Document:

THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
       HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
       EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE
       AGREEMENT DATED AS OF MARCH 6, 2006, NEITHER THIS WARRANT NOR ANY OF SUCH
       SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
       EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR,
       AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR
       OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT
       REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR
       REGULATION S UNDER SUCH ACT.

                                                                  Right to
                                                                  Purchase [ ]
                                                                  Shares of
                                                                  Common Stock,
                                                                  par value
                                                                  $.00005 per
                                                                  share

                             STOCK PURCHASE WARRANT

       THIS CERTIFIES THAT, for value received, [ ] its registered assigns, is
entitled to purchase from MIDNIGHT HOLDINGS GROUP, INC., a Delaware corporation
(the "Company"), at any time or from time to time during the period specified in
Paragraph 2 hereof, [ ] fully paid and nonassessable shares of the Company's
Common Stock, par value $.00005 per share (the "Common Stock"), at an exercise
price per share equal to $.08 (the "Exercise Price"). The term "Warrant Shares,"
as used herein, refers to the shares of Common Stock purchasable hereunder. The
Warrant Shares and the Exercise Price are subject to adjustment as provided in
Paragraph 4 hereof. The term "Warrants" means this Warrant and the other
warrants issued pursuant to that certain Securities Purchase Agreement, dated
March 6, 2006, by and among the Company and the Buyers listed on the execution
page thereof (the "Securities Purchase Agreement").

       This Warrant is subject to the following terms, provisions, and
conditions:

       1.     MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and upon (i)
payment to the Company in cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price for the Warrant
Shares specified in the Exercise Agreement or

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(ii) if the resale of the Warrant Shares by the holder is not then registered
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), delivery to the Company of a written
notice of an election to effect a "Cashless Exercise" (as defined in Section
11(c) below) for the Warrant Shares specified in the Exercise Agreement. The
Warrant Shares so purchased shall be deemed to be issued to the holder hereof or
such holder's designee, as the record owner of such shares, as of the close of
business on the date on which this Warrant shall have been surrendered, the
completed Exercise Agreement shall have been delivered, and payment shall have
been made for such shares as set forth above. Certificates for the Warrant
Shares so purchased, representing the aggregate number of shares specified in
the Exercise Agreement, shall be delivered to the holder hereof within a
reasonable time, not exceeding five (5) business days, after this Warrant shall
have been so exercised. The certificates so delivered shall be in such
denominations as may be requested by the holder hereof and shall be registered
in the name of such holder or such other name as shall be designated by such
holder. If this Warrant shall have been exercised only in part, then, unless
this Warrant has expired, the Company shall, at its expense, at the time of
delivery of such certificates, deliver to the holder a new Warrant representing
the number of shares with respect to which this Warrant shall not then have been
exercised. In addition to all other available remedies at law or in equity, if
the Company fails to deliver certificates for the Warrant Shares within five (5)
business days after this Warrant is exercised, then the Company shall pay to the
holder in cash a penalty (the "Penalty") equal to 2% of the number of Warrant
Shares that the holder is entitled to multiplied by the Market Price (as
hereinafter defined) for each day that the Company fails to deliver certificates
for the Warrant Shares. For example, if the holder is entitled to 100,000
Warrant Shares and the Market Price is $2.00, then the Company shall pay to the
holder $4,000 for each day that the Company fails to deliver certificates for
the Warrant Shares. The Penalty shall be paid to the holder by the fifth day of
the month following the month in which it has accrued.

              Notwithstanding anything in this Warrant to the contrary, in no
event shall the holder of this Warrant be entitled to exercise a number of
Warrants (or portions thereof) in excess of the number of Warrants (or portions
thereof) upon exercise of which the sum of (i) the number of shares of Common
Stock beneficially owned by the holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of any other
securities of the Company (including the Notes (as defined in the Securities
Purchase Agreement)) subject to a limitation on conversion or exercise analogous
to the limitation contained herein) and (ii) the number of shares of Common
Stock issuable upon exercise of the Warrants (or portions thereof) with respect
to which the determination described herein is being made, would result in
beneficial ownership by the holder and its affiliates of more than 4.9% of the
outstanding shares of Common Stock. For 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-G
thereunder, except as otherwise provided in clause (i) of the preceding
sentence. Notwithstanding anything to the contrary contained herein, the
limitation on exercise of this Warrant set forth herein may not be amended
without (i) the written consent of the holder hereof and the Company and (ii)
the approval of a majority of shareholders of the Company.

       2.     PERIOD OF EXERCISE. This Warrant is exercisable at any time or
from time to time on or after the date on which this Warrant is issued and
delivered pursuant to the terms of the

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<PAGE>

Securities Purchase Agreement and before 6:00 p.m., New York, New York time on
the fifth (5th) anniversary of the date of issuance (the "Exercise Period").

       3.     CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants
and agrees as follows:

              (a)    SHARES TO BE FULLY PAID. Subject to the completion of the
Charter Amendment Actions (as such term is defined in the Securities Purchase
Agreement), all Warrant Shares will, upon issuance in accordance with the terms
of this Warrant, be validly issued, fully paid, and nonassessable and free from
all taxes, liens, and charges with respect to the issue thereof.

              (b)    RESERVATION OF SHARES. Subject to the completion of the
Charter Amendment Actions, during the Exercise Period, the Company shall at all
times have authorized, and reserved for the purpose of issuance upon exercise of
this Warrant, a sufficient number of shares of Common Stock to provide for the
exercise of this Warrant.

              (c)    LISTING. The Company shall use its best efforts to secure
the listing of the shares of Common Stock issuable upon exercise of the Warrant
upon each national securities exchange or automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance upon exercise of this Warrant) and shall maintain, so long as any other
shares of Common Stock shall be so listed, such listing of all shares of Common
Stock from time to time issuable upon the exercise of this Warrant; and the
Company shall so list on each national securities exchange or automated
quotation system, as the case may be, and shall maintain such listing of, any
other shares of capital stock of the Company issuable upon the exercise of this
Warrant if and so long as any shares of the same class shall be listed on such
national securities exchange or automated quotation system.

              (d)    CERTAIN ACTIONS PROHIBITED. The Company will not, by
amendment of its charter 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 to be observed or performed by it hereunder, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such action as may reasonably be requested by the holder of
this Warrant in order to protect the exercise privilege of the holder of this
Warrant against dilution or other impairment, consistent with the tenor and
purpose of this Warrant. Without limiting the generality of the foregoing, the
Company (i) will not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, and (ii) will take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.

              (e)    SUCCESSORS AND ASSIGNS. This Warrant will be binding upon
any entity succeeding to the Company by merger, consolidation, or acquisition of
all or substantially all the Company's assets.

       4.     ANTIDILUTION PROVISIONS. During the Exercise Period, the Exercise
Price and the number of Warrant Shares shall be subject to adjustment from time
to time as provided in this Paragraph 4.

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<PAGE>

       In the event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up to the
nearest cent.

              (a)    ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES UPON
ISSUANCE OF COMMON STOCK. Except as otherwise provided in Paragraphs 4(c) and
4(e) hereof, if and whenever on or after the date of issuance of this Warrant,
the Company issues or sells, or in accordance with Paragraph 4(b) hereof is
deemed to have issued or sold, any shares of Common Stock for no consideration
or for a consideration per share (before deduction of reasonable expenses or
commissions or underwriting discounts or allowances in connection therewith)
less than the Market Price on the date of issuance (a "Dilutive Issuance"), then
immediately upon the Dilutive Issuance, the Exercise Price will be reduced to a
price determined by multiplying the Exercise Price in effect immediately prior
to the Dilutive Issuance by a fraction, (i) the numerator of which is an amount
equal to the sum of (x) the number of shares of Common Stock actually
outstanding immediately prior to the Dilutive Issuance, plus (y) the quotient of
the aggregate consideration, calculated as set forth in Paragraph 4(b) hereof,
received by the Company upon such Dilutive Issuance divided by the Market Price
in effect immediately prior to the Dilutive Issuance, and (ii) the denominator
of which is the total number of shares of Common Stock Deemed Outstanding (as
defined below) immediately after the Dilutive Issuance.

              (b)    EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Exercise Price under Paragraph 4(a) hereof, the
following will be applicable:

                     (i)    ISSUANCE OF RIGHTS OR OPTIONS. If the Company in any
manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or other
securities convertible into or exchangeable for Common Stock ("Convertible
Securities") (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as "Options") and the price
per share for which Common Stock is issuable upon the exercise of such Options
is less than the Market Price on the date of issuance or grant of such Options,
then the maximum total number of shares of Common Stock issuable upon the
exercise of all such Options will, as of the date of the issuance or grant of
such Options, be deemed to be outstanding and to have been issued and sold by
the Company for such price per share. For purposes of the preceding sentence,
the "price per share for which Common Stock is issuable upon the exercise of
such Options" is determined by dividing (i) the total amount, if any, received
or receivable by the Company as consideration for the issuance or granting of
all such Options, plus the minimum aggregate amount of additional consideration,
if any, payable to the Company upon the exercise of all such Options, plus, in
the case of Convertible Securities issuable upon the exercise of such Options,
the minimum aggregate amount of additional consideration payable upon the
conversion or exchange thereof at the time such Convertible Securities first
become convertible or exchangeable, by (ii) the maximum total number of shares
of Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable). No further adjustment to
the Exercise Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.

                     (ii)   ISSUANCE OF CONVERTIBLE SECURITIES. If the Company
in any manner issues or sells any Convertible Securities, whether or not
immediately convertible (other than where the same are issuable upon the
exercise of Options) and the price per share for which

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<PAGE>

Common Stock is issuable upon such conversion or exchange is less than the
Market Price on the date of issuance, then the maximum total number of shares of
Common Stock issuable upon the conversion or exchange of all such Convertible
Securities will, as of the date of the issuance of such Convertible Securities,
be deemed to be outstanding and to have been issued and sold by the Company for
such price per share. For the purposes of the preceding sentence, the "price per
share for which Common Stock is issuable upon such conversion or exchange" is
determined by dividing (i) the total amount, if any, received or receivable by
the Company as consideration for the issuance or sale of all such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the conversion or exchange thereof at the time
such Convertible Securities first become convertible or exchangeable, by (ii)
the maximum total number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities. No further adjustment to the
Exercise Price will be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities.

                     (iii)  CHANGE IN OPTION PRICE OR CONVERSION RATE. If there
is a change at any time in (i) the amount of additional consideration payable to
the Company upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Company upon the conversion or exchange of
any Convertible Securities; or (iii) the rate at which any Convertible
Securities are convertible into or exchangeable for Common Stock (other than
under or by reason of provisions designed to protect against dilution), the
Exercise Price in effect at the time of such change will be readjusted to the
Exercise Price which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold.

                     (iv)   TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED
CONVERTIBLE SECURITIES. If, in any case, the total number of shares of Common
Stock issuable upon exercise of any Option or upon conversion or exchange of any
Convertible Securities is not, in fact, issued and the rights to exercise such
Option or to convert or exchange such Convertible Securities shall have expired
or terminated, the Exercise Price then in effect will be readjusted to the
Exercise Price which would have been in effect at the time of such expiration or
termination had such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination (other than in respect of
the actual number of shares of Common Stock issued upon exercise or conversion
thereof), never been issued.

                     (v)    CALCULATION OF CONSIDERATION RECEIVED. If any Common
Stock, Options or Convertible Securities are issued, granted or sold for cash,
the consideration received therefor for purposes of this Warrant will be the
amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or sale.
In case any Common Stock, Options or Convertible Securities are issued or sold
for a consideration part or all of which shall be other than cash, the amount of
the consideration other than cash received by the Company will be the fair value
of such consideration, except where such consideration consists of securities,
in which case the amount of consideration received by the Company will be the
Market Price thereof as of the date of receipt. In case any Common Stock,
Options or Convertible Securities are issued in connection with any acquisition,
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration

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therefor will be deemed to be the fair value of such portion of the net assets
and business of the non-surviving corporation as is attributable to such Common
Stock, Options or Convertible Securities, as the case may be. The fair value of
any consideration other than cash or securities will be determined in good faith
by the Board of Directors of the Company.

                     (vi)   EXCEPTIONS TO ADJUSTMENT OF EXERCISE PRICE. No
adjustment to the Exercise Price will be made (i) upon the exercise of any
warrants, options or convertible securities granted, issued and outstanding on
the date of issuance of this Warrant; (ii) upon the grant or exercise of any
stock or options which may hereafter be granted or exercised under any employee
benefit plan, stock option plan or restricted stock plan of the Company now
existing or to be implemented in the future, so long as the issuance of such
stock or options is approved by a majority of the independent members of the
Board of Directors of the Company or a majority of the members of a committee of
independent directors established for such purpose; or (iii) upon the exercise
of the Warrants.

              (c)    SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company
at any time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased.

              (d)    ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Paragraph 4, the number of
shares of Common Stock issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.

              (e)    CONSOLIDATION, MERGER OR SALE. In case of any consolidation
of the Company with, or merger of the Company into any other corporation, or in
case of any sale or conveyance of all or substantially all of the assets of the
Company other than in connection with a plan of complete liquidation of the
Company, then as a condition of such consolidation, merger or sale or
conveyance, adequate provision will be made whereby the holder of this Warrant
will have the right to acquire and receive upon exercise of this Warrant in lieu
of the shares of Common Stock immediately theretofore acquirable upon the
exercise of this Warrant, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for the number of shares of
Common Stock immediately theretofore acquirable and receivable upon exercise of
this Warrant had such consolidation, merger or sale or conveyance not taken
place. In any such case, the Company will make appropriate provision to insure
that the provisions of this Paragraph 4 hereof will thereafter be applicable as
nearly as may be in relation to any shares of stock or securities thereafter
deliverable upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor corporation (if other than the Company) assumes by
written instrument the obligations under this Paragraph 4 and the obligations to
deliver to the holder of

                                     - 6 -
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this Warrant such shares of stock, securities or assets as, in accordance with
the foregoing provisions, the holder may be entitled to acquire.

              (f)    DISTRIBUTION OF ASSETS. In case the Company shall declare
or make any distribution of its assets (including cash) to holders of Common
Stock as a partial liquidating dividend, by way of return of capital or
otherwise, then, after the date of record for determining shareholders entitled
to such distribution, but prior to the date of distribution, the holder of this
Warrant shall be entitled upon exercise of this Warrant for the purchase of any
or all of the shares of Common Stock subject hereto, to receive the amount of
such assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the determination
of shareholders entitled to such distribution.

              (g)    NOTICE OF ADJUSTMENT. Upon the occurrence of any event
which requires any adjustment of the Exercise Price, then, and in each such
case, the Company shall give notice thereof to the holder of this Warrant, which
notice shall state the Exercise Price resulting from such adjustment and the
increase or decrease in the number of Warrant Shares purchasable at such price
upon exercise, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based. Such calculation shall be
certified by the Chief Financial Officer of the Company.

              (h)    MINIMUM ADJUSTMENT OF EXERCISE PRICE. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.

              (i)    NO FRACTIONAL SHARES. No fractional shares of Common Stock
are to be issued upon the exercise of this Warrant, but the Company shall pay a
cash adjustment in respect of any fractional share which would otherwise be
issuable in an amount equal to the same fraction of the Market Price of a share
of Common Stock on the date of such exercise.

              (j)    OTHER NOTICES. In case at any time:

                     (i)    the Company shall declare any dividend upon the
Common Stock payable in shares of stock of any class or make any other
distribution (including dividends or distributions payable in cash out of
retained earnings) to the holders of the Common Stock;

                     (ii)   the Company shall offer for subscription pro rata to
the holders of the Common Stock any additional shares of stock of any class or
other rights;

                     (iii)  there shall be any capital reorganization of the
Company, or reclassification of the Common Stock, or consolidation or merger of
the Company with or into, or sale of all or substantially all its assets to,
another corporation or entity; or

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

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then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company's books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings referred to in clauses (i), (ii), (iii)
and (iv) above.

              (k)    CERTAIN EVENTS. If any event occurs of the type
contemplated by the adjustment provisions of this Paragraph 4 but not expressly
provided for by such provisions, the Company will give notice of such event as
provided in Paragraph 4(g) hereof, and the Company's Board of Directors will
make an appropriate adjustment in the Exercise Price and the number of shares of
Common Stock acquirable upon exercise of this Warrant so that the rights of the
holder shall be neither enhanced nor diminished by such event.

              (l)    CERTAIN DEFINITIONS.

                     (i)    "COMMON STOCK DEEMED OUTSTANDING" shall mean the
number of shares of Common Stock actually outstanding (not including shares of
Common Stock held in the treasury of the Company), plus (x) pursuant to
Paragraph 4(b)(i) hereof, the maximum total number of shares of Common Stock
issuable upon the exercise of Options, as of the date of such issuance or grant
of such Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the
maximum total number of shares of Common Stock issuable upon conversion or
exchange of Convertible Securities, as of the date of issuance of such
Convertible Securities, if any.

                     (ii)   "MARKET PRICE," as of any date, (i) means the
average of the last reported sale prices for the shares of Common Stock on the
OTCBB for the five (5) Trading Days immediately preceding such date as reported
by Bloomberg, or (ii) if the OTCBB is not the principal trading market for the
shares of Common Stock, the average of the last reported sale prices on the
principal trading market for the Common Stock during the same period as reported
by Bloomberg, or (iii) if market value cannot be calculated as of such date on
any of the foregoing bases, the Market Price shall be the fair market value as
reasonably determined in good faith by (a) the Board of Directors of the Company
or, at the option of a majority-in-interest of the holders of the outstanding
Warrants by (b) an independent investment bank of nationally recognized standing
in the valuation of businesses similar to the business of the corporation. The
manner of determining the Market Price of the Common Stock set forth in the
foregoing definition shall apply with respect to any other security in respect
of which a determination as to market value must be made hereunder.

                     (iii)  "COMMON STOCK," for purposes of this Paragraph 4,
includes the Common Stock, par value $.00005 per share, and any additional class
of stock of the Company

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having no preference as to dividends or distributions on liquidation, provided
that the shares purchasable pursuant to this Warrant shall include only shares
of Common Stock, par value $.00005 per share, in respect of which this Warrant
is exercisable, or shares resulting from any subdivision or combination of such
Common Stock, or in the case of any reorganization, reclassification,
consolidation, merger, or sale of the character referred to in Paragraph 4(e)
hereof, the stock or other securities or property provided for in such
Paragraph.

       5.     ISSUE TAX. The issuance of certificates for Warrant Shares upon
the exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

       6.     NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

       7.     TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.

              (a)    RESTRICTION ON TRANSFER. This Warrant and the rights
granted to the holder hereof are transferable, in whole or in part, upon
surrender of this Warrant, together with a properly executed assignment in the
form attached hereto, at the office or agency of the Company referred to in
Paragraph 7(e) below, provided, however, that any transfer or assignment shall
be subject to the conditions set forth in Paragraph 7(f) hereof and to the
applicable provisions of the Securities Purchase Agreement. Until due
presentment for registration of transfer on the books of the Company, the
Company may treat the registered holder hereof as the owner and holder hereof
for all purposes, and the Company shall not be affected by any notice to the
contrary. Notwithstanding anything to the contrary contained herein, the
registration rights described in Paragraph 8 are assignable only in accordance
with the provisions of that certain Registration Rights Agreement, dated March
6, 2006, by and among the Company and the other signatories thereto (the
"Registration Rights Agreement").

              (b)    WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This
Warrant is exchangeable, upon the surrender hereof by the holder hereof at the
office or agency of the Company referred to in Paragraph 7(e) below, for new
Warrants of like tenor representing in the aggregate the right to purchase the
number of shares of Common Stock which may be purchased hereunder, each of such
new Warrants to represent the right to purchase such number of shares as shall
be designated by the holder hereof at the time of such surrender.

              (c)    REPLACEMENT OF WARRANT. Upon 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, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

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              (d)    CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of
this Warrant in connection with any transfer, exchange, or replacement as
provided in this Paragraph 7, this Warrant shall be promptly canceled by the
Company. The Company shall pay all taxes (other than securities transfer taxes)
and all other expenses (other than legal expenses, if any, incurred by the
holder or transferees) and charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Paragraph 7.

              (e)    REGISTER. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.

              (f)    EXERCISE OR TRANSFER WITHOUT REGISTRATION. If, at the time
of the surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise, the
Warrant Shares issuable hereunder), shall not be registered under the Securities
Act of 1933, as amended (the "Securities Act") and under applicable state
securities or blue sky laws, the Company may require, as a condition of allowing
such exercise, transfer, or exchange, (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 and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without registration under
said 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; provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof.

       8.     REGISTRATION RIGHTS. The initial holder of this Warrant (and
certain assignees thereof) is entitled to the benefit of such registration
rights in respect of the Warrant Shares as are set forth in Section 2 of the
Registration Rights Agreement.

       9.     NOTICES. All notices, requests, and other communications required
or permitted to be given or delivered hereunder to the holder of this Warrant
shall be in writing, and shall be personally delivered, or shall be sent by
certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to such holder at the address shown for such holder on
the books of the Company, or at such other address as shall have been furnished
to the Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 3872 Rochester Road,
Troy, MI 48083, Attention: Chief Executive Officer, or at such other address as
shall have been furnished to the holder of this Warrant by notice from the
Company. Any such notice, request, or other communication may be sent by
facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by

                                     - 10 -
<PAGE>

the person entitled to receive such notice at the address of such person for
purposes of this Paragraph 9, or, if mailed by registered or certified mail or
with a recognized overnight mail courier upon deposit with the United States
Post Office or such overnight mail courier, if postage is prepaid and the
mailing is properly addressed, as the case may be.

       10.    GOVERNING LAW. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT
SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

       11.    MISCELLANEOUS.

              (a)    AMENDMENTS. This Warrant and any provision hereof may only
be amended by an instrument in writing signed by the Company and the holder
hereof.

              (b)    DESCRIPTIVE HEADINGS. The descriptive headings of the
several paragraphs of this Warrant are inserted for purposes of reference only,
and shall not affect the meaning or construction of any of the provisions
hereof.

              (c)    CASHLESS EXERCISE. Notwithstanding anything to the contrary
contained in this Warrant, if the resale of the Warrant Shares by the holder is
not then registered pursuant to an effective registration statement under the
Securities Act, this Warrant may be exercised by presentation and surrender of
this Warrant to the Company at its principal executive offices with a written
notice of the holder's intention to effect a cashless exercise, including a
calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a "Cashless Exercise"). In the
event of a Cashless Exercise, in lieu of paying the Exercise Price in cash, the
holder shall surrender this Warrant for that number of shares of Common Stock
determined by multiplying the number of Warrant Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price per share of the Common Stock
and the Exercise Price, and the denominator of which shall be the then current
Market Price per share of Common Stock. For

                                     - 11 -
<PAGE>

example, if the holder is exercising 100,000 Warrants with a per Warrant
exercise price of $0.75 per share through a cashless exercise when the Common
Stock's current Market Price per share is $2.00 per share, then upon such
Cashless Exercise the holder will receive 62,500 shares of Common Stock.

              (d)    REMEDIES. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the holder, by
vitiating the intent and purpose of the transaction contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Warrant will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this Warrant,
that the holder shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to an
injunction or injunctions restraining, preventing or curing any breach of this
Warrant and to enforce specifically the terms and provisions thereof, without
the necessity of showing economic loss and without any bond or other security
being required.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     - 12 -
<PAGE>

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

                                       MIDNIGHT HOLDINGS GROUP, INC.

                                       By: _______________________________
                                           Nicholas Cocco
                                           Chief Executive Officer

Dated as of March 6, 2006

<PAGE>

                           FORM OF EXERCISE AGREEMENT

                                                      Dated:  ________ __, 200_

To:   ______________________

       The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of, or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by surrender of securities issued by the
Company (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________. Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:

                                          Name:______________________________

                                          Signature:
                                          Address:____________________________

                                                  ____________________________

                                          Note:   The above signature should
                                                  correspond exactly with the
                                                  name on the face of the
                                                  within Warrant, if applicable.

and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.

<PAGE>

                               FORM OF ASSIGNMENT

       FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:

Name of Assignee              Address                             No of Shares
----------------              -------                             ------------

, and hereby irrevocably constitutes and appoints ______________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.

Dated:      ________ __, 200_

In the presence of:                 __________________________________________

                                    Name:_____________________________________

                                    Signature:________________________________

                                    Title of Signing Officer or Agent (if any):
                                              ________________________________

                                    Address:  ________________________________

                                              ________________________________

                                        Note: The above signature should
                                              correspond exactly with the name
                                              on the face of the within Warrant,
                                              if applicable.SECURITIES PURCHASE AGREEMENT

       SECURITIES  PURCHASE AGREEMENT (this  "AGREEMENT"),  dated as of March 6,
2006, by and among Midnight Holdings Group, Inc., a Delaware  corporation,  with
headquarters located at 3872 Rochester Road, Troy, MI 48083 (the "Company"), and
each of the purchasers set forth on the signature pages hereto (the "BUYERS").

       WHEREAS:

       A.     The  Company  and the Buyers are  executing  and  delivering  this
Agreement in reliance upon the exemption from securities  registration  afforded
by the rules and regulations as promulgated by the United States  Securities and
Exchange  Commission  (the "SEC") under the  Securities  Act of 1933, as amended
(the "1933 ACT");

       B.     Buyers  desire to purchase  and the  Company  desires to issue and
sell,  upon the terms and conditions set forth in this Agreement (i) 10% secured
convertible notes of the Company, in the form attached hereto as EXHIBIT "A", in
the  aggregate  principal  amount of Four Hundred  Thousand  Dollars  ($400,000)
(together  with any note(s)  issued in  replacement  thereof or  otherwise  with
respect thereto in accordance with the terms thereof, the "NOTES"),  convertible
into shares of common stock,  par value  $.00005 per share,  of the Company (the
"COMMON  STOCK"),  upon the terms and subject to the  limitations and conditions
set  forth in such  Notes  and (ii)  warrants,  in the form  attached  hereto as
EXHIBIT "B", to purchase an aggregate of Eight Hundred Thousand (800,000) shares
of Common Stock (the "WARRANTS");

       C.     Each  Buyer  wishes to  purchase,  upon the  terms and  conditions
stated in this Agreement,  such principal amount of Notes and number of Warrants
as is set forth immediately below its name on the signature pages hereto; and

       D.     Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement,
in  the  form  attached  hereto  as  EXHIBIT  "C"  (the   "REGISTRATION   RIGHTS
AGREEMENT"),  pursuant  to which  the  Company  has  agreed to  provide  certain
registration rights under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.

<PAGE>

       NOW  THEREFORE,  the  Company and each of the Buyers  severally  (and not
jointly) hereby agree as follows:

              1.     PURCHASE AND SALE OF NOTES AND WARRANTS.

                     a.     PURCHASE OF NOTES AND WARRANTS.  On the Closing Date
(as  defined  below),  the  Company  shall issue and sell to each Buyer and each
Buyer  severally  agrees to purchase from the Company such  principal  amount of
Notes and number of Warrants as is set forth immediately below such Buyer's name
on the signature pages hereto.

                     b.     FORM OF  PAYMENT.  On the  Closing  Date (as defined
below),  (i)each  Buyer  shall pay the  purchase  price for the Notes  (less the
purchase  price paid with  respect to any Bridge  Note) and the  Warrants  to be
issued and sold to it at the Closing (as defined below) (the  "PURCHASE  PRICE")
by wire transfer of immediately  available  funds to the Company,  in accordance
with the Company's written wiring instructions, against delivery of the Notes in
the principal  amount equal to the Purchase  Price and the number of Warrants as
is set forth  immediately below such Buyer's name on the signature pages hereto,
and (ii) the Company  shall  deliver  such Notes and Warrants  duly  executed on
behalf of the Company, to such Buyer, against delivery of such Purchase Price.

                     c.     CLOSING  DATE.  Subject  to  the  satisfaction  (or
written  waiver) of the conditions  thereto set forth in Section 6 and Section 7
below,  the date and time of the issuance and sale of the Notes and the Warrants
pursuant to this  Agreement  (the "CLOSING  DATE") shall be 12:00 noon,  Eastern
Standard Time on March 6, 2006,  or such other  mutually  agreed upon time.  The
closing of the transactions contemplated by this Agreement (the "CLOSING") shall
occur on the Closing Date at such location as may be agreed to by the parties.

              2.     BUYERS'   REPRESENTATIONS   AND   WARRANTIES.   Each  Buyer
severally (and not jointly)  represents and warrants to the Company solely as to
such Buyer that:

                     a.     INVESTMENT  PURPOSE. As of the  date  hereof,  such
Buyer is  purchasing  the Notes and the  shares of Common  Stock  issuable  upon
conversion of or otherwise pursuant to the Notes (including, without limitation,
such  additional  shares of Common Stock, if any, as are issuable (i) on account
of interest on the Notes,  (ii) as a result of the events  described in Sections
1.3  and  1.4(g)  of the  Notes  and  Section  2(c) of the  Registration  Rights
Agreement  or (iii) in payment of the  Standard  Liquidated  Damages  Amount (as
defined in Section 2(f) below) pursuant to this Agreement, such shares of Common
Stock being collectively  referred to herein as the "CONVERSION SHARES") and the
Warrants  and the shares of Common Stock  issuable  upon  exercise  thereof (the
"WARRANT  SHARES" and,  collectively  with the Notes,  Warrants  and  Conversion
Shares,  the  "SECURITIES")  for its own  account  and not with a  present  view
towards  the public  sale or  distribution  thereof,  except  pursuant  to sales
registered or exempted from registration under the 1933 Act; PROVIDED,  HOWEVER,
that by making the representations herein, such Buyer does not agree to hold any
of the  Securities for any minimum or other specific term and reserves the right
to dispose of the  Securities  at any time in  accordance  with or pursuant to a
registration statement or an exemption under the 1933 Act.

                                       2
<PAGE>

                     b.     ACCREDITED   INVESTOR  STATUS.   Such  Buyer  is  an
"accredited investor" as that term is defined in Rule 501(a) of Regulation D (an
"ACCREDITED INVESTOR").

                     c.     RELIANCE ON EXEMPTIONS.  Such Buyer understands that
the  Securities  are being  offered  and sold to it in  reliance  upon  specific
exemptions from the registration requirements of United States federal and state
securities  laws and that the Company is relying upon the truth and accuracy of,
and such Buyer's compliance with, the representations,  warranties,  agreements,
acknowledgments  and  understandings  of such Buyer set forth herein in order to
determine the  availability of such exemptions and the eligibility of such Buyer
to acquire the Securities.

                     d.     INFORMATION. Such Buyer and its respective advisors,
if any,  have  been  furnished  with all  materials  relating  to the  business,
finances and  operations of the Company and materials  relating to the offer and
sale of the Securities which have been reasonably requested by such Buyer or its
advisors. Such Buyer and its respective advisors, if any, have been afforded the
opportunity to ask questions of the Company.  Notwithstanding the foregoing, the
Company has not disclosed to such Buyer any material  nonpublic  information and
will not disclose such  information  unless such information is disclosed to the
public prior to or promptly  following  such  disclosure to such Buyer.  Neither
such inquiries nor any other due diligence investigation conducted by such Buyer
or any of its  respective  advisors or  representatives  shall modify,  amend or
affect  Buyer's right to rely on the Company's  representations  and  warranties
contained in Section 3 below.  Such Buyer understands that its investment in the
Securities involves a significant degree of risk.

                     e.     GOVERNMENTAL  REVIEW. Such Buyer understands that no
United States  federal or state agency or any other  government or  governmental
agency  has  passed  upon or  made  any  recommendation  or  endorsement  of the
Securities.

                     f.     TRANSFER OR RE-SALE. Such Buyer understands that (i)
except as provided in the Registration Rights Agreement,  the sale or re-sale of
the Securities have not been and are not being  registered under the 1933 Act or
any applicable  state securities laws, and the Securities may not be transferred
unless  (a) the  Securities  are  sold  pursuant  to an  effective  registration
statement under the 1933 Act, (b) such Buyer shall have delivered to the Company
an opinion of counsel that shall be in form,  substance and scope  customary for
opinions of counsel in comparable transactions to the effect that the Securities
to be sold or transferred  may be sold or  transferred  pursuant to an exemption
from such registration,  which opinion shall be accepted by the Company, (c) the
Securities are sold or  transferred  to an  "affiliate"  (as defined in Rule 144
promulgated under the 1933 Act (or a successor rule) ("RULE 144")) of such Buyer
who agrees to sell or otherwise  transfer the Securities only in accordance with
this Section 2(f) and who is an Accredited  Investor,  or (d) the Securities are
sold pursuant to Rule 144, and such Buyer shall have delivered to the Company an
opinion of counsel  that shall be in form,  substance  and scope  customary  for
opinions of counsel in corporate  transactions,  which opinion shall be accepted
by the Company;  (ii) any sale of such  Securities  made in reliance on Rule 144
may be made only in accordance with the terms of said Rule and further,  if said
Rule is not applicable,  any re-sale of such Securities  under  circumstances in
which the seller (or the person  through whom the sale is made) may be deemed to
be an  underwriter  (as  that  term is  defined  in the 1933  Act)  may  require
compliance  with  some  other  exemption  under  the 1933 Act or the  rules  and

                                       3
<PAGE>

regulations of the SEC  thereunder;  and (iii) neither the Company nor any other
person is under any obligation to register such Securities under the 1933 Act or
any state  securities  laws or to comply  with the terms and  conditions  of any
exemption  thereunder  (in each case,  other than  pursuant to the  Registration
Rights  Agreement).  Notwithstanding  the foregoing or anything  else  contained
herein to the contrary, subject to applicable law, the Securities may be pledged
as  collateral in  connection  with a BONA FIDE margin  account or other lending
arrangement. In the event that the Company does not accept an opinion of counsel
provided by such Buyer with respect to the transfer of Securities pursuant to an
exemption  from  registration,  such as Rule 144, and such opinion is correct in
form and substance, within three (3) business days of delivery of the opinion to
the Company,  the Company  shall pay to such Buyer  liquidated  damages of three
percent (3%) of the outstanding amount of the Notes held by such Buyer per month
plus accrued and unpaid interest on the Notes,  prorated for partial months,  in
cash or  shares at the  option  of the  Company  ("STANDARD  LIQUIDATED  DAMAGES
AMOUNT"). If the Company elects to pay the Standard Liquidated Damages Amount in
shares of Common Stock,  such shares shall be issued at the Conversion  Price at
the time of payment.

                     g.     LEGENDS.  Such Buyer  understands that the Notes and
the Warrants and,  until such time as the  Conversion  Shares and Warrant Shares
have been  registered  under the 1933 Act as  contemplated  by the  Registration
Rights  Agreement  or  otherwise  may be sold  pursuant  to Rule 144 without any
restriction as to the number of securities as of a particular date that can then
be  immediately  sold,  the  Conversion  Shares  and  Warrant  Shares may bear a
restrictive  legend in  substantially  the following  form (and a  stop-transfer
order may be placed against transfer of the certificates for such Securities):

              "The  securities  represented  by this  certificate
              have not been  registered  under the Securities Act
              of 1933,  as  amended.  The  securities  may not be
              sold, transferred,  assigned, or otherwise disposed
              of in  the  absence  of an  effective  registration
              statement for the securities  under said Act, or an
              opinion of counsel,  in form,  substance  and scope
              customary  for  opinions  of counsel in  comparable
              transactions,  that  registration  is not  required
              under said Act or unless sold  pursuant to Rule 144
              under said Act."

       The legend set forth above shall be removed and the Company shall issue a
certificate  without such legend to the holder of any Security  upon which it is
stamped,  if, unless otherwise required by applicable state securities laws, (a)
such Security is registered for sale under an effective  registration  statement
filed under the 1933 Act or otherwise  may be sold  pursuant to Rule 144 without
any  restriction as to the number of securities as of a particular date that can
then be immediately  sold, (b) such holder  provides the Company with an opinion
of counsel,  in form,  substance and scope  customary for opinions of counsel in
comparable  transactions,  to the effect  that a public sale or transfer of such
Security  may be made without  registration  under the 1933 Act,  which  opinion
shall be accepted by the  Company so that the sale or transfer is  effected,  or
(c) such  holder  provides  the Company  with  reasonable  assurances  that such
Security  shall be sold  pursuant  to Rule 144.  Such  Buyer  agrees to sell all
Securities,  including  those  represented  by a  certificate(s)  from which the
legend has been  removed,  in compliance  with  applicable  prospectus  delivery
requirements, if any.

                                       4
<PAGE>

                     h.     AUTHORIZATION;  ENFORCEMENT.  This Agreement and the
Registration  Rights  Agreement  have been  duly and  validly  authorized.  This
Agreement has been duly executed and delivered on behalf of such Buyer, and this
Agreement  constitutes,  and upon  execution  and  delivery by such Buyer of the
Registration Rights Agreement, such agreement will constitute,  legal, valid and
binding agreements of such Buyer enforceable in accordance with their respective
terms.

                     i.     RESIDENCY.   Such  Buyer  is  a   resident   of  the
jurisdiction  set forth  immediately  below such Buyer's  name on the  signature
pages hereto.

              3.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company
represents and warrants to each Buyer that:

                     a.     ORGANIZATION AND QUALIFICATION. The Company and each
of its Subsidiaries (as defined below), if any, is a corporation duly organized,
validly  existing and in good  standing  under the laws of the  jurisdiction  in
which it is incorporated, with full power and authority (corporate and other) to
own,  lease,  use and operate its properties and to carry on its business as and
where now owned, leased, used, operated and conducted.  SCHEDULE 3(a) sets forth
a list of all of the  Subsidiaries  (as  defined  below) of the  Company and the
jurisdiction  in  which  each  is  incorporated.  The  Company  and  each of its
Subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which its ownership or use of property or
the nature of the business  conducted by it makes such  qualification  necessary
except where the failure to be so qualified or in good standing would not have a
Material  Adverse Effect.  "MATERIAL  ADVERSE EFFECT" means any material adverse
effect on the business,  operations, assets, financial condition or prospects of
the  Company  or  its  Subsidiaries,  if  any,  taken  as a  whole,  or  on  the
transactions  contemplated  hereby or by the  agreements  or  instruments  to be
entered into in connection  herewith.  "SUBSIDIARIES"  means any  corporation or
other organization, whether incorporated or unincorporated, in which the Company
owns, directly or indirectly, all of the equity or other ownership interests.

                     b.     AUTHORIZATION;  ENFORCEMENT. (i) The Company has all
requisite  corporate  power  and  authority  to  enter  into  and  perform  this
Agreement,  the Registration Rights Agreement, the Notes and the Warrants and to
consummate  the  transactions  contemplated  hereby and thereby and to issue the
Securities,  in accordance with the terms hereof and thereof, (ii) the execution
and delivery of this Agreement, the Registration Rights Agreement, the Notes and
the  Warrants  by the  Company and the  consummation  by it of the  transactions
contemplated hereby and thereby (including,  without limitation, the issuance of
the Notes and the Warrants and the issuance and  reservation for issuance of the
Conversion  Shares and  Warrant  Shares  issuable  upon  conversion  or exercise
thereof) have been duly  authorized  by the Company's  Board of Directors and no
further consent or authorization of the Company, its Board of Directors,  or its
shareholders  is  required,  (iii) this  Agreement  has been duly  executed  and
delivered by the Company by its authorized  representative,  and such authorized
representative  is the true and official  representative  with authority to sign
this Agreement and the other documents executed in connection  herewith and bind
the Company accordingly, and (iv) this Agreement constitutes, and upon execution
and delivery by the Company of the Registration Rights Agreement,  the Notes and
the Warrants,  each of such  instruments  will  constitute,  a legal,  valid and
binding obligation of the Company  enforceable against the Company in accordance
with its respective terms.

                                       5
<PAGE>

                     c.     CAPITALIZATION.  Except  as set  forth  on  SCHEDULE
3(c),  as of the date  hereof,  the  authorized  capital  stock  of the  Company
consists of (i)  1,000,000,000  shares of Common Stock,  par value $0.00005,  of
which [467,700,000] shares are issued and outstanding and (ii) 10,000,000 shares
of  preferred  stock,  par value  $0.001,  of which no  shares  are  issued  and
outstanding.  All of such  outstanding  shares of  capital  stock  are,  or upon
issuance will be, duly authorized, validly issued, fully paid and nonassessable.
No shares of capital  stock of the Company are subject to  preemptive  rights or
any other  similar  rights of the  shareholders  of the  Company or any liens or
encumbrances  imposed  through  the  actions or  failure to act of the  Company.
Except as  disclosed in SCHEDULE  3(c),  as of the date of this  Agreement,  (i)
there are no  outstanding  options,  warrants,  scrip,  rights to subscribe for,
puts,  calls,  rights of first refusal,  agreements,  understandings,  claims or
other  commitments  or  rights  of any  character  whatsoever  relating  to,  or
securities or rights  convertible into or exchangeable for any shares of capital
stock of the Company or any of its  Subsidiaries,  or  arrangements by which the
Company or any of its  Subsidiaries  is or may become bound to issue  additional
shares of capital  stock of the Company or any of its  Subsidiaries,  (ii) there
are  no  agreements  or  arrangements  under  which  the  Company  or any of its
Subsidiaries is obligated to register the sale of any of its or their securities
under the 1933 Act (except the  Registration  Rights  Agreement) and (iii) there
are no anti-dilution or price  adjustment  provisions  contained in any security
issued by the Company (or in any agreement providing rights to security holders)
that  will  be  triggered  by the  issuance  of the  Notes,  the  Warrants,  the
Conversion  Shares or Warrant  Shares.  The Company has made  available  to each
Buyer true copies of the Certificate of  Incorporation  as in effect on the date
hereof (the "CERTIFICATE OF INCORPORATION"), the Company's By-laws, as in effect
on the date hereof (the "BY-LAWS"),  and the terms of all securities convertible
into or exercisable  for Common Stock of the Company and the material  rights of
the holders thereof in respect thereto.

                     d.     ISSUANCE  OF  SHARES.   The  Conversion  Shares  and
Warrant  Shares  are  duly  authorized  and  reserved  for  issuance  and,  upon
conversion  of the Notes and exercise of the Warrants in  accordance  with their
respective terms,  will be validly issued,  fully paid and  non-assessable,  and
free from all taxes,  liens,  claims and encumbrances  with respect to the issue
thereof and shall not be subject to preemptive rights or other similar rights of
shareholders  of the Company  and will not impose  personal  liability  upon the
holder thereof.

                     e.     ACKNOWLEDGMENT OF DILUTION.  The Company understands
and  acknowledges  the potentially  dilutive effect to the Common Stock upon the
issuance of the Conversion Shares and Warrant Shares upon conversion of the Note
or  exercise  of  the  Warrants.  The  Company  further  acknowledges  that  its
obligation to issue Conversion  Shares and Warrant Shares upon conversion of the
Notes or exercise of the Warrants in accordance with this  Agreement,  the Notes
and the  Warrants  are absolute  and  unconditional  regardless  of the dilutive
effect  that  such  issuance  may  have  on the  ownership  interests  of  other
shareholders of the Company.

                     f.     NO   CONFLICTS.   The   execution,    delivery   and
performance of this Agreement,  the Registration Rights Agreement, the Notes and
the  Warrants  by  the  Company  and  the  consummation  by the  Company  of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance  and  reservation  for  issuance of the  Conversion  Shares and Warrant
Shares) will not (i) conflict  with or result in a violation of any provision of
the Certificate of Incorporation or By-laws or (ii) violate or conflict with, or
result in a breach of any

                                       6
<PAGE>

provision of, or constitute a default (or an event which with notice or lapse of
time or both  could  become a  default)  under,  or give to others any rights of
termination,   amendment,   acceleration  or  cancellation  of,  any  agreement,
indenture,  patent,  patent license or instrument to which the Company or any of
its  Subsidiaries  is a party,  or (iii) result in a violation of any law, rule,
regulation,  order,  judgment or decree (including  federal and state securities
laws and  regulations and regulations of any  self-regulatory  organizations  to
which the Company or its  securities  are currently  subject)  applicable to the
Company  or any of its  Subsidiaries  or by which any  property  or asset of the
Company  or any of its  Subsidiaries  is  bound  or  affected  (except  for such
conflicts, defaults, terminations, amendments, accelerations,  cancellations and
violations  as would  not,  individually  or in the  aggregate,  have a Material
Adverse  Effect).  Except for the failure of the Company to deliver a portion of
the shares of Common Stock to the stockholders of Midnight Auto Holdings,  Inc.,
a Michigan  corporation,  neither the Company nor any of its  Subsidiaries is in
violation of its Certificate of Incorporation,  By-laws or other  organizational
documents and neither the Company nor any of its Subsidiaries is in default (and
no event has  occurred  which with notice or lapse of time or both could put the
Company or any of its  Subsidiaries in default)  under,  and neither the Company
nor any of its  Subsidiaries  has taken any  action or failed to take any action
that would give to others any rights of termination,  amendment, acceleration or
cancellation of, any agreement,  indenture or instrument to which the Company or
any of its  Subsidiaries  is a party or by which any  property  or assets of the
Company or any of its  Subsidiaries  is bound or  affected,  except for possible
defaults as would not, individually or in the aggregate, have a Material Adverse
Effect.  The  businesses  of the Company and its  Subsidiaries,  if any, are not
being  conducted,  and shall not be conducted so long as a Buyer owns any of the
Securities, in violation of any law, ordinance or regulation of any governmental
entity,  which  violation  would  cause a  Material  Adverse  Effect.  Except as
specifically  contemplated  by this Agreement and as required under the 1933 Act
and any applicable  state securities laws, the Company is not required to obtain
any consent, authorization or order of, or make any filing or registration with,
any court,  governmental agency, regulatory agency, self regulatory organization
or stock  market  or any  third  party in order for it to  execute,  deliver  or
perform any of its obligations  under this Agreement,  the  Registration  Rights
Agreement,  the Notes or the  Warrants in  accordance  with the terms  hereof or
thereof or to issue and sell the Notes and Warrants in accordance with the terms
hereof and to issue the Conversion  Shares upon  conversion of the Notes and the
Warrant  Shares upon  exercise of the Warrants.  All  consents,  authorizations,
orders,  filings  and  registrations  which the  Company is  required  to obtain
pursuant  to the  preceding  sentence  have been  obtained  or will be  obtained
promptly after Closing effected on or prior to the date hereof.

                     g.     ABSENCE OF CERTAIN CHANGES. Since December 31, 2005,
there has been no material adverse change and no material adverse development in
the assets, liabilities,  business, properties, operations, financial condition,
results of operations or prospects of the Company or any of its Subsidiaries.

                     h.     ABSENCE OF  LITIGATION.  There is no  action,  suit,
claim,  proceeding,  inquiry or  investigation  before or by any  court,  public
board,  government agency,  self-regulatory  organization or body pending or, to
the knowledge of the Company or any of its Subsidiaries,  threatened  against or
affecting the Company or any of its Subsidiaries, or their officers or directors
in their capacity as such, that could have a Material  Adverse Effect.  SCHEDULE
3(h)  contains  a  complete  list and  summary  description  of any  pending  or
threatened proceeding

                                       7
<PAGE>

against or affecting the Company or any of its  Subsidiaries,  without regard to
whether  it  would  have  a  Material  Adverse  Effect.   The  Company  and  its
Subsidiaries are unaware of any facts or circumstances  which might give rise to
any of the foregoing.

                     i.     PATENTS,  COPYRIGHTS,  ETC.  The Company and each of
its Subsidiaries  owns or possesses the requisite  licenses or rights to use all
patents,  patent  applications,   patent  rights,  inventions,  know-how,  trade
secrets, trademarks, trademark applications, service marks, service names, trade
names and copyrights ("INTELLECTUAL PROPERTY") necessary to enable it to conduct
its business as now operated  (and, to the best of the Company's  knowledge,  as
presently  contemplated  to be  operated  in the  future);  there is no claim or
action by any person pertaining to, or proceeding  pending,  or to the Company's
knowledge  threatened,  which  challenges  the  right  of  the  Company  or of a
Subsidiary with respect to any Intellectual  Property  necessary to enable it to
conduct  its  business  as now  operated  (and,  to the  best  of the  Company's
knowledge,  as presently contemplated to be operated in the future); to the best
of the  Company's  knowledge,  the  Company's or its  Subsidiaries'  current and
intended  products,  services and processes do not infringe on any  Intellectual
Property or other  rights held by any person;  and the Company is unaware of any
facts or  circumstances  which  might  give  rise to any of the  foregoing.  The
Company and each of its Subsidiaries have taken reasonable  security measures to
protect the secrecy, confidentiality and value of their Intellectual Property.

                     j.     NO MATERIALLY  ADVERSE  CONTRACTS,  ETC. Neither the
Company nor any of its  Subsidiaries  is subject to any  charter,  corporate  or
other legal  restriction,  or any judgment,  decree,  order,  rule or regulation
which in the judgment of the Company's officers has or is expected in the future
to  have  a  Material  Adverse  Effect.  Neither  the  Company  nor  any  of its
Subsidiaries  is a party to any contract or  agreement  which in the judgment of
the Company's officers has or is expected to have a Material Adverse Effect.

                     k.     TAX STATUS.  Except as set forth on  SCHEDULE  3(k),
the Company and each of its  Subsidiaries  has made or filed all federal,  state
and foreign income and all other tax returns,  reports and declarations required
by any  jurisdiction  to which it is subject (unless and only to the extent that
the Company and each of its  Subsidiaries  has set aside on its books provisions
reasonably  adequate for the payment of all unpaid and unreported taxes) and has
paid all taxes and other governmental  assessments and charges that are material
in  amount,  shown  or  determined  to be  due  on  such  returns,  reports  and
declarations,  except  those being  contested in good faith and has set aside on
its  books  provisions  reasonably  adequate  for the  payment  of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply.  To the  Company's  knowledge,  there are no unpaid taxes in any material
amount  claimed  to be due by the  taxing  authority  of any  jurisdiction.  The
Company  has not  executed a waiver with  respect to the statute of  limitations
relating to the assessment or collection of any foreign, federal, state or local
tax.  Except as set forth on SCHEDULE 3(k), none of the Company's tax returns is
presently being audited by any taxing authority.

                     l.     CERTAIN   TRANSACTIONS.   Except  as  set  forth  on
SCHEDULE  3(l) and except for arm's  length  transactions  pursuant to which the
Company or any of its  Subsidiaries  makes  payments in the  ordinary  course of
business  upon  terms  no  less  favorable  than  the  Company  or  any  of  its
Subsidiaries  could obtain from third  parties and other than the grant of stock
options  disclosed  on  SCHEDULE  3(c),  none  of the  officers,  directors,  or
employees  of the

                                       8
<PAGE>

Company is presently a party to any  transaction  with the Company or any of its
Subsidiaries  (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 corporation,
partnership,  trust or other entity in which any officer,  director, or any such
employee  has a  substantial  interest  or is an officer,  director,  trustee or
partner.

                     m.     DISCLOSURE.  All   information   relating   to   or
concerning  the Company or any of its  Subsidiaries  set forth in this Agreement
and  provided to the Buyers  pursuant to Section  2(d) hereof and  otherwise  in
connection with the transactions contemplated hereby is, to the knowledge of the
Company,  true and  correct in all  material  respects  and the  Company has not
omitted to state any material  fact  necessary  in order to make the  statements
made  herein or  therein,  in light of the  circumstances  under which they were
made, not misleading.  To the knowledge of the Company, no event or circumstance
has occurred or exists with respect to the Company or any of its Subsidiaries or
its  or  their  business,   properties,   prospects,   operations  or  financial
conditions,  which,  under  applicable law, rule or regulation,  requires public
disclosure  or  announcement  by the  Company but which has not been so publicly
announced or disclosed  (assuming  for this purpose that the  Company's  reports
filed under the 1934 Act are being  incorporated into an effective  registration
statement filed by the Company under the 1933 Act).

                     n.     ACKNOWLEDGMENT   REGARDING   BUYERS'   PURCHASE   OF
SECURITIES.  The  Company  acknowledges  and  agrees  that the Buyers are acting
solely in the capacity of arm's length purchasers with respect to this Agreement
and the transactions  contemplated hereby. The Company further acknowledges that
no Buyer is acting as a financial advisor or fiduciary of the Company (or in any
similar   capacity)  with  respect  to  this  Agreement  and  the   transactions
contemplated  hereby  and  any  statement  made  by any  Buyer  or any of  their
respective  representatives  or agents in connection with this Agreement and the
transactions contemplated hereby is not advice or a recommendation and is merely
incidental  to the Buyers'  purchase  of the  Securities.  The  Company  further
represents  to each  Buyer  that  the  Company's  decision  to enter  into  this
Agreement has been based solely on the independent evaluation of the Company and
its representatives.

                     o.     NO   INTEGRATED   OFFERING.  Except  for  sales  of
securities to the Buyers and affiliates thereof heretofore consummated,  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 in any security or
solicited any offers to buy any security under  circumstances that would require
registration under the 1933 Act of the issuance of the Securities to the Buyers.
The issuance of the  Securities  to the Buyers will not be  integrated  with any
other  issuance  of the  Company's  securities  (past,  current or  future)  for
purposes of any shareholder approval provisions applicable to the Company or its
securities.

                     p.     NO BROKERS.  The  Company has taken no action  which
would  give  rise  to  any  claim  by  any  person  for  brokerage  commissions,
transaction  fees  or  similar  payments  relating  to  this  Agreement  or  the
transactions contemplated hereby.

                                       9
<PAGE>

                     q.     PERMITS;  COMPLIANCE. The  Company  and each of its
Subsidiaries   is  in   possession   of   all   material   franchises,   grants,
authorizations,  licenses, permits, easements, variances,  exemptions, consents,
certificates,  approvals  and orders  necessary  to own,  lease and  operate its
properties  and  to  carry  on  its  business  as  it  is  now  being  conducted
(collectively, the "COMPANY PERMITS"), and there is no action pending or, to the
knowledge of the Company, threatened regarding suspension or cancellation of any
of the Company  Permits.  Neither the Company nor any of its  Subsidiaries is in
conflict with, or in default or violation of, any of the Company Permits, except
for any such  conflicts,  defaults or violations  which,  individually or in the
aggregate,  would not reasonably be expected to have a Material  Adverse Effect.
Since  December 31, 2005,  neither the Company nor any of its  Subsidiaries  has
received  any  notification  with  respect to  possible  conflicts,  defaults or
violations  of  applicable  laws,   except  for  notices  relating  to  possible
conflicts, defaults or violations, which conflicts, defaults or violations would
not have a Material Adverse Effect.

                     r.     ENVIRONMENTAL MATTERS.

                            (i)    There are, to the Company's  knowledge,  with
respect to the  Company or any of its  Subsidiaries  or any  predecessor  of the
Company,  no  present  violations  of  Environmental  Laws (as  defined  below),
releases  of  any   material   into  the   environment,   actions,   activities,
circumstances,  conditions,  events, incidents, or contractual obligations which
may give rise to any common law  environmental  liability or any liability under
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
or similar federal, state, local or foreign laws and neither the Company nor any
of  its  Subsidiaries  has  received  any  notice  with  respect  to  any of the
foregoing, nor is any action pending or, to the Company's knowledge,  threatened
in connection with any of the foregoing. The term "ENVIRONMENTAL LAWS" means all
material  federal,  state,  local or  foreign  laws  relating  to  pollution  or
protection of human health or the environment  (including,  without  limitation,
ambient air,  surface water,  groundwater,  land surface or subsurface  strata),
including, without limitation, laws relating to emissions,  discharges, releases
or  threatened  releases  of  chemicals,  pollutants  contaminants,  or toxic or
hazardous substances or wastes  (collectively,  "HAZARDOUS  MATERIALS") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all  authorizations,  codes,  decrees,  demands  or  demand  letters,
injunctions,  judgments,  licenses,  notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.

                            (ii)   Other  than  those  that are or were  stored,
used or disposed of in compliance with  applicable  law, no Hazardous  Materials
are contained on or about any real property  currently owned,  leased or used by
the Company or any of its Subsidiaries, and no Hazardous Materials were released
on or about any real property previously owned, leased or used by the Company or
any of its Subsidiaries during the period the property was owned, leased or used
by the Company or any of its  Subsidiaries,  except in the normal  course of the
Company's or any of its Subsidiaries' business.

                            (iii)  There are no underground  storage tanks on or
under  any real  property  owned,  leased or used by the  Company  or any of its
Subsidiaries that are not in compliance with applicable law.

                                       10
<PAGE>

                     s.     TITLE TO  PROPERTY.  Except as set forth on SCHEDULE
3(s), the Company and its  Subsidiaries  have good and  marketable  title to all
real property and good and  marketable  title to all personal  property owned by
them which is material to the business of the Company and its  Subsidiaries,  in
each case free and clear of all liens and encumbrances  and, to the knowledge of
the Company, defects or such as would not have a Material Adverse Effect. To the
knowledge of the Company,  any real property and facilities  held under lease by
the Company and its  Subsidiaries  are held by them under valid,  subsisting and
enforceable  leases with such  exceptions  as would not have a Material  Adverse
Effect.

                     t.     INSURANCE.  The Company and each of its Subsidiaries
are insured by insurers of  recognized  financial  responsibility  against  such
losses and risks and in such amounts as management of the Company believes to be
prudent  and  customary  in  the   businesses  in  which  the  Company  and  its
Subsidiaries  are engaged.  Neither the Company nor any such  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 at a cost that
would not have a Material Adverse Effect. The Company has provided to Buyer true
and  correct  copies  of all  policies  relating  to  directors'  and  officers'
liability  coverage,  errors and  omissions  coverage,  and  commercial  general
liability coverage.

                     u.     INTERNAL ACCOUNTING  CONTROLS.  The Company and each
of  its  Subsidiaries   maintain  a  system  of  internal   accounting  controls
sufficient,  in the judgment of the  Company's  board of  directors,  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
generally accepted accounting  principles 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.

                     v.     FOREIGN CORRUPT PRACTICES.  Neither the Company, nor
any of its Subsidiaries,  nor any director,  officer,  agent,  employee or other
person acting on behalf of the Company or any  Subsidiary  has, in the course of
his actions for, or on behalf of, the Company,  used any corporate funds for any
unlawful contribution,  gift,  entertainment or other unlawful expenses relating
to  political  activity;  made any direct or  indirect  unlawful  payment to any
foreign or  domestic  government  official  or employee  from  corporate  funds;
violated  or is in  violation  of any  provision  of the  U.S.  Foreign  Corrupt
Practices Act of 1977, as amended, or made any bribe, rebate, payoff,  influence
payment,  kickback  or  other  unlawful  payment  to  any  foreign  or  domestic
government official or employee.

                     w.     SOLVENCY.  The Company  (after  giving effect to the
transactions contemplated by this Agreement) is solvent (i.e., its assets have a
fair  market  value  in  excess  of the  amount  required  to pay  its  probable
liabilities  on its  existing  debts as they become  absolute  and  matured) and
currently  the  Company  has no  information  that would  lead it to  reasonably
conclude  that the Company  would not,  after giving  effect to the  transaction
contemplated by this Agreement,  have the ability to, nor does it intend to take
any action  that would  impair its  ability  to, pay its debts from time to time
incurred in connection therewith as such debts mature.

                                       11
<PAGE>

                     x.     NO INVESTMENT COMPANY.  The Company is not, and upon
the issuance and sale of the Securities as  contemplated  by this Agreement will
not be an "investment  company"  required to be registered  under the Investment
Company Act of 1940 (an "INVESTMENT COMPANY").  The Company is not controlled by
an Investment Company.

                     y.     BREACH  OF  REPRESENTATIONS  AND  WARRANTIES  BY THE
COMPANY.  If the Company breaches any of the  representations  or warranties set
forth in this Section 3, and in addition to any other remedies  available to the
Buyers  pursuant  to this  Agreement,  the  Company  shall pay to the Buyers the
Standard  Liquidated  Damages Amount in cash or in shares of Common Stock at the
option of the Company,  until such breach is cured. If the Company elects to pay
the Standard  Liquidated  Damages Amounts in shares of Common Stock, such shares
shall be issued at the Conversion Price at the time of payment.

              4.     COVENANTS.

                     a.     BEST  EFFORTS.  The  parties  shall use  their  best
efforts to satisfy timely each of the conditions  agreed to thereby described in
Section 6 and 7 of this Agreement.

                     b.     FORM D; BLUE SKY LAWS.  The Company agrees to file a
Form D with respect to the Securities as required under Regulation D and to make
available a copy thereof to each Buyer promptly  after such filing.  The Company
shall,  on, before or promptly  after the Closing Date,  take such action as the
Company shall  reasonably  determine is necessary to qualify the  Securities for
sale to the Buyers under applicable  securities or "blue sky" laws of the states
of the United States (or to obtain an exemption  from such  qualification),  and
shall make  available  evidence  of any such action so taken to each Buyer on or
prior to the Closing Date.

                     c.     REPORTING STATUS;  ELIGIBILITY TO USE FORM S-3, SB-2
OR FORM S-1.  The Company  represents  and  warrants  that it shall use its best
efforts to meet the  requirements  for the use of Form S-3 (or if the Company is
not  eligible  for the use of Form S-3 as of the Filing  Date (as defined in the
Registration Rights Agreement), the Company may use the form of registration for
which it is eligible at that time) for  registration of the sale by the Buyer of
the Registrable Securities (as defined in the Registration Rights Agreement). So
long as any Buyer beneficially owns any of the Securities, the Company shall use
its best  efforts to timely file all  reports  required to be filed with the SEC
pursuant to the 1934 Act, and the Company  shall not  terminate its status as an
issuer  required to file reports  under the 1934 Act even if the 1934 Act or the
rules and  regulations  thereunder  would permit such  termination.  The Company
further  agrees that it shall use its best efforts to file all reports  required
to be filed by the  Company  with the SEC in a  timely  manner  so as to  become
eligible,  and thereafter to maintain its eligibility,  for the use of Form S-3.
The Company shall issue a press release  describing  the materials  terms of the
transaction  contemplated  hereby as soon as  practicable  following the Closing
Date but in no event more than five (5) business days of the Closing Date, which
press release shall be subject to prior review by the Buyers. The Company agrees
that  such  press  release  shall not  disclose  the name of the  Buyers  unless
expressly consented to in writing by the Buyers or unless required by applicable
law or regulation, and then only to the extent of such requirement.

                     d.     USE OF PROCEEDS.  The Company shall use the proceeds
from the sale of the Notes and the Warrants for general working capital purposes
and shall not, directly or

                                       12
<PAGE>

indirectly,  use  such  proceeds  for any  loan to or  investment  in any  other
corporation,  partnership, enterprise or other person (except in connection with
its currently existing direct or indirect Subsidiaries.

                     e.     FUTURE   OFFERINGS.   Subject   to  the   exceptions
described  below,  the Company will not,  without the prior written consent of a
majority-in-interest  of the Buyers, not to be unreasonably withheld,  negotiate
or contract with any party to obtain additional equity financing (including debt
financing  with an equity  component)  that  involves (A) the issuance of Common
Stock at a  discount  to the  market  price of the  Common  Stock on the date of
issuance  (taking  into  account the value of any warrants or options to acquire
Common Stock issued in connection  therewith) or (B) the issuance of convertible
securities that are convertible into an indeterminate number of shares of Common
Stock or (C) the issuance of warrants  during the period (the "LOCK-UP  PERIOD")
beginning on the Closing Date and ending on the later of (i) two hundred seventy
(270) days from the Closing Date and (ii) one hundred eighty (180) days from the
date  the  Registration   Statement  (as  defined  in  the  Registration  Rights
Agreement)  is declared  effective  (plus any days in which sales cannot be made
thereunder). In addition, subject to the exceptions described below, the Company
will not conduct any equity financing  (including debt with an equity component)
("FUTURE  OFFERINGS") during the period beginning on the Closing Date and ending
two (2) years  after the end of the  Lock-up  Period  unless it shall have first
delivered to each Buyer, at least twenty (20) business days prior to the closing
of such Future Offering, written notice describing the proposed Future Offering,
including the terms and conditions thereof and proposed definitive documentation
to be entered into in connection  therewith,  and providing each Buyer an option
during the fifteen (15) day period following delivery of such notice to purchase
its pro rata share (based on the ratio that the  aggregate  principal  amount of
Notes purchased by it hereunder bears to the aggregate principal amount of Notes
purchased  hereunder) of the securities  being offered in the Future Offering on
the same terms as contemplated by such Future Offering (the limitations referred
to in this sentence and the preceding  sentence are collectively  referred to as
the "CAPITAL RAISING  LIMITATIONS").  In the event the terms and conditions of a
proposed Future Offering are amended in any respect after delivery of the notice
to the Buyers concerning the proposed Future Offering, the Company shall deliver
a new notice to each Buyer  describing  the amended terms and  conditions of the
proposed Future Offering and each Buyer  thereafter  shall have an option during
the fifteen  (15) day period  following  delivery of such new notice to purchase
its pro  rata  share  of the  securities  being  offered  on the  same  terms as
contemplated  by such  proposed  Future  Offering,  as  amended.  The  foregoing
sentence shall apply to successive amendments to the terms and conditions of any
proposed Future Offering. The Capital Raising Limitations shall not apply to any
transaction   involving  (i)  issuances  of  securities  in  a  firm  commitment
underwritten  public offering  (excluding a continuous offering pursuant to Rule
415 under the 1933 Act) or (ii) issuances of securities as  consideration  for a
merger, consolidation or purchase of assets, or in connection with any strategic
partnership  or joint  venture  (the  primary  purpose  of which is not to raise
equity  capital),  or in connection  with the  disposition  or  acquisition of a
business,  product or license by the Company.  The Capital  Raising  Limitations
also shall not apply to the issuance of  securities  upon exercise or conversion
of the Company's options,  warrants or other convertible  securities outstanding
as of the date hereof or to the grant of additional options or warrants,  or the
issuance of additional securities,  under any Company stock option or restricted
stock plan approved by the shareholders of the Company.

                                       13
<PAGE>

                     f.     EXPENSES.   At  the  Closing,   the  Company   shall
reimburse  Buyers  for  expenses   incurred  by  them  in  connection  with  the
negotiation,  preparation, execution, delivery and performance of this Agreement
and the other  agreements to be executed in connection  herewith  ("DOCUMENTS"),
including,  without  limitation,  attorneys' and consultants' fees and expenses,
transfer agent fees,  fees for stock  quotation  services,  fees relating to any
amendments  or  modifications  of the  Documents  or any  consents or waivers of
provisions in the  Documents,  fees for the  preparation of opinions of counsel,
escrow fees, and costs of  restructuring  the  transactions  contemplated by the
Documents in an amount not to exceed  $30,000.  When possible,  the Company must
pay these fees directly,  otherwise the Company must make immediate  payment for
reimbursement  to the Buyers for all fees and expenses  immediately upon written
notice by the Buyer or the submission of an invoice by the Buyer. If the Company
fails to  reimburse  the Buyer in full  within  three (3)  business  days of the
written  notice or  submission  of invoice by the Buyer,  the Company  shall pay
interest  on the  total  amount  of fees to be  reimbursed  at a rate of 15% per
annum.

                     g.     FINANCIAL  INFORMATION.  The Company  agrees to send
the  following  reports to each Buyer until such Buyer  transfers,  assigns,  or
sells all of the Securities:  (i) within ten (10) days after the filing with the
SEC, a copy of its Annual  Report on Form 10-KSB its  Quarterly  Reports on Form
10-QSB  and any  Current  Reports  on Form 8-K;  (ii)  within  one (1) day after
release,  copies  of all press  releases  issued  by the  Company  or any of its
Subsidiaries; and (iii) contemporaneously with the making available or giving to
the shareholders of the Company,  copies of any notices or other information the
Company makes available or gives to such shareholders.

                     h.     AUTHORIZATION AND RESERVATION OF SHARES. The Company
shall at all times have authorized,  and reserved for the purpose of issuance, a
sufficient  number of shares of Common Stock to provide for the full  conversion
or exercise of the outstanding Notes and Warrants and issuance of the Conversion
Shares and Warrant Shares in connection therewith (based on the Conversion Price
of the Notes or Exercise  Price of the Warrants in effect from time to time) and
as otherwise  required by the Notes.  The Company shall not reduce the number of
shares of Common  Stock  reserved  for  issuance  upon  conversion  of Notes and
exercise of the Warrants without the consent of each Buyer. The Company shall at
all times maintain the number of shares of Common Stock so reserved for issuance
at an amount ("RESERVED  AMOUNT") equal to no less than two (2) times the number
that is then  actually  issuable  upon  full  conversion  of the  Notes and upon
exercise  of the  Warrants  (based on the  Conversion  Price of the Notes or the
Exercise Price of the Warrants in effect from time to time).  If at any time the
number  of  shares  of  Common  Stock   authorized  and  reserved  for  issuance
("AUTHORIZED  AND RESERVED  SHARES") is below the Reserved  Amount,  the Company
will  promptly take all  corporate  action  necessary to authorize and reserve a
sufficient number of shares,  including,  without limitation,  calling a special
meeting of  shareholders  to authorize  additional  shares to meet the Company's
obligations  under this Section 4(h), in the case of an  insufficient  number of
authorized shares, obtain shareholder approval of an increase in such authorized
number of shares, and voting the management shares of the Company in favor of an
increase  in the  authorized  shares of the Company to ensure that the number of
authorized  shares is  sufficient  to meet the Reserved  Amount.  If the Company
fails to obtain such  shareholder  approval within sixty (60) days following the
date on which the number of Reserved  Amount exceeds the Authorized and Reserved
Shares,  the Company  shall pay to the Buyers the  Standard  Liquidated  Damages
Amount,  in cash or in shares of Common Stock at the option of each Buyer.  If a
Buyer elects to be paid the Standard Liquidated

                                       14
<PAGE>

Damages  Amount in shares of Common  Stock,  such shares  shall be issued at the
Conversion Price at the time of payment. In order to ensure that the Company has
authorized  a  sufficient  amount of shares to meet the  Reserved  Amount at all
times, the Company shall use its best efforts to deliver to a representative for
the Buyers at the end of every month a list  detailing (1) the current amount of
shares authorized by the Company and reserved for the Buyers;  and (2) amount of
shares  issuable upon  conversion of the Notes and upon exercise of the Warrants
and as payment of  interest  accrued on the Notes for one year.  If the  Company
fails to provide  such list within five (5) business  days of having  received a
written demand therefor,  the Company shall pay the Standard  Liquidated Damages
Amount,  in cash or in shares of Common Stock at the option of the Buyer,  until
the list is  delivered.  If the Buyer elects to be paid the Standard  Liquidated
Damages  Amount in shares of Common  Stock,  such shares  shall be issued at the
Conversion Price at the time of payment.

                     i.     LISTING.  The Company  shall use its best efforts to
secure  the  listing  of the  Conversion  Shares and  Warrant  Shares  upon each
national  securities  exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed  (subject to official notice of issuance)
and, so long as any Buyer owns any of the Securities, shall maintain, so long as
any  other  shares of Common  Stock  shall be so  listed,  such  listing  of all
Conversion  Shares and Warrant Shares from time to time issuable upon conversion
of the Notes or exercise of the  Warrants.  The Company will use best efforts to
obtain  and,  so long as any  Buyer  owns any of the  Securities,  maintain  the
listing  and  trading  of its  Common  Stock  on  the  OTCBB  or any  equivalent
replacement exchange, the Nasdaq National Market ("NASDAQ"), the Nasdaq SmallCap
Market  ("NASDAQ  SMALLCAP"),  the New  York  Stock  Exchange  ("NYSE"),  or the
American  Stock  Exchange  ("AMEX")  and will  comply in all  respects  with the
Company's  reporting,  filing and other obligations under the bylaws or rules of
the National  Association of Securities Dealers ("NASD") and such exchanges,  as
applicable.  The  Company  shall  promptly  provide to each Buyer  copies of any
notices it receives from the OTCBB and any other exchanges or quotation  systems
on which the Common Stock is then listed regarding the continued  eligibility of
the Common Stock for listing on such exchanges and quotation systems.

                     j.     CORPORATE EXISTENCE. So long as a Buyer beneficially
owns any Notes or Warrants,  the Company shall maintain its corporate  existence
and shall not sell all or substantially all of the Company's  assets,  except in
the event of a merger or consolidation  or sale of all or  substantially  all of
the  Company's  assets,   where  the  surviving  or  successor  entity  in  such
transaction  (i)  assumes  the  Company's  obligations  hereunder  and under the
agreements  and  instruments  entered into in connection  herewith and (ii) is a
publicly  traded  corporation  whose  Common  Stock is listed for trading on the
OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

                     k.     NO  INTEGRATION.  The  Company  shall  not  make any
offers or sales of any security (other than the Securities) under  circumstances
that  would  require  registration  of the  Securities  being  offered  or  sold
hereunder  under  the 1933 Act or cause the  offering  of the  Securities  to be
integrated  with any other offering of securities by the Company for the purpose
of  any  stockholder  approval  provision  applicable  to  the  Company  or  its
securities.

                                       15
<PAGE>

                     l.     BREACH OF COVENANTS.  If the Company breaches any of
the covenants set forth in this Section 4, and in addition to any other remedies
available to the Buyers pursuant to this Agreement, the Company shall pay to the
Buyers the Standard  Liquidated  Damages Amount,  in cash or in shares of Common
Stock at the option of the Company,  until such breach is cured.  If the Company
elects to pay the  Standard  Liquidated  Damages  Amount in shares,  such shares
shall be issued at the Conversion Price at the time of payment.

              5.     TRANSFER  AGENT  INSTRUCTIONS.   The  Company  shall  issue
irrevocable instructions to its transfer agent to issue certificates, registered
in the name of each Buyer or its nominee,  for the Conversion Shares and Warrant
Shares in such  amounts  as  specified  from  time to time by each  Buyer to the
Company upon  conversion  of the Notes or exercise of the Warrants in accordance
with the terms thereof (the "IRREVOCABLE TRANSFER AGENT INSTRUCTIONS"). Prior to
registration  of the Conversion  Shares and Warrant Shares under the 1933 Act or
the date on which the Conversion  Shares and Warrant Shares may be sold pursuant
to Rule 144  without  any  restriction  as to the number of  Securities  as of a
particular date that can then be immediately sold, all such  certificates  shall
bear the restrictive  legend  specified in Section 2(g) of this  Agreement.  The
Company warrants that no instruction  other than the Irrevocable  Transfer Agent
Instructions  referred to in this Section 5, and stop transfer  instructions  to
give  effect to Section  2(f) hereof (in the case of the  Conversion  Shares and
Warrant  Shares,  prior to  registration  of the  Conversion  Shares and Warrant
Shares under the 1933 Act or the date on which the Conversion Shares and Warrant
Shares may be sold pursuant to Rule 144 without any restriction as to the number
of Securities as of a particular date that can then be immediately  sold),  will
be given by the  Company to its  transfer  agent and that the  Securities  shall
otherwise  be  freely  transferable  on the books and  records  of the  Company,
subject to and to the extent  provided in this  Agreement  and the  Registration
Rights  Agreement.  Nothing in this Section shall affect in any way each Buyer's
obligations  and  agreement  set forth in Section 2(g) hereof to comply with all
applicable  prospectus  delivery  requirements,  if  any,  upon  re-sale  of the
Securities.  If a Buyer  provides  the Company with (i) an opinion of counsel in
form, substance and scope customary for opinions in comparable transactions,  to
the effect that a public sale or transfer of such Securities may be made without
registration  under the 1933 Act and such sale or  transfer  is effected or (ii)
the  Buyer  provides  reasonable  assurances  that  the  Securities  can be sold
pursuant to Rule 144, the Company shall permit the transfer, and, in the case of
the Conversion  Shares and Warrant Shares,  promptly instruct its transfer agent
to issue one or more  certificates,  free from restrictive  legend, in such name
and in such  denominations as specified by such Buyer. The Company  acknowledges
that a breach by it of its obligations  hereunder will cause irreparable harm to
the Buyers, by vitiating the intent and purpose of the transactions contemplated
hereby.  Accordingly,  the  Company  acknowledges  that the  remedy at law for a
breach of its obligations  under this Section 5 may be inadequate and agrees, in
the event of a breach or threatened  breach by the Company of the  provisions of
this  Section,  that the Buyers  shall be  entitled,  in  addition  to all other
available  remedies,  to an  injunction  restraining  any breach  and  requiring
immediate  transfer,  without the necessity of showing economic loss and without
any bond or other security being required.

              6.     CONDITIONS  TO  THE  COMPANY'S   OBLIGATION  TO  SELL.  The
obligation of the Company  hereunder to issue and sell the Notes and Warrants to
a Buyer at the Closing is subject to the satisfaction,  at or before the Closing
Date of each of the following

                                       16
<PAGE>

conditions  thereto,  provided that these  conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole discretion:

                     a.     The  applicable   Buyer  shall  have  executed  this
Agreement and the Registration  Rights Agreement,  and delivered the same to the
Company.

                     b.     The  applicable   Buyer  shall  have  delivered  the
Purchase Price in accordance with Section 1(b) above.

                     c.     The representations and warranties of the applicable
Buyer  shall be true and  correct in all  material  respects as of the date when
made  and as of the  Closing  Date  as  though  made at that  time  (except  for
representations  and  warranties  that  speak as of a  specific  date),  and the
applicable  Buyer shall have  performed,  satisfied and complied in all material
respects  with  the  covenants,  agreements  and  conditions  required  by  this
Agreement to be performed, satisfied or complied with by the applicable Buyer at
or prior to the Closing Date.

                     d.     No litigation, statute, rule, regulation,  executive
order,  decree,   ruling  or  injunction  shall  have  been  enacted,   entered,
promulgated  or  endorsed  by or in  any  court  or  governmental  authority  of
competent jurisdiction or any self-regulatory organization having authority over
the matters  contemplated  hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.

              7.     CONDITIONS  TO EACH BUYER'S  OBLIGATION  TO  PURCHASE. The
obligation  of each Buyer  hereunder  to purchase  the Notes and Warrants at the
Closing is subject to the satisfaction, at or before the Closing Date of each of
the following  conditions,  provided that these  conditions are for such Buyer's
sole benefit and may be waived by such Buyer at any time in its sole discretion:

                     a.     The Company shall have  executed this  Agreement and
the Registration Rights Agreement, and delivered the same to the Buyer.

                     b.     The Company shall have  delivered to such Buyer duly
executed Notes (in such  denominations  as the Buyer shall request) and Warrants
in accordance with Section 1(b) above.

                     c.     The Irrevocable Transfer Agent Instructions, in form
and substance satisfactory to a  majority-in-interest  of the Buyers, shall have
been delivered to and acknowledged in writing by the Company's Transfer Agent.

                     d.     The  representations  and  warranties of the Company
shall be true and correct in all material  respects as of the date when made and
as of the Closing Date as though made at such time  (except for  representations
and  warranties  that speak as of a specific  date) and the  Company  shall have
performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Company at or prior to the Closing Date. The Buyer shall
have received a certificate  or  certificates,  executed by the Chief  Executive
Officer of the Company,  dated as of the Closing Date,  to the foregoing  effect
and as to such  other  matters  as may be  reasonably  requested  by such  Buyer
including,  but not  limited  to  certificates  with  respect  to the  Company's
Articles of

                                       17
<PAGE>

Incorporation,  By-laws  and Board of  Directors'  resolutions  relating  to the
transactions contemplated hereby.

                     e.     No litigation, statute, rule, regulation,  executive
order,  decree,   ruling  or  injunction  shall  have  been  enacted,   entered,
promulgated  or  endorsed  by or in  any  court  or  governmental  authority  of
competent jurisdiction or any self-regulatory organization having authority over
the matters  contemplated  hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.

                     f.     No event shall have occurred which could  reasonably
be expected to have a Material Adverse Effect on the Company.

                     g.     The  Buyer   shall  have   received   an   officer's
certificate described in Section 3(c) above, dated as of the Closing Date.

              8.     GOVERNING LAW; MISCELLANEOUS.

                     a.     GOVERNING  LAW.  THIS  AGREEMENT  SHALL BE ENFORCED,
GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS  MADE AND TO BE PERFORMED  ENTIRELY  WITHIN SUCH STATE,
WITHOUT  REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED
IN NEW YORK, NEW YORK WITH RESPECT TO ANY DISPUTE  ARISING UNDER THIS AGREEMENT,
THE  AGREEMENTS  ENTERED  INTO  IN  CONNECTION   HEREWITH  OR  THE  TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN
INCONVENIENT  FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES
FURTHER  AGREE THAT  SERVICE OF PROCESS  UPON A PARTY MAILED BY FIRST CLASS MAIL
SHALL BE DEEMED IN EVERY RESPECT  EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN
ANY SUCH SUIT OR PROCEEDING.NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO
SERVE  PROCESS IN ANY OTHER MANNER  PERMITTED BY LAW.  BOTH PARTIES AGREE THAT A
FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN OTHER  JURISDICTIONS  BY SUIT ON SUCH  JUDGMENT OR IN ANY
OTHER  LAWFUL  MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE  ARISING
UNDER THIS AGREEMENT SHALL BE RESPONSIBLE  FOR ALL FEES AND EXPENSES,  INCLUDING
ATTORNEYS'  FEES,  INCURRED  BY THE  PREVAILING  PARTY IN  CONNECTION  WITH SUCH
DISPUTE.

                     b.     COUNTERPARTS;    SIGNATURES   BY   FACSIMILE.   This
Agreement  may be executed in one or more  counterparts,  each of which shall be
deemed an original but all of which shall  constitute one and the same agreement
and shall become effective when  counterparts have been signed by each party and
delivered to the other party.  This Agreement,  once executed by a party, may be
delivered to the other party hereto by facsimile  transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.

                                       18
<PAGE>

                     c.     HEADINGS.  The  headings of this  Agreement  are for
convenience  of  reference  only and  shall  not form  part of,  or  affect  the
interpretation of, this Agreement.

                     d.     SEVERABILITY.  In the event  that any  provision  of
this Agreement 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 provision  hereof which may prove  invalid or  unenforceable
under any law shall not  affect  the  validity  or  enforceability  of any other
provision hereof.

                     e.     ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the
instruments  referenced  herein contain the entire  understanding of the parties
with  respect  to  the  matters  covered  herein  and  therein  and,  except  as
specifically  set forth  herein or  therein,  neither  the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to such
matters.  No provision of this  Agreement may be waived or amended other than by
an instrument in writing signed by the party to be charged with enforcement.

                     f.     NOTICES.  Any notices  required or  permitted  to be
given under the terms of this Agreement shall be sent by certified or registered
mail (return receipt requested) or delivered personally or by courier (including
a recognized  overnight delivery service) or by facsimile and shall be effective
five days after being  placed in the mail,  if mailed by regular  United  States
mail,  or upon  receipt,  if  delivered  personally  or by courier  (including a
recognized  overnight delivery service) or by facsimile,  in each case addressed
to a party. The addresses for such communications shall be:

                     If to the Company:

                            Midnight Holdings Group, Inc.
                            3872 Rochester Road
                            Troy, MI 48083
                            Attention:  Chief Executive Officer
                            Telephone:  586-783-1366
                            Facsimile:   586-783-1367

                     With a copy to:

                            Reitler Brown & Rosenblatt LLC
                            800 Third Avenue, 21st Floor
                            New York, NY  10022
                            Attention:  Robert Steven Brown, Esq.
                            Telephone:  212-209-3014
                            Facsimile: 212-371-5500

       If to a Buyer:  To the address set forth  immediately  below such Buyer's
name on the signature pages hereto.

                                       19
<PAGE>

                     With copy to:

                            Ballard Spahr Andrews & Ingersoll, LLP
                            1735 Market Street
                            51st Floor
                            Philadelphia, Pennsylvania  19103
                            Attention:  Gerald j. Guarcini, Esq.
                            Telephone:  215-864-8625
                            Facsimile:  215-864-8999
                            Email:  guarcini@ballardspahr.com

       Each  party  shall  provide  notice to the other  party of any  change in
address.

                     g.     SUCCESSORS  AND  ASSIGNS.  This  Agreement  shall be
binding  upon and inure to the benefit of the parties and their  successors  and
assigns.  Neither the Company nor any Buyer shall  assign this  Agreement or any
rights or obligations  hereunder without the prior written consent of the other.
Notwithstanding the foregoing, subject to Section 2(f), any Buyer may assign its
rights  hereunder to any person who is an  "Accredited  Investor" that purchases
Securities in a private  transaction from a Buyer or to any of its "affiliates,"
as that term is defined under the 1934 Act, without the consent of the Company.

                     h.     THIRD  PARTY   BENEFICIARIES.   This   Agreement  is
intended for the benefit of the parties  hereto and their  respective  permitted
successors  and  assigns,  and is not for the benefit of, nor may any  provision
hereof be enforced by, any other person.

                     i.     SURVIVAL.  The representations and warranties of the
Company and the  agreements  and  covenants  set forth in Sections 3, 4, 5 and 8
shall  survive  the  closing   hereunder   notwithstanding   any  due  diligence
investigation  conducted  by or on behalf of the Buyers.  The Company  agrees to
indemnify  and  hold  harmless  each  of the  Buyers  and  all  their  officers,
directors,  employees  and agents  for loss or damage  arising as a result of or
related  to  any  breach  or  alleged  breach  by  the  Company  of  any  of its
representations,  warranties  and covenants set forth in Sections 3 and 4 hereof
or any of its covenants and obligations under this Agreement or the Registration
Rights  Agreement,  including  advancement  of  reasonable  expenses as they are
incurred.

                     j.     PUBLICITY.  The Company and each of the Buyers shall
have the right to review a  reasonable  period of time  before  issuance  of any
press releases,  SEC, OTCBB or NASD filings, or any other public statements with
respect to the transactions  contemplated hereby;  PROVIDED,  HOWEVER,  that the
Company shall be entitled,  without the prior approval of each of the Buyers, to
make any press release or SEC,  OTCBB (or other  applicable  trading  market) or
NASD filings with respect to such  transactions as is required by applicable law
and  regulations  (although each of the Buyers shall be consulted by the Company
in  connection  with any such press  release  prior to its  release and shall be
provided with a copy thereof and be given an opportunity to comment thereon).

                     k.     FURTHER ASSURANCES. Each party shall do and perform,
or cause to be done and performed,  all such further acts and things,  and shall
execute and deliver all such other  agreements,  certificates,  instruments  and
documents, as the other party may reasonably request

                                       20
<PAGE>

in order to carry out the intent and  accomplish  the purposes of this Agreement
and the consummation of the transactions contemplated hereby.

                     l.     NO STRICT  CONSTRUCTION.  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.

                     m.     REMEDIES.  The Company acknowledges that a breach by
it of its  obligations  hereunder will cause  irreparable  harm to the Buyers by
vitiating  the  intent  and  purpose  of the  transaction  contemplated  hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations  under this Agreement will be inadequate and agrees, in the event of
a  breach  or  threatened  breach  by the  Company  of the  provisions  of  this
Agreement, that the Buyers shall be entitled, in addition to all other available
remedies  at law or in  equity,  and in  addition  to the  penalties  assessable
herein,  to an injunction or injunctions  restraining,  preventing or curing any
breach of this  Agreement and to enforce  specifically  the terms and provisions
hereof,  without the necessity of showing  economic loss and without any bond or
other security being required.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       21
<PAGE>

       IN WITNESS  WHEREOF,  the undersigned  Buyers and the Company have caused
this Agreement to be duly executed as of the date first above written.

MIDNIGHT HOLDINGS GROUP, INC.

/s/ Nicholas Cocco
----------------------------
Nicholas Cocco
Chief Executive Officer

AJW PARTNERS, LLC
By:  SMS Group, LLC

/s/ Corey S. Ribotsky
----------------------------
Corey S. Ribotsky
Manager

RESIDENCE:  Delaware

ADDRESS:    1044 Northern Boulevard
            Suite 302
            Roslyn, New York  11576
            Facsimile:  (516) 739-7115
            Telephone:  (516) 739-7110

AGGREGATE SUBSCRIPTION AMOUNT:

      Aggregate Principal Amount of Notes:                        $
      Number of Warrants:
      Aggregate Remaining Purchase Price (after
      accounting for any principal of Bridge Note):               $

                                       22
<PAGE>

AJW OFFSHORE, LTD.
By:  First Street Manager II, LLC

/s/ Corey S. Ribotsky
----------------------------
Corey S. Ribotsky
Manager

RESIDENCE:      Cayman Islands

ADDRESS:    AJW Offshore, Ltd.
            P.O. Box 32021 SMB
            Grand Cayman, Cayman Island, B.W.I.

AGGREGATE SUBSCRIPTION AMOUNT:

      Aggregate Principal Amount of Notes:                        $
      Number of Warrants:
      Aggregate Remaining Purchase Price (after
      accounting for any principal of Bridge Note):               $

                                       23
<PAGE>

AJW QUALIFIED PARTNERS, LLC
By:  AJW Manager, LLC

/s/ Corey S. Ribotsky
----------------------------
Corey S. Ribotsky
Manager

RESIDENCE:      New York

ADDRESS:    1044 Northern Boulevard
            Suite 302
            Roslyn, New York  11576
            Facsimile:  (516) 739-7115
            Telephone:  (516) 739-7110

AGGREGATE SUBSCRIPTION AMOUNT:

      Aggregate Principal Amount of Notes:                        $
      Number of Warrants:
      Aggregate Remaining Purchase Price (after
      accounting for any principal of Bridge Note):               $

                                       24
<PAGE>

NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By:  First Street Manager II, LLP

/s/ Corey S. Ribotsky
----------------------------
Corey S. Ribotsky
Manager

RESIDENCE:      New York

ADDRESS:    1044 Northern Boulevard
            Suite 302
            Roslyn, New York  11576
            Facsimile:  (516) 739-7115
            Telephone:  (516) 739-7110

AGGREGATE SUBSCRIPTION AMOUNT:

      Aggregate Principal Amount of Notes:                        $
      Number of Warrants:
      Aggregate Remaining Purchase Price (after
      accounting for any principal of Bridge Note):               $

                                       25

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}]]