantially the form attached hereto as Exhibit
C-3 (the "Series J Warrants"), to purchase the number of shares of Common Stock
equal to one hundred percent (100%) of the number of Conversion Shares issuable
upon conversion of the Preferred Shares purchased by each Purchaser, provided
that such Purchaser purchases Preferred Shares for a purchase price equal to or
greater than $2,000,000 pursuant to the terms of this Agreement, as set forth
opposite such Purchaser's name on Exhibit A hereto, (iv) Series C Warrants, in
substantially the form attached hereto as Exhibit C-4 (the "Series C Warrants"),
to purchase the number of shares of Common Stock equal to seventy-five percent
(75%) of the number of Conversion Shares issuable upon conversion of the
Preferred Shares purchased by each Purchaser pursuant to the terms of this
Agreement, as set forth opposite such Purchaser's name on Exhibit A hereto, and
(v) Series D Warrants, in substantially the form attached hereto as Exhibit C-5
(the "Series D Warrants" and, together with the Series A Warrants, the Series B
Warrants, the Series J Warrants and the Series C Warrants, the "Warrants"), to
purchase the number of shares of Common Stock equal to seventy-five percent
(75%) of the number of Conversion Shares issuable upon conversion of the
Preferred Shares purchased by each Purchaser pursuant to the terms of this
Agreement, as set forth opposite such Purchaser's name on Exhibit A hereto. The
Warrants shall expire five (5) years following the Closing Date, except for the
Series J Warrants, which shall expire one (1) year following the Closing Date.
Each of the Warrants shall have an exercise price per share equal to the Warrant
Price (as defined in the applicable Warrant).

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      Section 1.3 Conversion Shares. The Company has authorized and has reserved
and covenants to continue to reserve, free of preemptive rights and other
similar contractual rights of stockholders, a number of shares of Common Stock
equal to the number of shares of Common Stock that are not currently issued or
reserved for issuance; provided, however, upon the Company filing the Charter
Amendment (as defined in Section 3.22 hereof), the Company shall authorize and
reserve and continue to reserve, free of preemptive rights and other similar
contractual rights of stockholders, a number of shares of Common Stock equal to
one hundred fifty percent (150%) of the number of shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all of the
Preferred Shares and exercise of the Warrants then outstanding. Any shares of
Common Stock issuable upon conversion of the Preferred Shares and exercise of
the Warrants (and such shares when issued) are herein referred to as the
"Conversion Shares" and the "Warrant Shares", respectively. The Preferred
Shares, the Conversion Shares and the Warrant Shares are sometimes collectively
referred to as the "Shares".

      Section 1.4 Purchase Price and Closing. Subject to the terms and
conditions hereof, the Company agrees to issue and sell to the Purchasers and,
in consideration of and in express reliance upon the representations,
warranties, covenants, terms and conditions of this Agreement, the Purchasers,
severally but not jointly, agree to purchase the Preferred Shares and the
Warrants for an aggregate purchase price of up to $5,500,000 (the "Purchase
Price"). The closing of the purchase and sale of the Preferred Shares and the
Warrants to be acquired by the Purchasers from the Company under this Agreement
shall take place at the offices of Kramer Levin Naftalis & Frankel LLP, 1177
Avenue of the Americas, New York, New York 10036 (the "Closing") at 10:00 a.m.,
New York time on such date as the Purchasers and the Company may agree upon;
provided, that all of the conditions set forth in Article IV hereof and
applicable to the Closing shall have been fulfilled or waived in accordance
herewith (the "Closing Date"). Subject to the terms and conditions of this
Agreement, at the Closing the Company shall deliver or cause to be delivered to
each Purchaser (x) a certificate for the number of Preferred Shares set forth
opposite the name of such Purchaser on Exhibit A hereto, (y) its Warrants to
purchase such number of shares of Common Stock as is set forth opposite the name
of such Purchaser on Exhibit A attached hereto and (z) any other documents
required to be delivered pursuant to Article IV hereof. At the Closing, each
Purchaser shall deliver its Purchase Price by wire transfer to the escrow
account pursuant to the Escrow Agreement (as hereafter defined).

                                       2
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                                   ARTICLE II
                         Representations and Warranties

      Section 2.1 Representations and Warranties of the Company. The Company
hereby represents and warrants to the Purchasers, as of the date hereof and the
Closing Date (except as set forth on the Schedule of Exceptions attached hereto
with each numbered Schedule corresponding to the section number herein), as
follows:

      (a) Organization, Good Standing and Power. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Nevada and has the requisite corporate power to own, lease and operate
its properties and assets and to conduct its business as it is now being
conducted. The Company does not have any subsidiaries except as set forth in the
Company's Form 10-KSB for the year ended February 28, 2006, including the
accompanying financial statements (the "Form 10-KSB"), or in the Company's Form
10-QSB for the fiscal quarters ended May 31, 2006, November 30, 2005 and August
31, 2005 (collectively, the "Form 10-QSB"), or on Schedule 2.1(g) hereto. The
Company and each such subsidiary is duly qualified as a foreign corporation to
do business and is in good standing in every jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary except for any jurisdiction(s) (alone or in the aggregate) in which
the failure to be so qualified will not have a Material Adverse Effect (as
defined in Section 2.1(c) hereof) on the Company's financial condition.

      (b) Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and perform this Agreement, the Registration
Rights Agreement in the form attached hereto as Exhibit D (the "Registration
Rights Agreement"), the Lock-Up Agreement (as defined in Section 3.20 hereof) in
the form attached hereto as Exhibit E, the Escrow Agreement by and among the
Company, the Purchasers and the escrow agent, dated as of the date hereof,
substantially in the form of Exhibit F attached hereto (the "Escrow Agreement"),
the Irrevocable Transfer Agent Instructions (as defined in Section 3.13), the
Certificate of Designation, and the Warrants (collectively, the "Transaction
Documents") and to issue and sell the Shares and the Warrants in accordance with
the terms hereof. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action, and no further consent or authorization of the
Company or its Board of Directors or stockholders is required. This Agreement
has been duly executed and delivered by the Company. The other Transaction
Documents will have been duly executed and delivered by the Company at the
Closing. Each of the Transaction Documents constitutes, or shall constitute when
executed and delivered, a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditor's
rights and remedies or by other equitable principles of general application.

                                       3
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      (c) Capitalization. The authorized capital stock of the Company and the
shares thereof currently issued and outstanding as of the date hereof are set
forth on Schedule 2.1(c) hereto. All of the outstanding shares of the Common
Stock and the Preferred Shares have been duly and validly authorized. Except as
set forth on Schedule 2.1(c) hereto, no shares of Common Stock are entitled to
preemptive rights or registration rights and there are no outstanding options,
warrants, scrip, rights to subscribe to, call or commitments of any character
whatsoever relating to, or securities or rights convertible into, any shares of
capital stock of the Company. There are no contracts, commitments,
understandings, or arrangements by which the Company is or may become bound to
issue additional shares of the capital stock of the Company or options,
securities or rights convertible into shares of capital stock of the Company.
Except as set forth on Schedule 2.1(c) hereto, the Company is not a party to any
agreement granting registration or anti-dilution rights to any person with
respect to any of its equity or debt securities. The Company is not a party to,
and it has no knowledge of, any agreement restricting the voting or transfer of
any shares of the capital stock of the Company. The offer and sale of all
capital stock, convertible securities, rights, warrants, or options of the
Company issued prior to the Closing complied with all applicable Federal and
state securities laws, and no stockholder has a right of rescission or claim for
damages with respect thereto which would have a Material Adverse Effect (as
defined below). The Company has furnished or made available to the Purchasers
true and correct copies of the Company's Articles of Incorporation as in effect
on the date hereof (the "Articles"), and the Company's Bylaws as in effect on
the date hereof (the "Bylaws"). For the purposes of this Agreement, "Material
Adverse Effect" means any material adverse effect on the business, operations,
properties, prospects, or financial condition of the Company and its
subsidiaries and/or any condition, circumstance, or situation that would
prohibit or otherwise materially interfere with the ability of the Company to
perform any of its obligations under this Agreement in any material respect.

      (d) Issuance of Shares. The Preferred Shares and the Warrants to be issued
at the Closing have been duly authorized by all necessary corporate action and
the Preferred Shares, when paid for or issued in accordance with the terms
hereof, shall be validly issued and outstanding, fully paid and nonassessable
and entitled to the rights and preferences set forth in the Certificate of
Designation. When the Conversion Shares and the Warrant Shares are issued in
accordance with the terms of the Certificate of Designation and the Warrants,
respectively, such shares will be duly authorized by all necessary corporate
action and validly issued and outstanding, fully paid and nonassessable, and the
holders shall be entitled to all rights accorded to a holder of Common Stock.

                                       4
<PAGE>

      (e) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company, the performance by the Company of its
obligations under the Certificate of Designation and the consummation by the
Company of the transactions contemplated herein and therein do not and will not
(i) violate any provision of the Company's Articles or Bylaws, (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument or obligation
to which the Company is a party or by which it or its properties or assets are
bound, (iii) create or impose a lien, mortgage, security interest, charge or
encumbrance of any nature on any property of the Company under any agreement or
any commitment to which the Company is a party or by which the Company is bound
or by which any of its respective properties or assets are bound, or (iv) result
in a violation of any federal, state, local or foreign statute, rule,
regulation, order, judgment or decree (including Federal and state securities
laws and regulations) applicable to the Company or any of its subsidiaries or by
which any property or asset of the Company or any of its subsidiaries are bound
or affected, except, in all cases other than violations pursuant to clauses (i)
and (iv) above, for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect. The business of the Company and its
subsidiaries is not being conducted in violation of any laws, ordinances or
regulations of any governmental entity, except for possible violations which
singularly or in the aggregate do not and will not have a Material Adverse
Effect. The Company is not required under Federal, state or local law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under the Transaction
Documents, or issue and sell the Preferred Shares, the Warrants, the Conversion
Shares and the Warrant Shares in accordance with the terms hereof or thereof
(other than any filings which may be required to be made by the Company with the
Commission or state securities administrators subsequent to the Closing, any
registration statement which may be filed pursuant hereto, and the Certificate
of Designation); provided that, for purposes of the representation made in this
sentence, the Company is assuming and relying upon the accuracy of the relevant
representations and agreements of the Purchasers herein.

      (f) Commission Documents, Financial Statements. The Common Stock is
registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended the "Exchange Act"), and except as disclosed on Schedule
2.1(f), the Company has timely filed all reports, schedules, forms, statements
and other documents required to be filed by it with the Commission pursuant to
the reporting requirements of the Exchange Act, including material filed
pursuant to Section 13(a) or 15(d) of the Exchange Act (all of the foregoing
including filings incorporated by reference therein being referred to herein as
the "Commission Documents"). The Company has delivered or made available to each
of the Purchasers true and complete copies of the Commission Documents. The
Company has not provided to the Purchasers any material non-public information
or other information which, according to applicable law, rule or regulation, was
required to have been disclosed publicly by the Company but which has not been
so disclosed, other than with respect to the transactions contemplated by this
Agreement. At the times of their respective filings, the Form 10-KSB and the
Form 10-QSB complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder and other federal, state and local laws, rules and regulations
applicable to such documents, and, as of their respective dates, none of the
Form 10-KSB and the Form 10-QSB contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements of the
Company included in the Commission Documents comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the Commission or other applicable rules and regulations with
respect thereto. Such financial statements have been prepared in accordance with
United States generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed or summary statements), and fairly present in all material
respects the financial position of the Company and its subsidiaries as of the
dates thereof and the results of operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).

                                       5
<PAGE>

      (g) Subsidiaries. Schedule 2.1(g) hereto sets forth each subsidiary of the
Company, showing the jurisdiction of its incorporation or organization and
showing the percentage of each person's ownership. For the purposes of this
Agreement, "subsidiary" shall mean any corporation or other entity of which at
least a majority of the securities or other ownership interest having ordinary
voting power (absolutely or contingently) for the election of directors or other
persons performing similar functions are at the time owned directly or
indirectly by the Company and/or any of its other subsidiaries. All of the
outstanding shares of capital stock of each subsidiary have been duly authorized
and validly issued, and are fully paid and nonassessable. There are no
outstanding preemptive, conversion or other rights, options, warrants or
agreements granted or issued by or binding upon any subsidiary for the purchase
or acquisition of any shares of capital stock of any subsidiary or any other
securities convertible into, exchangeable for or evidencing the rights to
subscribe for any shares of such capital stock. Neither the Company nor any
subsidiary is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of the capital stock of any subsidiary
or any convertible securities, rights, warrants or options of the type described
in the preceding sentence. Neither the Company nor any subsidiary is party to,
nor has any knowledge of, any agreement restricting the voting or transfer of
any shares of the capital stock of any subsidiary.

      (h) No Material Adverse Change. Since February 28, 2006, the Company has
not experienced or suffered any Material Adverse Effect.

      (i) No Undisclosed Liabilities. Neither the Company nor any of its
subsidiaries has any liabilities, obligations, claims or losses (whether
liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent
or otherwise) other than those incurred in the ordinary course of the Company's
or its subsidiaries respective businesses since February 28, 2006 and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect on the Company or its subsidiaries.

      (j) No Undisclosed Events or Circumstances. No event or circumstance has
occurred or exists with respect to the Company or its subsidiaries or their
respective businesses, properties, prospects, operations or financial condition,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.

      (k) Indebtedness. The Form 10-KSB, Form 10-QSB or Schedule 2.1(k) hereto
sets forth as of a recent date all outstanding secured and unsecured
Indebtedness of the Company or any subsidiary, or for which the Company or any
subsidiary has commitments. For the purposes of this Agreement, "Indebtedness"
shall mean (a) any liabilities for borrowed money or amounts owed in excess of
$100,000 (other than trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations in
respect of Indebtedness of others, whether or not the same are or should be
reflected in the Company's balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $25,000 due under leases required to be
capitalized in accordance with GAAP. Except as set forth on Schedule 2.1(k),
neither the Company nor any subsidiary is in default with respect to any
Indebtedness.

                                        6
<PAGE>

      (l) Title to Assets. Each of the Company and the subsidiaries has good and
marketable title to all of its real and personal property reflected in the Form
10-KSB, free and clear of any mortgages, pledges, charges, liens, security
interests or other encumbrances, except for those disclosed in the Form 10-KSB
or such that, individually or in the aggregate, do not cause a Material Adverse
Effect. All leases of the Company and each of its subsidiaries are valid and
subsisting and in full force and effect.

      (m) Actions Pending. Except as disclosed on Schedule 2.1(m), there is no
action, suit, claim, investigation, arbitration, alternate dispute resolution
proceeding or any other proceeding pending or, to the knowledge of the Company,
threatened against the Company or any subsidiary which questions the validity of
this Agreement or any of the other Transaction Documents or the transactions
contemplated hereby or thereby or any action taken or to be taken pursuant
hereto or thereto. There is no action, suit, claim, investigation, arbitration,
alternate dispute resolution proceeding or any other proceeding pending or, to
the knowledge of the Company, threatened, against or involving the Company, any
subsidiary or any of their respective properties or assets. There are no
outstanding orders, judgments, injunctions, awards or decrees of any court,
arbitrator or governmental or regulatory body against the Company or any
subsidiary or any officers or directors of the Company or subsidiary in their
capacities as such.

      (n) Compliance with Law. The business of the Company and the subsidiaries
has been and is presently being conducted in accordance with all applicable
federal, state and local governmental laws, rules, regulations and ordinances,
except for such noncompliance that, individually or in the aggregate, would not
cause a Material Adverse Effect. The Company and each of its subsidiaries have
all franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals necessary for the conduct of its business as now
being conducted by it unless the failure to possess such franchises, permits,
licenses, consents and other governmental or regulatory authorizations and
approvals, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

      (o) Taxes. Except as disclosed on Schedule 2.1(o), the Company and each of
the subsidiaries has accurately prepared and filed all federal, state and other
tax returns required by law to be filed by it, has paid or made provisions for
the payment of all taxes shown to be due and all additional assessments, and
adequate provisions have been and are reflected in the financial statements of
the Company and the subsidiaries for all current taxes and other charges to
which the Company or any subsidiary is subject and which are not currently due
and payable. None of the federal income tax returns of the Company or any
subsidiary have been audited by the Internal Revenue Service. The Company has no
knowledge of any additional assessments, adjustments or contingent tax liability
(whether federal or state) of any nature whatsoever, whether pending or
threatened against the Company or any subsidiary for any period, nor of any
basis for any such assessment, adjustment or contingency.

                                       7
<PAGE>

      (p) Certain Fees. Except as set forth on Schedule 2.1(p) hereto, no
brokers, finders or financial advisory fees or commissions will be payable by
the Company or any subsidiary or any Purchaser with respect to the transactions
contemplated by this Agreement.

      (q) Disclosure. Neither this Agreement or the Schedules hereto nor any
other documents, certificates or instruments furnished to the Purchasers by or
on behalf of the Company or any subsidiary in connection with the transactions
contemplated by this Agreement contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made
herein or therein, in the light of the circumstances under which they were made
herein or therein, not misleading.

      (r) Operation of Business. The Company and each of the subsidiaries owns
or possesses all patents, trademarks, domain names (whether or not registered)
and any patentable improvements or copyrightable derivative works thereof,
websites and intellectual property rights relating thereto, service marks, trade
names, copyrights, licenses and authorizations as set forth in the Form 10-KSB,
and all rights with respect to the foregoing, which are necessary for the
conduct of its business as now conducted without any conflict with the rights of
others.

      (s) Environmental Compliance. The Company and each of its subsidiaries
have obtained all material approvals, authorization, certificates, consents,
licenses, orders and permits or other similar authorizations of all governmental
authorities, or from any other person, that are required under any Environmental
Laws. The Form 10-KSB or Form 10-QSB describes all material permits, licenses
and other authorizations issued under any Environmental Laws to the Company or
its subsidiaries. "Environmental Laws" shall mean all applicable laws relating
to the protection of the environment including, without limitation, all
requirements pertaining to reporting, licensing, permitting, controlling,
investigating or remediating emissions, discharges, releases or threatened
releases of hazardous substances, chemical substances, pollutants, contaminants
or toxic substances, materials or wastes, whether solid, liquid or gaseous in
nature, into the air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of hazardous substances, chemical substances, pollutants,
contaminants or toxic substances, material or wastes, whether solid, liquid or
gaseous in nature. The Company has all necessary governmental approvals required
under all Environmental Laws and used in its business or in the business of any
of its subsidiaries. The Company and each of its subsidiaries are also in
compliance with all other limitations, restrictions, conditions, standards,
requirements, schedules and timetables required or imposed under all
Environmental Laws. Except for such instances as would not individually or in
the aggregate have a Material Adverse Effect, there are no past or present
events, conditions, circumstances, incidents, actions or omissions relating to
or in any way affecting the Company or its subsidiaries that violate or may
violate any Environmental Law after the Closing Date or that may give rise to
any environmental liability, or otherwise form the basis of any claim, action,
demand, suit, proceeding, hearing, study or investigation (i) under any
Environmental Law, or (ii) based on or related to the manufacture, processing,
distribution, use, treatment, storage (including without limitation underground
storage tanks), disposal, transport or handling, or the emission, discharge,
release or threatened release of any hazardous substance.

                                       8
<PAGE>

      (t) Books and Record Internal Accounting Controls. The books and records
of the Company and its subsidiaries accurately reflect in all material respects
the information relating to the business of the Company and the subsidiaries,
the location and collection of their assets, and the nature of all transactions
giving rise to the obligations or accounts receivable of the Company or any
subsidiary. The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient, in the judgment of the Company, to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate actions is taken
with respect to any differences.

      (u) Material Agreements. Neither the Company nor any subsidiary is a party
to any written or oral contract, instrument, agreement, commitment, obligation,
plan or arrangement, a copy of which would be required to be filed with the
Commission as an exhibit to a registration statement on Form S-3 or applicable
form (collectively, "Material Agreements") if the Company or any subsidiary were
registering securities under the Securities Act, except as may already be filed
as an exhibit to or otherwise included in the Commission Documents. The Company
and each of its subsidiaries has in all material respects performed all the
obligations required to be performed by them to date under the foregoing
agreements, have received no notice of default and are not in default under any
Material Agreement now in effect, the result of which could cause a Material
Adverse Effect. No written or oral contract, instrument, agreement, commitment,
obligation, plan or arrangement of the Company or of any subsidiary limits or
shall limit the payment of dividends on the Company's Preferred Shares, other
preferred stock, if any, or its Common Stock.

      (v) Transactions with Affiliates. Except as set forth in the Commission
Documents, there are no loans, leases, agreements, contracts, royalty
agreements, management contracts or arrangements or other continuing
transactions between (a) the Company or any subsidiary on the one hand, and (b)
on the other hand, any officer, employee, consultant or director of the Company,
or any of its subsidiaries, or any person owning any capital stock of the
Company or any subsidiary or any member of the immediate family of such officer,
employee, consultant, director or stockholder or any corporation or other entity
controlled by such officer, employee, consultant, director or stockholder, or a
member of the immediate family of such officer, employee, consultant, director
or stockholder.

      (w) Securities Act of 1933. Based in material part upon the
representations herein of the Purchasers, the Company has complied and will
comply with all applicable federal and state securities laws in connection with
the offer, issuance and sale of the Shares and the Warrants hereunder. Neither
the Company nor anyone acting on its behalf, directly or indirectly, has or will
sell, offer to sell or solicit offers to buy any of the Shares, the Warrants or
similar securities to, or solicit offers with respect thereto from, or enter
into any preliminary conversations or negotiations relating thereto with, any
person, or has taken or will take any action so as to bring the issuance and
sale of any of the Shares and the Warrants under the registration provisions of
the Securities Act and applicable state securities laws, and neither the Company
nor any of its affiliates, nor any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) in connection with the offer
or sale of any of the Shares and the Warrants.

                                       9
<PAGE>

      (x) Governmental Approvals. Except for the filing of any notice prior or
subsequent to the Closing Date that may be required under applicable state
and/or Federal securities laws (which if required, shall be filed on a timely
basis), including the filing of a Form D and a registration statement or
statements pursuant to the Registration Rights Agreement, and the filing of the
Certificate of Designation with the Secretary of State for the State of Nevada,
no authorization, consent, approval, license, exemption of, filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for, or in connection with, the execution or delivery of the Preferred Shares
and the Warrants, or for the performance by the Company of its obligations under
the Transaction Documents.

      (y) Employees. Neither the Company nor any subsidiary has any collective
bargaining arrangements or agreements covering any of its employees. Neither the
Company nor any subsidiary has any employment contract, agreement regarding
proprietary information, non-competition agreement, non-solicitation agreement,
confidentiality agreement, or any other similar contract or restrictive
covenant, relating to the right of any officer, employee or consultant to be
employed or engaged by the Company or such subsidiary. No officer, consultant or
key employee of the Company or any subsidiary whose termination, either
individually or in the aggregate, could have a Material Adverse Effect, has
terminated or, to the knowledge of the Company, has any present intention of
terminating his or her employment or engagement with the Company or any
subsidiary.

      (z) Absence of Certain Developments. Except as disclosed on Schedule
2.1(z), since February 28, 2006, neither the Company nor any subsidiary has:

            (i) issued any stock, bonds or other corporate securities or any
rights, options or warrants with respect thereto;

            (ii) borrowed any amount or incurred or become subject to any
liabilities (absolute or contingent) except current liabilities incurred in the
ordinary course of business which are comparable in nature and amount to the
current liabilities incurred in the ordinary course of business during the
comparable portion of its prior fiscal year, as adjusted to reflect the current
nature and volume of the Company's or such subsidiary's business;

            (iii) discharged or satisfied any lien or encumbrance or paid any
obligation or liability (absolute or contingent), other than current liabilities
paid in the ordinary course of business;

                                       10
<PAGE>

            (iv) declared or made any payment or distribution of cash or other
property to stockholders with respect to its stock, or purchased or redeemed, or
made any agreements so to purchase or redeem, any shares of its capital stock;

            (v) sold, assigned or transferred any other tangible assets, or
canceled any debts or claims, except in the ordinary course of business;

            (vi) sold, assigned or transferred any patent rights, trademarks,
trade names, copyrights, trade secrets or other intangible assets or
intellectual property rights, or disclosed any proprietary confidential
information to any person except to customers in the ordinary course of business
or to the Purchasers or their representatives;

            (vii) suffered any substantial losses or waived any rights of
material value, whether or not in the ordinary course of business, or suffered
the loss of any material amount of prospective business;

            (viii) made any changes in employee compensation except in the
ordinary course of business and consistent with past practices;

            (ix) made capital expenditures or commitments therefor that
aggregate in excess of $100,000;

            (x) entered into any other transaction other than in the ordinary
course of business, or entered into any other material transaction, whether or
not in the ordinary course of business;

            (xi) made charitable contributions or pledges in excess of $25,000;

            (xii) suffered any material damage, destruction or casualty loss,
whether or not covered by insurance;

            (xiii) experienced any material problems with labor or management in
connection with the terms and conditions of their employment;

            (xiv) effected any two or more events of the foregoing kind which in
the aggregate would be material to the Company or its subsidiaries; or

            (xv) entered into an agreement, written or otherwise, to take any of
the foregoing actions.

      (aa) Public Utility Holding Company Act and Investment Company Act Status.
The Company is not a "holding company" or a "public utility company" as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
The Company is not, and as a result of and immediately upon the Closing will not
be, an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.

                                       11
<PAGE>

      (bb) ERISA. No liability to the Pension Benefit Guaranty Corporation has
been incurred with respect to any Plan (as defined below) by the Company or any
of its subsidiaries which is or would be materially adverse to the Company and
its subsidiaries. The execution and delivery of this Agreement and the issuance
and sale of the Preferred Shares will not involve any transaction which is
subject to the prohibitions of Section 406 of ERISA or in connection with which
a tax could be imposed pursuant to Section 4975 of the Internal Revenue Code of
1986, as amended, provided that, if any of the Purchasers, or any person or
entity that owns a beneficial interest in any of the Purchasers, is an "employee
pension benefit plan" (within the meaning of Section 3(2) of ERISA) with respect
to which the Company is a "party in interest" (within the meaning of Section
3(14) of ERISA), the requirements of Sections 407(d)(5) and 408(e) of ERISA, if
applicable, are met. As used in this Section 2.1(ac), the term "Plan" shall mean
an "employee pension benefit plan" (as defined in Section 3 of ERISA) which is
or has been established or maintained, or to which contributions are or have
been made, by the Company or any subsidiary or by any trade or business, whether
or not incorporated, which, together with the Company or any subsidiary, is
under common control, as described in Section 414(b) or (c) of the Code.

      (cc) Dilutive Effect. The Company understands and acknowledges that its
obligation to issue Conversion Shares upon conversion of the Preferred Shares in
accordance with this Agreement and the Certificate of Designation and its
obligations to issue the Warrant Shares upon the exercise of the Warrants in
accordance with this Agreement and the Warrants, is, in each case, absolute and
unconditional regardless of the dilutive effect that such issuance may have on
the ownership interest of other stockholders of the Company.

      (dd) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would cause the offering of the Shares
pursuant to this Agreement to be integrated with prior offerings by the Company
for purposes of the Securities Act which would prevent the Company from selling
the Shares pursuant to Rule 506 under the Securities Act, or any applicable
exchange-related stockholder approval provisions, nor will the Company or any of
its affiliates or subsidiaries take any action or steps that would cause the
offering of the Shares to be integrated with other offerings. The Company does
not have any registration statement pending before the Commission or currently
under the Commission's review and since March 1, 2006, the Company has not
offered or sold any of its equity securities or debt securities convertible into
shares of Common Stock.

      (ee) Sarbanes-Oxley Act. The Company is in compliance with the applicable
provisions of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), and the
rules and regulations promulgated thereunder, that are effective, and intends to
comply with other applicable provisions of the Sarbanes-Oxley Act, and the rules
and regulations promulgated thereunder, upon the effectiveness of such
provisions.

                                       12
<PAGE>

      (ff) Independent Nature of Purchasers. The Company acknowledges that the
obligations of each Purchaser under the Transaction Documents are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under the Transaction Documents. The Company acknowledges that the
decision of each Purchaser to purchase securities pursuant to this Agreement has
been made by such Purchaser independently of any other purchase and
independently of any information, materials, statements or opinions as to the
business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company or of
its Subsidiaries which may have made or given by any other Purchaser or by any
agent or employee of any other Purchaser, and no Purchaser or any of its agents
or employees shall have any liability to any Purchaser (or any other person)
relating to or arising from any such information, materials, statements or
opinions. The Company acknowledges that nothing contained herein, or in any
Transaction Document, and no action taken by any Purchaser pursuant hereto or
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents. The Company acknowledges that each Purchaser shall be
entitled to independently protect and enforce its rights, including without
limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose. The Company
acknowledges that for reasons of administrative convenience only, the
Transaction Documents have been prepared by counsel for one of the Purchasers
and such counsel does not represent all of the Purchasers but only such
Purchaser and the other Purchasers have retained their own individual counsel
with respect to the transactions contemplated hereby. The Company acknowledges
that it has elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by the Purchasers.

      (gg) DTC Status. The Company's transfer agent is a participant in and the
Common Stock is eligible for transfer pursuant to the Depository Trust Company
Automated Securities Transfer Program. The name, address, telephone number, fax
number, contact person and email address of the Company's transfer agent is set
forth on Schedule 2.1(gg) hereto.

      Section 2.2 Representations and Warranties of the Purchasers. Each
Purchaser hereby makes the following representations and warranties to the
Company with respect solely to itself and not with respect to any other
Purchaser:

      (a) Organization and Standing of the Purchasers. If the Purchaser is an
entity, such Purchaser is a corporation or partnership duly incorporated or
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization.

      (b) Authorization and Power. Each Purchaser has the requisite power and
authority to enter into and perform this Agreement and to purchase the Preferred
Shares and Warrants being sold to it hereunder. The execution, delivery and
performance of this Agreement and the Registration Rights Agreement by such
Purchaser and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate or partnership
action, and no further consent or authorization of such Purchaser or its Board
of Directors, stockholders, or partners, as the case may be, is required. Each
of this Agreement and the Registration Rights Agreement has been duly
authorized, executed and delivered by such Purchaser and constitutes, or shall
constitute when executed and delivered, a valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with the terms
thereof.

                                       13
<PAGE>

      (c) No Conflicts. The execution, delivery and performance of this
Agreement and the Registration Rights Agreement and the consummation by such
Purchaser of the transactions contemplated hereby and thereby or relating hereto
do not and will not (i) result in a violation of such Purchaser's charter
documents or bylaws or other organizational documents or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of any agreement, indenture or
instrument or obligation to which such Purchaser is a party or by which its
properties or assets are bound, or result in a violation of any law, rule, or
regulation, or any order, judgment or decree of any court or governmental agency
applicable to such Purchaser or its properties (except for such conflicts,
defaults and violations as would not, individually or in the aggregate, have a
material adverse effect on such Purchaser). Such Purchaser is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement or the
Registration Rights Agreement or to purchase the Preferred Shares or acquire the
Warrants in accordance with the terms hereof, provided that for purposes of the
representation made in this sentence, such Purchaser is assuming and relying
upon the accuracy of the relevant representations and agreements of the Company
herein.

      (d) Acquisition for Investment. Each Purchaser is acquiring the Preferred
Shares and the Warrants solely for its own account for the purpose of investment
and not with a view to or for sale in connection with distribution. Each
Purchaser does not have a present intention to sell the Preferred Shares or the
Warrants, nor a present arrangement (whether or not legally binding) or
intention to effect any distribution of the Preferred Shares or the Warrants to
or through any person or entity; provided, however, that by making the
representations herein and subject to Section 2.2(h) below, such Purchaser does
not agree to hold the Shares or the Warrants for any minimum or other specific
term and reserves the right to dispose of the Shares or the Warrants at any time
in accordance with Federal and state securities laws applicable to such
disposition. Each Purchaser acknowledges that it is able to bear the financial
risks associated with an investment in the Preferred Shares and the Warrants and
that it has been given full access to such records of the Company and the
subsidiaries and to the officers of the Company and the subsidiaries and
received such information as it has deemed necessary or appropriate to conduct
its due diligence investigation and has sufficient knowledge and experience in
investing in companies similar to the Company in terms of the Company's stage of
development so as to be able to evaluate the risks and merits of its investment
in the Company.

      (e) Status of Purchasers. Each Purchaser is an "accredited investor" as
defined in Regulation D promulgated under the Securities Act. Such Purchaser is
not required to be registered as a broker-dealer under Section 15 of the
Exchange Act and such Purchaser is not a broker-dealer.

                                       14
<PAGE>

      (f) Opportunities for Additional Information. Each Purchaser acknowledges
that such Purchaser has had the opportunity to ask questions of and receive
answers from, or obtain additional information from, the executive officers of
the Company concerning the financial and other affairs of the Company, and to
the extent deemed necessary in light of such Purchaser's personal knowledge of
the Company's affairs, such Purchaser has asked such questions and received
answers to the full satisfaction of such Purchaser, and such Purchaser desires
to invest in the Company.

      (g) No General Solicitation. Each Purchaser acknowledges that the
Preferred Shares and the Warrants were not offered to such Purchaser by means of
any form of general or public solicitation or general advertising, or publicly
disseminated advertisements or sales literature, including (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media, or broadcast over television or radio, or
(ii) any seminar or meeting to which such Purchaser was invited by any of the
foregoing means of communications.

      (h) Rule 144. Such Purchaser understands that the Shares must be held
indefinitely unless such Shares are registered under the Securities Act or an
exemption from registration is available. Such Purchaser acknowledges that such
Purchaser is familiar with Rule 144 of the rules and regulations of the
Commission, as amended, promulgated pursuant to the Securities Act ("Rule 144"),
and that such person has been advised that Rule 144 permits resales only under
certain circumstances. Such Purchaser understands that to the extent that Rule
144 is not available, such Purchaser will be unable to sell any Shares without
either registration under the Securities Act or the existence of another
exemption from such registration requirement.

      (i) General. Such Purchaser understands that the Shares are being offered
and sold in reliance on a transactional exemption from the registration
requirement of Federal and state securities laws and the Company is relying upon
the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the applicability of such exemptions and the suitability of such
Purchaser to acquire the Shares.

      (j) Independent Investment. Except as may be disclosed in any filings with
the Commission by the Purchasers under Section 13 and/or Section 16 of the
Exchange Act, no Purchaser has agreed to act with any other Purchaser for the
purpose of acquiring, holding, voting or disposing of the Shares purchased
hereunder for purposes of Section 13(d) under the Exchange Act, and each
Purchaser is acting independently with respect to its investment in the Shares.

      (k) Trading Activities. Each Purchaser's trading activities with respect
to the Shares shall be in compliance with all applicable federal and state
securities laws. No Purchaser nor any of its affiliates has an open short
position in the Common Stock, each Purchaser agrees that it shall not, and that
it will cause its affiliates not to, engage in any short sales with respect to
the Common Stock.

                                       15
<PAGE>

                                   ARTICLE III
                                    Covenants

      The Company covenants with each of the Purchasers as follows, which
covenants are for the benefit of the Purchasers and their permitted assignees
(as defined herein).

      Section 3.1 Securities Compliance. The Company shall notify the Commission
in accordance with their rules and regulations, of the transactions contemplated
by any of the Transaction Documents, including filing a Form D with respect to
the Preferred Shares, Warrants, Conversion Shares and Warrant Shares as required
under Regulation D and applicable "blue sky" laws, and shall take all other
necessary action and proceedings as may be required and permitted by applicable
law, rule and regulation, for the legal and valid issuance of the Preferred
Shares, the Warrants, the Conversion Shares and the Warrant Shares to the
Purchasers or subsequent holders.

      Section 3.2 Registration and Listing. The Company shall cause its Common
Stock to continue to be registered under Sections 12(b) or 12(g) of the Exchange
Act, to comply in all respects with its reporting and filing obligations under
the Exchange Act, to comply with all requirements related to any registration
statement filed pursuant to this Agreement, and to not take any action or file
any document (whether or not permitted by the Securities Act or the rules
promulgated thereunder) to terminate or suspend such registration or to
terminate or suspend its reporting and filing obligations under the Exchange Act
or Securities Act, except as permitted herein. The Company will take all action
necessary to continue the listing or trading of its Common Stock on the OTC
Bulletin Board or other exchange or market on which the Common Stock is trading
or may be traded in the future. Subject to the terms of the Transaction
Documents, the Company further covenants that it will take such further action
as the Purchasers may reasonably request, all to the extent required from time
to time to enable the Purchasers to sell the Shares without registration under
the Securities Act within the limitation of the exemptions provided by Rule 144
promulgated under the Securities Act. Upon the request of the Purchasers, the
Company shall deliver to the Purchasers a written certification of a duly
authorized officer as to whether it has complied with such requirements.

      Section 3.3 Inspection Rights. The Company shall permit, during normal
business hours and upon reasonable request and reasonable notice, each Purchaser
or any employees, agents or representatives thereof, so long as such Purchaser
shall be obligated hereunder to purchase the Preferred Shares or shall
beneficially own any Preferred Shares, or shall own Conversion Shares which, in
the aggregate, represent more than 2% of the total combined voting power of all
voting securities then outstanding, for purposes reasonably related to such
Purchaser's interests as a stockholder to examine and make reasonable copies of
and extracts from the records and books of account of, and visit and inspect the
properties, assets, operations and business of the Company and any subsidiary,
and to discuss the affairs, finances and accounts of the Company and any
subsidiary with any of its officers, consultants, directors, and key employees,
provided, however, that the Company shall not provide to or discuss with such
Purchaser any material non-public information, unless prior thereto such
Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information.

                                       16
<PAGE>

      Section 3.4 Compliance with Laws. The Company shall comply, and cause each
subsidiary to comply, with all applicable laws, rules, regulations and orders,
noncompliance with which could have a Material Adverse Effect.

      Section 3.5 Keeping of Records and Books of Account. The Company shall
keep and cause each subsidiary to keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP consistently
applied, reflecting all financial transactions of the Company and its
subsidiaries, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection with its business shall be made.

      Section 3.6 Reporting Requirements. If the Commission ceases making
periodic reports filed under the Exchange Act available via the Internet, then
at a Purchaser's request the Company shall furnish the following to such
Purchaser so long as such Purchaser shall be obligated hereunder to purchase the
Preferred Shares or shall beneficially own any Shares:

            (a) Quarterly Reports filed with the Commission on Form 10-QSB as
soon as practical after the document is filed with the Commission, and in any
event within five (5) days after the document is filed with the Commission;

            (b) Annual Reports filed with the Commission on Form 10-KSB as soon
as practical after the document is filed with the Commission, and in any event
within five (5) days after the document is filed with the Commission; and

            (c) Copies of all notices and information, including without
limitation notices and proxy statements in connection with any meetings, that
are provided to holders of shares of Common Stock, contemporaneously with the
delivery of such notices or information to such holders of Common Stock.

      Section 3.7 Amendments. The Company shall not amend or waive any provision
of the Articles or Bylaws of the Company in any way that would adversely affect
the liquidation preferences, dividends rights, conversion rights, voting rights
or redemption rights of the Preferred Shares; provided, however, that any
creation and issuance of another series of Junior Stock (as defined in the
Certificate of Designation) or any other class or series of equity securities
which by its terms shall rank on parity with the Preferred Shares shall not be
deemed to materially and adversely affect such rights, preferences or
privileges.

      Section 3.8 Other Agreements. The Company shall not enter into any
agreement in which the terms of such agreement would restrict or impair the
right or ability to perform of the Company or any subsidiary under any
Transaction Document.

      Section 3.9 Distributions. So long as any Preferred Shares or Warrants
remain outstanding, the Company agrees that it shall not (i) declare or pay any
dividends or make any distributions to any holder(s) of Common Stock or (ii)
purchase or otherwise acquire for value, directly or indirectly, any Common
Stock or other equity security of the Company.

                                       17
<PAGE>

      Section 3.10 Status of Dividends. The Company covenants and agrees that
(i) no Federal income tax return or claim for refund of Federal income tax or
other submission to the Internal Revenue Service (the "Service") will adversely
affect the Preferred Shares, any other series of its Preferred Stock, or the
Common Stock, and no deduction shall operate to jeopardize the availability to
Purchasers of the dividends received deduction provided by Section 243(a)(1) of
the Code or any successor provision, (ii) in no report to shareholders or to any
governmental body having jurisdiction over the Company or otherwise will it
treat the Preferred Shares other than as equity capital or the dividends paid
thereon other than as dividends paid on equity capital unless required to do so
by a governmental body having jurisdiction over the accounts of the Company or
by a change in generally accepted accounting principles required as a result of
action by an authoritative accounting standards setting body, and (iii) it will
take no action which would result in the dividends paid by the Company on the
Preferred Shares out of the Company's current or accumulated earnings and
profits being ineligible for the dividends received deduction provided by
Section 243(a)(1) of the Code. The preceding sentence shall not be deemed to
prevent the Company from designating the Preferred Stock as "Convertible
Preferred Stock" in its annual and quarterly financial statements in accordance
with its prior practice concerning other series of preferred stock of the
Company. In the event that the Purchasers have reasonable cause to believe that
dividends paid by the Company on the Preferred Shares out of the Company's
current or accumulated earnings and profits will not be treated as eligible for
the dividends received deduction provided by Section 243(a)(1) of the Code, or
any successor provision, the Company will, at the reasonable request of the
Purchasers of 51% of the outstanding Preferred Shares, join with the Purchasers
in the submission to the Service of a request for a ruling that dividends paid
on the Shares will be so eligible for Federal income tax purposes, at the
Purchasers expense. In addition, the Company will reasonably cooperate with the
Purchasers (at Purchasers' expense) in any litigation, appeal or other
proceeding challenging or contesting any ruling, technical advice, finding or
determination that earnings and profits are not eligible for the dividends
received deduction provided by Section 243(a)(1) of the Code, or any successor
provision to the extent that the position to be taken in any such litigation,
appeal, or other proceeding is not contrary to any provision of the Code.
Notwithstanding the foregoing, nothing herein contained shall be deemed to
preclude the Company from claiming a deduction with respect to such dividends if
(i) the Code shall hereafter be amended, or final Treasury regulations
thereunder are issued or modified, to provide that dividends on the Preferred
Shares or Conversion Shares should not be treated as dividends for Federal
income tax purposes or that a deduction with respect to all or a portion of the
dividends on the Shares is allowable for Federal income tax purposes, or (ii) in
the absence of such an amendment, issuance or modification and after a
submission of a request for ruling or technical advice, the Service shall issue
a published ruling or advise that dividends on the Shares should not be treated
as dividends for Federal income tax purposes. If the Service specifically
determines that the Preferred Shares or Conversion Shares constitute debt, the
Company may file protective claims for refund.

      Section 3.11 Use of Proceeds. The net proceeds from the sale of the Shares
hereunder shall be used by the Company to pay indebtedness of $1,600,000 to NIR
Group and the balance shall be used for working capital and general corporate
purposes and not to redeem any Common Stock or securities convertible,
exercisable or exchangeable into Common Stock or to settle any outstanding
litigation.

                                       18
<PAGE>

      Section 3.12 Reservation of Shares. So long as any of the Preferred Shares
or Warrants remain outstanding, the Company shall take all action necessary to
at all times have authorized, and reserved for the purpose of issuance, no less
than a number of shares of Common Stock equal to the number of shares of Common
Stock that are not currently issued or reserved for issuance; provided, however,
upon the Company filing the Charter Amendment, the Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance, free of preemptive rights and other similar contractual rights of
stockholders, a number of shares of Common Stock equal to one hundred fifty
percent (150%) of the number of shares of Common Stock as shall from time to
time be sufficient to effect the conversion of all of the Preferred Shares and
exercise of the Warrants then outstanding.

      Section 3.13 Transfer Agent Instructions. The Company shall issue
irrevocable instructions to its transfer agent, and any subsequent transfer
agent, to issue certificates, registered in the name of each Purchaser or its
respective nominee(s), for the Conversion Shares and the Warrant Shares in such
amounts as specified from time to time by each Purchaser to the Company upon
conversion of the Preferred Shares or exercise of the Warrants in the form of
Exhibit G attached hereto (the "Irrevocable Transfer Agent Instructions"). Prior
to registration of the Conversion Shares and the Warrant Shares under the
Securities Act, all such certificates shall bear the restrictive legend
specified in Section 5.1 of this Agreement. The Company warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred to
in this Section 3.13 will be given by the Company to its transfer agent and that
the Shares shall otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement and the Registration
Rights Agreement. If a Purchaser provides the Company with an opinion of
counsel, in a generally acceptable form, to the effect that a public sale,
assignment or transfer of all or some of such Purchaser's Shares may be made
without registration under the Securities Act or the Purchaser provides the
Company with reasonable assurances that such Shares can be sold pursuant to Rule
144 within the limitations of Rule 144, the Company shall permit the transfer,
and, in the case of the Conversion Shares and the Warrant Shares, promptly
instruct its transfer agent to issue one or more certificates in such name and
in such denominations as specified by such Purchaser and without any restrictive
legend. The Company acknowledges that a breach by it of its obligations under
this Section 3.13 will cause irreparable harm to the Purchasers by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Section 3.13 will be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this Section 3.13, that
the Purchasers shall be entitled, in addition to all other available remedies,
to an order and/or injunction restraining any breach and requiring immediate
issuance and transfer, without the necessity of showing economic loss and
without any bond or other security being required.

      Section 3.14 Disposition of Assets. So long as any Preferred Shares remain
outstanding, neither the Company nor any Subsidiary shall sell, transfer or
otherwise dispose of any of its properties, assets and rights including, without
limitation, its software and intellectual property, to any person except for
sales to customers in the ordinary course of business or with the prior written
consent of the holders of a majority of the Preferred Shares then outstanding.

                                       19
<PAGE>

      Section 3.15 Reporting Status. So long as a Purchaser beneficially owns
any of the Shares, the Company shall timely file all reports required to be
filed with the Commission pursuant to the Exchange Act, and the Company shall
not terminate its status as an issuer required to file reports under the
Exchange Act even if the Exchange Act or the rules and regulations thereunder
would permit such termination.

      Section 3.16 Disclosure of Transaction. The Company shall issue a press
release describing the material terms of the transactions contemplated hereby
(the "Press Release") as soon as practicable after the Closing but in no event
later than 9:00 A.M. Eastern Time on the first Trading Day following the
Closing. The Company shall also file with the Commission a Current Report on
Form 8-K (the "Form 8-K") describing the material terms of the transactions
contemplated hereby (and attaching as exhibits thereto this Agreement, the
Registration Rights Agreement, the Certificate of Designation, the Lock-Up
Agreement, the form of each series of Warrant and the Press Release) as soon as
practicable following the Closing Date but in no event more than two (2) Trading
Days following the Closing Date, which Press Release and Form 8-K shall be
subject to prior review and comment by the Purchasers. "Trading Day" means any
day during which the OTC Bulletin Board (or other quotation venue or principal
exchange on which the Common Stock is traded) shall be open for trading.

      Section 3.17 Disclosure of Material Information. The Company covenants and
agrees that neither it nor any other person acting on its behalf has provided or
will provide any Purchaser or its agents or counsel with any information that
the Company believes constitutes material non-public information (other than
with respect to the transactions contemplated by this Agreement), unless prior
thereto such Purchaser shall have executed a written agreement regarding the
confidentiality and use of such information. The Company understands and
confirms that each Purchaser shall be relying on the foregoing representations
in effecting transactions in securities of the Company.

      Section 3.18 Pledge of Securities. The Company acknowledges and agrees
that the Shares may be pledged by a Purchaser in connection with a bona fide
margin agreement or other loan or financing arrangement that is secured by the
Common Stock. The pledge of Common Stock shall not be deemed to be a transfer,
sale or assignment of the Common Stock hereunder, and no Purchaser effecting a
pledge of Common Stock shall be required to provide the Company with any notice
thereof or otherwise make any delivery to the Company pursuant to this Agreement
or any other Transaction Document; provided that a Purchaser and its pledgee
shall be required to comply with the provisions of Article V hereof in order to
effect a sale, transfer or assignment of Common Stock to such pledgee. At the
Purchasers' expense, the Company hereby agrees to execute and deliver such
documentation as a pledgee of the Common Stock may reasonably request in
connection with a pledge of the Common Stock to such pledgee by a Purchaser.

      Section 3.19 Form SB-2 Eligibility. The Company currently meets the
"registrant eligibility" and transaction requirements set forth in the general
instructions to Form SB-2 applicable to "resale" registrations on Form SB-2 and
the Company shall file all reports required to be filed by the Company with the
Commission in a timely manner.

                                       20
<PAGE>

      Section 3.20 Lock-Up Agreement. The persons listed on Schedule 3.20
attached hereto shall be subject to the terms and provisions of a lock-up
agreement in substantially the form as Exhibit E hereto (the "Lock-Up
Agreement"), which shall provide the manner in which such persons will sell,
transfer or dispose of their shares of Common Stock.

            Section 3.21 Investor Relations Firm. Not later than November 15,
2006, the Company shall hire an investor relations firm and purchase a minimum
of one third party independent research report.

            Section 3.22 Increase in Authorized Shares. Not later than ninety
(90) days following the Closing Date, the Company shall file an amendment to the
Articles (the "Charter Amendment") with the Nevada Secretary of State to effect
an increase in the number of its authorized shares of Common Stock from
40,000,000 to at least a number of shares of Common Stock sufficient to reserve
one hundred fifty percent (150%) of the number of shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all of the
Preferred Shares and exercise of the Warrants then outstanding (the "Share
Increase"). In the event that the Share Increase has not been effected within
ninety (90) days following the Closing Date, the term of each series of Warrant
issued pursuant to this Agreement shall be automatically extended for a period
of one (1) year (and the Company shall promptly issue to each Purchaser new
Warrants evidencing the extension of such Warrant term) and each Purchaser shall
have the right to redeem any Preferred Shares then held by it in accordance with
the terms of the Certificate of Designation.

      Section 3.23 Subsequent Financings.

      (a) For a period of one (1) year following the effective date of the
Registration Statement (as defined in the Registration Rights Agreement), the
Company covenants and agrees to promptly notify in writing (a "Rights Notice")
the Purchasers of the terms and conditions of any proposed offer or sale to, or
exchange with (or other type of distribution to) any third party (a "Subsequent
Financing"), of Common Stock or any debt or equity securities convertible,
exercisable or exchangeable into Common Stock; provided, however, prior to
delivering to each Purchaser a Rights Notice, the Company shall first deliver to
each Purchaser a written notice of its intention to effect a Subsequent
Financing ("Pre-Notice") within three (3) Trading Days of receiving an
applicable offer, which Pre-Notice shall ask such Purchaser if it wants to
review the details of such financing. Upon the request of a Purchaser, and only
upon a request by such Purchaser within three (3) Trading Days of receipt of a
Pre-Notice, the Company shall promptly, but no later than two (2) Trading Days
after such request, deliver a Rights Notice to such Purchaser. The Rights Notice
shall describe, in reasonable detail, the proposed Subsequent Financing, the
names and investment amounts of all investors participating in the Subsequent
Financing (if known), the proposed closing date of the Subsequent Financing,
which shall be no earlier than ten (10) Trading Days from the date of the Rights
Notice, and all of the terms and conditions thereof and proposed definitive
documentation to be entered into in connection therewith. The Rights Notice
shall provide each Purchaser an option (the "Rights Option") during the ten (10)
Trading Days following delivery of the Rights Notice (the "Option Period") to
inform the Company whether such Purchaser will purchase up to its pro rata
portion of all or a portion of the securities being offered in such Subsequent
Financing on the same, absolute terms and conditions as contemplated by such
Subsequent Financing, provided the amount of such purchase shall not exceed such
Purchaser's Purchase Price hereunder except as allowed by the following
sentence. If any Purchaser elects not to participate in such Subsequent
Financing, the other Purchasers may participate on a pro-rata basis so long as
such participation in the aggregate does not exceed the total Purchase Price
hereunder. For purposes of this Section, all references to "pro rata" means, for
any Purchaser electing to participate in such Subsequent Financing, the
percentage obtained by dividing (x) the number of Preferred Shares purchased by
such Purchaser at the Closing by (y) the total number of all of the Preferred
Shares purchased by all of the participating Purchasers at the Closing. Delivery
of any Rights Notice constitutes a representation and warranty by the Company
that there are no other material terms and conditions, arrangements, agreements
or otherwise except for those disclosed in the Rights Notice, to provide
additional compensation to any party participating in any proposed Subsequent
Financing, including, but not limited to, additional compensation based on
changes in the Purchase Price or any type of reset or adjustment of a purchase
or conversion price or to issue additional securities at any time after the
closing date of a Subsequent Financing. If the Company does not receive notice
of exercise of the Rights Option from any or all of Purchasers within the Option
Period, the Company shall have the right to close the Subsequent Financing on
the scheduled closing date set forth in the Rights Notice (or within thirty (30)
days thereafter) without the participation of any or all of such Purchasers;
provided that all of the material terms and conditions of the closing are the
same as those provided to the Purchasers in the Rights Notice. If the closing of
the proposed Subsequent Financing does not occur on the scheduled closing date
set forth in the Rights Notice (or within thirty (30) days thereafter), any
closing of the contemplated Subsequent Financing or any other Subsequent
Financing shall be subject to all of the provisions of this Section 3.23(a),
including, without limitation, the delivery of a new Rights Notice. The
provisions of this Section 3.23(a) shall not apply to issuances of securities in
a Permitted Financing.

                                       21
<PAGE>

      (b) For purposes of this Agreement, a Permitted Financing (as defined
hereinafter) shall not be considered a Subsequent Financing. A "Permitted
Financing" shall mean (i) securities issued (other than for cash) in connection
with a merger, acquisition, or consolidation, (ii) securities issued pursuant to
the conversion or exercise of convertible or exercisable securities issued or
outstanding on or prior to the date of this Agreement or issued pursuant to this
Agreement (so long as the conversion or exercise price in such securities are
not amended to lower such price and/or adversely affect the Purchasers), (iii)
securities issued in connection with bona fide strategic license agreements or
other partnering arrangements so long as such issuances are not for the purpose
of raising capital, (iv) Common Stock issued or the issuance or grants of
options to purchase Common Stock pursuant to the Company's stock option plans
and employee stock purchase plans outstanding as they exist on the date of this
Agreement, and (v) any warrants issued to the placement agent and its designees
for the transactions contemplated by the Purchase Agreement.

      (c) For a period of two (2) years following the Closing Date, the Company
shall be prohibited from effecting or entering into an agreement to effect any
Subsequent Financing involving a "Variable Rate Transaction" without the prior
written consent of the holders of 75% of the Preferred Shares then outstanding.
The term "Variable Rate Transaction" shall mean a transaction in which the
Company issues or sells (i) any debt or equity securities that are convertible
into, exchangeable or exercisable for, or include the right to receive
additional shares of Common Stock either (A) at a conversion, exercise or
exchange rate or other price that is based upon and/or varies with the trading
prices of or quotations for the shares of Common Stock at any time after the
initial issuance of such debt or equity securities, or (B) with a conversion,
exercise or exchange price that is subject to being reset at some future date
after the initial issuance of such debt or equity security or upon the
occurrence of specified or contingent events directly or indirectly related to
the business of the Company or the market for the Common Stock (other than
customary anti-dilution features) or (ii) enters into any agreement, including,
but not limited to, an equity line of credit, whereby the Company may sell
securities at a future determined price.

                                       22
<PAGE>

      (d) For the period commencing on the Closing Date and ending on the date
that is one hundred eighty (180) days following the effective date of the
Registration Statement, the Company shall not file any registration statement
under the Securities Act without the prior written consent of the Purchasers,
other than the Registration Statement.

                                   ARTICLE IV
                                   CONDITIONS

      Section 4.1 Conditions Precedent to the Obligation of the Company to Sell
the Shares. The obligation hereunder of the Company to issue and sell the
Preferred Shares and the Warrants to the Purchasers is subject to the
satisfaction or waiver, at or before the Closing, of each of the conditions set
forth below. These conditions are for the Company's sole benefit and may be
waived by the Company at any time in its sole discretion.

      (a) Accuracy of Each Purchaser's Representations and Warranties. The
representations and warranties of each Purchaser shall be true and correct in
all material respects as of the date when made and as of the Closing Date as
though made at that time, except for representations and warranties that are
expressly made as of a particular date, which shall be true and correct in all
material respects as of such date.

      (b) Performance by the Purchasers. Each Purchaser shall have performed,
satisfied and complied in all respects with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by such Purchaser at or prior to the Closing.

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

      (d) Delivery of Purchase Price. The Purchase Price for the Preferred
Shares and Warrants has been delivered to the escrow agent pursuant to the
Escrow Agreement.

      (e) Delivery of Transaction Documents. The Transaction Documents shall
have been duly executed and delivered by the Purchasers and, with respect to the
Escrow Agreement, the escrow agent, to the Company.

                                       23
<PAGE>

      Section 4.2 Conditions Precedent to the Obligation of the Purchasers to
Purchase the Shares. The obligation hereunder of each Purchaser to acquire and
pay for the Preferred Shares and the Warrants is subject to the satisfaction or
waiver, at or before the Closing, of each of the conditions set forth below.
These conditions are for each Purchaser's sole benefit and may be waived by such
Purchaser at any time in its sole discretion.

      (a) Accuracy of the Company's Representations and Warranties. Each of the
representations and warranties of the Company in this Agreement and the
Registration Rights Agreement shall be true and correct in all respects as of
the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that are expressly made as of a
particular date), which shall be true and correct in all respects as of such
date.

      (b) Performance by the Company. The Company shall have performed,
satisfied and complied in all respects with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing.

      (c) No Suspension, Etc. Trading in the Company's Common Stock shall not
have been suspended by the Commission or the OTC Bulletin Board (except for any
suspension of trading of limited duration agreed to by the Company, which
suspension shall be terminated prior to the applicable Closing), and, at any
time prior to the Closing Date, trading in securities generally as reported by
Bloomberg Financial Markets ("Bloomberg") shall not have been suspended or
limited, or minimum prices shall not have been established on securities whose
trades are reported by Bloomberg, or on the New York Stock Exchange, nor shall a
banking moratorium have been declared either by the United States or New York
State authorities, nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international calamity or crisis
of such magnitude in its effect on, or any material adverse change in any
financial market which, in each case, in the judgment of such Purchaser, makes
it impracticable or inadvisable to purchase the Preferred Shares.

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

      (e) No Proceedings or Litigation. No action, suit or proceeding before any
arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened, against
the Company or any subsidiary, or any of the officers, directors or affiliates
of the Company or any subsidiary seeking to restrain, prevent or change the
transactions contemplated by this Agreement, or seeking damages in connection
with such transactions.

                                       24
<PAGE>

      (f) Certificate of Designation of Rights and Preferences. Prior to the
Closing, the Certificate of Designation in the form of Exhibit B attached hereto
shall have been filed with the Secretary of State of Nevada.

      (g) Opinion of Counsel, Etc. At the Closing, the Purchasers shall have
received an opinion of counsel to the Company, dated the date of the Closing, in
the form of Exhibit H hereto, and such other certificates and documents as the
Purchasers or its counsel shall reasonably require incident to the Closing.

      (h) Registration Rights Agreement. At the Closing, the Company shall have
executed and delivered the Registration Rights Agreement to each Purchaser.

      (i) Certificates. The Company shall have executed and delivered to the
Purchasers the certificates (in such denominations as such Purchaser shall
request) for the Preferred Shares and the Warrants being acquired by such
Purchaser at the Closing (in such denominations as such Purchaser shall
request).

      (j) Resolutions. The Board of Directors of the Company shall have adopted
resolutions consistent with Section 2.1(b) hereof in a form reasonably
acceptable to such Purchaser (the "Resolutions").

      (k) Reservation of Shares. As of the Closing Date, the Company shall have
reserved out of its authorized and unissued Common Stock, solely for the purpose
of effecting the conversion of the Preferred Shares and the exercise of the
Warrants, a number of shares of Common Stock equal to one hundred fifty percent
(150%) of the aggregate number of Conversion Shares issuable upon conversion of
the Preferred Shares issued or to be issued pursuant to this Agreement and the
number of Warrant Shares issuable upon exercise of the number of Warrants issued
or to be issued pursuant to this Agreement.

      (l) Transfer Agent Instructions. As of the Closing Date, the Irrevocable
Transfer Agent Instructions, in the form of Exhibit G attached hereto, shall
have been delivered to and acknowledged in writing by the Company's transfer
agent.

      (m) Lock-Up Agreement. As of the Closing Date, the persons listed on
Schedule 3.20 hereto shall have delivered to the Purchasers a fully executed
Lock-Up Agreement in the form of Exhibit E attached hereto.

      (n) Secretary's Certificate. The Company shall have delivered to such
Purchaser a secretary's certificate, dated as of the Closing Date, as to (i) the
Resolutions, (ii) the Articles, (iii) the Bylaws, (iv) the Certificate of
Designation, each as in effect at the Closing, and (iv) the authority and
incumbency of the officers of the Company executing the Transaction Documents
and any other documents required to be executed or delivered in connection
therewith.

                                       25
<PAGE>

      (o) Officer's Certificate. The Company shall have delivered to the
Purchasers a certificate of an executive officer of the Company, dated as of the
Closing Date, confirming the accuracy of the Company's representations,
warranties and covenants as of the Closing Date and confirming the compliance by
the Company with the conditions precedent set forth in this Section 4.2 as of
the Closing Date.

      (p) Convertible Securities. On or prior to the Closing Date, (i) Martin
Euler shall have exchanged his promissory note issued by the Company in the
principal amount of $250,000 for Preferred Shares pursuant to the terms of this
Agreement, (ii) Pointe Capital Ltd. shall have exchanged its promissory notes
issued by the Company in the aggregate principal amount of $500,000 for
Preferred Shares pursuant to the terms of this Agreement, (iii) Infomax Company
Ltd. shall have exchanged its promissory notes issued by the Company in the
aggregate principal amount of $300,000 for Preferred Shares pursuant to the
terms of this Agreement, (iv) Wick Trust Ltd. shall have exchanged its
promissory notes issued by the Company in the principal amount of $450,000 for
Preferred Shares pursuant to the terms of this Agreement, and (v) any
outstanding securities of the Company that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common
Stock, at a conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for the shares of
Common Stock at any time after the initial issuance of such debt or equity
securities, shall have been converted, exchanged, exercised, redeemed or
otherwise cancelled.

      (q) Voting Agreements. The Purchasers shall have received copies of
executed voting agreements of the Company's stockholders, in substantially the
form of Exhibit I hereto, evidencing such stockholder's agreement to vote in
favor of the Share Increase so that the number of shares of Common Stock held by
such stockholders (plus the number of shares of Common Stock held by Vision
Opportunity Master Fund, Ltd. following the conversion of 9.9% of its Preferred
Shares) is greater than fifty percent (50%) of the issued and outstanding shares
of Common Stock at such time.

      (r) NIR Group. At or prior to the Closing Date, $1,600,000 of indebtedness
held by NIR Group shall have been converted into Common Stock or repaid.

      (s) Escrow Agreement. At the Closing, the Company and the escrow agent
shall have executed and delivered the Escrow Agreement in the form of Exhibit F
attached hereto to each Purchaser.

      (t) Pending Registration Statement. The registration statement filed by
the Company currently pending before the Commission shall have been withdrawn.

      (u) Material Adverse Effect. No Material Adverse Effect shall have
occurred at or before the Closing Date.

                                    ARTICLE V
                            Stock Certificate Legend

                                       26
<PAGE>

      Section 5.1 Legend. Each certificate representing the Preferred Shares and
the Warrants, and, if appropriate, securities issued upon conversion thereof,
shall be stamped or otherwise imprinted with a legend substantially in the
following form (in addition to any legend required by applicable state
securities or "blue sky" laws):

      THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE
      NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
      TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
      SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR ASTRATA GROUP
      INCORPORATED SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION
      OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF
      APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

      The Company agrees to reissue certificates representing any of the
Conversion Shares and the Warrant Shares, without the legend set forth above if
at such time, prior to making any transfer of any such securities, such holder
thereof shall give written notice to the Company describing the manner and terms
of such transfer and removal as the Company may reasonably request. Such
proposed transfer and removal will not be effected until: (a) either (i) the
Company has received an opinion of counsel reasonably satisfactory to the
Company, to the effect that the registration of the Conversion Shares or the
Warrant Shares under the Securities Act is not required in connection with such
proposed transfer, (ii) a registration statement under the Securities Act
covering such proposed disposition has been filed by the Company with the
Commission and has become effective under the Securities Act, (iii) the Company
has received other evidence reasonably satisfactory to the Company that such
registration and qualification under the Securities Act and state securities
laws are not required, or (iv) the holder provides the Company with reasonable
assurances that such security can be sold pursuant to Rule 144 under the
Securities Act; and (b) either (i) the Company has received an opinion of
counsel reasonably satisfactory to the Company, to the effect that registration
or qualification under the securities or "blue sky" laws of any state is not
required in connection with such proposed disposition, or (ii) compliance with
applicable state securities or "blue sky" laws has been effected or a valid
exemption exists with respect thereto. The Company will respond to any such
notice from a holder within five (5) business days. In the case of any proposed
transfer under this Section 5.1, the Company will use reasonable efforts to
comply with any such applicable state securities or "blue sky" laws, but shall
in no event be required, (x) to qualify to do business in any state where it is
not then qualified, (y) to take any action that would subject it to tax or to
the general service of process in any state where it is not then subject, or (z)
to comply with state securities or "blue sky" laws of any state for which
registration by coordination is unavailable to the Company. The restrictions on
transfer contained in this Section 5.1 shall be in addition to, and not by way
of limitation of, any other restrictions on transfer contained in any other
section of this Agreement. Whenever a certificate representing the Conversion
Shares or Warrant Shares is required to be issued to a Purchaser without a
legend, in lieu of delivering physical certificates representing the Conversion
Shares or Warrant Shares (provided that a registration statement under the
Securities Act providing for the resale of the Warrant Shares and Conversion
Shares is then in effect), the Company shall cause its transfer agent to
electronically transmit the Conversion Shares or Warrant Shares to a Purchaser
by crediting the account of such Purchaser or such Purchaser's Prime Broker with
the Depository Trust Company ("DTC") through its Deposit Withdrawal Agent
Commission ("DWAC") system (to the extent not inconsistent with any provisions
of this Agreement).

                                       27
<PAGE>

                                   ARTICLE VI
                                 Indemnification

      Section 6.1 General Indemnity. The Company agrees to indemnify and hold
harmless the Purchasers (and their respective directors, officers, managers,
partners, members, shareholders, affiliates, agents, successors and assigns)
from and against any and all losses, liabilities, deficiencies, costs, damages
and expenses (including, without limitation, reasonable attorneys' fees, charges
and disbursements) incurred by the Purchasers as a result of any inaccuracy in
or breach of the representations, warranties or covenants made by the Company
herein. Each Purchaser severally but not jointly agrees to indemnify and hold
harmless the Company and its directors, officers, affiliates, agents, successors
and assigns from and against any and all losses, liabilities, deficiencies,
costs, damages and expenses (including, without limitation, reasonable
attorneys' fees, charges and disbursements) incurred by the Company as result of
any inaccuracy in or breach of the representations, warranties or covenants made
by such Purchaser herein. The maximum aggregate liability of each Purchaser
pursuant to its indemnification obligations under this Article VI shall not
exceed the portion of the Purchase Price paid by such Purchaser hereunder.

      Section 6.2 Indemnification Procedure. Any party entitled to
indemnification under this Article VI (an "indemnified party") will give written
notice to the indemnifying party of any matters giving rise to a claim for
indemnification; provided, that the failure of any party entitled to
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Article VI except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
indemnified party in respect of which indemnification is sought hereunder, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the indemnified party a conflict of interest between it
and the indemnifying party may exist with respect of such action, proceeding or
claim, to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. In the event that the indemnifying party advises an
indemnified party that it will contest such a claim for indemnification
hereunder, or fails, within thirty (30) days of receipt of any indemnification
notice to notify, in writing, such person of its election to defend, settle or
compromise, at its sole cost and expense, any action, proceeding or claim (or
discontinues its defense at any time after it commences such defense), then the
indemnified party may, at its option, defend, settle or otherwise compromise or
pay such action or claim. In any event, unless and until the indemnifying party
elects in writing to assume and does so assume the defense of any such claim,
proceeding or action, the indemnified party's costs and expenses arising out of
the defense, settlement or compromise of any such action, claim or proceeding
shall be losses subject to indemnification hereunder. The indemnified party
shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the indemnified party which relates to such action or claim. The indemnifying
party shall keep the indemnified party fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. If
the indemnifying party elects to defend any such action or claim, then the
indemnified party shall be entitled to participate in such defense with counsel
of its choice at its sole cost and expense. The indemnifying party shall not be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent. Notwithstanding anything in this Article VI to the
contrary, the indemnifying party shall not, without the indemnified party's
prior written consent, settle or compromise any claim or consent to entry of any
judgment in respect thereof which imposes any future obligation on the
indemnified party or which does not include, as an unconditional term thereof,
the giving by the claimant or the plaintiff to the indemnified party of a
release from all liability in respect of such claim. The indemnification
required by this Article VI shall be made by periodic payments of the amount
thereof during the course of investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred, so long as the
indemnified party irrevocably agrees to refund such moneys if it is ultimately
determined by a court of competent jurisdiction that such party was not entitled
to indemnification. The indemnity agreements contained herein shall be in
addition to (a) any cause of action or similar rights of the indemnified party
against the indemnifying party or others, and (b) any liabilities the
indemnifying party may be subject to pursuant to the law.

                                       28
<PAGE>

                                   ARTICLE VII
                                  Miscellaneous

      Section 7.1 Fees and Expenses. Except as otherwise set forth in this
Agreement and the other Transaction Documents, each party shall pay the fees and
expenses of its advisors, counsel, accountants and other experts, if any, and
all other expenses, incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement, provided
that the Company shall pay all actual attorneys' fees and expenses (including
disbursements and out-of-pocket expenses) incurred by the Purchasers in
connection with (i) the preparation, negotiation, execution and delivery of this
Agreement and the other Transaction Documents and the transactions contemplated
thereunder, which payment shall be made at the Closing and shall not exceed
$30,000 (plus disbursements and out-of-pocket expenses), of which $7,500 has
been paid prior to the date hereof, (ii) the filing and declaration of
effectiveness by the Commission of the Registration Statement and (iii) any
amendments, modifications or waivers of this Agreement or any of the other
Transaction Documents. The Company shall also pay up to $15,000 to the
Purchasers at the Closing in connection with all due diligence expenses incurred
by the Purchasers and all reasonable fees and expenses incurred by the
Purchasers in connection with the enforcement of this Agreement or any of the
other Transaction Documents, including, without limitation, all reasonable
attorneys' fees and expenses.

      Section 7.2 Specific Enforcement, Consent to Jurisdiction.

      (a) The Company and the Purchasers acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement or
the other Transaction Documents were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement or the Registration Rights
Agreement and to enforce specifically the terms and provisions hereof or
thereof, this being in addition to any other remedy to which any of them may be
entitled by law or equity.

                                       29
<PAGE>

      (b) Each of the Company and the Purchasers (i) hereby irrevocably submits
to the jurisdiction of the United States District Court sitting in the Southern
District of New York and the courts of the State of New York located in New York
county for the purposes of any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Transaction Documents or the
transactions contemplated hereby or thereby and (ii) hereby waives, and agrees
not to assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. Each of the Company and the Purchasers
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing in this Section 7.2
shall affect or limit any right to serve process in any other manner permitted
by law.

      Section 7.3 Entire Agreement; Amendment. This Agreement and the
Transaction Documents contains the entire understanding and agreement of the
parties with respect to the matters covered hereby and, except as specifically
set forth herein or in the Transaction Documents, neither the Company nor any of
the Purchasers makes any representations, warranty, covenant or undertaking with
respect to such matters and they supersede all prior understandings and
agreements with respect to said subject matter, all of which are merged herein.
No provision of this Agreement may be waived or amended other than by a written
instrument signed by the Company and the holders of at least seventy-five
percent (75%) of the Preferred Shares then outstanding, and no provision hereof
may be waived other than by an a written instrument signed by the party against
whom enforcement of any such amendment or waiver is sought. No such amendment
shall be effective to the extent that it applies to less than all of the holders
of the Preferred Shares then outstanding. No consideration shall be offered or
paid to any person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents or holders of
Preferred Shares, as the case may be.

      Section 7.4 Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery by telex (with correct answer back
received), telecopy or facsimile at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

                                       30
<PAGE>

          If to the Company:            Astrata Group Incorporated
                                        1801 Century Park East, Suite 1830
                                        Los Angeles, California 90067-2320
                                        Attention: Chief Executive Officer
                                        Tel. No.: (310) 282-8646
                                        Fax No.:  (310) 226-8553

          with copies to:               Anslow & Jaclin, LLP
                                        195 Route 9 South, Suite 204
                                        Manalapan, New Jersey 07726
                                        Attention: Richard I. Anslow, Esq.
                                        Tel. No.: (732) 409-1212
                                        Fax No.: (732) 577-1188

          If to any Purchaser:          At the address of such Purchaser
                                        set forth on Exhibit A to this
                                        Agreement, with copies to
                                        Purchaser's counsel as set
                                        forth on Exhibit A or as
                                        specified in writing by such
                                        Purchaser with copies to:

                                        Kramer Levin Naftalis & Frankel LLP
                                        1177 Avenue of the Americas
                                        New York, New York 10036
                                        Attention: Christopher S. Auguste
                                        Tel No.: (212) 715-9100
                                        Fax No.: (212) 715-8000

      Any party hereto may from time to time change its address for notices by
giving at least ten (10) days written notice of such changed address to the
other party hereto.

      Section 7.5 Waivers. No waiver by either party of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any other provisions,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.

      Section 7.6 Headings. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.

      Section 7.7 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and assigns.

                                       31
<PAGE>

      Section 7.8 No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

      Section 7.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to any of the conflicts of law principles which would result in
the application of the substantive law of another jurisdiction. This Agreement
shall not be interpreted or construed with any presumption against the party
causing this Agreement to be drafted.

      Section 7.10 Survival. The representations and warranties of the Company
and the Purchasers shall survive the execution and delivery hereof and the
Closings hereunder.

      Section 7.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other parties hereto, it being understood that all parties need
not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or scanned electronic mail (e-mail) attachment, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile or scanned signature were the original thereof.

      Section 7.12 Publicity. The Company agrees that it will not disclose, and
will not include in any public announcement, the name of the Purchasers without
the consent of the Purchasers unless and until such disclosure is required by
law or applicable regulation, and then only to the extent of such requirement.

      Section 7.13 Severability. The provisions of this Agreement and the
Transaction Documents are severable and, in the event that any court of
competent jurisdiction shall determine that any one or more of the provisions or
part of the provisions contained in this Agreement or the Transaction Documents
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement or the Transaction
Documents and such provision shall be reformed and construed as if such invalid
or illegal or unenforceable provision, or part of such provision, had never been
contained herein, so that such provisions would be valid, legal and enforceable
to the maximum extent possible.

      Section 7.14 Further Assurances. From and after the date of this
Agreement, upon the request of any Purchaser or the Company, each of the Company
and the Purchasers shall execute and deliver such instrument, documents and
other writings as may be reasonably necessary or desirable to confirm and carry
out and to effectuate fully the intent and purposes of this Agreement, the
Preferred Shares, the Conversion Shares, the Warrants, the Warrant Shares, the
Certificate of Designation, and the Registration Rights Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       32
<PAGE>

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

                                            ASTRATA GROUP INCORPORATED

                                            By:
                                                -------------------------------
                                                Name:  Martin George Euler
                                                Title: Chief Executive Officer

                                            PURCHASER

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

<PAGE>

                                EXHIBIT A to the
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

<TABLE>
<CAPTION>
Names and Addresses                         Number of Preferred Shares          Dollar Amount of
of Purchasers                               & Warrants Purchased                Investment
-------------------                         --------------------------          ----------------
<S>                                         <C>                                 <C>
Vision Opportunity Master Fund, Ltd         Preferred Shares:                         $2,500,000
20 W 55th St., 5th floor                    Series A Warrants:
New York, NY 10019                          Series B Warrants:
                                            Series J Warrants:
                                            Series C Warrants:
                                            Series D Warrants:

Martin Euler                                Preferred Shares:                           $250,000
                                            Series A Warrants:
                                            Series B Warrants:
                                            Series J Warrants:
                                            Series C Warrants:
                                            Series D Warrants:

Pointe Capital Limited                      Preferred Shares:                           $500,000
P.O. Box 556, Main Street                   Series A Warrants:
Hunkins Waterfront Plaza                    Series B Warrants:
Charlestown, Nevis, West Indies             Series J Warrants:
                                            Series C Warrants:
                                            Series D Warrants:

Infomax Company Limited                     Preferred Shares:                           $300,000
Suites 2302-3, Great Eagle Centre           Series A Warrants:
Harbour Road                                Series B Warrants:
Wanchai, Hong Kong                          Series J Warrants:
                                            Series C Warrants:
                                            Series D Warrants:

Wick Trust Limited                          Preferred Shares:                           $450,000
P.O. Box 556, Main Street                   Series A Warrants:
Hunkins Waterfront Plaza                    Series B Warrants:
Charlestown, Nevis, West Indies             Series J Warrants:
Attn: Mayfair Trust Company, Trustee        Series C Warrants:
                                            Series D Warrants:
</TABLE>

<PAGE>

                                EXHIBIT B to the
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

                       FORM OF CERTIFICATE OF DESIGNATION

<PAGE>

                               EXHIBIT C-1 to the
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

                            FORM OF SERIES A WARRANT

<PAGE>

                               EXHIBIT C-2 to the
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

                            FORM OF SERIES B WARRANT

<PAGE>

                               EXHIBIT C-3 to the
          SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

                            FORM OF SERIES J WARRANT

<PAGE>

                               EXHIBIT C-4 to the
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

                            FORM OF SERIES C WARRANT

<PAGE>

                               EXHIBIT C-5 to the
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

                            FORM OF SERIES D WARRANT

<PAGE>

                                EXHIBIT D to the
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

                      FORM OF REGISTRATION RIGHTS AGREEMENT

<PAGE>

                                EXHIBIT E to the
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

                            FORM OF LOCK-UP AGREEMENT

<PAGE>

                                EXHIBIT F to the
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

                            FORM OF ESCROW AGREEMENT

<PAGE>

                                EXHIBIT G to the
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

                 FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

                           ASTRATA GROUP INCORPORATED

                                                          as of October 12, 2006

[Name and address of Transfer Agent]
Attn:  _____________

Ladies and Gentlemen:

      Reference is made to that certain Series A Convertible Preferred Stock
Purchase Agreement (the "Purchase Agreement"), dated as of October 12, 2006, by
and among Astrata Group Incorporated, a Nevada corporation (the "Company"), and
the purchasers named therein (collectively, the "Purchasers") pursuant to which
the Company is issuing to the Purchasers shares of its Series A Convertible
Preferred Stock, par value $0.0001 per share, (the "Preferred Shares") and
warrants (the "Warrants") to purchase shares of the Company's common stock, par
value $0.0001 per share (the "Common Stock"). This letter shall serve as our
irrevocable authorization and direction to you provided that you are the
transfer agent of the Company at such time) to issue shares of Common Stock upon
conversion of the Preferred Shares (the "Conversion Shares") and exercise of the
Warrants (the "Warrant Shares") to or upon the order of a Purchaser from time to
time upon (i) surrender to you of a properly completed and duly executed
Conversion Notice or Exercise Notice, as the case may be, in the form attached
hereto as Exhibit I and Exhibit II, respectively, (ii) in the case of the
conversion of Preferred Shares, a copy of the certificates (with the original
certificates delivered to the Company) representing Preferred Shares being
converted or, in the case of Warrants being exercised, a copy of the Warrants
(with the original Warrants delivered to the Company) being exercised (or, in
each case, an indemnification undertaking with respect to such share
certificates or the warrants in the case of their loss, theft or destruction),
and (iii) delivery of a treasury order or other appropriate order duly executed
by a duly authorized officer of the Company. So long as you have previously
received (x) written confirmation from counsel to the Company that a
registration statement covering resales of the Conversion Shares or Warrant
Shares, as applicable, has been declared effective by the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "1933 Act"), and no subsequent notice by the Company or its counsel of the
suspension or termination of its effectiveness and (y) a copy of such
registration statement, and if the Purchaser represents in writing that the
Conversion Shares or the Warrant Shares, as the case may be, were sold pursuant
to the Registration Statement, then certificates representing the Conversion
Shares and the Warrant Shares, as the case may be, shall not bear any legend
restricting transfer of the Conversion Shares and the Warrant Shares, as the
case may be, thereby and should not be subject to any stop-transfer restriction.
Provided, however, that if you have not previously received those items and
representations listed above, then the certificates for the Conversion Shares
and the Warrant Shares shall bear the following legend:

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES
         ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
         OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OR
         APPLICABLE STATE SECURITIES LAWS, OR ASTRATA GROUP INCORPORATED SHALL
         HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH
         SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF
         APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED."

and, provided further, that the Company may from time to time notify you to
place stop-transfer restrictions on the certificates for the Conversion Shares
and the Warrant Shares in the event a registration statement covering the
Conversion Shares and the Warrant Shares is subject to amendment for events then
current.

      A form of written confirmation from counsel to the Company that a
registration statement covering resales of the Conversion Shares and the Warrant
Shares has been declared effective by the SEC under the 1933 Act is attached
hereto as Exhibit III.

      Please be advised that the Purchasers are relying upon this letter as an
inducement to enter into the Purchase Agreement and, accordingly, each Purchaser
is a third party beneficiary to these instructions.

      Please execute this letter in the space indicated to acknowledge your
agreement to act in accordance with these instructions. Should you have any
questions concerning this matter, please contact me at ___________.

                                        Very truly yours,

                                        ASTRATA GROUP INCORPORATED

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

ACKNOWLEDGED AND AGREED:

[TRANSFER AGENT]

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

<PAGE>

                                    EXHIBIT I
                           ASTRATA GROUP INCORPORATED
                                CONVERSION NOTICE

Reference is made to the Certificate of Designation of the Relative Rights and
Preferences of the Series A Preferred Stock of Astrata Group Incorporated (the
"Certificate of Designation"). In accordance with and pursuant to the
Certificate of Designation, the undersigned hereby elects to convert the number
of shares of Series A Preferred Stock, par value $0.0001 per share (the
"Preferred Shares"), of Astrata Group Incorporated, a Nevada corporation (the
"Company"), indicated below into shares of Common Stock, par value $0.0001 per
share (the "Common Stock"), of the Company, by tendering the stock
certificate(s) representing the share(s) of Preferred Shares specified below as
of the date specified below.

         Date of Conversion:
                             ---------------------------------------------------

         Number of Preferred Shares to be converted:
                                                    --------
         Stock certificate no(s). of Preferred Shares to be converted:
                                                                       ---------

      The Common Stock have been sold pursuant to the Registration Statement (as
defined in the Registration Rights Agreement): YES ____ NO____

Please confirm the following information:

         Conversion Price:
                             ---------------------------------------------------

         Number of shares of Common Stock
         to be issued:
                             ---------------------------------------------------

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the Date of Conversion: _________________________

Please issue the Common Stock into which the Preferred Shares are being
converted and, if applicable, any check drawn on an account of the Company in
the following name and to the following address:

         Issue to:
                             ---------------------------------------------------
                             ---------------------------------------------------

         Facsimile Number:
                             ---------------------------------------------------

         Authorization:
                             ---------------------------------------------------

                             By:
                                    -------------------------------------------

                             Title:
                                    --------------------------------------------

         Dated:

<PAGE>

                                   EXHIBIT II

                             FORM OF EXERCISE NOTICE

                                  EXERCISE FORM

                           ASTRATA GROUP INCORPORATED

The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Common Stock of Astrata Group
Incorporated covered by the within Warrant.

Dated: _________________             Signature __________________________

                                     Address   __________________________
                                               __________________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of Exercise: _________________________

                                   ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

Dated: _________________             Signature __________________________

                                     Address   __________________________
                                               __________________________

                               PARTIAL ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

Dated: _________________             Signature __________________________

                                     Address   __________________________
                                               __________________________

                           FOR USE BY THE ISSUER ONLY:

This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of ___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. W-_____ issued for ____ shares of Common Stock in
the name of _______________.

<PAGE>

                                   EXHIBIT III

                         FORM OF NOTICE OF EFFECTIVENESS

                            OF REGISTRATION STATEMENT

[Name and address of Transfer Agent]
Attn:  _____________

                  Re:      Astrata Group Incorporated

Ladies and Gentlemen:

      We are counsel to Astrata Group Incorporated, a Nevada corporation (the
"Company"), and have represented the Company in connection with that certain
Series A Convertible Preferred Stock Purchase Agreement (the "Purchase
Agreement"), dated as of October 12, 2006, by and among the Company and the
purchasers named therein (collectively, the "Purchasers") pursuant to which the
Company issued to the Purchasers shares of its Series A Convertible Preferred
Stock, par value $0.0001 per share, (the "Preferred Shares") and warrants (the
"Warrants") to purchase shares of the Company's common stock, par value $0.0001
per share (the "Common Stock"). Pursuant to the Purchase Agreement, the Company
has also entered into a Registration Rights Agreement with the Purchasers (the
"Registration Rights Agreement"), dated as of October 12, 2006, pursuant to
which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement), including the
shares of Common Stock issuable upon conversion of the Preferred Shares and
exercise of the Warrants, under the Securities Act of 1933, as amended (the
"1933 Act"). In connection with the Company's obligations under the Registration
Rights Agreement, on ________________, 2006, the Company filed a Registration
Statement on Form SB-2 (File No. 333-________) (the "Registration Statement")
with the Securities and Exchange Commission (the "SEC") relating to the resale
of the Registrable Securities which names each of the present Purchasers as a
selling stockholder thereunder.

      In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and accordingly, the
Registrable Securities are available for resale under the 1933 Act pursuant to
the Registration Statement.

                                         Very truly yours,

                                         [COMPANY COUNSEL]

                                         By:
                                             -----------------------------------

cc: [LIST NAMES OF PURCHASERS]

<PAGE>

                                EXHIBIT H to the
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

                           FORM OF OPINION OF COUNSEL

      1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Nevada and has the requisite
corporate power to own, lease and operate its properties and assets, and to
carry on its business as presently conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary.

      2. The Company has the requisite corporate power and authority to enter
into and perform its obligations under the Transaction Documents and to issue
the Preferred Stock, the Warrants and the Common Stock issuable upon conversion
of the Preferred Stock and exercise of the Warrants. The execution, delivery and
performance of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been duly and
validly authorized by all necessary corporate action and no further consent or
authorization of the Company or its Board of Directors or stockholders is
required. Each of the Transaction Documents have been duly executed and
delivered, and the Preferred Stock and the Warrants have been duly executed,
issued and delivered by the Company and each of the Transaction Documents
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its respective terms. The Common Stock
issuable upon conversion of the Preferred Stock and exercise of the Warrants are
not subject to any preemptive rights under the Articles of Incorporation or the
Bylaws.

      3. The Preferred Stock and the Warrants have been duly authorized and,
when delivered against payment in full as provided in the Purchase Agreement,
will be validly issued, fully paid and nonassessable. The shares of Common Stock
issuable upon conversion of the Preferred Stock and exercise of the Warrants,
have been duly authorized and reserved for issuance, and, when delivered upon
conversion or against payment in full as provided in the Certificate of
Designation and the Warrants, as applicable, will be validly issued, fully paid
and nonassessable.

      4. The execution, delivery and performance of and compliance with the
terms of the Transaction Documents and the issuance of the Preferred Stock, the
Warrants and the Common Stock issuable upon conversion of the Preferred Stock
and exercise of the Warrants do not (i) violate any provision of the Articles of
Incorporation or Bylaws, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, mortgage, deed of trust, indenture,
note, bond, license, lease agreement, instrument or obligation to which the
Company is a party, (iii) create or impose a lien, charge or encumbrance on any
property of the Company under any agreement or any commitment to which the
Company is a party or by which the Company is bound or by which any of its
respective properties or assets are bound, or (iv) result in a violation of any
federal, state, local or foreign statute, rule, regulation, order, judgment,
injunction or decree (including Federal and state securities laws and
regulations) applicable to the Company or by which any property or asset of the
Company is bound or affected, except, in all cases other than violations
pursuant to clauses (i) and (iv) above, for such conflicts, default,
terminations, amendments, acceleration, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect.

<PAGE>

      5. No consent, approval or authorization of or designation, declaration or
filing with any governmental authority on the part of the Company is required
under Federal, state or local law, rule or regulation in connection with the
valid execution and delivery of the Transaction Documents, or the offer, sale or
issuance of the Preferred Stock, the Warrants or the Common Stock issuable upon
conversion of the Preferred Stock and exercise of the Warrants other than the
Certificate of Designation and the Registration Statement.

      6. There is no action, suit, claim, investigation or proceeding pending or
threatened against the Company which questions the validity of this Agreement or
the transactions contemplated hereby or any action taken or to be taken pursuant
hereto or thereto. There is no action, suit, claim, investigation or proceeding
pending, or to our knowledge, threatened, against or involving the Company or
any of its properties or assets and which, if adversely determined, is
reasonably likely to result in a Material Adverse Effect. There are no
outstanding orders, judgments, injunctions, awards or decrees of any court,
arbitrator or governmental or regulatory body against the Company or any
officers or directors of the Company in their capacities as such.

      7. The offer, issuance and sale of the Preferred Stock and the Warrants
and the offer, issuance and sale of the shares of Common Stock issuable upon
conversion of the Preferred Stock and exercise of the Warrants pursuant to the
Purchase Agreement, the Certificate of Designation and the Warrants, as
applicable, are exempt from the registration requirements of the Securities Act.

      8. The Company is not, and as a result of and immediately upon Closing
will not be, an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.

                                 Very truly yours,

<PAGE>

                                EXHIBIT I to the
           SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                           ASTRATA GROUP INCORPORATED

                            FORM OF VOTING AGREEMENTTHIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.

                          SERIES A WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                           ASTRATA GROUP INCORPORATED

                            Expires October 13, 2011

No.: W-A-06- __                                    Number of Shares: ___________
Date of Issuance: October 13, 2006

         FOR VALUE RECEIVED, the undersigned, Astrata Group Incorporated, a
Nevada corporation (together with its successors and assigns, the "Issuer"),
hereby certifies that _______________________________ or its registered assigns
is entitled to subscribe for and purchase, during the Term (as hereinafter
defined), up to ____________________________________ (_____________) shares
(subject to adjustment as hereinafter provided) of the duly authorized, validly
issued, fully paid and non-assessable Common Stock of the Issuer, at an exercise
price per share equal to the Warrant Price then in effect, subject, however, to
the provisions and upon the terms and conditions hereinafter set forth.
Capitalized terms used in this Warrant and not otherwise defined herein shall
have the respective meanings specified in Section 9 hereof.

         1. Term. The term of this Warrant shall commence on October 13, 2006
and shall expire at 6:00 p.m., eastern time, on October 13, 2011; provided,
however, in the event that the Share Increase (as defined in the Purchase
Agreement) has not been effected within ninety (90) days following the Original
Issue Date, the term of this Warrant shall be automatically extended for a
period of one (1) year and the Issuer shall promptly issue to the Holder a new
Warrant evidencing the extension of such term (such period being the "Term").

         2. Method of Exercise; Payment; Issuance of New Warrant; Transfer and
Exchange.

         (a) Time of Exercise. The purchase rights represented by this Warrant
may be exercised in whole or in part during the Term.

                                     - 1 -
<PAGE>

         (b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such Holder's election (i) by certified or official bank
check or by wire transfer to an account designated by the Issuer, (ii) by
"cashless exercise" in accordance with the provisions of subsection (c) of this
Section 2, but only when a registration statement under the Securities Act
providing for the resale of the Warrant Stock is not then in effect, or (iii) by
a combination of the foregoing methods of payment selected by the Holder of this
Warrant.

         (c) Cashless Exercise. Notwithstanding any provisions herein to the
contrary and commencing one (1) year following the Original Issue Date if (i)
the Per Share Market Value of one share of Common Stock is greater than the
Warrant Price (at the date of calculation as set forth below) and (ii) a
registration statement under the Securities Act providing for the resale of the
Warrant Stock is not then in effect by the date such registration statement is
required to be effective pursuant to the Registration Rights Agreement (as
defined in the Purchase Agreement) or not effective at any time during the
Effectiveness Period (as defined in the Registration Rights Agreement) in
accordance with the terms of the Registration Rights Agreement, unless the
registration statement is not effective as a result of the Issuer exercising its
rights under Section 3(n) of the Registration Rights Agreement, in lieu of
exercising this Warrant by payment of cash, the Holder may exercise this Warrant
by a cashless exercise and shall receive the number of shares of Common Stock
equal to an amount (as determined below) by surrender of this Warrant at the
principal office of the Issuer together with the properly endorsed Notice of
Exercise in which event the Issuer shall issue to the Holder a number of shares
of Common Stock computed using the following formula:

                  X = Y - (A)(Y)
                          ------
                            B

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

                  Y = the number of shares of Common Stock purchasable upon
                      exercise of all of the Warrant or, if only a portion of
                      the Warrant is being exercised, the portion of the
                      Warrant being exercised.

                  A = the Warrant Price.

                  B = the Per Share Market Value of one share of Common Stock.

                                     - 2 -
<PAGE>

         (d) Issuance of Stock Certificates. In the event of any exercise of
this Warrant in accordance with and subject to the terms and conditions hereof,
certificates for the shares of Warrant Stock so purchased shall be dated the
date of such exercise and delivered to the Holder hereof within a reasonable
time, not exceeding three (3) Trading Days after such exercise (the "Delivery
Date") or, at the request of the Holder (provided that a registration statement
under the Securities Act providing for the resale of the Warrant Stock is then
in effect or that the shares of Warrant Stock are otherwise exempt from
registration), issued and delivered to the Depository Trust Company ("DTC")
account on the Holder's behalf via the Deposit Withdrawal Agent Commission
System ("DWAC") within a reasonable time, not exceeding three (3) Trading Days
after such exercise, and the Holder hereof shall be deemed for all purposes to
be the holder of the shares of Warrant Stock so purchased as of the date of such
exercise. Notwithstanding the foregoing to the contrary, the Issuer or its
transfer agent shall only be obligated to issue and deliver the shares to the
DTC on a holder's behalf via DWAC if such exercise is in connection with a sale
or other exemption from registration by which the shares may be issued without a
restrictive legend and the Issuer and its transfer agent are participating in
DTC through the DWAC system. The Holder shall deliver this original Warrant, or
an indemnification reasonably acceptable to the Issuer undertaking with respect
to such Warrant in the case of its loss, theft or destruction, at such time that
this Warrant is fully exercised. With respect to partial exercises of this
Warrant, the Issuer shall keep written records for the Holder of the number of
shares of Warrant Stock exercised as of each date of exercise.

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

                                     - 3 -
<PAGE>

         (f) Transferability of Warrant. Subject to Section 2(h) hereof, this
Warrant may be transferred by a Holder, in whole or in part, without the consent
of the Issuer. If transferred pursuant to this paragraph, this Warrant may be
transferred on the books of the Issuer by the Holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant at the principal office of
the Issuer, properly endorsed (by the Holder executing an assignment in the form
attached hereto) and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. This Warrant is exchangeable at
the principal office of the Issuer for Warrants to purchase the same aggregate
number of shares of Warrant Stock, each new Warrant to represent the right to
purchase such number of shares of Warrant Stock as the Holder hereof shall
designate at the time of such exchange. All Warrants issued on transfers or
exchanges shall be dated the Original Issue Date and shall be identical with
this Warrant except as to the number of shares of Warrant Stock issuable
pursuant thereto.

         (g) Continuing Rights of Holder. The Issuer will, at the time of or at
any time after each exercise of this Warrant, upon the request of the Holder
hereof, acknowledge in writing the extent, if any, of its continuing obligation
to afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such Holder shall fail to make any such request, the
failure shall not affect the continuing obligation of the Issuer to afford such
rights to such Holder.

         (h) Compliance with Securities Laws.

                  (i) The Holder of this Warrant, by acceptance hereof,
         acknowledges that this Warrant and the shares of Warrant Stock to be
         issued upon exercise hereof are being acquired solely for the Holder's
         own account and not as a nominee for any other party, and for
         investment, and that the Holder will not offer, sell or otherwise
         dispose of this Warrant or any shares of Warrant Stock to be issued
         upon exercise hereof except pursuant to an effective registration
         statement, or an exemption from registration, under the Securities Act
         and any applicable state securities laws.

                  (ii) Except as provided in paragraph (iii) below, this Warrant
         and all certificates representing shares of Warrant Stock issued upon
         exercise hereof shall be stamped or imprinted with a legend in
         substantially the following form:

                  THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON
                  EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
                  ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
                  SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
                  DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND
                  UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL
                  HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
                  THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER THE
                  SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
                  SECURITIES LAWS IS NOT REQUIRED.

                                     - 4 -
<PAGE>

                  (iii) The Issuer agrees to reissue this Warrant or
         certificates representing any of the Warrant Stock, without the legend
         set forth above if at such time, prior to making any transfer of any
         such securities, the Holder shall give written notice to the Issuer
         describing the manner and terms of such transfer. Such proposed
         transfer will not be effected until: (a) either (i) the Issuer has
         received an opinion of counsel reasonably satisfactory to the Issuer,
         to the effect that the registration of such securities under the
         Securities Act is not required in connection with such proposed
         transfer, (ii) a registration statement under the Securities Act
         covering such proposed disposition has been filed by the Issuer with
         the Securities and Exchange Commission and has become effective under
         the Securities Act, (iii) the Issuer has received other evidence
         reasonably satisfactory to the Issuer that such registration and
         qualification under the Securities Act and state securities laws are
         not required, or (iv) the Holder provides the Issuer with reasonable
         assurances that such security can be sold pursuant to Rule 144 under
         the Securities Act; and (b) either (i) the Issuer has received an
         opinion of counsel reasonably satisfactory to the Issuer, to the effect
         that registration or qualification under the securities or "blue sky"
         laws of any state is not required in connection with such proposed
         disposition, or (ii) compliance with applicable state securities or
         "blue sky" laws has been effected or a valid exemption exists with
         respect thereto. The Issuer will respond to any such notice from a
         holder within three (3) Trading Days. In the case of any proposed
         transfer under this Section 2(h), the Issuer will use reasonable
         efforts to comply with any such applicable state securities or "blue
         sky" laws, but shall in no event be required, (x) to qualify to do
         business in any state where it is not then qualified, (y) to take any
         action that would subject it to tax or to the general service of
         process in any state where it is not then subject, or (z) to comply
         with state securities or "blue sky" laws of any state for which
         registration by coordination is unavailable to the Issuer. The
         restrictions on transfer contained in this Section 2(h) shall be in
         addition to, and not by way of limitation of, any other restrictions on
         transfer contained in any other section of this Warrant. Whenever a
         certificate representing the Warrant Stock is required to be issued to
         a the Holder without a legend, in lieu of delivering physical
         certificates representing the Warrant Stock, the Issuer shall cause its
         transfer agent to electronically transmit the Warrant Stock to the
         Holder by crediting the account of the Holder or Holder's Prime Broker
         with DTC through its DWAC system (to the extent not inconsistent with
         any provisions of this Warrant or the Purchase Agreement).

         (i) Accredited Investor Status. In no event may the Holder exercise
this Warrant in whole or in part unless the Holder is an "accredited investor"
as defined in Regulation D under the Securities Act.

                                     - 5 -
<PAGE>

         3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.

         (a) Stock Fully Paid. The Issuer represents, warrants, covenants and
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this Warrant or otherwise hereunder will, when issued in accordance with the
terms of this Warrant, be duly authorized, validly issued, fully paid and
non-assessable and free from all taxes, liens and charges created by or through
the Issuer. The Issuer further covenants and agrees that during the period
within which this Warrant may be exercised, the Issuer will at all times have
authorized and reserved for the purpose of the issuance upon exercise of this
Warrant a number of authorized but unissued shares of Common Stock equal to at
least one hundred fifty (150%) of the number of shares of Common Stock issuable
upon exercise of this Warrant without regard to any limitations on exercise.

         (b) Reservation. If any shares of Common Stock required to be reserved
for issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any Governmental Authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, and maintain and increase when necessary such listing,
of, all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder (provided that such Warrant Stock has
been registered pursuant to a registration statement under the Securities Act
then in effect), and, to the extent permissible under the applicable securities
exchange rules, all unissued shares of Warrant Stock which are at any time
issuable hereunder, so long as any shares of Common Stock shall be so listed.
The Issuer will also so list on each securities exchange or market, and will
maintain such listing of, any other securities which the Holder of this Warrant
shall be entitled to receive upon the exercise of this Warrant if at the time
any securities of the same class shall be listed on such securities exchange or
market by the Issuer.

         (c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Articles of Incorporation or the by-laws of the Issuer,
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such actions as may be necessary or appropriate to protect
the rights of the Holder hereof against dilution (to the extent specifically
provided herein) or impairment. Without limiting the generality of the
foregoing, the Issuer will (i) not permit the par value, if any, of its Common
Stock to exceed the then effective Warrant Price, (ii) not amend or modify any
provision of the Articles of Incorporation or by-laws of the Issuer in any
manner that would adversely affect the rights of the Holders of the Warrants,
(iii) take all such action as may be reasonably necessary in order that the
Issuer may validly and legally issue fully paid and nonassessable shares of
Common Stock, free and clear of any liens, claims, encumbrances and restrictions
(other than as provided herein) upon the exercise of this Warrant, and (iv) use
its best efforts to obtain all such authorizations, exemptions or consents from
any public regulatory body having jurisdiction thereof as may be reasonably
necessary to enable the Issuer to perform its obligations under this Warrant.

                                     - 6 -
<PAGE>

         (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.

         (e) Payment of Taxes. The Issuer will pay any documentary stamp taxes
attributable to the initial issuance of the Warrant Stock issuable upon exercise
of this Warrant; provided, however, that the Issuer shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issuance or delivery of any certificates representing Warrant Stock in a name
other than that of the Holder in respect to which such shares are issued.

         4. Adjustment of Warrant Price. The price at which such shares of
Warrant Stock may be purchased upon exercise of this Warrant shall be subject to
adjustment from time to time as set forth in this Section 4. The Issuer shall
give the Holder notice of any event described below which requires an adjustment
pursuant to this Section 4 in accordance with the notice provisions set forth in
Section 5.

         (a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.

                  (i) In case the Issuer after the Original Issue Date shall do
         any of the following (each, a "Triggering Event"): (a) consolidate or
         merge with or into any other Person and the Issuer shall not be the
         continuing or surviving corporation of such consolidation or merger, or
         (b) permit any other Person to consolidate with or merge into the
         Issuer and the Issuer shall be the continuing or surviving Person but,
         in connection with such consolidation or merger, any Capital Stock of
         the Issuer shall be changed into or exchanged for Securities of any
         other Person or cash or any other property, or (c) transfer all or
         substantially all of its properties or assets to any other Person, or
         (d) effect a capital reorganization or reclassification of its Capital
         Stock, then, and in the case of each such Triggering Event, proper
         provision shall be made to the Warrant Price and the number of shares
         of Warrant Stock that may be purchased upon exercise of this Warrant so
         that, upon the basis and the terms and in the manner provided in this
         Warrant, the Holder of this Warrant shall be entitled upon the exercise
         hereof at any time after the consummation of such Triggering Event, to
         the extent this Warrant is not exercised prior to such Triggering
         Event, to receive at the Warrant Price as adjusted to take into account
         the consummation of such Triggering Event, in lieu of the Common Stock
         issuable upon such exercise of this Warrant prior to such Triggering
         Event, the Securities, cash and property to which such Holder would
         have been entitled upon the consummation of such Triggering Event if
         such Holder had exercised the rights represented by this Warrant
         immediately prior thereto (including the right of a shareholder to
         elect the type of consideration it will receive upon a Triggering
         Event), subject to adjustments (subsequent to such corporate action) as
         nearly equivalent as possible to the adjustments provided for elsewhere
         in this Section 4, and the Warrant Price shall be adjusted to equal the
         product of (A) the closing price of the common stock of the continuing
         or surviving corporation as a result of such Triggering Event as of the
         date immediately preceding the date of the consummation of such
         Triggering Event multiplied by (B) the quotient of (i) the Warrant
         Price divided by (ii) the Per Share Market Value of the Common Stock as
         of the date immediately preceding the Original Issue Date; provided,
         however, the Holder at its option may elect to receive an amount in
         cash equal to the value of this Warrant calculated in accordance with
         the Black-Scholes formula. Immediately upon the occurrence of a
         Triggering Event, the Issuer shall notify the Holder in writing of such
         Triggering Event and provide the calculations in determining the number
         of shares of Warrant Stock issuable upon exercise of the new warrant
         and the adjusted Warrant Price. Upon the Holder's request, the
         continuing or surviving corporation as a result of such Triggering
         Event shall issue to the Holder a new warrant of like tenor evidencing
         the right to purchase the adjusted number of shares of Warrant Stock
         and the adjusted Warrant Price pursuant to the terms and provisions of
         this Section 4(a)(i). Notwithstanding the foregoing to the contrary,
         this Section 4(a)(i) shall only apply if the surviving entity pursuant
         to any such Triggering Event is a company that has a class of equity
         securities registered pursuant to the Securities Exchange Act of 1934,
         as amended, and its common stock is listed or quoted on a national
         securities exchange, national automated quotation system or the OTC
         Bulletin Board. In the event that the surviving entity pursuant to any
         such Triggering Event is not a public company that is registered
         pursuant to the Securities Exchange Act of 1934, as amended, or its
         common stock is not listed or quoted on a national securities exchange,
         national automated quotation system or the OTC Bulletin Board, then the
         Holder shall have the right to demand that the Issuer pay to the Holder
         an amount in cash equal to the value of this Warrant calculated in
         accordance with the Black-Scholes formula.

                                     - 7 -
<PAGE>

                  (ii) In the event that the Holder has elected not to exercise
         this Warrant prior to the consummation of a Triggering Event and has
         also elected not to receive an amount in cash equal to the value of
         this Warrant calculated in accordance with the Black-Scholes formula
         pursuant to the provisions of Section 4(a)(i) above, so long as the
         surviving entity pursuant to any Triggering Event is a company that has
         a class of equity securities registered pursuant to the Securities
         Exchange Act of 1934, as amended, and its common stock is listed or
         quoted on a national securities exchange, national automated quotation
         system or the OTC Bulletin Board, the surviving entity and/or each
         Person (other than the Issuer) which may be required to deliver any
         Securities, cash or property upon the exercise of this Warrant as
         provided herein shall assume, by written instrument delivered to, and
         reasonably satisfactory to, the Holder of this Warrant, (A) the
         obligations of the Issuer under this Warrant (and if the Issuer shall
         survive the consummation of such Triggering Event, such assumption
         shall be in addition to, and shall not release the Issuer from, any
         continuing obligations of the Issuer under this Warrant) and (B) the
         obligation to deliver to such Holder such Securities, cash or property
         as, in accordance with the foregoing provisions of this subsection (a),
         such Holder shall be entitled to receive, and the surviving entity
         and/or each such Person shall have similarly delivered to such Holder
         an opinion of counsel for the surviving entity and/or each such Person,
         which counsel shall be reasonably satisfactory to such Holder, or in
         the alternative, a written acknowledgement executed by the President or
         Chief Financial Officer of the Issuer, stating that this Warrant shall
         thereafter continue in full force and effect and the terms hereof
         (including, without limitation, all of the provisions of this
         subsection (a)) shall be applicable to the Securities, cash or property
         which the surviving entity and/or each such Person may be required to
         deliver upon any exercise of this Warrant or the exercise of any rights
         pursuant hereto.

                                     - 8 -
<PAGE>

                  (b) Stock Dividends, Subdivisions and Combinations. If at any
         time the Issuer shall:

                           (i) make or issue or set a record date for the
         holders of the Common Stock for the purpose of entitling them to
         receive a dividend payable in, or other distribution of, shares of
         Common Stock,

                           (ii) subdivide its outstanding shares of Common Stock
         into a larger number of shares of Common Stock, or

                           (iii) combine its outstanding shares of Common Stock
         into a smaller number of shares of Common Stock,

then (1) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (2) the Warrant Price then in
effect shall be adjusted to equal (A) the Warrant Price then in effect
multiplied by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable immediately after
such adjustment.

         (c) Certain Other Distributions. If at any time the Issuer shall make
or issue or set a record date for the holders of the Common Stock for the
purpose of entitling them to receive any dividend or other distribution of:

                           (i) cash (other than a cash dividend payable out of
         earnings or earned surplus legally available for the payment of
         dividends under the laws of the jurisdiction of incorporation of the
         Issuer),

                           (ii) any evidences of its indebtedness, any shares of
         stock of any class or any other securities or property of any nature
         whatsoever (other than cash, Common Stock Equivalents or Additional
         Shares of Common Stock), or

                           (iii) any warrants or other rights to subscribe for
         or purchase any evidences of its indebtedness, any shares of stock of
         any class or any other securities or property of any nature whatsoever
         (other than cash, Common Stock Equivalents or Additional Shares of
         Common Stock),

                                     - 9 -
<PAGE>

then (1) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
adjustment multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Per Share Market Value minus the amount
allocable to one share of Common Stock of any such cash so distributable and of
the fair value (as determined in good faith by the Board of Directors of the
Issuer and supported by an opinion from an investment banking firm mutually
agreed upon by the Issuer and the Holder) of any and all such evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights so distributable, and (2) the Warrant Price then
in effect shall be adjusted to equal (A) the Warrant Price then in effect
multiplied by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable immediately after
such adjustment. A reclassification of the Common Stock (other than a change in
par value, or from par value to no par value or from no par value to par value)
into shares of Common Stock and shares of any other class of stock shall be
deemed a distribution by the Issuer to the holders of its Common Stock of such
shares of such other class of stock within the meaning of this Section 4(c) and,
if the outstanding shares of Common Stock shall be changed into a larger or
smaller number of shares of Common Stock as a part of such reclassification,
such change shall be deemed a subdivision or combination, as the case may be, of
the outstanding shares of Common Stock within the meaning of Section 4(b).

      (d) Issuance of Additional Shares of Common Stock. In the event the Issuer
shall at any time  following  the Original  Issuance  Date issue any  Additional
Shares of Common Stock (otherwise than as provided in the foregoing  subsections
(b) through  (c) of this  Section 4), at a price per share less than the Warrant
Price then in effect or without consideration,  then the Warrant Price upon each
such  issuance  shall be adjusted to the price  equal to the  consideration  per
share paid for such Additional Shares of Common Stock.

      (e) Issuance of Common Stock Equivalents. In the event the Issuer shall at
any time  following  the Original  Issuance Date take a record of the holders of
its Common Stock for the purpose of entitling them to receive a distribution of,
or shall in any manner  (whether  directly or by assumption in a merger in which
the  Issuer  is the  surviving  corporation)  issue or sell,  any  Common  Stock
Equivalents,  whether or not the rights to  exchange or convert  thereunder  are
immediately  exercisable,  and the price per  share  for which  Common  Stock is
issuable upon such  conversion or exchange  shall be less than the Warrant Price
in effect  immediately prior to the time of such issue or sale, or if, after any
such  issuance  of  Common  Stock  Equivalents,  the  price  per share for which
Additional  Shares of Common  Stock may be  issuable  thereafter  is  amended or
adjusted,  and such price as so amended  shall be less than the Warrant Price in
effect at the time of such amendment or adjustment,  then the Warrant Price then
in effect shall be adjusted as provided in Section 4(d). No further  adjustments
of the number of shares of Common  Stock for which this  Warrant is  exercisable
and the Warrant Price then in effect shall be made upon the actual issue of such
Common Stock upon conversion or exchange of such Common Stock Equivalents.

      (f) Other  Provisions  applicable to Adjustments  under this Section.  The
following  provisions  shall be applicable to the making of  adjustments  of the
number of shares of Common Stock for which this Warrant is  exercisable  and the
Warrant Price then in effect provided for in this Section 4:

                                     - 10 -
<PAGE>

                  (i) Computation of Consideration. To the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents (or any
warrants or other rights therefor) shall be issued for cash consideration, the
consideration received by the Issuer therefor shall be the amount of the cash
received by the Issuer therefor, or, if such Additional Shares of Common Stock
or Common Stock Equivalents are offered by the Issuer for subscription, the
subscription price, or, if such Additional Shares of Common Stock or Common
Stock Equivalents are sold to underwriters or dealers for public offering
without a subscription offering, the initial public offering price (in any such
case subtracting any amounts paid or receivable for accrued interest or accrued
dividends and without taking into account any compensation, discounts or
expenses paid or incurred by the Issuer for and in the underwriting of, or
otherwise in connection with, the issuance thereof). In connection with any
merger or consolidation in which the Issuer is the surviving corporation (other
than any consolidation or merger in which the previously outstanding shares of
Common Stock of the Issuer shall be changed to or exchanged for the stock or
other securities of another corporation), the amount of consideration therefore
shall be, deemed to be the fair value, as determined reasonably and in good
faith by the Board, of such portion of the assets and business of the
nonsurviving corporation as the Board may determine to be attributable to such
shares of Common Stock or Common Stock Equivalents, as the case may be. The
consideration for any Additional Shares of Common Stock issuable pursuant to any
warrants or other rights to subscribe for or purchase the same shall be the
consideration received by the Issuer for issuing such warrants or other rights
plus the additional consideration payable to the Issuer upon exercise of such
warrants or other rights. The consideration for any Additional Shares of Common
Stock issuable pursuant to the terms of any Common Stock Equivalents shall be
the consideration received by the Issuer for issuing warrants or other rights to
subscribe for or purchase such Common Stock Equivalents, plus the consideration
paid or payable to the Issuer in respect of the subscription for or purchase of
such Common Stock Equivalents, plus the additional consideration, if any,
payable to the Issuer upon the exercise of the right of conversion or exchange
in such Common Stock Equivalents. In the event of any consolidation or merger of
the Issuer in which the Issuer is not the surviving corporation or in which the
previously outstanding shares of Common Stock of the Issuer shall be changed
into or exchanged for the stock or other securities of another corporation, or
in the event of any sale of all or substantially all of the assets of the Issuer
for stock or other securities of any corporation, the Issuer shall be deemed to
have issued a number of shares of its Common Stock for stock or securities or
other property of the other corporation computed on the basis of the actual
exchange ratio on which the transaction was predicated, and for a consideration
equal to the fair market value on the date of such transaction of all such stock
or securities or other property of the other corporation. In the event any
consideration received by the Issuer for any securities consists of property
other than cash, the fair market value thereof at the time of issuance or as
otherwise applicable shall be as determined in good faith by the Board. In the
event Common Stock is issued with other shares or securities or other assets of
the Issuer for consideration which covers both, the consideration computed as
provided in this Section 4(f)(i) shall be allocated among such securities and
assets as determined in good faith by the Board.

                                     - 11 -
<PAGE>

                  (ii) When Adjustments to Be Made. The adjustments required by
this Section 4 shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that any adjustment of the number of
shares of Common Stock for which this Warrant is exercisable that would
otherwise be required may be postponed (except in the case of a subdivision or
combination of shares of the Common Stock, as provided for in Section 4(b)) up
to, but not beyond the date of exercise if such adjustment either by itself or
with other adjustments not previously made adds or subtracts less than one
percent (1%) of the shares of Common Stock for which this Warrant is exercisable
immediately prior to the making of such adjustment. Any adjustment representing
a change of less than such minimum amount (except as aforesaid) which is
postponed shall be carried forward and made as soon as such adjustment, together
with other adjustments required by this Section 4 and not previously made, would
result in a minimum adjustment or on the date of exercise. For the purpose of
any adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.

                  (iii) Fractional Interests. In computing adjustments under
this Section 4, fractional interests in Common Stock shall be taken into account
to the nearest one one-hundredth (1/100th) of a share.

                  (iv) When Adjustment Not Required. If the Issuer shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights, then thereafter no adjustment shall be required by reason of the taking
of such record and any such adjustment previously made in respect thereof shall
be rescinded and annulled.

         (g) Form of Warrant after Adjustments. The form of this Warrant need
not be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.

         (h) Escrow of Warrant Stock. If after any property becomes
distributable pursuant to this Section 4 by reason of the taking of any record
of the holders of Common Stock, but prior to the occurrence of the event for
which such record is taken, and the Holder exercises this Warrant, any shares of
Common Stock issuable upon exercise by reason of such adjustment shall be deemed
the last shares of Common Stock for which this Warrant is exercised
(notwithstanding any other provision to the contrary herein) and such shares or
other property shall be held in escrow for the Holder by the Issuer to be issued
to the Holder upon and to the extent that the event actually takes place, upon
payment of the current Warrant Price. Notwithstanding any other provision to the
contrary herein, if the event for which such record was taken fails to occur or
is rescinded, then such escrowed shares shall be cancelled by the Issuer and
escrowed property returned.

         5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to a national or regional
accounting firm reasonably acceptable to the Issuer and the Holder, provided
that the Issuer shall have ten (10) days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty (30) days after submission
to it of such dispute. Such opinion shall be final and binding on the parties
hereto. The costs and expenses of the initial accounting firm shall be paid
equally by the Issuer and the Holder and, in the case of an objection by the
Issuer, the costs and expenses of the subsequent accounting firm shall be paid
in full by the Issuer.

                                     - 12 -
<PAGE>

         6. Fractional Shares. No fractional shares of Warrant Stock will be
issued in connection with any exercise hereof, but in lieu of such fractional
shares, the Issuer shall round the number of shares to be issued upon exercise
up to the nearest whole number of shares.

         7. Ownership Cap and Exercise Restriction. Notwithstanding anything to
the contrary set forth in this Warrant, at no time may a Holder of this Warrant
exercise this Warrant if the number of shares of Common Stock to be issued
pursuant to such exercise would exceed, when aggregated with all other shares of
Common Stock owned by such Holder at such time, the number of shares of Common
Stock which would result in such Holder beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules thereunder) in
excess of 9.9% of the then issued and outstanding shares of Common Stock;
provided, however, that upon a holder of this Warrant providing the Issuer with
sixty-one (61) days notice (pursuant to Section 13 hereof) (the "Waiver Notice")
that such Holder would like to waive this Section 7 with regard to any or all
shares of Common Stock issuable upon exercise of this Warrant, this Section 7
will be of no force or effect with regard to all or a portion of the Warrant
referenced in the Waiver Notice; provided, further, that this provision shall be
of no further force or effect during the sixty-one (61) days immediately
preceding the expiration of the term of this Warrant.

         8. Issuer's Redemption Option. If (A) the Per Share Market Value of the
Common Stock for any twenty (20) consecutive Trading Days equals or exceeds
$4.00 per share (as may be adjusted for any stock splits or combinations of the
Common Stock) and (B) the trading volume of the Common Stock for each Trading
Day of such twenty (20) Trading Day period equals or exceeds 50,000 shares of
Common Stock, the Issuer may, at any time thereafter upon twenty (20) Trading
Days prior written notice (the "Issuer Redemption Notice") to the Holder, redeem
the unexercised portion of this Warrant in cash at a price equal to the number
of shares of Warrant Stock with respect to the unexercised portion of this
Warrant multiplied by $0.0001 (the "Issuer Redemption Price"); provided, that,
in connection with any redemption by the Issuer under this Section 8, (A) the
registration statement (the `Registration Statement") filed by the Issuer with
the Securities and Exchange Commission providing for the resale of the Warrant
Stock and the shares of Common Stock issuable upon conversion of the Series A
Convertible Preferred Stock issued pursuant to the Purchase Agreement is then in
effect and has been effective, without lapse or suspension of any kind, for a
period of sixty (60) consecutive calendar days, (B) trading in the Common Stock
shall not have been suspended by the Securities and Exchange Commission or the
OTC Bulletin Board (or other exchange or market on which the Common Stock is
trading), (C) the Issuer is in material compliance with the terms and conditions
of this Warrant and the other Transaction Documents (as defined in the Purchase
Agreement) and (D) the Issuer is not in possession of any material non-public
information; provided, further, that the Registration Statement is in effect
from the date of delivery of the Issuer Redemption Notice until the date which
is the later of (1) the date the Holder exercises the Warrant pursuant to the
Issuer Redemption Notice and (2) the twentieth (20th) Trading Day after the
Holder receives the Issuer Redemption Notice (the "Early Termination Date"). The
rights and privileges granted pursuant to this Warrant with respect to the
shares of Warrant Stock subject to the Issuer Redemption Notice (the "Redeemed
Warrant Shares") shall expire on the Early Termination Date if this Warrant is
not exercised with respect to such Redeemed Warrant Shares prior to such Early
Termination Date. The Issuer's Redemption Notice shall state the date of
redemption which date shall be the twenty-first (21st) Trading Day after the
Issuer has delivered the Issuer's Redemption Notice (the "Issuer's Redemption
Date"), the Issuer's Redemption Price and the number of shares to be redeemed by
the Issuer. The Issuer shall not send a Issuer's Redemption Notice unless it has
good and clear funds for a minimum of the amount it intends to redeem in a bank
account controlled by the Issuer. The Issuer shall deliver the Issuer's
Redemption Price to the Holder on the Issuer's Redemption Date. Not later than
five (5) days after receipt of the Issuer Redemption Price, Holder shall return
to the Issuer for cancellation the original Warrant to be redeemed. If the
Issuer fails to pay the Issuer's Redemption Price by the Issuer's Redemption
Date, the redemption will be declared null and void. Notwithstanding anything in
the foregoing to the contrary, if the Holder may not exercise this Warrant as a
result of the restriction contained in Section 7 hereof, the Issuer Redemption
Notice shall be deemed null and void and shall not be deemed effective until the
date that the Holder may exercise this Warrant in accordance with Section 7
hereof.

                                     - 13 -
<PAGE>

         9. Definitions. For the purposes of this Warrant, the following terms
have the following meanings:

                  "Additional Shares of Common Stock" means all shares of Common
         Stock issued by the Issuer after the Original Issue Date, and all
         shares of Other Common, if any, issued by the Issuer after the Original
         Issue Date, except: (i) securities issued (other than for cash) in
         connection with a merger, acquisition, or consolidation, (ii)
         securities issued pursuant to the conversion or exercise of convertible
         or exercisable securities issued or outstanding on or prior to the date
         of the Purchase Agreement or issued pursuant to the Purchase Agreement
         (so long as the conversion or exercise price in such securities are not
         amended to lower such price and/or adversely affect the Holders), (iii)
         the Warrant Stock, (iv) securities issued in connection with bona fide
         strategic license agreements or other partnering arrangements so long
         as such issuances are not for the purpose of raising capital, (v)
         Common Stock issued or the issuance or grants of options to purchase
         Common Stock pursuant to the Issuer's stock option plans and employee
         stock purchase plans outstanding as they exist on the date of the
         Purchase Agreement, and (vi) any warrants issued to the placement agent
         and its designees for the transactions contemplated by the Purchase
         Agreement.

                  "Articles of Incorporation" means the Articles of
         Incorporation of the Issuer as in effect on the Original Issue Date,
         and as hereafter from time to time amended, modified, supplemented or
         restated in accordance with the terms hereof and thereof and pursuant
         to applicable law.

                                     - 14 -
<PAGE>

                  "Board" shall mean the Board of Directors of the Issuer.

                  "Capital Stock" means and includes (i) any and all shares,
         interests, participations or other equivalents of or interests in
         (however designated) corporate stock, including, without limitation,
         shares of preferred or preference stock, (ii) all partnership interests
         (whether general or limited) in any Person which is a partnership,
         (iii) all membership interests or limited liability company interests
         in any limited liability company, and (iv) all equity or ownership
         interests in any Person of any other type.

                  "Common Stock" means the Common Stock, $0.0001 par value per
         share, of the Issuer and any other Capital Stock into which such stock
         may hereafter be changed.

                  "Common Stock Equivalent" means any Convertible Security or
         warrant, option or other right to subscribe for or purchase any
         Additional Shares of Common Stock or any Convertible Security.

                  "Convertible Securities" means evidences of Indebtedness,
         shares of Capital Stock or other Securities which are or may be at any
         time convertible into or exchangeable for Additional Shares of Common
         Stock. The term "Convertible Security" means one of the Convertible
         Securities.

                  "Governmental Authority" means any governmental, regulatory or
         self-regulatory entity, department, body, official, authority,
         commission, board, agency or instrumentality, whether federal, state or
         local, and whether domestic or foreign.

                  "Holders" mean the Persons who shall from time to time own any
         Warrant. The term "Holder" means one of the Holders.

                  "Independent Appraiser" means a nationally recognized or major
         regional investment banking firm or firm of independent certified
         public accountants of recognized standing (which may be the firm that
         regularly examines the financial statements of the Issuer) that is
         regularly engaged in the business of appraising the Capital Stock or
         assets of corporations or other entities as going concerns, and which
         is not affiliated with either the Issuer or the Holder of any Warrant.

                  "Issuer" means Astrata Group Incorporated, a Nevada
         corporation, and its successors.

                  "Majority Holders" means at any time the Holders of Warrants
         exercisable for a majority of the shares of Warrant Stock issuable
         under the Warrants at the time outstanding.

                  "Original Issue Date" means October 13, 2006.

                  "OTC Bulletin Board" means the over-the-counter electronic
         bulletin board.

                                     - 15 -
<PAGE>

                  "Other Common" means any other Capital Stock of the Issuer of
         any class which shall be authorized at any time after the date of this
         Warrant (other than Common Stock) and which shall have the right to
         participate in the distribution of earnings and assets of the Issuer
         without limitation as to amount.

                  "Outstanding Common Stock" means, at any given time, the
         aggregate amount of outstanding shares of Common Stock, assuming full
         exercise, conversion or exchange (as applicable) of all options,
         warrants and other Securities which are convertible into or exercisable
         or exchangeable for, and any right to subscribe for, shares of Common
         Stock that are outstanding at such time.

                  "Person" means an individual, corporation, limited liability
         company, partnership, joint stock company, trust, unincorporated
         organization, joint venture, Governmental Authority or other entity of
         whatever nature.

                  "Per Share Market Value" means on any particular date (a) the
         last closing bid price per share of the Common Stock on such date on
         the OTC Bulletin Board or another registered national stock exchange on
         which the Common Stock is then listed, or if there is no such price on
         such date, then the closing bid price on such exchange or quotation
         system on the date nearest preceding such date, or (b) if the Common
         Stock is not listed or traded then on the OTC Bulletin Board or any
         registered national stock exchange, the last closing bid price for a
         share of Common Stock in the over-the-counter market, as reported by
         the OTC Bulletin Board or by the Pink Sheets LLC or similar
         organization or agency succeeding to its functions of reporting prices)
         at the close of business on such date, or (c) if the Common Stock is
         not then publicly traded the fair market value of a share of Common
         Stock as determined by an Independent Appraiser selected in good faith
         by the Majority Holders; provided, however, that the Issuer, after
         receipt of the determination by such Independent Appraiser, shall have
         the right to select an additional Independent Appraiser, in which case,
         the fair market value shall be equal to the average of the
         determinations by each such Independent Appraiser; and provided,
         further that all determinations of the Per Share Market Value shall be
         appropriately adjusted for any stock dividends, stock splits or other
         similar transactions during such period. The determination of fair
         market value by an Independent Appraiser shall be based upon the fair
         market value of the Issuer determined on a going concern basis as
         between a willing buyer and a willing seller and taking into account
         all relevant factors determinative of value, and shall be final and
         binding on all parties. In determining the fair market value of any
         shares of Common Stock, no consideration shall be given to any
         restrictions on transfer of the Common Stock imposed by agreement or by
         federal or state securities laws, or to the existence or absence of, or
         any limitations on, voting rights.

                  "Purchase Agreement" means the Series A Convertible Preferred
         Stock Purchase Agreement dated as of October 13, 2006, among the Issuer
         and the Purchasers.

                  "Purchasers" means the purchasers of the Series A Convertible
         Preferred Stock and the Warrants issued by the Issuer pursuant to the
         Purchase Agreement.

                                     - 16 -
<PAGE>

                  "Securities" means any debt or equity securities of the
         Issuer, whether now or hereafter authorized, any instrument convertible
         into or exchangeable for Securities or a Security, and any option,
         warrant or other right to purchase or acquire any Security. "Security"
         means one of the Securities.

                  "Securities Act" means the Securities Act of 1933, as amended,
         or any similar federal statute then in effect.

                  "Subsidiary" means any corporation at least 50% of whose
         outstanding Voting Stock shall at the time be owned directly or
         indirectly by the Issuer or by one or more of its Subsidiaries, or by
         the Issuer and one or more of its Subsidiaries.

                  "Term" has the meaning specified in Section 1 hereof.

                  "Trading Day" means (a) a day on which the Common Stock is
         traded on the OTC Bulletin Board or any other exchange or trading venue
         on which the Common Stock may be principally traded in the future, or
         (b) if the Common Stock is not traded on the OTC Bulletin Board, a day
         on which the Common Stock is quoted in the over-the-counter market as
         reported by the Pink Sheets LLC (or any similar organization or agency
         succeeding its functions of reporting prices); provided, however, that
         in the event that the Common Stock is not listed or quoted as set forth
         in (a) or (b) hereof, then Trading Day shall mean any day except
         Saturday, Sunday and any day which shall be a legal holiday or a day on
         which banking institutions in the State of New York are authorized or
         required by law or other government action to close.

                  "Voting Stock" means, as applied to the Capital Stock of any
         corporation, Capital Stock of any class or classes (however designated)
         having ordinary voting power for the election of a majority of the
         members of the Board of Directors (or other governing body) of such
         corporation, other than Capital Stock having such power only by reason
         of the happening of a contingency.

                  "Warrants" means the Warrants issued and sold pursuant to the
         Purchase Agreement, including, without limitation, this Warrant, and
         any other warrants of like tenor issued in substitution or exchange for
         any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e)
         hereof or of any of such other Warrants.

                  "Warrant Price" initially means $1.00, as such price may be
         adjusted from time to time as shall result from the adjustments
         specified in this Warrant, including Section 4 hereto.

                  "Warrant Share Number" means at any time the aggregate number
         of shares of Warrant Stock which may at such time be purchased upon
         exercise of this Warrant, after giving effect to all prior adjustments
         and increases to such number made or required to be made under the
         terms hereof.

                  "Warrant Stock" means Common Stock issuable upon exercise of
         any Warrant or Warrants or otherwise issuable pursuant to any Warrant
         or Warrants.

                                     - 17 -
<PAGE>

         10. Other Notices. In case at any time:

                                    (A)     the Issuer shall make any
                                            distributions to the holders of
                                            Common Stock; or

                                    (B)     the Issuer shall authorize the
                                            granting to all holders of its
                                            Common Stock of rights to subscribe
                                            for or purchase any shares of
                                            Capital Stock of any class or other
                                            rights; or

                                    (C)     there shall be any reclassification
                                            of the Capital Stock of the Issuer;
                                            or

                                    (D)     there shall be any capital
                                            reorganization by the Issuer; or

                                    (E)     there shall be any (i) consolidation
                                            or merger involving the Issuer or
                                            (ii) sale, transfer or other
                                            disposition of all or substantially
                                            all of the Issuer's property, assets
                                            or business (except a merger or
                                            other reorganization in which the
                                            Issuer shall be the surviving
                                            corporation and its shares of
                                            Capital Stock shall continue to be
                                            outstanding and unchanged and except
                                            a consolidation, merger, sale,
                                            transfer or other disposition
                                            involving a wholly-owned
                                            Subsidiary); or

                                    (F)     there shall be a voluntary or
                                            involuntary dissolution, liquidation
                                            or winding-up of the Issuer or any
                                            partial liquidation of the Issuer or
                                            distribution to holders of Common
                                            Stock;

then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the action in question and not less than ten (10) days prior
to the record date or the date on which the Issuer's transfer books are closed
in respect thereto. This Warrant entitles the Holder to receive copies of all
financial and other information distributed or required to be distributed to the
holders of the Common Stock.

         11. Amendment and Waiver. Any term, covenant, agreement or condition in
this Warrant may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Issuer and the Majority Holders; provided, however, that no such amendment or
waiver shall reduce the Warrant Share Number, increase the Warrant Price,
shorten the period during which this Warrant may be exercised or modify any
provision of this Section 11 without the consent of the Holder of this Warrant.
No consideration shall be offered or paid to any person to amend or consent to a
waiver or modification of any provision of this Warrant unless the same
consideration is also offered to all holders of the Warrants.

                                     - 18 -
<PAGE>

         12. Governing Law; Jurisdiction. This Warrant shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to any of the conflicts of law principles which would result in
the application of the substantive law of another jurisdiction. This Warrant
shall not be interpreted or construed with any presumption against the party
causing this Warrant to be drafted. The Issuer and the Holder agree that venue
for any dispute arising under this Warrant will lie exclusively in the state or
federal courts located in New York County, New York, and the parties irrevocably
waive any right to raise forum non conveniens or any other argument that New
York is not the proper venue. The Issuer and the Holder irrevocably consent to
personal jurisdiction in the state and federal courts of the state of New York.
The Issuer and the Holder consent to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in
effect for notices to it under this Warrant and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing in
this Section 12 shall affect or limit any right to serve process in any other
manner permitted by law. The Issuer and the Holder hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
this Warrant or the Purchase Agreement, shall be entitled to reimbursement for
reasonable legal fees from the non-prevailing party. The parties hereby waive
all rights to a trial by jury.

         13. Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be
effective (a) upon hand delivery by telecopy or facsimile at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day
following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall be:

If to the Issuer:                   Astrata Group Incorporated
                                    1801 Century Park East, Suite 1830
                                    Los Angeles, California 90067-2320
                                    Attention: Chief Executive Officer
                                    Tel. No.: (310) 282-8646
                                    Fax No.:  (310) 226-8553

with copies (which copies
shall not constitute notice)
to:                                 Anslow & Jaclin, LLP
                                    195 Route 9 South, Suite 204
                                    Manalapan, New Jersey 07726
                                    Attention: Richard I. Anslow, Esq.
                                    Tel. No.: (732) 409-1212
                                    Fax No.: (732) 577-1188

                                     - 19 -
<PAGE>

If to any Holder:                   At the address of such Holder
                                    set forth on Exhibit A to this Agreement,
                                    with copies to Holder's counsel as set forth
                                    on Exhibit A or as specified in writing by
                                    such Holder with copies to:

with copies (which copies
shall not constitute notice)
to:                                 Kramer Levin Naftalis & Frankel LLP
                                    1177 Avenue of the Americas
                                    New York, New York 10036
                                    Attention: Christopher S. Auguste
                                    Tel. No.: (212) 715-9100
                                    Fax No.: (212) 715-8000

         Any party hereto may from time to time change its address for notices
by giving written notice of such changed address to the other party hereto.

         14. Warrant Agent. The Issuer may, by written notice to each Holder of
this Warrant, appoint an agent having an office in New York, New York for the
purpose of issuing shares of Warrant Stock on the exercise of this Warrant
pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to subsection (d) of Section 2 hereof or replacing this Warrant pursuant to
subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.

         15. Remedies. The Issuer stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Issuer in the performance of or compliance with any of the terms of this Warrant
are not and will not be adequate and that, to the fullest extent permitted by
law, such terms may be specifically enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.

         16. Successors and Assigns. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such Holder or Holder of Warrant Stock.

         17. Modification and Severability. If, in any action before any court
or agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.

                                     - 20 -
<PAGE>

         18. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

         19. Registration Rights. The Holder of this Warrant is entitled to the
benefit of certain registration rights with respect to the shares of Warrant
Stock issuable upon the exercise of this Warrant pursuant to that certain
Registration Rights Agreement, of even date herewith, by and among the Company
and Persons listed on Schedule I thereto (the "Registration Rights Agreement")
and the registration rights with respect to the shares of Warrant Stock issuable
upon the exercise of this Warrant by any subsequent Holder may only be assigned
in accordance with the terms and provisions of the Registrations Rights
Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     - 21 -
<PAGE>

         IN WITNESS WHEREOF, the Issuer has executed this Series A Warrant as of
the day and year first above written.

                                        ASTRATA GROUP INCORPORATED

                                        By:
                                           -------------------------------------
                                           Name:  Martin George Euler
                                           Title: Chief Executive Officer

                                     - 22 -
<PAGE>
                                  EXERCISE FORM
                                SERIES A WARRANT

                           ASTRATA GROUP INCORPORATED

The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Common Stock of Astrata Group
Incorporated covered by the within Warrant.

Dated: _________________                Signature    ___________________________

                                        Address      ___________________________

                                                     ___________________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of Exercise: _________________________

The undersigned is an "accredited investor" as defined in Regulation D under the
Securities Act of 1933, as amended.

The undersigned intends that payment of the Warrant Price shall be made as
(check one):

                  Cash Exercise_______

                  Cashless Exercise_______

If the Holder has elected a Cash Exercise, the Holder shall pay the sum of
$________ by certified or official bank check (or via wire transfer) to the
Issuer in accordance with the terms of the Warrant.

If the Holder has elected a Cashless Exercise, a certificate shall be issued to
the Holder for the number of shares equal to the whole number portion of the
product of the calculation set forth below, which is ___________. The Company
shall pay a cash adjustment in respect of the fractional portion of the product
of the calculation set forth below in an amount equal to the product of the
fractional portion of such product and the Per Share Market Value on the date of
exercise, which product is ____________.

         X = Y - (A)(Y)
                 -----
                   B

Where:

The number of Ordinary Shares to be issued to the Holder
__________________("X").

The number of Ordinary Shares purchasable upon exercise of all of the Warrant
or, if only a portion of the Warrant is being exercised, the portion of the
Warrant being exercised ___________________________ ("Y").

                                     - 23 -
<PAGE>

The Warrant Price ______________ ("A").

The Per Share Market Value of one Ordinary Share _______________________ ("B").

                                   ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

Dated: _________________                Signature    ___________________________

                                        Address      ___________________________

                                                     ___________________________

                               PARTIAL ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

Dated: _________________                Signature    ___________________________

                                        Address      ___________________________

                                                     ___________________________

                           FOR USE BY THE ISSUER ONLY:

This Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. W-_____ issued for ____ shares of Common Stock in
the name of _______________.

                                     - 24 -

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