Document:

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
      WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK
      ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
      PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE
      SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ADAL
      GROUP, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

            Right to Purchase up to 375,000 Shares of Common Stock of
                                ADAL GROUP, INC.

                   (subject to adjustment as provided herein)

                          COMMON STOCK PURCHASE WARRANT

No. _________________                                 Issue Date:  June 29, 2005

      ADAL GROUP, INC., a corporation organized under the laws of the State of
Delaware (the "Company"), hereby certifies that, for value received, LAURUS
MASTER FUND, LTD., or assigns (the "Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company (as defined herein) from and after
the Issue Date of this Warrant and at any time or from time to time before 5:00
p.m., New York time, through the close of business June 29, 2012 (the
"Expiration Date"), up to 375,000 fully paid and nonassessable shares of Common
Stock (as hereinafter defined), $0.0001 par value per share, at the applicable
Exercise Price per share (as defined below). The number and character of such
shares of Common Stock and the applicable Exercise Price per share are subject
to adjustment as provided herein.

      As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:

            (a) The term "Company" shall include ADAL GROUP, INC. and any
      corporation which shall succeed, or assume the obligations of, ADAL GROUP,
      INC. hereunder.

            (b) The term "Common Stock" includes (i) the Company's Common Stock,
      par value $0.0001 per share; and (ii) any other securities into which or
      for which any of the securities described in the preceding clause (i) may
      be converted or exchanged pursuant to a plan of recapitalization,
      reorganization, merger, sale of assets or otherwise.

            (c) The term "Other Securities" refers to any stock (other than
      Common Stock) and other securities of the Company or any other person
      (corporate or otherwise) which the holder of the Warrant at any time shall

<PAGE>

      be entitled to receive, or shall have received, on the exercise of the
      Warrant, in lieu of or in addition to Common Stock, or which at any time
      shall be issuable or shall have been issued in exchange for or in
      replacement of Common Stock or Other Securities pursuant to Section 4 or
      otherwise.

            (d) The "Exercise Price" applicable under this Warrant shall be as
      follows:

            (i) a price of $6.30 for the first 187,500 shares acquired
      hereunder; and

            (ii) a price of $6.83 for any additional shares acquired hereunder.

      1. Exercise of Warrant.

            1.1. Number of Shares Issuable upon Exercise. From and after the
date hereof through and including the Expiration Date, the Holder shall be
entitled to receive, upon exercise of this Warrant in whole or in part, by
delivery of an original or fax copy of an exercise notice in the form attached
hereto as Exhibit A (the "Exercise Notice"), shares of Common Stock of the
Company, subject to adjustment pursuant to Section 4.

      1.2. Fair Market Value. For purposes hereof, the "Fair Market Value" of a
share of Common Stock as of a particular date (the "Determination Date") shall
mean:

            (a) If the Company's Common Stock is traded on the American Stock
      Exchange or another national exchange or is quoted on the National or
      SmallCap Market of The Nasdaq Stock Market, Inc.("Nasdaq"), then the
      closing or last sale price, respectively, reported for the last business
      day immediately preceding the Determination Date.

            (b) If the Company's Common Stock is not traded on the American
      Stock Exchange or another national exchange or on the Nasdaq but is traded
      on the NASD Over the Counter Bulletin Board, then the mean of the average
      of the closing bid and asked prices reported for the last business day
      immediately preceding the Determination Date.

            (c) Except as provided in clause (d) below, if the Company's Common
      Stock is not publicly traded, then as the Holder and the Company agree or
      in the absence of agreement by arbitration in accordance with the rules
      then in effect of the American Arbitration Association, before a single
      arbitrator to be chosen from a panel of persons qualified by education and
      training to pass on the matter to be decided.

            (d) If the Determination Date is the date of a liquidation,
      dissolution or winding up, or any event deemed to be a liquidation,
      dissolution or winding up pursuant to the Company's charter, then all
      amounts to be payable per share to holders of the Common Stock pursuant to
      the charter in the event of such liquidation, dissolution or winding up,
      plus all other amounts to be payable per share in respect of the Common
      Stock in liquidation under the charter, assuming for the purposes of this
      clause (d) that all of the shares of Common Stock then issuable upon
      exercise of the Warrant are outstanding at the Determination Date.

                                       2
<PAGE>

            1.3. Company Acknowledgment. The Company will, at the time of the
exercise of this Warrant, upon the request of the holder hereof acknowledge in
writing its continuing obligation to afford to such holder any rights to which
such holder shall continue to be entitled after such exercise in accordance with
the provisions of this Warrant. If the holder shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such holder any such rights.

            1.4. Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of this Warrant
pursuant to Subsection 3.2, such bank or trust company shall have all the powers
and duties of a warrant agent (as hereinafter described) and shall accept, in
its own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.

      2. Procedure for Exercise.

            2.1. Delivery of Stock Certificates, Etc., on Exercise. The Company
agrees that the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares in accordance herewith. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within three (3) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.

            2.2. Exercise. Payment may be made in cash or by certified or
official bank check payable to the order of the Company equal to the applicable
aggregate Exercise Price, for the number of Common Shares specified in such
Exercise Notice (as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to the Holder
per the terms of this Warrant) and the Holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.

      3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

            3.1. Reorganization, Consolidation, Merger, Etc. In case at any time
or from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder , on the
exercise hereof as provided in Section 1 at any time after the consummation of

                                       3
<PAGE>

such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock (or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such Holder had so
exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.

            3.2. Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, concurrently with any distributions made to holders of its Common
Stock, shall at its expense deliver or cause to be delivered to the Holder the
stock and other securities and property (including cash, where applicable)
receivable by the Holder pursuant to Section 3.1, or, if the Holder shall so
instruct the Company, to a bank or trust company specified by the Holder and
having its principal office in New York, NY as trustee for the Holder (the
"Trustee").

            3.3. Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 4. In the
event this Warrant does not continue in full force and effect after the
consummation of the transactions described in this Section 3, then the Company's
securities and property (including cash, where applicable) receivable by the
Holder will be delivered to the Holder or the Trustee as contemplated by Section
3.2.

      4. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock or any preferred stock issued by
the Company (b) subdivide its outstanding shares of Common Stock, or (c) combine
its outstanding shares of the Common Stock into a smaller number of shares of
the Common Stock, then, in each such event, the Exercise Price shall,
simultaneously with the happening of such event, be adjusted by multiplying the
then Exercise Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be
the Exercise Price then in effect. The Exercise Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or
events described herein in this Section 4. The number of shares of Common Stock
that the Holder shall thereafter, on the exercise hereof as provided in Section
1, be entitled to receive shall be adjusted to a number determined by

                                       4
<PAGE>

multiplying the number of shares of Common Stock that would otherwise (but for
the provisions of this Section 4) be issuable on such exercise by a fraction of
which (a) the numerator is the Exercise Price that would otherwise (but for the
provisions of this Section 4) be in effect, and (b) the denominator is the
Exercise Price in effect on the date of such exercise (taking into account the
provisions of this Section 4).

      5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of this Warrant, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the Holder and any Warrant agent of the
Company (appointed pursuant to Section 11 hereof).

      6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of this Warrant, shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of this Warrant.

      7. Assignment; Exchange of Warrant. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor") in whole or in
part. On the surrender for exchange of this Warrant, with the Transferor's
endorsement in the form of Exhibit B attached hereto (the "Transferor
Endorsement Form") and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall
include, without limitation, the provision of a legal opinion from the
Transferor's counsel (at the Company's expense) that such transfer is exempt
from the registration requirements of applicable securities laws, the Company at
its expense (but with payment by the Transferor of any applicable transfer
taxes) will issue and deliver to or on the order of the Transferor thereof a new
Warrant of like tenor, in the name of the Transferor and/or the transferee(s)
specified in such Transferor Endorsement Form (each a "Transferee"), calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant so surrendered by the
Transferor.

      8. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

      9. Registration Rights. The Holder has been granted certain registration
rights by the Company. These registration rights are set forth in a Registration
Rights Agreement entered into by the Company and Holder dated as of the date
hereof, as the same may be amended, modified and/or supplemented from time to
time.

                                       5
<PAGE>

      10. Maximum Exercise. Notwithstanding anything contained herein to the
contrary, the Holder shall not be entitled to exercise this Warrant in
connection with that number of shares of Common Stock which would exceed the
difference between (i) 4.99% of the issued and outstanding shares of Common
Stock and (ii) the number of shares of Common Stock beneficially owned by the
Holder. For the purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder. The
limitation described in the first sentence of this Section 10 shall
automatically become null and void following notice to the Company upon the
occurrence and during the continuance of an Event of Default under and as
defined in the Note made by the Company to the Holder dated the date hereof (as
amended, modified or supplemented from time to time, the "Note"), or upon 75
days prior notice to the Company.

      11. Warrant Agent. The Company may, by written notice to the each Holder
of the Warrant, appoint an agent for the purpose of issuing Common Stock (or
Other Securities) on the exercise of this Warrant pursuant to Section 1,
exchanging this Warrant pursuant to Section 7, and replacing this Warrant
pursuant to Section 8, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such agent.

      12. Transfer on the Company's Books. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered Holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

      13. Notices, Etc. All notices and other communications from the Company to
the Holder shall be mailed by first class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company in writing by
such Holder or, until any such Holder furnishes to the Company an address, then
to, and at the address of, the last Holder who has so furnished an address to
the Company.

      14. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
ANY ACTION BROUGHT CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT
SHALL BE BROUGHT ONLY IN THE STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS
LOCATED IN THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE
TO WAIVE THIS PROVISION AND BRING AN ACTION OUTSIDE THE STATE OF NEW YORK. The
individuals executing this Warrant on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorneys' fees
and costs. In the event that any provision of this Warrant is invalid or
unenforceable under any applicable statute or rule of law, then such provision

                                       6
<PAGE>

shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Warrant.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision hereof. The Company acknowledges that
legal counsel participated in the preparation of this Warrant and, therefore,
stipulates that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be applied in the interpretation of this
Warrant to favor any party against the other party.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                             SIGNATURE PAGE FOLLOWS]

                                       7
<PAGE>

      IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.

                                            ADAL GROUP, INC.

WITNESS:

                                            By:      /s/ Nicholas Shrager
                                                     --------------------
                                            Name:    N. Shrager
                                                     --------------------
/s/ Rosalind Hallifax                       Title:   CEO
------------------------------------                 --------------------
Rosalind Hallifax, Kidd Rapinet
14/15 Craven Street
London WC2N 5AD

                                       8
<PAGE>

                                    Exhibit A

                              FORM OF SUBSCRIPTION
                   (To Be Signed Only On Exercise Of Warrant)

TO:   ADAL GROUP, INC.

      Attention: Chief Financial Officer

      The undersigned, pursuant to the provisions set forth in the attached
Warrant (No.____), hereby irrevocably elects to purchase ________ shares of the
Common Stock covered by such Warrant.

      The undersigned herewith makes payment of the full Exercise Price for such
shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of $__________ in lawful money of the
United States.

      The undersigned requests that the certificates for such shares be issued
in the name of, and delivered to ______________________________________________
whose address is

      The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act") or pursuant to an exemption from
registration under the Securities Act.

Dated:
         ------------------------          ----------------------------------
                                           (Signature must conform to name of
                                           holder as specified
                                           on the face of the Warrant)

                                           Address:
                                                   --------------------------

                                                   --------------------------

                                      A-1
<PAGE>

                                    Exhibit B

                         FORM OF TRANSFEROR ENDORSEMENT
                   (To Be Signed Only On Transfer Of Warrant)

         For value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading "Transferees" the
right represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of ADAL GROUP, INC. into which the within Warrant relates
specified under the headings "Percentage Transferred" and "Number Transferred,"
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of ADAL GROUP,
INC. with full power of substitution in the premises.

<TABLE>
<CAPTION>
                                                                                Percentage                    Number
Transferees                               Address                               Transferred                 Transferred
-----------                               -------                               -----------                 -----------
<S>                                   <C>                                  <C>                        <C>
-------------------------------       ---------------------------          -----------------------    ------------------------

-------------------------------       ---------------------------          -----------------------    ------------------------

-------------------------------       ---------------------------          -----------------------    ------------------------

-------------------------------       ---------------------------          -----------------------    ------------------------
</TABLE>

Dated:
         ------------------------------          ------------------------------
                                                 (Signature must conform to
                                                 name of holder as specified
                                                 on the face of the Warrant)

                                                 Address:
                                                         ----------------------

                                                         ----------------------

                                                 SIGNED IN THE PRESENCE OF:

                                                 ------------------------------
                                                             (Name)

ACCEPTED AND AGREED:
[TRANSFEREE]

---------------------------------
            (Name)

                                      B-1THIS OPTION AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THE
      OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED, OR ANY STATE SECURITIES LAWS. THIS OPTION AND THE COMMON STOCK
      ISSUABLE UPON EXERCISE OF THIS OPTION MAY NOT BE SOLD, OFFERED FOR SALE,
      PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT AS TO THIS OPTION UNDER SAID ACT AND ANY APPLICABLE STATE
      SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ADAL
      GROUP, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

   Right to Purchase up to 150,702 Shares of Common Stock of ADAL GROUP, INC.
                   (subject to adjustment as provided herein)

                                     OPTION

No. _________________                                Issue Date:  June 29, 2005

      ADAL GROUP, INC., a corporation organized under the laws of the State of
Delaware ("Company"), hereby certifies that, for value received, LAURUS MASTER
FUND, LTD., or assigns (the "Holder"), is entitled, subject to the terms set
forth below, to purchase from the Company (as defined herein) from and after the
Issue Date of this Option and at any time or from time to time, up to 150,702
fully paid and nonassessable shares of Common Stock (as hereinafter defined),
$0.0001 par value per share (the "Option Shares"), at the applicable Exercise
Price per share (as defined below). The number and character of such shares of
Common Stock and the applicable Exercise Price per share are subject to
adjustment as provided herein.

      As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:

            (a) The term "Company" shall include ADAL GROUP, INC. and any
      corporation that shall succeed, or assume the

            obligations of, ADAL GROUP, INC. hereunder. (b) The term "Common
      Stock" includes (i) the Company's Common Stock, $0.0001 par value per
      share; and (ii) any other securities into which or for which any of the
      securities described in (a) may be converted or exchanged pursuant to a
      plan of recapitalization, reorganization, merger, sale of assets or
      otherwise.

            (c) The "Exercise Price" applicable under this Option shall be a
      price of $0.0001 per share.

<PAGE>

            (d) The term "Other Securities" refers to any stock (other than
      Common Stock) and other securities of the Company or any other person
      (corporate or otherwise) which the Holder at any time shall be entitled to
      receive, or shall have received, on the exercise of the Option, in lieu of
      or in addition to Common Stock, or which at any time shall be issuable or
      shall have been issued in exchange for or in replacement of Common Stock
      or Other Securities pursuant to Section 4 or otherwise.

      1. Exercise of Option.

            1.1 Number of Shares Issuable upon Exercise. (a) From and after the
date hereof, the Holder shall be entitled to receive, upon exercise of this
Option in whole or in part, by delivery of an original or fax copy of an
exercise notice in the form attached hereto as Exhibit A (the "Exercise
Notice"), shares of Common Stock of the Company, subject to adjustment pursuant
to Section 4. Notwithstanding anything contained herein to the contrary, the
Holder shall not be entitled to exercise this Option in connection with that
number of shares of Common Stock which would exceed the difference between (i)
4.99% of the issued and outstanding shares of Common Stock and (ii) the number
of shares of Common Stock beneficially owned by the Holder. For the purposes of
the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and Regulation 13d-3
thereunder. The limitation described in the second sentence of this Section 1.1
shall automatically become null and void following notice to the Company upon
the occurrence and during the continuance beyond any applicable grace period of
an Event of Default under and as defined in that certain Secured Convertible
Term Note dated as of the date hereof among the Holder and the Company (as
amended, modified or supplemented from time to time, the "Term Note"), or upon
75 days prior notice to the Company.

      (b) Reduction of Shares Issuable upon Exercise of Option. In the event
that, on the Maturity Date (as defined in the Term Note) (i) the Option Shares
at such time is greater than 75,351shares of Common Stock (such amount of Common
Stock to be adjusted in the same manner as the Option Shares are to be adjusted
following any event of the type referred to in Section 4 below) (the "Option
Share Reduction Amount"), (ii) all principal, interest, fees and other
obligations under, or related to, the Term Note have been indefeasibly repaid in
full, (iii) the closing price of the Common Stock as reported by Bloomberg, L.P.
on the Principal Market (as defined in the Purchase Agreement referred to in the
Term Note) for each of the twenty (20) consecutive trading days immediately
preceding the Maturity Date is greater than or equal to three hundred percent
(300%) of the Fixed Conversion Price (as defined in the Term Note) on the
Maturity Date and (iv) the aggregate amount of shares of Common Stock traded on
the Principal Market during the twenty (20) consecutive trading days immediately
preceding the Maturity Date exceeds twenty five percent (25%) of the Option
Shares outstanding on the Maturity Date, then the Option Shares shall be reduced
to the Option Share Reduction Amount.

            1.2 Fair Market Value. For purposes hereof, the "Fair Market Value"
of a share of Common Stock as of a particular date (the "Determination Date")
shall mean:

                                       2
<PAGE>

            (a) If the Company's Common Stock is traded on the American Stock
      Exchange or another national exchange or is quoted on the National or
      SmallCap Market of The Nasdaq Stock Market, Inc. ("Nasdaq"), then the
      closing or last sale price, respectively, reported for the last business
      day immediately preceding the Determination Date.

            (b) If the Company's Common Stock is not traded on the American
      Stock Exchange or another national exchange or on the Nasdaq but is quoted
      on the NASD Over The Counter Bulletin Board, then the mean of the average
      of the closing bid and asked prices reported for the last business day
      immediately preceding the Determination Date.

            (c) Except as provided in clause (d) below, if the Company's Common
      Stock is not publicly traded, then as the Holder and the Company agree or
      in the absence of agreement by arbitration in accordance with the rules
      then in effect of the American Arbitration Association, before a single
      arbitrator to be chosen from a panel of persons qualified by education and
      training to pass on the matter to be decided.

            (d) If the Determination Date is the date of a liquidation,
      dissolution or winding up, or any event deemed to be a liquidation,
      dissolution or winding up pursuant to the Company's charter, then all
      amounts to be payable per share to holders of the Common Stock pursuant to
      the charter in the event of such liquidation, dissolution or winding up,
      plus all other amounts to be payable per share in respect of the Common
      Stock in liquidation under the charter, assuming for the purposes of this
      clause (d) that all of the shares of Common Stock then issuable upon
      exercise of the Option are outstanding at the Determination Date.

            1.3 Company Acknowledgment. The Company will, at the time of the
exercise of the Option, upon the request of the Holder hereof acknowledge in
writing its continuing obligation to afford to such Holder any rights to which
such Holder shall continue to be entitled after such exercise in accordance with
the provisions of the Option. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights.

            1.4 Trustee for Option Holders. In the event that a bank or trust
company shall have been appointed as trustee for the Holder of the Option
pursuant to Subsection 3.2, such bank or trust company shall have all the powers
and duties of an option agent (as hereinafter described) and shall accept, in
its own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Option pursuant to this
Section 1.

      2. Procedure for Exercise.

      2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees
that the shares of Common Stock purchased upon exercise of this Option shall be
deemed to be issued to the Holder as the record owner of such shares as of the

                                       3
<PAGE>

close of business on the date on which this Option shall have been surrendered
and payment made for such shares in accordance herewith. As soon as practicable
after the exercise of this Option in full or in part, and in any event within
three (3) business days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the Holder, or as such Holder (upon payment by such Holder
of any applicable transfer taxes) may direct in compliance with applicable
securities laws, a certificate or certificates for the number of duly and
validly issued, fully paid and nonassessable shares of Common Stock (or Other
Securities) to which such Holder shall be entitled on such exercise, plus, in
lieu of any fractional share to which such Holder would otherwise be entitled,
cash equal to such fraction multiplied by the then Fair Market Value of one full
share, together with any other stock or other securities and property (including
cash, where applicable) to which such Holder is entitled upon such exercise
pursuant to Section 1 or otherwise.

            2.2 Exercise. Payment shall be made in cash or by certified or
official bank check payable to the order of the Company equal to the applicable
aggregate Exercise Price for the number of Common Shares specified in such
Exercise Notice (as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to the Holder
per the terms of this Option) and the Holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.

      3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

            3.1 Reorganization, Consolidation, Merger, Etc. In case at any time
or from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder, on the
exercise hereof as provided in Section 1 at any time after the consummation of
such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock (or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such Holder had so
exercised this Option, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.

            3.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, concurrently with any distributions made to holders of its Common
Stock, shall at its expense deliver or cause to be delivered to the Holder the
stock and other securities and property (including cash, where applicable)

                                       4
<PAGE>

receivable by the Holder pursuant to Section 3.1, or, if the Holder shall so
instruct the Company, to a bank or trust company specified by the Holder and
having its principal office in New York, NY as trustee for the Holder (the
"Trustee").

            3.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Option shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Option after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Option as provided in Section 4. In the
event this Option does not continue in full force and effect after the
consummation of the transactions described in this Section 3, then the Company's
securities and property (including cash, where applicable) receivable by the
Holders will be delivered to Holder or the Trustee as contemplated by Section
3.2.

      4. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock or any preferred stock issued by
the Company, (b) subdivide its outstanding shares of Common Stock, or (c)
combine its outstanding shares of the Common Stock into a smaller number of
shares of the Common Stock (each of the preceding clauses (a) through (c),
inclusive, an "Event"), then, in each such event, the number of shares of Common
Stock that the Holder shall thereafter, on the exercise hereof as provided in
Section 1, be entitled to receive shall be increased or decreased to a number
determined by multiplying the number of shares of Common Stock that would,
immediately prior to such Event, be issuable upon the exercise of this Option by
a fraction of which (a) the numerator is the number of issued and outstanding
shares of Common Stock immediately after such Event, and (b) the denominator is
the number of issued and outstanding shares of Common Stock immediately prior to
such Event.

      5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Option, the Company at its expense will promptly cause its Chief
Financial Officer or other appropriate designee to compute such adjustment or
readjustment in accordance with the terms of the Option and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price

                                       5
<PAGE>

and the number of shares of Common Stock to be received upon exercise of this
Option, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Option. The Company will forthwith
mail a copy of each such certificate to the Holder and any Option agent of the
Company (appointed pursuant to Section 10 hereof).

      6. Reservation of Stock, Etc., Issuable on Exercise of Option. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Option, shares of Common Stock (or Other Securities) from
time to time issuable on the exercise of the Option.

      7. Assignment; Exchange of Option. Subject to compliance with applicable
securities laws, this Option, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor") in whole or in
part. On the surrender for exchange of this Option, with the Transferor's
endorsement in the form of Exhibit B attached hereto (the "Transferor
Endorsement Form") and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall
include, without limitation, the provision of a legal opinion from the
Transferor's counsel (at the Company's expense) that such transfer is exempt
from the registration requirements of applicable securities laws, and with
payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the Transferor thereof a new Option of like tenor,
in the name of the Transferor and/or the transferee(s) specified in such
Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Option so surrendered by the Transferor.

      8. Replacement of Option. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Option and,
in the case of any such loss, theft or destruction of this Option, on delivery
of an indemnity agreement or security reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, on surrender and
cancellation of this Option, the Company at its expense will execute and
deliver, in lieu thereof, a new Option of like tenor.

      9. Registration Rights. The Holder has been granted certain registration
rights by the Company. These registration rights are set forth in a Registration
Rights Agreement entered into by the Company and Holder dated as of even date of
this Option.

      10. Option Agent. The Company may, by written notice to each Holder of the
Option, appoint an agent for the purpose of issuing Common Stock (or Other
Securities) on the exercise of this Option pursuant to Section 1, exchanging
this Option pursuant to Section 7, and replacing this Option pursuant to Section
8, or any of the foregoing, and thereafter any such issuance, exchange or
replacement, as the case may be, shall be made at such office by such agent.

      11. Transfer on the Company's Books. Until this Option is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

                                       6
<PAGE>

      12. Notices, Etc. All notices and other communications from the Company to
the Holder shall be mailed by first class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company in writing by
such Holder or, until any such Holder furnishes to the Company an address, then
to, and at the address of, the last Holder who has so furnished an address to
the Company.

      13. Miscellaneous. THIS OPTION AND ANY TERM HEREOF MAY BE CHANGED, WAIVED,
DISCHARGED OR TERMINATED ONLY BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTY
AGAINST WHICH ENFORCEMENT OF SUCH CHANGE, WAIVER, DISCHARGE OR TERMINATION IS
SOUGHT. THIS OPTION SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. Any
action brought concerning the transactions contemplated by this Option shall be
brought only in the state courts of New York or in the federal courts located in
the state of New York; provided, however, that the Holder may choose to waive
this provision and bring an action outside the state of New York. The
individuals executing this Option on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorney's fees
and costs. In the event that any provision of this Option is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Option. The
headings in this Option are for purposes of reference only, and shall not limit
or otherwise affect any of the terms hereof. The invalidity or unenforceability
of any provision hereof shall in no way affect the validity or enforceability of
any other provision hereof. The Company acknowledges that legal counsel
participated in the preparation of this Option and, therefore, stipulates that
the rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in the interpretation of this Option to
favor any party against the other party.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                            SIGNATURE PAGE FOLLOWS.]

                                       7
<PAGE>

      IN WITNESS WHEREOF, the Company has executed this Option as of the date
first written above.

                                              ADAL GROUP, INC.

WITNESS:

                                              By:    /s/ Nicholas Shrager
                                                     --------------------
                                              Name:  N. Shrager
                                                     --------------------
/s/ Rosalind Hallifax                         Title: CEO
Rosalind Hallifax, Kidd Rapinet                      --------------------
14/15 Craven Street
London, WC2N 5AD

                                       8
<PAGE>

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION
                   (To Be Signed Only On Exercise Of Options)

TO:   ADAL GROUP, INC.

      Attention: Chief Financial Officer

      The undersigned, pursuant to the provisions set forth in the attached
Option (No. ____), hereby irrevocably elects to purchase ________ shares of the
Common Stock covered by such Option.

      The undersigned herewith makes payment of the full Exercise Price for such
shares at the price per share provided for in such Option, which is
$___________. Such payment takes the form of $__________ in lawful money of the
United States.

      The undersigned requests that the certificates for such shares be issued
in the name of, and delivered to ____________________________________________
whose address is

                                       9
<PAGE>

      The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Option shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act") or pursuant to an exemption from
registration under the Securities Act.

Dated:
      ------------------------                ---------------------------------
                                              (Signature must conform to name
                                              of Holder as specified on the face
                                              of the Option)

                                              Address:
                                                      -------------------------

                                                      -------------------------

                                       10
<PAGE>

                                    EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT
                    (To Be Signed Only On Transfer Of Option)

      For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading "Transferees" the right
represented by the within Option to purchase the percentage and number of shares
of Common Stock of ADAL GROUP, INC. into which the within Option relates
specified under the headings "Percentage Transferred" and "Number Transferred,"
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of ADAL GROUP,
INC. with full power of substitution in the premises.

<TABLE>
<CAPTION>
                                                                        Percentage             Number
Transferees                         Address                            Transferred           Transferred
-----------                         -------                            -----------           -----------
<S>                            <C>                                <C>                      <C>
-----------------------        -----------------------            --------------------     ---------------------

-----------------------        -----------------------            --------------------     ---------------------

-----------------------        -----------------------            --------------------     ---------------------

-----------------------        -----------------------            --------------------     ---------------------
</TABLE>

Dated
     -------------------------                      ---------------------------
                                                    (Signature must conform to
                                                    name of Holder as specified
                                                    on the face of the Option)

                                                    Address:
                                                            -------------------

                                                            -------------------

                                                   SIGNED IN THE PRESENCE OF:

                                                   --------------------------
                                                              (Name)

ACCEPTED AND AGREED:
[TRANSFEREE]

-----------------------------
           (Name)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}]]