Document:

Unassociated Document

    SECURITIES
      PURCHASE AGREEMENT

     

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

     

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

     

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

     

    ARTICLE
      I.

    DEFINITIONS

     

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

     

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

     

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

    

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

     

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

     

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

    

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

     

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

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

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

    

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

      

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

     

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

     

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

    

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

    

    Exhibit
      A
      - Certificate
      of Designation

    Exhibit
      B
      - Registration
      Rights Agreement

    Exhibit
      C
      - Legal
      Opinion of Company Counsel

     

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

    

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

     

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

     

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

     

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

    

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

      

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

    

    
      
         

      

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

     

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

     

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

     

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

     

    “SEC”
means
      the Securities and Exchange Commission.

    

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

     

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

    

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

     

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

     

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

    

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

    

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

     

    ARTICLE
      II.

    PURCHASE
      AND SALE

     

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

     

    
      
         

      

      
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    2.2
       Deliveries.
      

     

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

     

    (i)
      this Agreement duly executed by the Company;

     

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

    

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

     

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

     

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

    

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

    

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

    

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

     

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

     

    (i)
      this Agreement duly executed by each Purchaser;

     

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

     

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

    

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

    

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

    

    
      
         

      

      
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    2.3
      Closing Conditions.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    

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

    

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

    

    ARTICLE
      III.

    REPRESENTATIONS
      AND WARRANTIES

     

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

     

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

     

    (b)
      Organization and Qualification.
      

    

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

    

    
      
         

      

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

     

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

     

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

     

    
      
         

      

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

     

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

     

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

    

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

     

    
      
         

      

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

    

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

    

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

      

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

     

    
      
         

      

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

    

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

     

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

     

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

     

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

     

    
      
         

      

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

     

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

     

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

    

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

    

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

     

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

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    ARTICLE
      IV.

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1
      Transfer Restrictions.

    

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

     

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

     

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

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

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

    

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

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

    

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

    

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

     

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

    

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

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

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

     

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

     

    ARTICLE
      V.

    MISCELLANEOUS

     

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

     

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

    

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

     

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

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

    

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

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

    

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

    

     

    (Signature
      Pages Follow)

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

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

    

    

      

       

      
        	
                JANEL
                  WORLD TRADE, LTD.

              	
                Address
                  for Notice:

              

      
        	
                 

              	
                 

              	 	
                 

              
	
                By:

              	
                Name:James
                  N. Jannello

                Title:
                  Executive Vice President and Chief Executive Officer

              	 	
                 150-14
                  132nd
                  Avenue

                Jamaica,
                  NY 11434

                 

                Fax:
                  718 527-1689

                Email:
                  jjannello@janelgroup.net

              

      

       

    

     

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

    William
      J. Davis, Esq.

    Scheichet
      & Davis, P.C.

    767
      Third Avenue - 24th
      Floor

    New
      York, NY 10017

    

    Fax:
      212 371-7634

    Email:
      william@scheichetdavis.com

    

     

    [SIGNATURE
      PAGE FOR PURCHASER FOLLOWS]

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    [PURCHASER
      SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

     

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

     

    
      	
               

            
	
              Name
                of Purchaser: NAME
                REDACTED

            
	
               

            
	
              Signature
                of Authorized Signatory of Purchaser:/s/NAME
                REDACTED

            
	
               

            
	
              Name
                of Authorized Signatory:NAME
                REDACTED

            
	
               

            
	
              Title
                of Authorized Signatory: Chief
                Operating Officer 

            
	
               

            
	
              Email
                Address of Purchaser: Address
                Redacted 

            
	
               

            
	
              Facsimile
                Number of Purchaser: Number
                Redacted 

            
	
               

            
	
              Address
                for Notice of Purchaser: Address
                Redacted

            

    

    

     

    Address
      for Delivery of Shares for Purchaser (if not same as above):

     

     

    Aggregate
      Purchase Price: $500,000.00

    Shares:
      1,000,000

    Warrants:
      -0-

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    SCHEDULE
      3.1(g)

    

    Capitalization

    

    

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

     

    
      
         

      

      
         

        
          

        

      

      
         

    

    SCHEDULE
      3.1(j)

    

    LitigationUnassociated Document

    REGISTRATION
      RIGHTS AGREEMENT

     

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

     

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

     

    The
      Company and the Investors hereby agree as follows:

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Investors”
      shall mean, collectively, each Investor.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    2. Registration.

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

    5. Indemnification

     

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

     

    
      
        
        

      

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

     

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

     

    
      
        
        

      

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

     

     

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

     

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

     

    
      
        
        

      

      
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    6. Miscellaneous.

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

    

    [Remainder
      of page intentionally left blank]

     

     

    
      
        
        

      

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

     

    
 

    
       

      
        	 	
                JANEL
                  WORLD TRADE, LTD.

              
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	 	
                Name:
                  James N. Jannello 

              
	 	 	
                Title:
                  Executive Vice President and

              
	
                 

              	 	
                Chief
                  Executive Officer

              

      

    

    

    

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    INVESTOR’S
      SIGNATURE PAGE

    

    

    

    

      NAME
        REDACTED

      
        	 	 
	
                By:

              	
                /s/NAME
                  REDACTED

              
	 	
                Name:
                  NAME
                  REDACTED

              
	 	
                Title:
                  Chief Operating Officer

              
	
                Address:
                  Address
                  Redacted

              

      

      

      Facsimile
        Number: Number
        Redacted 

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

        
        

      

    

    ANNEX
      A

     

    Plan
      of Distribution

    

    

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

     

    
      	 	
              ·

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

            

    

     

    
      	 	
              ·

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

            

    

     

    
      	 	
              ·

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

            

    

     

    
      	 	
              ·

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

            

    

     

    
      	 	
              ·

            	
              privately
                negotiated transactions;

            

    

     

    
      	 	
              ·

            	
              settlement
                of short sales;

            

    

     

    
      	 	
              ·

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

            

    

     

    
      	 	
              ·

            	
              a
                combination of any such methods of sale;
                and

            

    

     

    
      	 	
              ·

            	
              any
                other method permitted pursuant to applicable
                law.

            

    

     

    

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

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

     

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

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    SELLING
      STOCKHOLDER QUESTIONNAIRE

    

    

    Janel
      World Trade

    

    

    

    Ladies
      and Gentlemen:

    

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

    

    
      	
               Please
                answer every question.

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

            

    

    

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

    

    
      
        

      

    

    

    2.  Manner
      of Ownership of Shares:

     

    Individual
      _______ Community Property ________  Tenants
      in Common _______

    

    Joint
      Tenants with Rights of Survivorship ________  Corporate
      ________

     

    Partnership
      ______ Trust ________ Other ___________________________

    

    

    
      	
              3.

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

            

    

     

    

    
      	
              Address:

            	
               

            
	 	 
	
              Phone:

            	
               

            
	
              Fax:

            	
               

            

    

    

    

    
      	
              4.

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

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

     

     

     

     

     

     

    
      	
              5.

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

            

    

    
      	
              (a) Are
                you a natural
                person?

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

            	
               ̈
                Yes  ̈
                No

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

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

            	
               ̈
                Yes  ̈
                No

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

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

            	
               

               ̈
                Yes  ̈
                No

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

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

            	
               ̈
                Yes  ̈
                No

            

    

    

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

     

    
      	
              Legal
                Description of Entity: 

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

            	 
	 	
               

               

            
	 	
               

               

            
	
              Name
                of Entity(ies) Managing such Entity(ies) 

              (if
                any): 

            	 
	 	
               

               

            
	 	
               

               

            
	
              Name(s)
                of Natural Persons Having Voting or Investment

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

            	 
	 	
               

               

            
	 	
               

               

            
	 	
               

               

            

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    

    
      	
              6.
                

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

            

    

     

    

    No.
      of Shares of
      Stock______________________________________________________________________________
       

     

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

     

    
      	
              8.

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

            

    

     

    
      	
              9.

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

            

    

     

    
      	
              10.

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

            

    

    

    PART
      A: DETERMINATION OF RESTRICTED PERSON STATUS:

    

    Please
      check all appropriate categories.

    

    The
      undersigned is:

    

    ___ (i) a
      broker-dealer;

    

    
      	 	 	
              ___
                

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

            

    

     

    
      
        

      

    

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

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

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    
      	 	 	
              ___
                

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

            

    

    

    
      	 	 	
              ___
                

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

            

    

    

    
      	 	
               

            	
              ___
                

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

            

    

    

    
      	 	 	
              ___
                

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

            

    

     

    

    
      	 	 	
              ___
                

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

            

    

     

    

    
      	 	 	
              ___
                

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

            

    

    

    
      	 	
               

            	
              ___
                

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

            

    

    

    
      	 	 	
              ___
                

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

            

    

    

    
      	 	 	
              ___
                

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

            

    

     

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

            

    

     

     

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

      

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

       

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

      

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

      

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    

    PART
      B: DETERMINATION OF EXEMPTED ENTITY STATUS:

    

    The
      undersigned is:

    

    
      	 	 	
              ___
                

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

            

    

    

    
      	 	 	
              ____
                

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

            

    

    

    
      	 	 	
              ____
                

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

            

    

    

     

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

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

    

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

    

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

    

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

    

    
      	 	 	
              ____
                

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

            

    

    

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

    

    
      	 	 	
              ___
                

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

            

    

    

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

    

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

    

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

    

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

    

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

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    

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

    

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

    

    

    

     

    

    
      	
              Date:

            	
                  ,
                200__

            	 	 
	 	 	 	
               

            	
              (Print
                name of selling stockholder)

            
	 	 	 	
              By:

            	 
	 	 	 	 	
              (Signature)

            
	 	 	 	
              Name:

            	 
	 	 	 	 	
              (Print
                name)

            
	 	 	 	
              Title:

            	 

    

     

    
      
        

        

      

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    APPENDIX
      A

    

    
      	
              1.

            	
              Definition
                of “Beneficial Ownership”

            

    

    

    
      	 	
              (a)

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

            

    

    

    
      	 	
              (1)

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

            

    

    

    
      	 	
              (2)

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

            

    

    

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

    

    
      	 	
              (b)

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

            

    

    

    
      	 	
              (c)

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

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