Document:

THESE
      SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
      OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
      ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
      INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
      SECURITIES ACT.

     

    STOCK
      PURCHASE WARRANT

    

    WARRANT
      No. 001

    

    To
      Purchase 4,000,000 Shares of Common Stock of

     

    Hudson
      Holding Corporation

     

    THIS
      STOCK PURCHASE WARRANT CERTIFIES that, for value received, Seaport Hudson LLC
      (the “Holder”), is entitled, upon the terms and subject to the limitations on
      exercise and the conditions hereinafter set forth, at any time on or after
      June__, 2008 (the “Initial
      Exercise Date”)
      and on
      or prior to 5:00 P.M. Eastern Time on the five year anniversary of the Initial
      Exercise Date (the “Termination
      Date”)
      but
      not thereafter, to subscribe for and purchase from Hudson Securities, Inc.,
      a
      corporation incorporated in the State of Delaware (the
      “Company”),
      up to
      4,000,000 shares (the “Warrant
      Shares”)
      of
      Common Stock, par value $0.001 per share, of the Company (the “Common
      Stock”).
      The
      purchase price of one share of Common Stock (the “Exercise
      Price”)
      under
      this Warrant shall be $0.75 or market price at the end of the Trading Date
      on
      the Closing Date, whichever is higher, subject to adjustment hereunder. The
      Exercise Price and the number of Warrant Shares for which the Warrant is
      exercisable shall be subject to adjustment as provided herein. Capitalized
      terms
      used and not otherwise defined herein shall have the meanings set forth in
      that
      certain Securities Purchase Agreement (the “Purchase
      Agreement”),
      dated
      June __, 2008, between the Company and the investors signatory
      thereto.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    1. Title
      to Warrant.
      Prior
      to the Termination Date and subject to compliance with applicable laws and
      Section 7 of this Warrant, this Warrant and all rights hereunder are
      transferable, in whole or in part, at the office or agency of the Company by
      the
      Holder in person or by duly authorized attorney, upon surrender of this Warrant
      together with the Assignment Form annexed hereto properly endorsed.

     

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

     

    3. Exercise
      of Warrant.
      

     

    (a)
      Except as provided in Section 4 herein, exercise of the purchase rights
      represented by this Warrant may be made at any time or times on or after the
      Initial Exercise Date and on or before the Termination Date by the surrender
      of
      this Warrant and the Notice of Exercise Form annexed hereto duly executed,
      at
      the office of the Company (or such other office or agency of the Company as
      it
      may designate by notice in writing to the registered Holder at the address
      of
      such Holder appearing on the books of the Company) and upon payment of the
      Exercise Price of the shares thereby purchased by wire transfer or cashier’s
      check drawn on a United States bank. Upon such exercise, the Holder shall be
      entitled to receive a certificate for the number of Warrant Shares so purchased.
      Certificates for shares purchased hereunder shall be delivered to the Holder
      within three Trading Days after the date on which this Warrant shall have been
      exercised as aforesaid. Notwithstanding anything herein to the contrary, in
      lieu
      of issuing certificates for shares purchased hereunder, upon mutual agreement
      of
      the Company and the Holder, the Company may authorize its transfer agent to
      issue shares through electronic transactions. This Warrant shall be deemed
      to
      have been exercised and such certificate or certificates shall be deemed to
      have
      been issued, and Holder or any other person so designated to be named therein
      shall be deemed to have become a holder of record of such shares for all
      purposes, as of the date the Warrant has been exercised by payment to the
      Company of the Exercise Price and all taxes required to be paid by the Holder,
      if any, pursuant to Section 5 prior to the issuance of such shares, have been
      paid. If the Company fails to deliver to the Holder a certificate or
      certificates representing the Warrant Shares pursuant to this Section 3(a)
      by
      the third Trading Day after the date of exercise, then the Holder will have
      the
      right to rescind such exercise. In addition to any other rights available to
      the
      Holder, if the Company fails to deliver to the Holder a certificate or
      certificates representing the Warrant Shares pursuant to an exercise by the
      third Trading Day after the date of exercise, and if after such third Trading
      Day the Holder is required by its broker to purchase (in an open market
      transaction or otherwise) shares of Common Stock to deliver in satisfaction
      of a
      sale by the Holder of the Warrant Shares which the Holder anticipated receiving
      upon such exercise (a "Buy-In"),
      then
      the Company shall (1) pay in cash to the Holder the amount by which (x) the
      Holder's total purchase price (for costs incurred either directly by such
      Warrantholder or on behalf of a third party) for the shares of Common Stock
      so
      purchased exceeds (y) the amount obtained by multiplying (A) the number of
      Warrant Shares that the Company was required to deliver to the Holder in
      connection with the exercise at issue times (B) the price at which the sell
      order giving rise to such purchase obligation was executed, and (2) at the
      option of the Holder, either reinstate the portion of the Warrant and equivalent
      number of Warrant Shares for which such exercise was not honored or deliver
      to
      the Holder the number of shares of Common Stock that would have been issued
      had
      the Company timely complied with its exercise and delivery obligations
      hereunder. For example, if the Holder purchases Common Stock having a total
      purchase price of $11,000 to cover a Buy-In with respect to an attempted
      exercise of shares of Common Stock with an aggregate sale price giving rise
      to
      such purchase obligation of $10,000, under clause (1) of the immediately
      preceding sentence, the Company shall be required to pay the Holder $1,000.
      The
      Holder shall provide the Company written notice indicating the amounts payable
      to the Holder in respect of the Buy-In, together with applicable confirmations
      and other evidence reasonably requested by the Company. Nothing herein shall
      limit a Holder's right to pursue a decree of specific performance and/or
      injunctive relief with respect to the Company's failure to timely deliver
      certificates representing shares of Common Stock upon exercise of the Warrant
      as
      required pursuant to the terms hereof.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

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

     

    (c)
      Subject to the provisions of this Section 3, if after the Effective Date the
      Closing Price (the “Measurement
      Price”)
      exceeds 250% of the then Exercise Price (subject to adjustment
      herein)(“Threshold
      Price Date”)
      and
      the daily average trading volume of the Common Stock for the 10 Trading Days
      including and prior to such Threshold Price Date exceeds 100,000 shares, then
      the Company may, within five Trading Days of such date, call for the exercise
      of
      all or any portion of this Warrant for which a Notice of Exercise has not yet
      been delivered (such right, a “Call”).
      To
      exercise this right, the Company must deliver to the Holder an irrevocable
      written notice (a “Call
      Notice”),
      indicating therein the portion of unexercised portion of this Warrant to which
      such notice applies (such date, the "Call
      Date").
      If
      Holder wants to exercise Called Warrants within three Trading Days of the Call
      Date, the Holder shall pay to the Company by wire transfer of immediately
      available funds the exercise price (or exercise the Warrant on a cashless basis
      pursuant to Section 18 hereof) for the Warrant Shares to be issued in connection
      with the Call Notice. Any unexercised portion of this Warrant to which the
      Call
      Notice does not pertain will be unaffected by such Call Notice. Notwithstanding
      anything to the contrary set forth in this Warrant, the Company may not deliver
      a Call Notice or require the cancellation of this Warrant (and any Call Notice
      will be void), unless, at the time of sending such Call Notice, the Registration
      Statement shall be effective as to all Warrant Shares and the prospectus
      thereunder available for use by the Holder for the resale all such Warrant
      Shares and the Common Stock shall be listed or quoted for trading on the Trading
      Market. 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

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

     

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

     

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

     

    7. Transfer,
      Division and Combination.
      

     

    (a) Subject
      to compliance with any applicable securities laws and the conditions set forth
      in Sections 1 and 7(f) hereof and to the provisions of Section 4.1 of the
      Purchase Agreement, this Warrant and all rights hereunder are transferable,
      in
      whole or in part, upon surrender of this Warrant at the principal office of
      the
      Company, together with a written assignment of this Warrant substantially in
      the
      form attached hereto duly executed by the Holder or its agent or attorney and
      funds sufficient to pay any transfer taxes payable upon the making of such
      transfer. Upon such surrender and, if required, such payment, the Company shall
      execute and deliver a new Warrant or Warrants in the name of the assignee or
      assignees and in the denomination or denominations specified in such instrument
      of assignment, and shall issue to the assignor a new Warrant evidencing the
      portion of this Warrant not so assigned, and this Warrant shall promptly be
      cancelled. A Warrant, if properly assigned, may be exercised by a new holder
      for
      the purchase of Warrant Shares without having a new Warrant issued.

     

    (b) This
      Warrant may be divided or combined with other Warrants of like tenor and terms
      upon presentation hereof at the aforesaid office of the Company, together with
      a
      written notice specifying the names and denominations in which new Warrants
      are
      to be issued, signed by the Holder or its agent or attorney. Subject to
      compliance with Section 7(a), as to any transfer which may be involved in such
      division or combination, the Company shall execute and deliver a new Warrant
      or
      Warrants in exchange for the Warrant or Warrants to be divided or combined
      in
      accordance with such notice.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (c) The
      Company shall prepare, issue and deliver at its own expense (other than transfer
      taxes) the new Warrant or Warrants under this Section 7.

    

    (d) The
      Company agrees to maintain, at its aforesaid office, books for the registration
      and the registration of transfer of the Warrants.

     

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

     

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

     

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

     

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

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    11. Adjustments
      of Exercise Price and Number of Warrant Shares;
      Stock
      Splits, etc.
      The
      number and kind of securities purchasable upon the exercise of this Warrant
      and
      the Exercise Price shall be subject to adjustment from time to time upon the
      happening of any of the following. In case the Company shall (i) pay a dividend
      in shares of Common Stock or make a distribution in shares of Common Stock
      to
      holders of its outstanding Common Stock, (ii) subdivide its outstanding shares
      of Common Stock into a greater number of shares, (iii) combine its outstanding
      shares of Common Stock into a smaller number of shares of Common Stock, or
      (iv)
      issue any shares of its capital stock in a reclassification of the Common Stock,
      then the number of Warrant Shares purchasable upon exercise of this Warrant
      immediately prior thereto shall be adjusted so that the Holder shall be entitled
      to receive the kind and number of Warrant Shares or other securities of the
      Company which it would have owned or have been entitled to receive had such
      Warrant been exercised in advance thereof. Upon
      each
      such adjustment of the kind and number of Warrant Shares or other securities
      of
      the Company which are purchasable hereunder, the Holder shall thereafter be
      entitled to purchase the number of Warrant Shares or other securities resulting
      from such adjustment at an Exercise Price per Warrant Share or other security
      obtained by multiplying the Exercise Price in effect immediately prior to such
      adjustment by the number of Warrant Shares purchasable pursuant hereto
      immediately prior to such adjustment and dividing by the number of Warrant
      Shares or other securities of the Company resulting from such adjustment.
An
      adjustment made pursuant to this paragraph shall become effective immediately
      after the effective date of such event retroactive to the record date, if any,
      for such event.

     

    12. Reorganization,
      Reclassification, Merger, Consolidation or Disposition of Assets.
      In case
      the Company shall reorganize its capital, reclassify its capital stock,
      consolidate or merge with or into another corporation (where the Company is
      not
      the surviving corporation or where there is a change in or distribution with
      respect to the Common Stock of the Company), or sell, transfer or otherwise
      dispose of all or substantially all its property, assets or business to another
      corporation and, pursuant to the terms of such reorganization, reclassification,
      merger, consolidation or disposition of assets, shares of common stock of the
      successor or acquiring corporation, or any cash, shares of stock or other
      securities or property of any nature whatsoever (including warrants or other
      subscription or purchase rights) in addition to or in lieu of common stock
      of
      the successor or acquiring corporation (“Other
      Property”),
      are
      to be received by or distributed to the holders of Common Stock of the Company,
      then the Holder shall have the right thereafter to receive upon exercise of
      this
      Warrant, the number of shares of Common Stock of the successor or acquiring
      corporation or of the Company, if it is the surviving corporation, and Other
      Property receivable upon or as a result of such reorganization,
      reclassification, merger, consolidation or disposition of assets by a Holder
      of
      the number of shares of Common Stock for which this Warrant is exercisable
      immediately prior to such event. In case of any such reorganization,
      reclassification, merger, consolidation or disposition of assets, the successor
      or acquiring corporation (if other than the Company) shall expressly assume
      the
      due and punctual observance and performance of each and every covenant and
      condition of this Warrant to be performed and observed by the Company and all
      the obligations and liabilities hereunder, subject to such modifications as
      may
      be deemed appropriate (as determined in good faith by resolution of the Board
      of
      Directors of the Company) in order to provide for adjustments of Warrant Shares
      for which this Warrant is exercisable which shall be as nearly equivalent as
      practicable to the adjustments provided for in this Section 12. For purposes
      of
      this Section 12, “common stock of the successor or acquiring corporation” shall
      include stock of such corporation of any class which is not preferred as to
      dividends or assets over any other class of stock of such corporation and which
      is not subject to redemption and shall also include any evidences of
      indebtedness, shares of stock or other securities which are convertible into
      or
      exchangeable for any such stock, either immediately or upon the arrival of
      a
      specified date or the happening of a specified event and any warrants or other
      rights to subscribe for or purchase any such stock. The foregoing provisions
      of
      this Section 12 shall similarly apply to successive reorganizations,
      reclassifications, mergers, consolidations or disposition of assets.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

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

     

    14. Notice
      of Adjustment.
      Whenever the number of Warrant Shares or number or kind of securities or other
      property purchasable upon the exercise of this Warrant or the Exercise Price
      is
      adjusted, as herein provided, the Company shall give notice thereof to the
      Holder, which notice shall state the number of Warrant Shares (and other
      securities or property) purchasable upon the exercise of this Warrant and the
      Exercise Price of such Warrant Shares (and other securities or property) after
      such adjustment, setting forth a brief statement of the facts requiring such
      adjustment and setting forth the computation by which such adjustment was
      made.

     

    15. Notice
      of Corporate Action.
      If at
      any time:

     

    (a) the
      Company shall take a record of the holders of its Common Stock for the purpose
      of entitling them to receive a dividend or other distribution, or any right
      to
      subscribe for or purchase any evidences of its indebtedness, any shares of
      stock
      of any class or any other securities or property, or to receive any other right,
      or

    

    (b) there
      shall be any capital reorganization of the Company, any reclassification or
      recapitalization of the capital stock of the Company or any consolidation or
      merger of the Company with, or any sale, transfer or other disposition of all
      or
      substantially all the property, assets or business of the Company to, another
      corporation or,

    

    (c) there
      shall be a voluntary or involuntary dissolution, liquidation or winding up
      of
      the Company;

    

    then,
      in
      any one or more of such cases, the Company shall give to Holder (i) at least
      20
      days’ prior written notice of the date on which a record date shall be selected
      for such dividend, distribution or right or for determining rights to vote
      in
      respect of any such reorganization, reclassification, merger, consolidation,
      sale, transfer, disposition, liquidation or winding up, and (ii) in the case
      of
      any such reorganization, reclassification, merger, consolidation, sale,
      transfer, disposition, dissolution, liquidation or winding up, at least 20
      days’
prior written notice of the date when the same shall take place. Such notice
      in
      accordance with the foregoing clause also shall specify (i) the date on which
      any such record is to be taken for the purpose of such dividend, distribution
      or
      right, the date on which the holders of Common Stock shall be entitled to any
      such dividend, distribution or right, and the amount and character thereof,
      and
      (ii) the date on which any such reorganization, reclassification, merger,
      consolidation, sale, transfer, disposition, dissolution, liquidation or winding
      up is to take place and the time, if any such time is to be fixed, as of which
      the holders of Common Stock shall be entitled to exchange their Warrant Shares
      for securities or other property deliverable upon such disposition, dissolution,
      liquidation or winding up. Each such written notice shall be sufficiently given
      if addressed to Holder at the last address of Holder appearing on the books
      of
      the Company and delivered in accordance with Section 20(d).

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

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

     

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

    

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

    

    17. Registration
      Rights.
      The
      initial Warrantholder is entitled to the benefit of certain registration rights
      with respect to the shares of Common Stock issuable upon the exercise of this
      Warrant as provided in the Registration Rights Agreement, and any subsequent
      Warrantholder may be entitled to such rights.

     

    18. Cashless
      Exercise.
      Notwithstanding any other provision contained herein to the contrary, during
      the
      period from and after the six-month anniversary of the Closing Date and so
      long
      as the Company is required under the Registration Rights Agreement to have
      effected the registration of the Warrant Shares for resale to the public
      pursuant to a Registration Statement (as such term is defined in the
      Registration Rights Agreement), if the Warrant Shares may not be freely sold
      to
      the public for any reason (including, but not limited to, the failure of the
      Company to have effected the registration of the Warrant Shares or to have
      a
      current prospectus available for delivery or otherwise), the Warrantholder
      may
      elect to receive, without the payment by the Warrantholder of the aggregate
      Exercise Price in respect of the shares of Common Stock to be acquired, shares
      of Common Stock of equal value to the value of this Warrant, or any specified
      portion hereof, by the surrender of this Warrant (or such portion of this
      Warrant being so exercised) together with a Net Issue Election Notice, in the
      form annexed hereto, duly executed, to the Company. Thereupon, the Company
      shall
      issue to the Warrantholder such number of fully paid, validly issued and
      nonassessable shares of Common Stock as is computed using the following
      formula:

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    X
      =
Y
      (A -
      B)

    A

    

    where 

    

    X
      = the
      number of shares of Common Stock to which the Warrantholder is entitled upon
      such cashless exercise;

    

    Y
      = the
      total
      number of shares of Common Stock covered by this Warrant for which the
      Warrantholder has surrendered purchase rights at such time for cashless exercise
      (including both shares to be issued to the Warrantholder and shares as to which
      the purchase rights are to be canceled as payment therefor);

    

    A
      = the
      “Market Price” of one share of Common Stock as at the date the net issue
      election is made; and

    

    B
      = the
      Exercise Price in effect under this Warrant at the time the net issue election
      is made.

     

    19. Miscellaneous.

     

    (a) Jurisdiction.
      This
      Warrant shall constitute a contract under the laws of New York, without regard
      to its conflict of law, principles or rules.

     

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

     

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

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

    

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

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

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

    

    
      	
              Dated:  June
                __, 2008

            	 	 
	 	
              HUDSON
                HOLDING CORPORATION

            
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:  Keith
                Knox

            
	 	 	
              Title:  President

            

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    NOTICE
      OF EXERCISE

    

    To: Hudson
      Holding Corporation

    

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

     

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

    _______________________________

    

    The
      Warrant Shares shall be delivered to the following:

    _______________________________

     

    _______________________________

     

    _______________________________

    

    (3)
      Accredited
      Investor.
      The
      undersigned is an “accredited investor” as defined in Regulation D promulgated
      under the Securities Act of 1933, as amended.

    

    
      	 	
              [PURCHASER]

            
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:

            
	 	 	
              Title:

            
	 	 	 
	 	
              Dated:

            	 

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    ASSIGNMENT
      FORM

    

    (To
      assign the foregoing warrant, execute

    this
      form
      and supply required information. 

    Do
      not
      use this form to exercise the warrant.)

    

    FOR
      VALUE
      RECEIVED, subject to receipt of the Company’s consent, the foregoing Warrant and
      all rights evidenced thereby are hereby assigned to

    

    _______________________________________________
      whose address is

    

    _______________________________________________________________.

    

    _______________________________________________________________

    

    
      	 	
               

            	
              
                Dated:  ________________,
                  ______

              

            
	 	 	 
	 	 	 
	 	
              Holder's Signature:

            	
              _____________________________

            
	 	 	 
	 	
              Holder's
                Address:

            	
              _____________________________

            
	 	 	 
	 	 	
              _____________________________

            

    

     

    
      	
              Signature Guaranteed:

            	
              ___________________________________________

            	 

    

     

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

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    HUDSON
      HOLDING CORPORATION

    NET
      ISSUE
      ELECTION NOTICE

    

    To:
      [Name]

    

    Date:[_________________________]

    

    The
      undersigned hereby elects under Section
      20
      of this
      Warrant to surrender the right to purchase [____________] shares of Common
      Stock
      pursuant to this Warrant and hereby requests the issuance of [_____________]
      shares of Common Stock. The certificate(s) for the shares issuable upon such
      net
      issue election shall be issued in the name of the undersigned or as otherwise
      indicated below.

    

    
      	
               

            	 
	
              Signature

            	 
	 	 
	
               

            	 
	
              Name
                for Registration

            	 
	 	 
	
               

            	 
	
              Mailing
                AddressSECURITIES
        PURCHASE AGREEMENT

    

     

    This
      Securities Purchase Agreement (this “Agreement”)
      is
      dated as of June __, 2008, among Hudson Holding Corporation, a Delaware
      corporation (the “Company”),
      and
      the purchasers identified on the signature pages hereto (each a “Purchaser”
and
      collectively the “Purchasers”);
      and

     

    WHEREAS,
      subject to the terms and conditions set forth in this Agreement and pursuant
      to
      Section 4(2) of the Securities Act (as defined below), and Rule 506 promulgated
      thereunder, the Company desires to issue and sell to the Purchasers, and each
      Purchaser, severally and not jointly, desires to purchase from the Company,
      in
      the aggregate up to $4,750,000 of the Company’s Common Stock and certain
      Warrants, in the form attached hereto as Exhibit
      A,
      as more
      fully described in this Agreement;

     

    WHEREAS,
      contemporaneous with the sale of the Common Stock and Warrants, the parties
      hereto will execute and deliver a Registration Rights Agreement, in the form
      attached hereto as Exhibit
      B
      (the
“Registration
      Rights Agreement”),
      pursuant to which the Company will agree to provide certain registration rights
      under the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder, and applicable state securities laws.

     

    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 Purchaser agrees as
      follows:

     

    ARTICLE
      I.

    DEFINITIONS

     

    1.1 Definitions.
      In
      addition to the terms defined elsewhere in this Agreement, for all purposes
      of
      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. With respect to a Purchaser,
      any
      investment fund or managed account that is managed on a discretionary basis
      by
      the same investment manager as such Purchaser will be deemed to be an Affiliate
      of such Purchaser.

     

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

     

    “Closing”
means
      the closing of the purchase and sale of the Common Stock and Warrants pursuant
      to Section 2.2.

     

    “Closing
      Date”
means
      the date of a Closing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Closing
      Price”
means
      on any particular date (a) the last reported closing price per share of
      Common Stock on such date on the Trading Market (as reported by Bloomberg L.P.
      at 4:15 PM (New York time), or (b) if there is no such price on such date,
      then
      the closing price on the Trading Market on the date nearest preceding such
      date
      (as reported by Bloomberg L.P. at 4:15 PM (New York time) for the closing price
      for regular session trading on such day), or (c)  if the Common Stock is
      not then listed or quoted on the Trading Market and if prices for the Common
      Stock are then reported in the “pink sheets” published by the National Quotation
      Bureau Incorporated (or a similar organization or agency succeeding to its
      functions of reporting prices), the most recent bid price per share of the
      Common Stock so reported, or (d) if the shares of Common Stock are not then
      publicly traded the fair market value of a share of Common Stock as determined
      by an appraiser selected in good faith by the Purchasers of a majority in
      interest of the Shares then outstanding.

     

    “Commission”
means
      the Securities and Exchange Commission.

     

    “Common
      Stock”
means
      the common stock of the Company, $0.001 par value per share, and any securities
      into which such common stock may hereafter be reclassified. 

     

    “Common
      Stock Equivalents”
means
      any securities of the Company or the Subsidiaries, which would entitle the
      holder thereof to acquire at any time Common Stock, including without
      limitation, any debt, preferred stock, rights, options, warrants or other
      instrument that is at any time convertible into or exchangeable for, or
      otherwise entitles the holder thereof to receive, Common Stock.

     

    “Disclosure
      Schedules”
means
      the Disclosure Schedules attached as Annex I
      hereto.

     

    “Effective
      Date”
means
      the date that the Registration Statement is first declared effective by the
      Commission.

     

    “Evaluation
      Date”
shall
      have the meaning ascribed to such term in Section 3.1(r).

     

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

     

    “Initial
      Closing”
shall
      have the meaning ascribed to such term in Section 2.2.

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Maximum
      Offering Amount”
shall
      have the meaning ascribed to such term in Section 2.1.

     

    “Per
      Share Purchase Price”
means
      $0.50, subject to adjustment for reverse and forward stock splits, stock
      dividends, stock combinations and other similar transactions of the Common
      Stock
      that occur after the date of this Agreement.

     

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

     

    “Questionnaire”
means
      the Confidential Purchaser Questionnaire distributed by the Company to the
      Purchaser.

     

    “Registration
      Statement”
has
      the
      meaning set forth in the Registration Rights Agreement.

    

    “Rule
      144,”
means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
      Rules 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. 

     

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

     

    “Securities”
means
      the Shares, the Warrants and the Warrant Shares.

     

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

     

    “Shares”
means
      the shares of Common Stock issued or issuable to each Purchaser pursuant to
      this
      Agreement other than the shares of Common Stock issuable pursuant to Section
      4.9.

     

    “Subscription
      Amount”
means,
      as to each Purchaser and the Closing, the amounts set forth below such
      Purchaser’s signature block on the signature page hereto, in United States
      dollars and in immediately available funds.

     

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

     

    “Trading
      Day”
means
      (i) a day on which the Common Stock is traded on a Trading Market, or (ii)
      if
      the Common Stock is not listed on a Trading Market, a day on which the Common
      Stock is traded on the over-the-counter market, as reported by the OTC Bulletin
      Board, or (iii) if the Common Stock is not quoted on the OTC Bulletin Board,
      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 its functions of reporting prices); provided,
      that in the event that the Common Stock is not listed or quoted as set forth
      in
      (i), (ii) and (iii) hereof, then Trading Day shall mean a Business
      Day.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “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 American Stock Exchange, the New York
      Stock Exchange, the Nasdaq Global Market, the Nasdaq Capital Market, or the
      OTC
      Bulletin Board.

     

    “Transaction
      Documents”
means
      this Agreement, the Warrants and any other documents or agreements executed
      in
      connection with the transactions contemplated hereunder.

     

    “Warrants”
means
      the Common Stock Purchase Warrants, in the form of Exhibit A,
      issuable to the Purchasers at the Closing, exercisable for a term of five years
      at an exercise price equal to $0.75 or the market price at the end of the
      Trading Day on the Closing Date, whichever is higher, subject to adjustment
      therein.

     

    “Warrant
      Shares”
means
      the shares of Common Stock issuable upon exercise of the Warrants.

     

    ARTICLE
      II.

    PURCHASE
      AND SALE

     

    2.1 Purchase
      and Sale. At
      the
      Initial Closing (as defined below), the Purchasers shall purchase, severally
      and
      not jointly, and the Company shall issue and sell, in the aggregate, up to
      $4,500,000 (the “Maximum Offering Amount”) of Common Stock, together with the
      Warrants. Each Purchaser shall purchase from the Company, and the Company shall
      issue and sell to each Purchaser, (a) a number of Shares equal to such
      Purchaser’s Subscription Amount divided by the Per Share Purchase Price and (b)
      the Warrants as determined pursuant to Section 2.3(a). 

     

    2.2 Closing. The
      Closing (the “Closing”) shall take place on the date of this Agreement.

     

    (a) Upon
      satisfaction of the conditions set forth in Section 2.3, the Closing shall
      occur
      at the offices of the Company, or such other location as the parties shall
      mutually agree.

     

    (b) Purchaser
      understands and acknowledges that this Agreement is part of a proposed placement
      by the Company of up to the Maximum Offering Amount. No minimum amount of
      Securities must be sold before a Closing may take place. 

     

    2.3 Closing
      Conditions.

     

    (a) Conditions
      to the Purchasers’ Obligations.
      The
      obligation of each Purchaser to purchase the Shares and the Warrants at the
      Closing is subject to the fulfillment to such Purchaser's satisfaction, on
      or
      prior to the Closing Date, of the following conditions, any of which may be
      waived by such Purchaser (as to itself only):

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (i) The
      representations and warranties made by the Company in Section 3.1 hereof
      qualified as to materiality shall be true and correct at all times prior to
      and
      on the Closing Date, except to the extent any such representation or warranty
      expressly speaks as of an earlier date, in which case such representation or
      warranty shall be true and correct as of such earlier date, and, the
      representations and warranties made by the Company in Section 3 hereof not
      qualified as to materiality shall be true and correct in all material respects
      at all times prior to and on the Closing Date, except to the extent any such
      representation or warranty expressly speaks as of an earlier date, in which
      case
      such representation or warranty shall be true and correct in all material
      respects as of such earlier date. The Company shall have performed in all
      material respects all obligations and covenants herein required to be performed
      by it on or prior to the Closing Date.

    

    (ii) The
      Company shall have obtained any and all consents, permits, approvals,
      registrations and necessary or appropriate for consummation of the purchase
      and
      sale of the Securities and the consummation of the other transactions
      contemplated by the Transaction Documents, all of which shall be in full force
      and effect.

    

    (iii) The
      Company shall have executed and delivered the Registration Rights
      Agreement.

    

    (iv) No
      judgment, writ, order, injunction, award or decree of or by any court, or judge,
      justice or magistrate, including any bankruptcy court or judge, or any order
      of
      or by any governmental authority, shall have been issued, and no action or
      proceeding shall have been instituted by any governmental authority, enjoining
      or preventing the consummation of the transactions contemplated hereby or in
      the
      other Transaction Documents.

    

    (v) The
      Company shall have delivered a Certificate, executed on behalf of the Company
      by
      its Chief Executive Officer or its Chief Financial Officer, dated as of the
      Closing Date, certifying to the fulfillment of the conditions specified in
      subsections (i), (ii), (iv) and (viii) of this Section 2.3(a).

    

    (vi) The
      Company shall have delivered a Certificate, executed on behalf of the Company
      by
      its Secretary, dated as of the Closing Date, certifying the resolutions adopted
      by the Board of Directors of the Company approving the transactions contemplated
      by this Agreement and the other Transaction Documents and the issuance of the
      Securities, certifying the current versions of the Certificate of Incorporation
      and Bylaws of the Company and certifying as to the signatures and authority
      of
      persons signing the Transaction Documents and related documents on behalf of
      the
      Company.

    

    (vii) The
      Purchasers shall have received an opinion from Ellenoff, Grossman & Schole
      LLP, the Company's counsel, dated as of the Closing Date, in form and substance
      reasonably acceptable to the Purchasers and addressing such legal matters as
      the
      Purchasers may reasonably request.

    

    (viii) No
      stop
      order or suspension of trading shall have been imposed by Nasdaq, the SEC or
      any
      other governmental or regulatory body with respect to public trading in the
      Common Stock.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (ix)
      The
      Purchaser shall have received a certificate evidencing the number of Shares
      equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase
      Price, registered in the name of such Purchaser.

     

    (x)
      The
      Purchaser shall have received a Warrant, registered in the name of such
      Purchaser, pursuant to which such Purchaser shall have the right to acquire
      up
      to the number of shares of Common Stock equal to 50% of the Shares to be issued
      to such Purchaser at the Closing.

    

    (b) Conditions
      to Obligations of the Company.
      The
      Company's obligation to sell and issue the Shares and the Warrants at the
      Closing is subject to the fulfillment to the satisfaction of the Company on
      or
      prior to the Closing Date of the following conditions, any of which may be
      waived by the Company:

    

    (i) The
      representations and warranties made by the Purchasers in Section 3.2 hereof,
      other than the representations and warranties contained in Sections 3.2(b)
      through (g) (the “Investment Representations”), shall be true and correct in all
      material respects when made, and shall be true and correct in all material
      respects on the Closing Date with the same force and effect as if they had
      been
      made on and as of said date. The Investment Representations shall be true and
      correct in all respects when made, and shall be true and correct in all respects
      on the Closing Date with the same force and effect as if they had been made
      on
      and as of said date. The Purchasers shall have performed in all material
      respects all obligations and covenants herein required to be performed by them
      on or prior to the Closing Date.

    

    (ii) The
      Purchasers shall have executed and delivered the Registration Rights
      Agreement.

    

    (iii) The
      Purchasers shall have delivered the Purchase Price to the Company.

     

    (iv) A
      completed and executed Questionnaire.

     

    ARTICLE
      III.

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1 Representations
      and Warranties of the Company. Except
      as
      set forth in the corresponding section of the Disclosure Schedules delivered
      concurrently herewith, the Company hereby makes the following representations
      and warranties as of the date hereof and as of the Closing Date to each
      Purchaser:

     

    (a) Subsidiaries.
      Other
      than Hudson Securities, Inc., and Hudson Technologies, Inc. the Company has
      no
      direct or indirect subsidiaries. The Company owns, directly or indirectly,
      all
      of the capital stock of each Subsidiary free and clear of any lien, charge,
      security interest, encumbrance, right of first refusal or other restriction
      (collectively, “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. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (b) Organization
      and Qualification.
      Each of
      the Company and 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. Neither the Company nor any
      Subsidiary is in violation of any of the provisions of its respective
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents. Each of the Company and 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 or reasonably be expected to result in (i) a material adverse effect on
      the
      legality, validity or enforceability of any Transaction Document, (ii) a
      material adverse effect on the results of operations, assets, business or
      financial condition of the Company and the Subsidiaries, taken as a whole,
      or
      (iii) adversely impair the Company’s ability to perform in any material respect
      on a timely basis its obligations under any Transaction Document (any of (i),
      (ii) or (iii), 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 thereunder. The execution and
      delivery of each of the Transaction Documents by the Company and the
      consummation by it of the transactions contemplated thereby have been duly
      authorized by all necessary action on the part of the Company and no further
      action is required by the Company 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, will constitute the
      valid and binding obligation of the Company enforceable against the Company
      in
      accordance with its terms except (i) as limited by applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general application
      affecting enforcement of creditors’ rights generally and (ii) as limited by laws
      relating to the availability of specific performance, injunctive relief or
      other
      equitable remedies.

     

    (d) No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by the Company of the transactions contemplated thereby
      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, 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) or other understanding to which the Company
      or
      any Subsidiary is a party or by which any property or asset of the Company
      or
      any Subsidiary is bound or affected, or (iii) 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 a Subsidiary is
      subject (including federal and state securities laws and regulations), or by
      which any property or asset of the Company or a Subsidiary is bound or affected;
      except in the case of each of clauses (ii) and (iii), such as would not have
      or
      reasonably be expected to result in a Material Adverse Effect.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (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 (a) the filing with the Commission of the
      Registration Statement, the application(s) to each Trading Market for the
      listing of the Shares and Warrant Shares for trading thereon in the time and
      manner required thereby, and applicable Blue Sky filings, (b) such as have
      already been obtained or such exemptive filings as are required to be made
      under
      applicable securities laws, (c) such other filings that have been made pursuant
      to applicable state securities laws and post-sale filings pursuant to applicable
      state and federal securities laws which the Company undertakes to file within
      the applicable time periods. Subject to the accuracy of the representations
      and
      warranties of each Purchaser set forth in Section 4 hereof, the Company has
      taken all action necessary to exempt (i) the issuance and sale of the
      Securities, (ii) the issuance of the Warrant Shares upon due exercise of the
      Warrants, and (iii) the other transactions contemplated by the Transaction
      Documents from the provisions of any stockholder rights plan or other “poison
      pill” arrangement, any anti-takeover, business combination or control share law
      or statute binding on the Company or to which the Company or any of its assets
      and properties may be subject and any provision of the Company’s Certificate of
      Incorporation or Bylaws that is or could reasonably be expected to become
      applicable to the Purchasers as a result of the transactions contemplated
      hereby, including without limitation, the issuance of the Securities and the
      ownership, disposition or voting of the Securities by the Purchasers or the
      exercise of any right granted to the Purchasers pursuant to this Agreement
      or
      the other Transaction Documents.

     

    (f) Issuance
      of the Securities.
      The
      Shares are duly authorized and, when issued and paid for in accordance with
      the
      Transaction Documents, will be duly and validly issued, fully paid and
      nonassessable, free and clear of all Liens. The Warrants have been duly and
      validly authorized. Upon the due exercise of the Warrants, the Warrant Shares
      will be validly issued, fully paid and non-assessable free and clear of all
      Liens. The Company has reserved from its duly authorized capital stock the
      maximum number of shares of Common Stock issuable pursuant to this Agreement
      and
      the Warrants.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (g) Capitalization.
      Schedule
      3(g)
      sets
      forth as of the date hereof (a) the authorized capital stock of the Company;
      (b)
      the number of shares of capital stock issued and outstanding; (c) the number
      of
      shares of capital stock issuable pursuant to the Company’s stock plans; and (d)
      the number of shares of capital stock issuable and reserved for issuance
      pursuant to securities (other than the Shares and the Warrants) exercisable
      for,
      or convertible into or exchangeable for any shares of capital stock of the
      Company. All of the issued and outstanding shares of the Company’s capital stock
      have been duly authorized and validly issued and are fully paid, nonassessable
      and free of pre-emptive rights and were issued in full compliance with
      applicable state and federal securities law and any rights of third parties.
      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. Except as described on Schedule
      3(g),
      there
      are no outstanding options, warrants, script rights to subscribe to, calls
      or
      commitments of any character whatsoever relating to, or securities, rights
      or
      obligations convertible into or exchangeable for, or giving any Person any
      right
      to subscribe for or acquire, any shares of Common Stock, or contracts,
      commitments, understandings or arrangements by which the Company or any
      Subsidiary is or may become bound to issue additional shares of Common Stock,
      or
      securities or rights convertible or exchangeable into shares of Common Stock,
      other than in connection with the Purchase Agreement and the Company’s stock
      option plans. The issue and sale of the Securities will not obligate the Company
      to issue shares of Common Stock or other securities to any Person (other than
      the Purchasers) and will not result in a right of any holder of Company
      securities to adjust the exercise, conversion, exchange or reset price under
      such securities. Except as described on Schedule
      3(g)
      and
      except for the Registration Rights Agreement, there are no voting agreements,
      buy-sell agreements, option or right of first purchase agreements or other
      agreements of any kind among the Company and any of the securityholders of
      the
      Company relating to the securities of the Company held by them. Except as
      described on Schedule
      3(g)
      and
      except as provided in the Registration Rights Agreement, no Person has the
      right
      to require the Company to register any securities of the Company under the
      1933
      Act, whether on a demand basis or in connection with the registration of
      securities of the Company for its own account or for the account of any other
      Person.

     

    (h) SEC
      Reports; Financial Statements.
      The
      Company has filed all reports and registration statements 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 two years preceding the date hereof
      (or
      such shorter period as the Company was required by law to file such material)
      (the foregoing materials, including the exhibits thereto, being collectively
      referred to herein as the “SEC
      Reports”
and,
      together with the Disclosure Schedules to this Agreement, the “Disclosure
      Materials”)
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension. As
      of
      their respective dates, the SEC Reports complied in all material respects with
      the requirements of the Securities Act and the Exchange Act and the rules and
      regulations of the Commission promulgated thereunder, and none of the SEC
      Reports, when filed, contained any untrue statement of a material fact or
      omitted to state a material fact required to be stated therein or necessary
      in
      order to make the statements therein, in light of the circumstances under which
      they were made, not misleading. The financial statements of the Company included
      in the SEC Reports comply in all material respects with applicable accounting
      requirements and the rules and regulations of the Commission with respect
      thereto as in effect at the time of filing. Such financial statements have
      been
      prepared in accordance with generally accepted accounting principles applied
      on
      a consistent basis during the periods involved (“GAAP”),
      except as may be otherwise specified in such financial statements or the notes
      thereto and except that unaudited financial statements may not contain all
      footnotes required by GAAP, and fairly present in all material respects the
      financial position of the Company and its consolidated subsidiaries as of and
      for the dates thereof and the results of operations and cash flows for the
      periods then ended, subject, in the case of unaudited statements, to normal,
      immaterial, year-end audit adjustments. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (i) Material
      Changes.
      Since
      the date of the latest audited financial statements included within the SEC
      Reports, except as disclosed in the SEC Reports, (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 or required to be disclosed in filings
      made with the Commission, and (iii) the Company has not altered its method
      of
      accounting, (iv) 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 and (v) the Company has not issued any equity securities to any officer,
      director or Affiliate, except pursuant to existing Company stock option plans
      and in connection with the Purchase Agreement. The Company does not have pending
      before the Commission any request for confidential treatment of
      information.

     

    (j) Litigation.
      Except
      as described on Schedule
      3(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 Securities or (ii) could, if there
      were
      an unfavorable decision, have or reasonably be expected to result in a Material
      Adverse Effect. Neither the Company nor any Subsidiary, nor any director or
      officer thereof, is or has been the subject of any Action involving a claim
      of
      violation of or liability under federal or state securities laws or a claim
      of
      breach of fiduciary duty. There has not been, and to the knowledge of the
      Company, there is not pending or contemplated, any investigation by the
      Commission involving the Company or any current or former director or officer
      of
      the Company. The Commission has not issued any stop order or other order
      suspending the effectiveness of any registration statement filed by the Company
      or any Subsidiary under the Exchange Act or the Securities Act.

     

    (k) Labor
      Relations.
      Except
      as
      set forth on Schedule
      3(k),
      the
      Company is not a party to or bound by any collective bargaining agreements
      or
      other agreements with labor organizations. The Company has not violated in
      any
      material respect any laws, regulations, orders or contract terms, affecting
      the
      collective bargaining rights of employees, labor organizations or any laws,
      regulations or orders affecting employment discrimination, equal opportunity
      employment, or employees’ health, safety, welfare, wages and hours. No
      material labor dispute exists or, to the knowledge of the Company, is imminent
      with respect to any of the employees of the Company which could reasonably
      be
      expected to result in a Material Adverse Effect.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (l) 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),
      nor has the Company or any Subsidiary received notice of a claim that it is
      in
      default under or that it is in violation of, 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 (whether or not such default or
      violation has been waived), (ii) is in violation of any order of any court,
      arbitrator or governmental body, or (iii) is or has been in violation of any
      statute, rule or regulation of any governmental authority, including without
      limitation all foreign, federal, state and local laws applicable to its
      business, except in the case of clauses (i), (ii) and (iii) as would not have
      or
      reasonably be expected to result in a Material Adverse Effect.

     

    (m) Regulatory
      Permits.
      The
      Company and the Subsidiaries 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 have
      or
      reasonably be expected to result in a Material Adverse Effect (“Material
      Permits”),
      and
      neither the Company nor any Subsidiary has received any notice of proceedings
      relating to the revocation or modification of any Material Permit.

     

    (n) Title
      to Assets.
      The
      Company and the Subsidiaries have good and marketable title in fee simple to
      all
      real property owned by them that is material to the business of the Company
      and
      the Subsidiaries and good and marketable title in all personal property owned
      by
      them that is material to the business of the Company and the Subsidiaries,
      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 the
      Subsidiaries and Liens for the payment of federal, state or other taxes, the
      payment of which is neither delinquent nor subject to penalties. Any real
      property and facilities held under lease by the Company and the Subsidiaries
      are
      held by them under valid, subsisting and enforceable leases of which the Company
      and the Subsidiaries are in compliance.

     

    (o) Patents
      and Trademarks.
      To the
      knowledge of the Company and each Subsidiary, the Company and the Subsidiaries
      have, or have rights to use, all patents, patent applications, trademarks,
      trademark applications, service marks, trade names, copyrights, licenses and
      other similar rights that are necessary or material for use in connection with
      their respective businesses as described in the SEC Reports and which the
      failure to so have could have or reasonably be expected to result in a Material
      Adverse Effect (collectively, the “Intellectual
      Property Rights”).
      Neither the Company nor any Subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or any Subsidiary violates
      or
      infringes upon the rights of any Person. To the knowledge of the Company, all
      such Intellectual Property Rights are enforceable. The Company and its
      Subsidiaries have taken reasonable steps to protect the Company’s and its
      Subsidiaries’ rights in their Intellectual Property Rights and confidential
      information (the "Confidential Information"). Each employee, consultant and
      contractor who has had access to Confidential Information which is necessary
      for
      the conduct of Company’s and each of its Subsidiaries’ respective businesses as
      currently conducted or as currently proposed to be conducted has executed an
      agreement to maintain the confidentiality of such Confidential Information
      and
      has executed appropriate agreements that are substantially consistent with
      the
      Company’s standard forms thereof. Except under confidentiality obligations,
      there has been no material disclosure of any of the Company’s or its
      Subsidiaries’ Confidential Information to any third party.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (p) Environmental
      Matters.
      Neither
      the Company nor any Subsidiary is in violation of any statute, rule, regulation,
      decision or order of any governmental agency or body or any court, domestic
      or
      foreign, relating to the use, disposal or release of hazardous or toxic
      substances or relating to the protection or restoration of the environment
      or
      human exposure to hazardous or toxic substances (collectively, “Environmental
      Laws”), owns or operates any real property contaminated with any substance that
      is subject to any Environmental Laws, is liable for any off-site disposal or
      contamination pursuant to any Environmental Laws, or is subject to any claim
      relating to any Environmental Laws, which violation, contamination, liability
      or
      claim has had or could reasonably be expected to have a Material Adverse Effect,
      individually or in the aggregate; and there is no pending or, to the Company’s
      knowledge, threatened investigation that might lead to such a
      claim.

     

    (q) Insurance.
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses in which the Company and the Subsidiaries are
      engaged. 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.

     

    (r) Transactions
      With Affiliates and Employees.
      None of
      the officers or directors of the Company and, to the knowledge of the Company,
      none of the employees of the Company is presently a party to any transaction
      with the Company or any Subsidiary (other than for services as employees,
      officers and directors), including any contract, agreement or other arrangement
      providing for the furnishing of services to or by, providing for rental of
      real
      or personal property to or from, or otherwise requiring payments to or from
      any
      officer, director or such employee or, to the knowledge of the Company, any
      entity in which any officer, director, or any such employee has a substantial
      interest or is an officer, director, trustee or partner, in each case in excess
      of $60,000 other than (a) for payment of salary or consulting fees for services
      rendered, (b) reimbursement for expenses incurred on behalf of the Company
      and
      (c) for other employee benefits, including stock option agreements under any
      stock option plan of the Company.

     

    (s) Internal
      Accounting Controls.
      The
      Company is
      in
      material compliance with the provisions of the Sarbanes-Oxley Act of 2002
      currently applicable to the Company. The
      Company and each of its Subsidiaries maintains a system of internal accounting
      controls sufficient to provide reasonable assurance that (i) transactions are
      executed in accordance with management’s general or specific authorizations,
      (ii) transactions are recorded as necessary to permit preparation of financial
      statements in conformity with GAAP and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management’s general or
      specific authorization, and (iv) the recorded accountability for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences.
      The
      Company has established disclosure controls and procedures (as defined in
      Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
      disclosures controls and procedures to ensure that material information relating
      to the Company, including its subsidiaries, is made known to the certifying
      officers by others within those entities, particularly during the period in
      which the Company's Form 10-K or 10-Q, as the case may be, is being prepared.
      The Company's certifying officers have evaluated the effectiveness of the
      Company's controls and procedures as of a date within 90 days prior to the
      filing date of the Form 10-QSB for the quarter ended December 31, 2007 (such
      date, the "Evaluation
      Date").
      The
      Company presented in its most recently filed Form 10-KSB or Form 10-QSB the
      conclusions of the certifying officers about the effectiveness of the disclosure
      controls and procedures based on their evaluations as of the Evaluation Date.
      Since the Evaluation Date, there have been no significant changes in the
      Company's internal controls or, to the Company's knowledge, in other factors
      that could significantly affect the Company's internal controls.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

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

     

    (u) Listing
      and Maintenance Requirements.
      The
      Company has not, in the 12 months preceding the date hereof, received notice
      from any Trading Market on which the Common Stock is or has been listed or
      quoted to the effect that the Company is not in compliance with the listing
      or
      maintenance requirements of such Trading Market.

     

    (v) No
      Integrated Offering.
      Other
      than in connection with the Purchase Agreement, neither the Company, nor any
      of
      its affiliates, nor any Person acting on its or their behalf has, directly
      or
      indirectly, made any offers or sales of any security or solicited any offers
      to
      buy any security, under circumstances that would cause this offering of the
      Securities to be integrated with prior offerings by the Company for purposes
      of
      the Securities Act or any applicable shareholder approval provisions, including,
      without limitation, under the rules and regulations of any exchange or automated
      quotation system on which any of the securities of the Company are listed or
      designated.

     

    (w) Brokers
      and Finders.
      No
      Person will have, as a result of the transactions contemplated by the
      Transaction Documents, any valid right, interest or claim against or upon the
      Company, any Subsidiary or an Purchaser for any commission, fee or other
      compensation pursuant to any agreement, arrangement or understanding entered
      into by or on behalf of the Company. 

     

    (x) No
      Directed Selling Efforts or General Solicitation.
      Neither
      the Company nor any Person acting on its behalf has conducted any general
      solicitation or general advertising (as those terms are used in Regulation
      D) in
      connection with the offer or sale of any of the Securities.

     

    (y) Questionable
      Payments.
      Neither
      the Company nor any of its Subsidiaries nor, to the Company’s knowledge, any of
      their respective current or former stockholders, directors, officers, employees,
      agents or other Persons acting on behalf of the Company or any Subsidiary,
      has
      on behalf of the Company or any Subsidiary or in connection with their
      respective businesses: (a) used any corporate funds for unlawful contributions,
      gifts, entertainment or other unlawful expenses relating to political activity;
      (b) made any direct or indirect unlawful payments to any governmental officials
      or employees from corporate funds; (c) established or maintained any unlawful
      or
      unrecorded fund of corporate monies or other assets; (d) made any false or
      fictitious entries on the books and records of the Company or any Subsidiary;
      or
      (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or
      other unlawful payment of any nature.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (z) Disclosures.
      Neither
      the Company nor any Person acting on its behalf has provided the Purchasers
      or
      their agents or counsel with any information that constitutes or might
      constitute material, non-public information, other than the terms of the
      transactions contemplated hereby. The written materials delivered to the
      Purchasers in connection with the transactions contemplated by the Transaction
      Documents do not contain any untrue statement of a material fact or omit to
      state a material fact necessary in order to make the statements contained
      therein, in light of the circumstances under which they were made, not
      misleading.

     

    3.2 Representations
      and Warranties of the Purchasers. Each
      Purchaser hereby, for itself and for no other Purchaser, represents and warrants
      as of the date hereof and as of the Closing Date to the Company as
      follows:

     

    (a) Organization;
      Authority.
      Such
      Purchaser is an entity 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 thereunder. The execution, delivery and performance by
      such
      Purchaser of the transactions contemplated by this Agreement has been duly
      authorized by all necessary corporate action on the part of such Purchaser.
      Each
      Transaction Document to which it is party has been duly executed by such
      Purchaser, and when delivered by such Purchaser in accordance with terms hereof,
      will constitute the valid and legally binding obligation of such Purchaser,
      enforceable against it in accordance with its terms.

     

    (b) Investment
      Intent.
      Such
      Purchaser understands that the Securities are “restricted securities” and have
      not been registered under the Securities Act or any applicable state securities
      law and is acquiring the Securities as principal for its own account for
      investment purposes only and not with a view to or for distributing or reselling
      such Securities or any part thereof, has no present intention of distributing
      any of such Securities and has no arrangement or understanding with any other
      persons regarding the distribution of such Securities (this representation
      and
      warranty not limiting such Purchaser’s right to sell the Securities pursuant to
      the Registration Statement or otherwise in compliance with applicable federal
      and state securities laws). Such Purchaser is acquiring the Securities hereunder
      in the ordinary course of its business. Such Purchaser does not have any
      agreement or understanding, directly or indirectly, with any Person to
      distribute any of the Securities.

     

    (c) Purchaser
      Status.
      At the
      time such Purchaser was offered the Securities, it was, and at the date hereof
      it is an “accredited investor” as defined in Rule 501(a) under the Securities
      Act. Such Purchaser is not required to be registered as a broker-dealer under
      Section 15 of the Exchange Act. 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (d) Experience
      of such Purchaser.
      Such
      Purchaser, either alone or together with its representatives, has such
      knowledge, sophistication and experience in business and financial matters
      so as
      to be capable of evaluating the merits and risks of the prospective investment
      in the Securities, and has so evaluated the merits and risks of such investment.
      Such Purchaser is able to bear the economic risk of an investment in the
      Securities and, at the present time, is able to afford a complete loss of such
      investment.

     

    (e) General
      Solicitation.
      Such
      Purchaser is not purchasing the Securities as a result of any advertisement,
      article, notice or other communication regarding the Securities 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.

     

    (f) Access
      to Information.
      Such
      Purchaser acknowledges that it has reviewed the Disclosure Materials and has
      been afforded (i) the opportunity to ask such questions as it has deemed
      necessary of, and to receive answers from, representatives of the Company
      concerning the terms and conditions of the offering of the Securities and the
      merits and risks of investing in the Securities; (ii) access to information
      about the Company and the Subsidiaries and their respective financial condition,
      results of operations, business, properties, management and prospects sufficient
      to enable it to evaluate its investment; and (iii) the opportunity to obtain
      such additional information that the Company possesses or can acquire without
      unreasonable effort or expense that is necessary to make an informed investment
      decision with respect to the investment. Neither such inquiries nor any other
      investigation conducted by or on behalf of such Purchaser or its representatives
      or counsel shall modify, amend or affect such Purchaser’s right to rely on the
      truth, accuracy and completeness of the Disclosure Materials and the Company’s
      representations and warranties contained in the Transaction Documents.

     

    (g) Registration
      Required.
      Such
      Purchaser hereby covenants with the Company not to make any sale of the Shares
      and the Warrant Shares without complying with the provisions hereof, and such
      Purchaser acknowledges that the certificates evidencing the Shares will be
      imprinted with a legend that prohibits their transfer except in accordance
      therewith. 

     

    (h) No
      Tax
      or Legal Advice.
      Such
      Purchaser understands that nothing in this Agreement, any other Transaction
      Document or any other materials presented to such Purchaser in connection with
      the purchase and sale of the Securities constitutes legal, tax or investment
      advice. Such Purchaser has consulted such legal, tax and investment advisors
      as
      it, in its sole discretion, has deemed necessary or appropriate in connection
      with its purchase of Securities.

     

    (i) Placement
      Fee. Such
      Purchaser represents and warrants that no finder, broker, agent, financial
      advisor or other intermediary, nor any purchaser representative or any
      broker-dealer acting as a broker, is entitled to any compensation in connection
      with the transactions contemplated by this Agreement

     

    The
      Company acknowledges and agrees that each Purchaser does not make or has not
      made any representations or warranties with respect to the transactions
      contemplated hereby other than those specifically set forth in this Section
      3.2.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IV.

    OTHER
      AGREEMENTS OF THE PARTIES

     

    4.1 Transfer
      Restrictions. 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, to the Company, to an Affiliate
      of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b),
      the Company may require the transferor thereof to provide to the Company an
      opinion of counsel selected 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.

     

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

     

    THESE
      SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
      OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
      ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
      INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
      SECURITIES ACT.

     

    The
      Company acknowledges and agrees that a Purchaser may from time to time pledge
      pursuant to a bona fide margin agreement with a registered broker-dealer or
      grant a security interest in some or all of the Securities to a financial
      institution that is an “accredited investor” as defined in Rule 501(a) under the
      Securities Act and, if required under the terms of such arrangement, such
      Purchaser may transfer pledged or secured Securities to the pledgees or secured
      parties. Such a pledge or transfer would not be subject to approval of the
      Company and no legal opinion of legal counsel of the pledgee, secured party
      or
      pledgor shall be required in connection therewith. Further, no notice shall
      be
      required of such pledge. At the appropriate Purchaser’s expense, the Company
      will execute and deliver such reasonable documentation as a pledgee or secured
      party of Securities may reasonably request in connection with a pledge or
      transfer of the Securities, including the preparation and filing of any required
      prospectus supplement under Rule 424(b)(3) of the Securities Act or other
      applicable provision of the Securities Act to appropriately amend the list
      of
      Selling Stockholders thereunder.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (c) Certificates
      evidencing the Shares and Warrant Shares shall not contain any legend (including
      the legend set forth in Section 4.1(b)), (i) while a registration statement
      (including the Registration Statement) covering the resale of such security
      is
      effective under the Securities Act, or (ii) following any sale of such Shares
      or
      Warrant Shares pursuant to Rule 144, or (iii) if such Shares or Warrant Shares
      are eligible for sale under Rule 144 without limitation, or (iv) if such legend
      is not required under applicable requirements of the Securities Act (including
      judicial interpretations and pronouncements issued by the Staff of the
      Commission). If all or any portion of a Warrant is exercised at a time when
      there is an effective registration statement to cover the resale of the Warrant
      Shares, such Warrant Shares shall be issued free of all legends. The Company
      agrees that at such time as such legend is no longer required under this Section
      4.1(c), it will, no later than three Trading Days following the delivery by
      a
      Purchaser to the Company or the Company’s transfer agent of a certificate
      representing Shares or Warrant Shares, as the case may be, issued with a
      restrictive legend, deliver or cause to be delivered to such Purchaser a
      certificate representing such Securities that is free from all restrictive
      and
      other legends. The Company may not make any notation on its records or give
      instructions to any transfer agent of the Company that enlarge the restrictions
      on transfer set forth in this Section. In addition, in connection with any
      sale
      or disposition of the Securities by a Purchaser pursuant to Rule 144 or pursuant
      to any other exemption under the Securities Act such that the purchaser acquires
      freely tradable shares and upon compliance by the Purchaser with the
      requirements of this Agreement, the Company shall or, in the case of Common
      Stock, shall cause the transfer agent for the Common Stock (the “Transfer
      Agent”) to issue replacement certificates representing the Securities sold or
      disposed of without restrictive legends. The Purchaser shall be required to
      provide the Company with an undertaking that when required it will deliver
      a
      prospectus to the purchaser of the Shares or Warrant Shares. When the Company
      is
      required to cause an unlegended certificate to replace a previously issued
      legended certificate or issue new certificates, if: (1) the unlegended
      certificate is not delivered to a Purchaser within three (3) Business Days
      of
      submission by that Purchaser of a legended certificate and supporting
      documentation to the Transfer Agent as provided above and (2) prior to the
      time
      such unlegended certificate is received by the Purchaser the Purchaser, or
      any
      third party on behalf of such Purchaser or for the Purchaser’s account,
      purchases (in an open market transaction or otherwise) shares of Common Stock
      to
      deliver in satisfaction of a sale by the Purchaser of shares represented by
      such
      certificate (a “Buy-In”),
      then
      the Company shall pay in cash to the Purchaser (for costs incurred either
      directly by such Purchaser or on behalf of a third party) the amount by which
      the total purchase price paid for Common Stock as a result of the Buy-In
      (including brokerage commissions, if any) exceeds the proceeds received by
      such
      Purchaser as a result of the sale to which such Buy-In relates. The Purchaser
      shall provide the Company written notice indicating the amounts payable to
      the
      Purchaser in respect of the Buy-In.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    4.2 Furnishing
      of Information.
      As long
      as any Purchaser owns Securities, 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. Upon the request of any such holder of Securities,
      the Company shall deliver to such holder a written certification of a duly
      authorized officer as to whether it has complied with the preceding sentence.
      As
      long as any Purchaser owns Securities, if the Company is not required to file
      reports pursuant to such laws, it will prepare and furnish to the Purchasers
      and
      make publicly available in accordance with Rule 144(c)(2) such information
      as is
      required for the Purchasers to sell the Securities under Rule 144. The Company
      further covenants that it will take such further action as any holder of
      Securities may reasonably request, all to the extent required from time to
      time
      to enable such Person to sell such Securities without registration under the
      Securities Act within the limitation of the exemptions provided by Rule
      144.

     

    4.3 Integration.
      The
      Company shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Securities in a
      manner that would require the registration under the Securities Act of the
      sale
      of the Securities to the Purchasers.

     

    4.4 Securities
      Laws Disclosure; Publicity. The Company shall, within two (2) Trading Days
      of the Closing Date, issue a press release or file a Current Report on Form
      8-K,
      in each case reasonably acceptable to the attorney for Purchaser disclosing
      the
      transactions contemplated hereby and make such other filings and notices in
      the
      manner and time required by the Commission. The Company and each Purchaser
      shall
      consult with the attorney for other in issuing any press releases with respect
      to the transactions contemplated hereby, and neither the Company nor any
      Purchaser shall issue any such press release or otherwise make any such public
      statement without the prior consent of the Company, with respect to any press
      release of any Purchaser, which consent shall not unreasonably be withheld,
      except if such disclosure is required by law, in which case the disclosing
      party
      shall promptly provide the attorney for other party with prior notice of such
      public statement or communication. Notwithstanding the foregoing, the Company
      shall not publicly disclose the name of any Purchaser, or include the name
      of
      any Purchaser in any filing with the Commission or any regulatory agency or
      Trading Market, without the prior written consent of such Purchaser, except
      (i)
      to the extent such disclosure is required by law or Trading Market regulations,
      in which case the Company shall provide the Purchasers with prior notice of
      such
      disclosure permitted under subclause (i). The determination that such disclosure
      is necessary will be made by the Company’s attorneys.

     

    4.5 Non-Public
      Information. The Company covenants and agrees that neither it nor any other
      Person acting on its behalf will provide any Purchaser or its agents or counsel
      with any information that the Company believes constitutes material non-public
      information, unless prior thereto such Purchaser shall have executed a written
      agreement regarding the confidentiality and use of such information. The Company
      understands and confirms that each Purchaser shall be relying on the foregoing
      representations in effecting transactions in securities of the
      Company.

     

    4.6 Use
      of
      Proceeds. The Company shall use the net proceeds from the sale of the
      Securities hereunder for working capital purposes including to use it for growth
      capital for the Company to recruit and retain key employees and not for the
      satisfaction of any portion of the Company’s debt (other than payment of trade
      payables in the ordinary course of the Company’s business and prior practices),
      to redeem any Company equity or equity-equivalent securities or to settle any
      outstanding litigation.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    4.7 Reservation
      of Common Stock. As
      of the
      date hereof, the Company has reserved and the Company shall continue to reserve
      and keep available at all times, free of preemptive rights, a sufficient number
      of shares of Common Stock for the purpose of enabling the Company to issue
      Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise
      of
      the Warrants. 

    

    4.8 Listing
      of Common Stock. The
      Company agrees, if the Company applies to have the Common Stock traded on any
      Trading Market, it will include in such application the Shares and the Warrant
      Shares, and will take such other action as is necessary or desirable in the
      opinion of the Purchasers to cause the Shares and Warrant Shares to be listed
      on
      such other Trading Market as promptly as possible. The Company will take all
      action reasonably necessary to continue the listing and trading of its Common
      Stock on a Trading Market and will comply in all respects with the Company’s
      reporting, filing and other obligations under the bylaws or rules of the Trading
      Market. 

     

    4.9 No
      Short Sales. Prior to the earliest to occur of (i) the termination of this
      Agreement or (ii) the Effective Date (as defined in the Registration Rights
      Agreement), each Purchaser and its Affiliates shall not engage in short sales
      of
      the Common Stock (as defined in applicable SEC and NASD rules). In addition,
      each Purchaser confirms that it has not held a short position in the Company’s
      Common Stock for at least 30 days prior to the date of this
      Agreement.

     

    ARTICLE
      V.

    MISCELLANEOUS

     

    5.1 Fees
      and Expenses. Except as otherwise set forth in this Agreement, each party
      shall pay the fees and expenses of its advisers, counsel, accountants and other
      experts, if any, and all other expenses incurred by such party incident to
      the
      negotiation, execution, delivery and performance of this Agreement. The Company
      shall pay up to $15,000 for the legal fees and expenses of the Purchasers and
      all stamp and other taxes and duties levied in connection with the sale of
      the
      Securities and will pay the other costs associated with the closing and
      documenting this transaction.

     

    5.2 Entire
      Agreement. The Transaction Documents, together with the exhibits and
      schedules 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.

     

    5.3 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, if such notice or
      communication is delivered via facsimile at the facsimile number specified
      in
      this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (b)
      the
      next Trading Day after the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile number specified in this Section
      on
      a day that is not a Trading Day or later than 6:30 p.m. (New York City time)
      on
      any Trading Day, (c) the Trading 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.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    5.3 Amendments;
      Waivers. No provision of this Agreement may be waived or amended except in a
      written instrument signed, in the case of an amendment, by the Company and
      each
      Purchaser or, in the case of a waiver, by the party against whom enforcement
      of
      any such waiver 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 either party to exercise any right hereunder in any manner
      impair the exercise of any such right.

     

    5.4 Construction.
      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. The language used in this Agreement will be deemed to be the language
      chosen by the parties to express their mutual intent, and no rules of strict
      construction will be applied against any party.

     

    5.5 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 each Purchaser. Any Purchaser may assign any or all of its rights
      under this Agreement to any Person to whom such Purchaser assigns or transfers
      any Securities, provided such transferee agrees in writing to be bound, with
      respect to the transferred Securities, by the provisions hereof that apply
      to
      the “Purchasers”.

     

    5.6 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.

     

    5.7 Governing
      Law. All questions concerning the construction, validity, enforcement and
      interpretation of the Transaction Documents shall be governed by and construed
      and enforced 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 hereto hereby irrevocably submits to the exclusive jurisdiction
      of the state and federal courts sitting in the City of New York, New York 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 the 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. Each party hereto 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 manner permitted by law. Each party
      hereto (including its affiliates, agents, officers, directors and employees)
      hereby irrevocably waives, to the fullest extent permitted by applicable law,
      any and all right to trial by jury in any legal proceeding arising out of or
      relating to this Agreement or the transactions contemplated hereby. If either
      party shall commence an action or proceeding to enforce any provisions of a
      Transaction Document, then the prevailing party in such action or proceeding
      shall be reimbursed by the other party for its attorneys fees and other costs
      and expenses incurred with the investigation, preparation and prosecution of
      such action or proceeding.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    5.8 Survival.
      The representations, warranties, agreements and covenants contained herein
      shall
      survive for two (2) years after the Closing of the transactions contemplated
      by
      this Agreement.

     

    5.9 Indemnification.
      (a) The Company agrees to indemnify and hold harmless each Purchaser and its
      Affiliates and their respective directors, officers, employees and agents from
      and against any and all losses, claims, damages, liabilities and expenses
      (including without limitation reasonable attorney fees and disbursements and
      other expenses incurred in connection with investigating, preparing or defending
      any action, claim or proceeding, pending or threatened and the costs of
      enforcement thereof) (collectively, “Losses”) to which such Person may become
      subject as a result of any breach of representation, warranty, covenant or
      agreement made by or to be performed on the part of the Company under the
      Transaction Documents, and will reimburse any such Person for all such amounts
      as they are incurred by such Person.

     

    (b) Promptly
      after receipt by any Person (the “Indemnified
      Person”)
      of
      notice of any demand, claim or circumstances which would or might give rise
      to a
      claim or the commencement of any action, proceeding or investigation in respect
      of which indemnity may be sought pursuant to Section 5.9, such Indemnified
      Person shall promptly notify the Company in writing and the Company shall assume
      the defense thereof, including the employment of counsel reasonably satisfactory
      to such Indemnified Person, and shall assume the payment of all fees and
      expenses; provided, however, that
      the
      failure of any Indemnified Person so to notify the Company shall not relieve
      the
      Company of its obligations hereunder except to the extent that the Company
      is
      materially prejudiced by such failure to notify. In any such proceeding, any
      Indemnified Person shall have the right to retain its own counsel, but the
      fees
      and expenses of such counsel shall be at the expense of such Indemnified Person
      unless: (i) the Company and the Indemnified Person shall have mutually agreed
      to
      the retention of such counsel; or (ii) in the reasonable judgment of counsel
      to
      such Indemnified Person representation of both parties by the same counsel
      would
      be inappropriate due to actual or potential differing interests between them.
      The Company shall not be liable for any settlement of any proceeding effected
      without its written consent, which consent shall not be unreasonably withheld,
      but if settled with such consent, or if there be a final judgment for the
      plaintiff, the Company shall indemnify and hold harmless such Indemnified Person
      from and against any loss or liability (to the extent stated above) by reason
      of
      such settlement or judgment. Without the prior written consent of the
      Indemnified Person, which consent shall not be unreasonably withheld, the
      Company shall not effect any settlement of any pending or threatened proceeding
      in respect of which any Indemnified Person is or could have been a party and
      indemnity could have been sought hereunder by such Indemnified Party, unless
      such settlement includes an unconditional release of such Indemnified Person
      from all liability arising out of such proceeding.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    5.10 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, 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 signature page were an original
      thereof.

     

    5.11 Severability.
      If any provision of this Agreement is held to be invalid or unenforceable in
      any
      respect, the validity and enforceability of the remaining terms and provisions
      of this Agreement shall not in any way be affected or impaired thereby and
      the
      parties will attempt to agree upon a valid and enforceable provision that is
      a
      reasonable substitute therefor, and upon so agreeing, shall incorporate such
      substitute provision in this Agreement.

     

    5.12 Replacement
      of Securities. If any certificate or instrument evidencing any Securities is
      mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
      issued in exchange and substitution for and upon cancellation thereof, or in
      lieu of and substitution therefor, a new certificate or instrument, but only
      upon receipt of evidence reasonably satisfactory to the Company of such loss,
      theft or destruction and customary and reasonable indemnity, if requested.
      The
      applicants for a new certificate or instrument under such circumstances shall
      also pay any reasonable third-party costs associated with the issuance of such
      replacement Securities.

     

    5.13 Remedies.
      In addition to being entitled to exercise all rights provided herein or granted
      by law, including recovery of damages, each of the Purchasers and the Company
      will be entitled to specific performance under the Transaction Documents. The
      parties agree that monetary damages may not be adequate compensation for any
      loss incurred by reason of any breach of obligations described in the foregoing
      sentence and hereby agrees to waive in any action for specific performance
      of
      any such obligation the defense that a remedy at law would be
      adequate.

     

    5.14 Payment
      Set Aside. To the extent that the Company makes a payment or payments to any
      Purchaser pursuant to any Transaction Document or a Purchaser enforces or
      exercises its rights thereunder, and such payment or payments or the proceeds
      of
      such enforcement or exercise or any part thereof are subsequently invalidated,
      declared to be fraudulent or preferential, set aside, recovered from, disgorged
      by or are required to be refunded, repaid or otherwise restored to the Company,
      a trustee, receiver or any other person under any law (including, without
      limitation, any bankruptcy law, state or federal law, common law or equitable
      cause of action), then to the extent of any such restoration the obligation
      or
      part thereof originally intended to be satisfied shall be revived and continued
      in full force and effect as if such payment had not been made or such
      enforcement or setoff had not occurred.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    5.15 Independent
      Nature of Purchasers’ Obligations and Rights.
      The
      obligations of each Purchaser under any Transaction Document are several and
      not
      joint with the obligations of any other Purchaser, and no Purchaser shall be
      responsible in any way for the performance of the obligations of any other
      Purchaser under any Transaction Document. Nothing contained herein or in any
      Transaction Document, and no action taken by any Purchaser pursuant thereto,
      shall be deemed to constitute the Purchasers as a partnership, an association,
      a
      joint venture or any other kind of entity, or create a presumption that the
      Purchasers are in any way acting in concert or as a group with respect to such
      obligations or the transactions contemplated by the Transaction Document. Each
      Purchaser shall be entitled to independently protect and enforce its rights,
      including without limitation, the rights arising out of this Agreement or out
      of
      the other Transaction Documents, and it shall not be necessary for any other
      Purchaser to be joined as an additional party in any proceeding for such
      purpose. Each Purchaser has been represented by its own separate legal counsel
      in their review and negotiation of the Transaction Documents. The Company has
      elected to provide all Purchasers with the same terms and Transaction Documents
      for the convenience of the Company and not because it was required or requested
      to do so by the Purchasers.

     

    5.15 Irrevocable
      Offer. Purchaser
      agrees that this Agreement constitutes an irrevocable offer to purchase the
      Securities of the Company and that Purchaser cannot cancel, terminate or revoke
      this Agreement or any agreement of Purchaser made hereunder. This Agreement
      shall survive the death or legal disability of Purchaser and shall be binding
      upon Purchaser’s heirs, executors, administrators and successors.

     

    (Signature
      Page Follows)

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    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.

    

      
        	
                HUDSON
                  HOLDING CORPORATION

              	 	
                Address
                  for Notice:

              
	 	 	 
	 	 	
                111
                  Town Square Place

              
	 	 	
                Suite
                  1500A

              
	 	 	
                Jersey
                  City, New Jersey 07310

              
	
                By:

              	 	 	
                Tel.
                  (201) 216-0100

              
	 	
                Name:

              	 	 
	 	
                Title:

              	 	 

      

    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    [PURCHASER
      SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

    

    IN
      WITNESS WHEREOF, Purchaser has caused this Agreement to be executed as of the
      date indicated below.

    

      
        	
                SEAPORT HUDSON
                  LLC 

              	 	
                Address
                  for Notice:

              
	 	 	 
	 	 	
                The
                  Seaport Group LLC

              
	 	 	
                360
                  Madison Avenue

              
	 	 	
                22nd
                  Floor

              
	
                By:
                  

              	 	 	
                New
                  York, New York 10017

              
	 	
                Name:

              	 	
                Fax:
                  (212) 616-7733

              
	 	
                Title:

              	 	
                Attn:
                  Jonathan R. Silverman

              

      

    

    

      
        	 
	
                Social
                  Security Number or Taxpayer 

              
	
                Identification
                  Number

              
	 
	
                Subscription
                  Amount: $

              
	 
	
                Number
                  of Shares of Common Stock:

              
	
                Number
                  of Warrants:

              

      

    

     

    
      
        
        

      

      
        25

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}]]