Document:

EXHIBIT 4.2.2

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE
SECURITIES   COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS  EVIDENCED BY A LEGAL  OPINION OF COUNSEL TO THE  TRANSFEROR
REASONABLY  ACCEPTABLE  TO THE COMPANY TO SUCH  EFFECT,  THE  SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THE TRANSFER OF THIS SECURITY AND
THE  SECURITIES  ISSUABLE  UPON  EXERCISE  OF THIS  SECURITY  ARE SUBJECT TO THE
RESTRICTIONS ON TRANSFER SET FORTH HEREIN.  THESE  SECURITIES AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE  SECURITIES MAY BE PLEDGED IN CONNECTION  WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

                          COMMON STOCK PURCHASE WARRANT

                  To Purchase 810,373 Shares of Common Stock of

                                   LMIC, Inc.

                  This COMMON STOCK PURCHASE  WARRANT  CERTIFIES that, for value
received,  Omicron Master Trust (the "Holder"),  is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after March 11, 2004 (the "Initial  Exercise  Date") and on or
prior to the close of business on the fifth  anniversary of the Initial Exercise
Date (the "Termination Date") but not thereafter,  to subscribe for and purchase
from LMIC, Inc., a corporation  incorporated in Delaware (the "Company"),  up to
810,373  shares (the  "Warrant  Shares") of Common  Stock,  par value $0.001 per
share, of the Company (the "Common  Stock").  The purchase price of one share of
Common Stock (the "Exercise Price") under this Warrant shall be $2.468,  subject
to adjustment hereunder. Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in that certain Securities  Purchase Agreement
(the "Purchase  Agreement"),  dated March 11, 2004,  between the Company and the
purchasers signatory thereto.

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         1. Title to Warrant. The Company may treat the registered owner of this
Warrant as the absolute owner hereof for all purposes.  Prior to the Termination
Date and  subject  to  compliance  with  applicable  laws and  Section 7 of this
Warrant, this Warrant and all rights hereunder are transferable,  in whole or in
part,  at the office or agency of the Company by the Holder in person or by duly
authorized attorney, upon surrender of this Warrant together with the Assignment
Form annexed hereto properly  endorsed,  provided that any such transferee is an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act. Prior to any transfer,  the transferee  shall sign an investment  letter in
form and substance reasonably satisfactory to the Company.

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

         3. Exercise of Warrant.

                  (a)  Exercise  of the  purchase  rights  represented  by  this
         Warrant  may be made at any  time or  times  on or  after  the  Initial
         Exercise Date and on or before the Termination  Date by delivery to the
         Company of a duly  executed  facsimile  copy of the Notice of  Exercise
         Form  annexed  hereto (or such other office or agency of the Company as
         it may designate by notice in writing to the  registered  Holder at the
         address  of  such  Holder  appearing  on the  books  of  the  Company);
         provided,  however,  within 5 Trading  Days of the date said  Notice of
         Exercise is delivered to the Company, the Holder shall have surrendered
         this Warrant to the Company and the Company shall have received payment
         of the aggregate Exercise Price of the shares thereby purchased by wire
         transfer or cashier's check drawn on a United States bank. Certificates
         for shares purchased  hereunder shall be delivered to the Holder within
         the earlier of (i) 5 Trading Days after the date on which the Notice of
         Exercise  shall have been delivered by facsimile copy or (ii) 3 Trading
         Days from the delivery to the Company of the Notice of Exercise Form by
         facsimile copy,  surrender of this Warrant and payment of the aggregate
         Exercise  Price as set forth above  ("Warrant  Share  Delivery  Date");
         provided,  however,  in the event the Warrant is not surrendered or the
         aggregate  Exercise  Price  is not  received  by the  Company  within 5
         Trading  Days after the date on which the Notice of  Exercise  shall be
         delivered by facsimile  copy,  the Warrant Share Delivery Date shall be
         extended  to the extent  such 5 Trading  Day period is  exceeded.  This
         Warrant  shall be deemed to have been  exercised on the date the Notice
         of Exercise is delivered to the Company by facsimile  copy. The Warrant
         Shares  shall be deemed to have been  issued,  and  Holder or any other
         person so designated to be named therein shall be deemed to have become
         a holder of record of such shares for all purposes,  as of the date set
         forth in Section 8 of this Warrant.  If the Company fails to deliver to
         the Holder a  certificate  or  certificates  representing  the  Warrant
         Shares  pursuant to this  Section  3(a) by the Warrant  Share  Delivery
         Date, then the Holder will have the right to rescind such exercise.  In
         addition to

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         any other  rights  available  to the Holder,  if the  Company  fails to
         deliver to the Holder a certificate or  certificates  representing  the
         Warrant  Shares  pursuant to an exercise on or before the Warrant Share
         Delivery  Date,  and if after such date the Holder is  required  by its
         broker to purchase (in an open market  transaction or otherwise) shares
         of Common Stock to deliver in  satisfaction  of a sale by the Holder of
         the Warrant  Shares which the Holder  anticipated  receiving  upon such
         exercise (a  "Buy-In"),  then the Company  shall (1) pay in cash to the
         Holder  the  amount  by which (x) the  Holder's  total  purchase  price
         (including  brokerage  commissions,  if any) for the  shares  of Common
         Stock so purchased  exceeds (y) the amount  obtained by multiplying (A)
         the number of Warrant  Shares that the Company was  required to deliver
         to the Holder in connection with the exercise at issue times by (B) the
         price at which the sell order giving rise to such  purchase  obligation
         was executed, and (2) at the option of the Holder, either reinstate the
         portion of the  Warrant  and  equivalent  number of Warrant  Shares for
         which such exercise was not honored or deliver to the Holder the number
         of shares of Common  Stock that would have been  issued had the Company
         timely complied with its exercise and delivery  obligations  hereunder.
         For  example,  if the  Holder  purchases  Common  Stock  having a total
         purchase  price  of  $11,000  to  cover a  Buy-In  with  respect  to an
         attempted  exercise of shares of Common  Stock with an  aggregate  sale
         price giving rise to such purchase obligation of $10,000,  under clause
         (1) of the immediately preceding sentence the Company shall be required
         to pay the Holder $1,000.  The Holder shall provide the Company written
         notice  indicating the amounts  payable to the Holder in respect of the
         Buy-In,  together  with  applicable  confirmations  and other  evidence
         reasonably  requested  by the  Company.  Nothing  herein  shall limit a
         Holder's right to pursue any other remedies  available to it hereunder,
         at law or in equity including, without limitation, a decree of specific
         performance  and/or  injunctive  relief with  respect to the  Company's
         failure to timely deliver  certificates  representing  shares of Common
         Stock upon  exercise of the  Warrant as required  pursuant to the terms
         hereof.   Notwithstanding  anything  herein  to  the  contrary,  Buy-In
         compensation  hereunder  payable as to any Warrant  Shares shall not be
         payable to a Holder if the Holder has previously  demanded,  as to such
         Warrant Shares,  liquidated  damages  pursuant to Section 4.1(d) of the
         Purchase Agreement.

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

                  (c) The Company shall not effect any exercise of this Warrant,
         and the Holder shall not have the right to exercise any portion of this
         Warrant,  pursuant  to Section  3(a) or  otherwise,  to the extent that
         after  giving  effect  to such  issuance  after  exercise,  the  Holder
         (together with the Holder's affiliates), as set forth on the applicable
         Notice of Exercise,  would  beneficially  own in excess of 4.99% of the
         number of shares of the  Common  Stock  outstanding  immediately  after
         giving effect to such issuance. For purposes of the foregoing sentence,
         the number of shares of Common Stock  beneficially  owned by the Holder
         and its  affiliates  shall include the number of shares of Common Stock
         issuable  upon  exercise  of this  Warrant  with  respect  to which the
         determination  of such  sentence is being made,  but shall  exclude the
         number of  shares of Common  Stock  which  would be  issuable  upon (A)
         exercise of the remaining, nonexercised portion of this

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         Warrant  beneficially  owned by the Holder or any of its affiliates and
         (B) exercise or conversion of the unexercised or  nonconverted  portion
         of any other securities of the Company (including, any other Debentures
         or  Warrants)  subject  to  a  limitation  on  conversion  or  exercise
         analogous to the limitation  contained herein beneficially owned by the
         Holder or any of its  affiliates.  Except as set forth in the preceding
         sentence, for purposes of this Section 3(c), beneficial ownership shall
         be calculated in accordance with Section 13(d) of the Exchange Act. (To
         the extent that the limitation  contained in this Section 3(c) applies,
         the  determination  of whether this Warrant is exercisable (in relation
         to other securities owned by the Holder) and of which a portion of this
         Warrant is exercisable  shall be in the sole discretion of such Holder,
         and the  submission of a Notice of Exercise  shall be deemed to be such
         Holder's  determination  of whether  this  Warrant is  exercisable  (in
         relation to other securities owned by such Holder) and of which portion
         of this Warrant is exercisable,  in each case subject to such aggregate
         percentage  limitation.)  and the Company  shall have no  obligation to
         verify or confirm the accuracy of such  determination.  For purposes of
         this Section 3(c), in determining  the number of outstanding  shares of
         Common Stock,  the Holder may rely on the number of outstanding  shares
         of Common Stock as reflected in the most recent of the  following:  (x)
         the Company's  Form 10-Q or Form 10-K, as the case may be, (y) a public
         announcement  by the Company or (z) any other  notice by the Company or
         the  Company's  Transfer  Agent  setting  forth the number of shares of
         Common  Stock  outstanding.  Upon the  written  or oral  request of the
         Holder, the Company shall within two Trading Days confirm orally and in
         writing  to the  Holder  the  number of shares  of  Common  Stock  then
         outstanding.  In any case, the number of  outstanding  shares of Common
         Stock shall be  determined  after giving  effect to the  conversion  or
         exercise of securities of the Company,  including this Warrant,  by the
         Holder  or its  affiliates  since the date as of which  such  number of
         outstanding shares of Common Stock was reported.

                  (d) If at any time after one year from the date of issuance of
         this Warrant there is no effective  Registration  Statement registering
         the resale of the Warrant  Shares by the Holder,  then this Warrant may
         also be  exercised  at such time by means of a "cashless  exercise"  in
         which the Holder  shall be  entitled to receive a  certificate  for the
         number of Warrant  Shares  equal to the  quotient  obtained by dividing
         [(A-B) (X)] by (A), where:

                  (A)     = the VWAP on the  Trading Day  immediately  preceding
                          the date of such election;

                  (B)     = the Exercise Price of this Warrant, as adjusted; and

                  (X)     = the number of Warrant Shares  issuable upon exercise
                          of this Warrant in  accordance  with the terms of this
                          Warrant if this Warrant is  exercised  for cash rather
                          than by cashless exercise.

                  (e) In the event that this Warrant is  exercised  prior to the
         Effective  Date, the shares  issuable upon such exercise shall bear the
         legend set forth in Section 4.1(b) of the Purchase Agreement.

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

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

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

         7. Transfer, Division and Combination.

                  (a) Subject to compliance with any applicable  securities laws
         and the  conditions  set forth in Sections 1 and 7(e) hereof and to the
         provisions of Section 4.1 of the Purchase  Agreement,  this Warrant and
         all  rights  hereunder  are  transferable,  in whole  or in part,  upon
         surrender  of this  Warrant  at the  principal  office of the  Company,
         together with a written assignment of this Warrant substantially in the
         form attached hereto duly executed by the Holder or its duly authorized
         agent or  attorney  and  funds  sufficient  to pay any  transfer  taxes
         payable upon the making of such  transfer.  Upon such surrender and, if
         required,  such  payment,  the Company  shall execute and deliver a new
         Warrant or Warrants in the name of the assignee or assignees and in the
         denomination   or   denominations   specified  in  such  instrument  of
         assignment,  and shall issue to the  assignor a new Warrant  evidencing
         the portion of this  Warrant not so assigned,  and this  Warrant  shall
         promptly be cancelled.

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

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

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

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

         8. No Rights as  Shareholder  until  Exercise.  This  Warrant  does not
entitle the Holder to any voting rights or other rights as a shareholder  of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate  Exercise Price (or by means of a cashless  exercise as
provided in Section 3(d)) and all applicable  taxes,  if any, the Warrant Shares
so  purchased  shall be and be deemed to be issued to such  Holder as the record
owner of such  shares  as of the close of  business  on the later of the date of
such surrender or payment.

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

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

         11. Adjustments of Exercise Price and Number of Warrant Shares.

                  (a) Stock  Splits,  etc.  The  number  and kind of  securities
         purchasable  upon the exercise of this  Warrant and the Exercise  Price
         shall be subject to adjustment  from time to time upon the happening of
         any of the  following.  In case  the  Company,  at any time  while  the
         Warrant is  outstanding,  shall (i) pay a dividend  in shares of Common
         Stock or make a  distribution  in shares of Common  Stock to holders of
         its outstanding  Common Stock, (ii) subdivide its outstanding shares of
         Common Stock into a greater

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         number of shares,  (iii)  combine  (including  by way of reverse  stock
         split) its outstanding  shares of Common Stock into a smaller number of
         shares of Common  Stock,  or (iv) issue any shares of its capital stock
         in a  reclassification  of the Common Stock, then the number of Warrant
         Shares  purchasable  upon  exercise of this Warrant  immediately  prior
         thereto  shall be  adjusted  so that the Holder  shall be  entitled  to
         receive the kind and number of Warrant  Shares or other  securities  of
         the Company  which it would have owned or have been entitled to receive
         had such Warrant  been  exercised  in advance  thereof.  Upon each such
         adjustment of the kind and number of Warrant Shares or other securities
         of the  Company  which are  purchasable  hereunder,  the  Holder  shall
         thereafter  be  entitled to  purchase  the number of Warrant  Shares or
         other  securities  resulting from such  adjustment at an Exercise Price
         per  Warrant  Share or  other  security  obtained  by  multiplying  the
         Exercise Price in effect  immediately  prior to such  adjustment by the
         number of Warrant Shares purchasable  pursuant hereto immediately prior
         to such  adjustment  and  dividing  by the number of Warrant  Shares or
         other  securities of the Company that are  purchasable  pursuant hereto
         immediately  thereafter.  An adjustment made pursuant to this paragraph
         shall become  effective  immediately  after the effective  date of such
         event retroactive to the record date, if any, for such event.

                  (b)  Anti-Dilution  Provisions.  The  Exercise  Price shall be
         subject to  adjustment  from time to time as provided  in this  Section
         11(b).  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 or down to the nearest cent.

                           (i) Adjustment of Exercise Price.  Subject to Section
                  11(b)(ii)(E),  if and whenever the Company issues or sells, or
                  in accordance with Section  11(b)(ii) hereof is deemed to have
                  issued or sold, any shares of Common Stock for a consideration
                  per share  ("Consideration")  of less  than the then  Exercise
                  Price, or for no  consideration  (such lower price,  the "Base
                  Share  Price" and such  issuances  collectively,  a  "Dilutive
                  Issuance"),  then,  the  Exercise  Price shall be reduced to a
                  price equal to the Base Share Price.  Such adjustment shall be
                  made whenever such Capital Shares or Capital Shares Equivalent
                  are issued.

                           (ii) Effect on Exercise Price of Certain Events.  For
                  purposes of  determining  the  adjusted  Exercise  Price under
                  Section 11(b) hereof, the following will be applicable:

                                             (A)  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 Capital  Shares  Equivalent
                           (such warrants, rights and options to purchase Common
                           Stock or Capital Shares  Equivalent  are  hereinafter
                           referred to as "Options") and the effective price per
                           share for which  Common  Stock is  issuable  upon the
                           exercise  of such  Options is less than the  Exercise
                           Price ("Below Base Price Options"),  then the maximum
                           total number of shares of Common Stock  issuable upon
                           the  exercise  of all such Below  Base Price  Options
                           (assuming  full  exercise,  conversion or exchange of
                           Capital Shares Equivalent, if applicable) will, as of
                           the date of the issuance or grant of

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                           such  Below  Base  Price  Options,  be  deemed  to be
                           outstanding  and to have been  issued and sold by the
                           Company  for such  price per  share  and the  maximum
                           consideration   payable  to  the  Company  upon  such
                           exercise  (assuming  full  exercise,   conversion  or
                           exchange of Capital Shares Equivalent, if applicable)
                           will be deemed to have been  received by the Company.
                           For purposes of this Section 11(b), the Consideration
                           and the  "effective  price per share for which Common
                           Stock is  issuable  upon the  exercise  of such Below
                           Base Price 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  Below  Base  Price  Options,  plus  the
                           minimum aggregate amount of additional consideration,
                           if any,  payable to the Company  upon the exercise of
                           all such Below Base Price Options,  plus, in the case
                           of  Capital  Shares  Equivalent   issuable  upon  the
                           exercise  of  such  Below  Base  Price  Options,  the
                           minimum aggregate amount of additional  consideration
                           payable  upon the  exercise,  conversion  or exchange
                           thereof at the time such  Capital  Shares  Equivalent
                           first    become    exercisable,     convertible    or
                           exchangeable,  by (ii) the  maximum  total  number of
                           shares of Common Stock  issuable upon the exercise of
                           all such  Below  Base Price  Options  (assuming  full
                           conversion   of   Capital   Shares   Equivalent,   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 Below Base
                           Price  Options or upon the  exercise,  conversion  or
                           exchange of Capital Shares  Equivalent  issuable upon
                           exercise of such Below Base Price Options.

                                            (B)   Issuance  of  Capital   Shares
                           Equivalent.  If the  Company in any manner  issues or
                           sells any Capital Shares  Equivalent,  whether or not
                           immediately  convertible  (other  than where the same
                           are  issuable  upon the  exercise of Options) and the
                           effective  price per share for which  Common Stock is
                           issuable upon such  exercise,  conversion or exchange
                           is less than the  Exercise  Price,  then the  maximum
                           total number of shares of Common Stock  issuable upon
                           the  exercise,  conversion  or  exchange  of all such
                           Capital Shares Equivalent will, as of the date of the
                           issuance of such Capital Shares Equivalent, be deemed
                           to be outstanding and to have been issued and sold by
                           the  Company for such price per share and the maximum
                           consideration   payable  to  the  Company  upon  such
                           exercise  (assuming  full  exercise,   conversion  or
                           exchange of Capital Shares Equivalent, if applicable)
                           will be deemed to have been  received by the Company.
                           For  the   purposes  of  this  Section   11(b),   the
                           Consideration  and the "effective price per share for
                           which  Common Stock is issuable  upon such  exercise,
                           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  Capital  Shares  Equivalent,  plus  the
                           minimum aggregate amount of additional consideration,
                           if any,  payable to the  Company  upon the  exercise,
                           conversion  or  exchange  thereof  at the  time  such
                           Capital Shares Equivalent

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                           first    become    exercisable,     convertible    or
                           exchangeable,  by (ii) the  maximum  total  number of
                           shares of Common Stock  issuable  upon the  exercise,
                           conversion  or  exchange of all such  Capital  Shares
                           Equivalent.  No further  adjustment  to the  Exercise
                           Price will be made upon the actual  issuance  of such
                           Common Stock upon exercise, conversion or exchange of
                           such Capital Shares Equivalent.

                                            (C)   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 exercise,  conversion
                           or  exchange  of any Capital  Shares  Equivalent;  or
                           (iii) the rate at which any Capital Shares Equivalent
                           are convertible into or exchangeable for Common Stock
                           (in each such case,  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
                           Capital Shares Equivalent 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.

                                            (D)  Calculation  of   Consideration
                           Received.  If any  Common  Stock,  Options or Capital
                           Shares  Equivalent  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 Capital  Shares  Equivalent  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 market 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  fair  market  value  (the  mean
                           between the closing bid and asked  prices,  if traded
                           on any market) thereof as of the date of receipt.  In
                           case any Common  Stock,  Options  or  Capital  Shares
                           Equivalent  are issued in connection  with any merger
                           or   consolidation   in  which  the  Company  is  the
                           surviving  corporation,  the amount of  consideration
                           therefor  will be deemed to be the fair market  value
                           of such portion of the net assets and business of the
                           non-surviving  corporation as is attributable to such
                           Common Stock,  Options or Capital Shares  Equivalent,
                           as the case  may be.  The  fair  market  value of any
                           consideration  other than cash or securities  will be
                           determined in good faith by the Board of Directors of
                           the Company.

                                       9
<PAGE>

                                            (E)   Exceptions  to  Adjustment  of
                           Exercise  Price.  Notwithstanding  the foregoing,  no
                           adjustment  will be made under this Section  11(b) in
                           respect of (1) the granting (at an exercise price not
                           less than the fair market value on the date of grant)
                           or  exercise  of  options  to  employees,   officers,
                           directors  or  key   consultants   (but,  as  to  key
                           consultants  only,  not  to  exceed  100,000  Capital
                           Shares or Capital Shares Equivalents per any 12 month
                           period) of the Company  pursuant to any stock  option
                           plan duly  adopted by a majority of the  non-employee
                           members of the Board of Directors of the Company or a
                           majority   of  the   members   of  a   committee   of
                           non-employee  directors established for such purpose,
                           (2)  upon  the  exercise  of  the  Debentures  or any
                           debentures  of such series or of any other  series or
                           Warrants  or  security   issued  by  the  Company  in
                           connection  with the offer and sale of this Company's
                           securities  pursuant to the Purchase  Agreement,  (3)
                           the  issuance  of any  Common  Stock  as  payment  of
                           interest with respect to any Debenture,  (4) upon the
                           exercise  of or  conversion  of  any  Capital  Shares
                           Equivalents,  Options,  rights or warrants issued and
                           outstanding on the Original Issue Date, provided that
                           the  securities  have  not been  amended  in order to
                           reduce the exercise or  conversion  price  thereof or
                           increase  the number of shares  issuable  thereunder,
                           since the date of the Purchase  Agreement except as a
                           result of the  Purchase  Agreement or (5) pursuant to
                           the Vertical  Ventures  Financing  (as defined in the
                           Purchase Agreement).

                           (iii)  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.

         12.   Reorganization,   Reclassification,   Merger,   Consolidation  or
Disposition  of  Assets.  In case the  Company  shall  reorganize  its  capital,
reclassify  its  capital  stock,  consolidate  or  merge  with or  into  another
corporation  (where the Company is not the surviving  corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell,  transfer or otherwise  dispose of its property,  assets or business to
another  corporation  and,  pursuant  to  the  terms  of  such   reorganization,
reclassification,  merger,  consolidation  or disposition  of assets,  shares of
common stock of the successor or acquiring  corporation,  or any cash, shares of
stock or other  securities  or  property  of any  nature  whatsoever  (including
warrants or other  subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring  corporation ("Other Property"),  are
to be received by or  distributed to the holders of Common Stock of the Company,
then the Holder shall have the right thereafter to receive upon exercise of this
Warrant,  the number of shares of Common  Stock of the  successor  or  acquiring
corporation  or of the Company,  if it is the surviving  corporation,  and Other
Property   receivable   upon   or   as  a   result   of   such   reorganization,
reclassification,  merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this

                                       10
<PAGE>

Warrant is  exercisable  immediately  prior to such  event.  In case of any such
reorganization,   reclassification,  merger,  consolidation  or  disposition  of
assets, the successor or acquiring corporation (if other than the Company) shall
expressly  assume the due and punctual  observance  and  performance of each and
every covenant and condition of this Warrant to be performed and observed by the
Company  and all the  obligations  and  liabilities  hereunder,  subject to such
modifications  as may be deemed  appropriate  (as  determined  in good  faith by
resolution  of the Board of  Directors  of the  Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable  which shall
be as nearly  equivalent as practicable to the adjustments  provided for in this
Section 12. For purposes of this Section 12,  "common  stock of the successor or
acquiring  corporation"  shall  include stock of such  corporation  of any class
which is not  preferred  as to dividends or assets over any other class of stock
of such  corporation  and which is not  subject  to  redemption  and shall  also
include any evidences of indebtedness, shares of stock or other securities which
are convertible into or exchangeable for any such stock,  either  immediately or
upon the arrival of a specified  date or the happening of a specified  event and
any warrants or other rights to  subscribe  for or purchase any such stock.  The
foregoing  provisions  of this Section 12 shall  similarly  apply to  successive
reorganizations,  reclassifications,  mergers,  consolidations or disposition of
assets.

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

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

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

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

                  (b) there shall be any capital  reorganization of the Company,
         any  reclassification  or  recapitalization of the capital stock of the
         Company or any  consolidation  or merger of the  Company  with  another
         corporation, or

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

then, in any one or more of such cases,  the Company shall give to Holder (i) at
least 10 days' prior written  notice of the date on which a record date shall be
selected for such dividend,  distribution or right or for determining  rights to
vote  in  respect  of  any  such   reorganization,   reclassification,   merger,
consolidation, sale, transfer, disposition,  liquidation or winding up, and (ii)
in the case of any such reorganization,

                                       11
<PAGE>

reclassification,    merger,   consolidation,   sale,   transfer,   disposition,
dissolution,  liquidation  or winding up, at least 10 days' prior written notice
of the date when the same shall take place.  Such notice in accordance  with the
foregoing  clause also shall specify (i) the date on which any such record is to
be taken for the purpose of such dividend,  distribution  or right,  the date on
which the  holders  of Common  Stock  shall be  entitled  to any such  dividend,
distribution or right, and the amount and character  thereof,  and (ii) the date
on which any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition,  dissolution,  liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Common
Stock shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition,  dissolution, liquidation or winding
up. Each such written notice shall be sufficiently  given if addressed to Holder
at the  last  address  of  Holder  appearing  on the  books of the  Company  and
delivered in accordance with Section 17(d).

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

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

         17. Miscellaneous.

                  (a) Governing Law; Venue;  Waiver of Jury Trial. All questions
         concerning the construction,  validity,  enforcement and interpretation
         of this  Warrant  shall be governed by and  construed  and  enforced in
         accordance  with the  internal  laws of the State of New York,  without
         regard to the principles of conflicts of law thereof. Each party

                                       12
<PAGE>

         agrees  that all  legal  proceedings  concerning  the  interpretations,
         enforcement  and  defense  of the  transactions  contemplated  by  this
         Warrant  (whether  brought  against a party  hereto  or its  respective
         affiliates,  directors,  officers,  shareholders,  employees or agents)
         shall be commenced  exclusively in the state and federal courts sitting
         in the City of New York,  borough of Manhattan (the "New York Courts").
         Each party hereby irrevocably submits to the exclusive  jurisdiction of
         the New York Courts for the adjudication of any dispute hereunder or in
         connection  herewith  or with any  transaction  contemplated  hereby or
         discussed  herein,  and hereby  irrevocably  waives,  and agrees not to
         assert in any  suit,  action or  proceeding,  any claim  that it is not
         personally  subject to the  jurisdiction of any such court, or that the
         New  York  Courts  are an  improper  or  inconvenient  venue  for  such
         proceeding.  Each party hereby  irrevocably  waives personal service of
         process and consents to process  being served in any such suit,  action
         or  proceeding  by mailing a copy thereof via  registered  or certified
         mail or overnight delivery (with evidence of delivery) to such party at
         the address in effect for  notices to it under this  Warrant and agrees
         that such  service  shall  constitute  good and  sufficient  service of
         process and notice thereof. Nothing contained herein shall be deemed to
         limit in any way any right to serve process in any manner  permitted by
         law. The parties hereto hereby irrevocably waive, to the fullest extent
         permitted by applicable  law, any and all right to trial by jury in any
         legal  proceeding  arising out of or  relating  to this  Warrant or the
         transactions  contemplated  thereby.  If either party shall commence an
         action or  proceeding to enforce any  provisions of this Warrant,  then
         the prevailing  party in such action or proceeding  shall be reimbursed
         by the other party for its attorneys' fees and other costs and expenses
         incurred with the  investigation,  preparation  and prosecution of such
         action or proceeding.

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

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

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

                  (e)  Limitation  of  Liability.  No provision  hereof,  in the
         absence of any affirmative action by Holder to exercise this Warrant or
         purchase  Warrant  Shares,  and no enumeration  herein of the rights or
         privileges of Holder, shall give rise to any liability

                                       13
<PAGE>

         of  Holder  for  the  purchase  price  of  any  Common  Stock  or  as a
         stockholder  of the Company,  whether such liability is asserted by the
         Company or by creditors of the Company.

                  (f)  Remedies.  Holder,  in  addition  to  being  entitled  to
         exercise all rights granted by law, including recovery of damages, will
         be entitled to specific  performance  of its rights under this Warrant.
         The  Company  agrees  that  monetary  damages  would  not  be  adequate
         compensation  for any loss  incurred by reason of a breach by it of the
         provisions  of this  Warrant and hereby  agrees to waive the defense in
         any  action  for  specific  performance  that a remedy  at law would be
         adequate.

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

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

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

                  (j)  Construction.  The  headings  herein are for  convenience
         only, do not  constitute a part of this Warrant and shall not be deemed
         to limit or affect any of the provisions  hereof.  The language used in
         this Warrant 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.

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

                                       14
<PAGE>

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

Dated:  March __, 2004
                                             LMIC, INC.

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

                                       15
<PAGE>

                               NOTICE OF EXERCISE

To:      LMIC, INC.

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

         (2) Payment shall take the form of (check applicable box):

                  [ ] in lawful money of the United States; or

                  [ ] the  cancellation  of such number of Warrant  Shares as is
                  necessary,  in  accordance  with  the  formula  set  forth  in
                  subsection  3(d), to exercise this Warrant with respect to the
                  maximum number of Warrant Shares  purchasable  pursuant to the
                  cashless exercise procedure set forth in subsection 3(d).

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

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

The Warrant Shares shall be delivered to the following:

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

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

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

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

                                         [PURCHASER]

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

                                         Dated:
                                                ---------------------------

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

         FOR VALUE  RECEIVED,  the  foregoing  Warrant and all rights  evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

__________________________________________________________________ .

__________________________________________________________________

                                                 Dated:  ______________, _______

                           Holder's Signature:
                                              ----------------------------------

                           Holder's Address:
                                              ----------------------------------

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

Signature Guaranteed:
                      -------------------------------

NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Warrant,  without  alteration or  enlargement  or any
change whatsoever,  and must be guaranteed by a bank or trust company.  Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.Exhibit 10.1.1

                          SECURITIES PURCHASE AGREEMENT

      This Securities Purchase Agreement (this "Agreement") is dated as of March
12, 2004 by and between LMIC, Inc., a Delaware corporation (the "Company"), and
[ _________________________ ] (the "Purchaser").

      WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act of 1933, as amended, the
Company desires to issue and sell to the Purchaser, and the Purchaser desires to
purchase from the Company, certain securities of the Company as more fully
described in this Agreement.

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

                                    ARTICLE I
                                   DEFINITIONS

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

"Affiliate" means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144. With respect to
a Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as the Purchaser will be
deemed to be an Affiliate of the Purchaser.

"Bankruptcy Event" means any of the following events: (a) the Company or any
Subsidiary commences a case or other proceeding under any bankruptcy,
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any Subsidiary thereof; (b) there is commenced against the Company or
any Subsidiary any such case or proceeding that is not dismissed within 60 days
after commencement; (c) the Company or any Subsidiary is adjudicated insolvent
or bankrupt or any order of relief or other order approving any such case or
proceeding is entered; (d) the Company or any Subsidiary suffers any appointment
of any custodian or the like for it or any substantial part of its property that
is not discharged or stayed within 60 days; (e) the Company or any Subsidiary
makes a general assignment for the benefit of creditors; (f) the Company or any
Subsidiary fails to pay, or states that it is unable to pay or is unable to pay,
its debts generally as they become due; or (g) the Company or any Subsidiary
calls a meeting of its creditors with a view to arranging a composition,
adjustment or restructuring of its debts.

"Business Day" means any day other than Saturday, Sunday or other day on which
commercial banks in the City of New York are authorized or required by law to
remain closed.

"Change of Control" means the occurrence of any of the following in one or a
series of related transactions: (i) an acquisition after the date hereof by an

                                                                               1
<PAGE>

individual or legal entity or "group" (as described in Rule 13d-5(b)(1) under
the Exchange Act) of more than one-third of the voting ______ rights or equity
interests in the Company; (ii) a replacement of more than one-third of the
members of the Company's board of directors that is not approved by those
individuals who are members of the board of directors on the date hereof (or
other directors previously approved by such individuals); (iii) a merger or
consolidation of the Company or any Subsidiary or a sale of more than one-third
of the assets of the Company in one or a series of related transactions, unless
following such transaction or series of transactions, the holders of the
Company's securities prior to the first such transaction continue to hold at
least 50.1% of the voting rights and equity interests in of the surviving entity
or acquirer of such assets; (iv) a recapitalization, reorganization or other
transaction involving the Company or any Subsidiary that constitutes or results
in a transfer of more than one-third of the voting rights or equity interests in
the Company; (v) consummation of a "Rule 13e-3 transaction" as defined in Rule
13e-3 under the Exchange Act with respect to the Company, or (vi) the execution
by the Company or its controlling stockholders of an agreement providing for any
of the foregoing events.

"Closing," means the closing of the purchase and sale of the Shares pursuant to
Section 2.1.

"Closing Date," means the date of the Closing.

"Commission" means the Securities and Exchange Commission.

"Common Stock" means the common stock of the Company, par value $0.001 per
share.

"Common Stock Equivalents" means, collectively, Options and Convertible Shares.

"Company Counsel" means Willkie Farr & Gallagher, LLP.

"Convertible Shares" means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for Common Stock.

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

"Eligible Market" means any of the New York Stock Exchange, the American Stock
Exchange, the Nasdaq National Market, the Nasdaq Small Cap Market or the OTC
Bulletin Board or any successor to any of the foregoing.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Excluded Stock" means the issuance of Common Stock (A) upon exercise or
conversion of any Options or other securities described in Schedule 3.1(f)
(provided that such exercise or conversion occurs in accordance with the terms
thereof, without amendment or modification, and that the applicable exercise or
conversion price or ratio is described in such schedule), (B) in connection with
any grant of options to employees, officers, directors or consultants of the

                                                                               2

<PAGE>

Company pursuant to a stock option plan duly adopted by the Company's board of
directors or in respect of the issuance of Common Stock upon exercise of any
such options, (C) pursuant to a bona fide firm commitment underwritten public
offering with a nationally recognized underwriter (excluding any equity line) at
a per share offering price equal to at least the market price and in an
aggregate offering amount greater than $25,000,000, (D) pursuant to any bona
fide strategic transaction or investment, the primary purpose of which is not to
raise capital, (E) in connection with any bona fide loan transaction with a
commercial bank or other similar commercial lender; (F) in connection with the
Omicron Financing, or (G) in connection with a "Concurrent Offering" as defined
in Section 4.3.

"Filing Date" means no later than 45 days following the Closing Date.

"Lien" means any lien, charge, claim, security interest, encumbrance or right of
first refusal.

"Losses" means any and all losses, claims, damages, liabilities, settlement
costs and expenses, including, without limitation, costs of preparation and
reasonable attorneys' fees.

"Manager" means Aladdin Investment Advisors, LLC, a Delaware limited liability
company.

"Member" means the Manager and any other holder of members' interests or other
equity interests of the Purchaser.

"Omicron Financing" means the proposed sale and issuance of up to $5,000,000 of
4% convertible debentures of the Company due August 3, 2006 and warrants to
purchase 810,373 shares of Common Stock of the Company to Omicron Master Trust
or its registered assigns.

"Options" means any rights, warrants or options to subscribe for or purchase
Common Stock or Convertible Shares.

"Per Share Closing Price" means $1.50 per share, unless otherwise specified
herein.

"Person" means any individual or corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or any court or
other federal, state, local or other governmental authority or other entity of
any kind.

"Post-Effective Amendment" means a post-effective amendment to the Registration
Statement.

"Post-Effective Amendment Filing Deadline" means the 10th Trading Day after the
Registration Statement ceases to be effective pursuant to applicable securities
laws due to the passage of time or the occurrence of an event requiring the
Company to file a Post-Effective Amendment.

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

                                                                               3

<PAGE>

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

"Purchase Price" has the meaning defined in Section 2.1(b) hereof.

"Registrable Shares" means the Shares and any other shares of Common Stock
issued or issuable pursuant to the Transaction Documents that are owned of
record or beneficially by the Purchaser or any Member, together with any
securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the foregoing.

"Registration Statement" means each registration statement required to be filed
under Article VI, including (in each case) the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.

"Required Effectiveness Date," means 150 days following the Closing Date.

"Rule 144," "Rule 415," and "Rule 424" means Rule 144, Rule 415 and Rule 424,
respectively, promulgated by the Commission pursuant to the Securities Act, as
such Rules may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.

"Securities Act" means the Securities Act of 1933, as amended.

"Shares" means the aggregate number of shares of Common Stock, which are being
issued and sold to the Purchaser at the Closing.

"Subsidiary" means any subsidiary, as defined in Rule 1-02(x) of Regulation S-X
promulgated by the Commission, of the Company.

"Trading Day" means (a) any day on which the Common Stock is listed or quoted
and traded on its primary Trading Market (or any successor thereto) or (b) if
trading does not occur on any Trading Market (or any successor thereto), any
Business Day.

"Trading Market," means the OTC Bulletin Board or any other Eligible Market on
which the Common Stock is then listed or quoted.

"Transaction Documents" means this Agreement, the Transfer Agent Instructions
and any other documents or agreements executed in connection with the
transactions contemplated hereunder.

                                                                               4

<PAGE>

"Transfer Agent" means Continental Stock Transfer & Trust Company, or any other
transfer agent selected by the Company.

"Transfer Agent Instructions" means the Irrevocable Transfer Agent Instructions,
in the form of Exhibit D, executed by the Company and delivered to and
acknowledged in writing by the Transfer Agent.

"Vertical Ventures Financing" means the sale in January and February 2004 of
approximately 3,201,667 shares of Company Common Stock at $1.50 per share to
investors originated by Vertical Ventures LLC.

                                   ARTICLE II
                                PURCHASE AND SALE

2.1.        Purchase and Sale of the Shares; Closing.

      (a)   Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to the Purchaser, and
the Purchaser shall purchase from the Company, an aggregate of [ ] Shares. Each
of the Shares shall be purchased at the Per Share Closing Price.

      (b)   At the Closing, the Purchaser shall, against delivery of one or more
stock certificates evidencing the applicable number of the Shares, pay to the
Company, an amount equal to the product of (i) the number of Shares to be
purchased, and (ii) the Per Share Closing Price (the "Purchase Price").

      (c)   The Closing shall take place at the offices of Gersten Savage
Kaplowitz Wolf & Marcus, LLP, counsel to the Purchaser, 101 East 52nd Street,
New York, New York 10022, immediately following the execution hereof, or at such
other location or time as the parties may agree.

2.2.        Closing Deliveries.

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

            (i)   one or more stock certificates, free and clear of all
restrictive and other legends (except as expressly provided in Section 4.1(b)
hereof), evidencing the number of Shares being purchased under this Agreement,
registered in the name of the Purchaser;

            (ii)  a legal opinion of Company Counsel, in the form of Exhibit B,
executed by such counsel and delivered to the Purchaser; and

            (iii) duly executed Transfer Agent Instructions acknowledged by the
Transfer Agent.

                                                                               5

<PAGE>

      (b)   At the Closing, the Purchaser shall deliver or cause to be delivered
to the Company the aggregate Purchase Price for the applicable number of Shares
to be purchased hereunder, in United States dollars and in immediately available
funds, by wire transfer to an account designated in writing by the Company for
such purpose.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

3.1.        Representations and Warranties of the Company. The Company hereby
represents and warrants to each of the Purchaser as follows:

            (a)   Subsidiaries. The Company has no direct or indirect
Subsidiaries other than those listed in Schedule 3.1(a). Except as disclosed in
Schedule 3.1(a), the Company owns, directly or indirectly, all of the capital
stock or comparable equity interests of each Subsidiary free and clear of any
Lien, and all the issued and outstanding shares of capital stock or comparable
equity interests of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights.

            (b)   Organization and Qualification. Each of the Company and the
Subsidiaries is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in material violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, (i) materially
adversely affect the legality, validity or enforceability of any Transaction
Document, (ii) have or result in a material adverse effect on the results of
operations, assets, business or condition (financial or otherwise) of the
Company and the Subsidiaries, taken as a whole, or (iii) materially adversely
impair the Company's ability to perform fully on a timely basis its obligations
under any of the Transaction Documents (any of (i), (ii) or (iii), a "Material
Adverse Effect").

            (c)   Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company and no further consent or action is
required by the Company, its Board of Directors or its stockholders. Each of the
Transaction Documents has been (or upon delivery will be) duly executed by the
Company and is, or when delivered in accordance with the terms hereof, will
constitute, the valid and binding obligation of the Company enforceable against

                                                                               6

<PAGE>

the Company in accordance with its terms, subject to: (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting the enforcement of creditors' rights
generally; (ii) general equitable principles (whether considered in a proceeding
in equity or at law); and (iii) an implied covenant of good faith and fair
dealing.

            (d)   No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of the Company's or any Subsidiary's certificate
or articles of incorporation, bylaws or other organizational or charter
documents, (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit facility, debt
or other instrument (evidencing a Company or Subsidiary debt or otherwise) or
other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or
affected, except to the extent that such conflict, default or termination right
could not reasonably be expected to have a Material Adverse Effect, or (iii)
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state securities laws
and regulations and the rules and regulations of any self-regulatory
organization to which the Company or its securities are subject), or by which
any property or asset of the Company or a Subsidiary is bound or affected.

            (e)   Issuance of the Shares. The Shares are duly authorized and,
when issued and paid for in accordance with the Transaction Documents, will be
duly and validly issued, fully paid and nonassessable, free and clear of all
Liens and shall not be subject to preemptive rights or similar rights of
stockholders.

            (f)   Capitalization. The number of shares and type of all
authorized, issued and outstanding capital stock, options and other securities
of the Company (whether or not presently convertible into or exercisable or
exchangeable for shares of capital stock of the Company) is set forth in
Schedule 3.1(f). hereto. All outstanding shares of capital stock are duly
authorized, validly issued, fully paid and nonassessable and have been issued in
compliance with all applicable securities laws. Except as disclosed in Schedule
3.1(f), there are no outstanding options, warrants, script rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company or any subsidiary is or may become bound to issue additional shares of
Common Stock, or securities or rights convertible or exchangeable into shares of
Common Stock. 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) and the issue and sale of the Shares will not
obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Purchaser) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under such securities. To the knowledge of the Company, except as

                                                                               7

<PAGE>

specifically disclosed in Schedule 3.1(f), no Person or group of related Persons
beneficially owns (as determined pursuant to Rule 13d-3 under the Exchange Act),
or has the right to acquire, by agreement with or by obligation binding upon the
Company, beneficial ownership of in excess of 5% of the outstanding Common
Stock, ignoring for such purposes any limitation on the number of shares of
Common Stock that may be owned at any single time.

            (g)   SEC Reports; Financial Statements. The Company has filed all
reports required to be filed by it under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, since July 17, 2003
(or such shorter period as the Company was required by law to file such
material) (the foregoing materials being collectively referred to herein as the
"SEC Reports" and, together with this Agreement and the Schedules to this
Agreement, the "Disclosure Materials") on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. The Company has delivered to the Purchaser
true, correct and complete copies of all SEC Reports filed within the ten (10)
days preceding the date hereof. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved ("GAAP"), except as may be otherwise specified in
such financial statements or the notes thereto, and fairly present in all
material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial year-end audit adjustments. All material
agreements to which the Company or any Subsidiary is a party or to which the
property or assets of the Company or any Subsidiary are subject are included as
part of or specifically identified in the SEC Reports.

            (h)   Material Changes. Since the date of the latest audited
financial statements included within the SEC Reports (the "Financial Statement
Date"), except as specifically disclosed in the SEC Reports or on Schedule
3.1(h) annexed hereto , (i) there has been no event, occurrence or development
that, individually or in the aggregate, has had or that could result in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses
incurred pursuant to arrangements in existence on the Financial Statement Date
or incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company's financial
statements pursuant to GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting or the
identity of its auditors, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital

                                                                               8

<PAGE>

stock, and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option plans.

            (i)   Absence of Litigation. Except as set forth in Schedule 3.1(i),
there is no Proceeding against or affecting the Company or any of its
Subsidiaries that could, individually or in the aggregate, have a Material
Adverse Effect.

            (j)   Compliance. Neither the Company nor any Subsidiary (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except
in each case as could not, individually or in the aggregate, have or result in a
Material Adverse Effect.

            (k)   Title to Assets. The Company and the Subsidiaries have good
and marketable title in fee simple to all real property owned by them that is
material to the business of the Company and the Subsidiaries and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries. Any real property and
facilities held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases of which the Company and the
Subsidiaries are in material compliance.

            (l)   Certain Fees. Except for fees described in Schedule 3.1(l), no
brokerage or finder's fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement, and the Company has not taken any action that
would cause any Purchaser to be liable for any such fees or commissions.

            (m)   Private Placement. Neither the Company nor any Person acting
on the Company's behalf has sold or offered to sell or solicited any offer to
buy the Shares by means of any form of general solicitation or advertising.
Neither the Company nor any of its Affiliates nor any Person acting on the
Company's behalf has, directly or indirectly, at any time within the past six
months, made any offer or sale of any security or solicitation of any offer to
buy any security under circumstances that would eliminate the availability of
the exemption from registration under Regulation D under the Securities Act in
connection with the offer and sale of the Shares as contemplated hereby. The
Company is not, and is not an Affiliate of, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended. The Company is not a

                                                                               9

<PAGE>

United States real property holding corporation within the meaning of the
Foreign Investment in Real Property Tax Act of 1980.

            (n)   Form SB-2 Eligibility. The Company is eligible to register the
Shares to be issued to the Purchaser hereunder for resale by the Purchaser or
its Affiliates, using Form SB-2 promulgated under the Securities Act.

            (o)   Listing and Maintenance Requirements. Except as disclosed on
Schedule 3.1(o), the Company has not received notice (written or oral) from any
Trading Market on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no reason to
believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements.

            (p)   Registration Rights. Except as described in Schedule 3.1(p),
the Company has not granted or agreed to grant to any Person any rights
(including "piggy-back" registration rights) to have any securities of the
Company registered with the Commission or any other governmental authority that
have not been satisfied.

            (q)   Application of Takeover Protections. There is no control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company's
charter documents that is or could become applicable to any of the Purchaser as
a result of the Purchaser and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including, without
limitation, as a result of the Company's issuance of the Shares and the
Purchaser' ownership of the Shares.

            (r)   Disclosure. The Company confirms that neither it nor any other
Person acting on its behalf has provided any of the Purchaser or their agents or
counsel with any information that constitutes or might constitute material,
nonpublic information. The Company understands and confirms that each of the
Purchaser will rely on the foregoing representations in effecting transactions
in securities of the Company. All disclosure provided to the Purchaser regarding
the Company, its business and the transactions contemplated hereby, including
the Schedules to this Agreement, furnished by or on behalf of the Company are
true and correct and do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. No event or circumstance has occurred or information 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. The
Company acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3.2.

            (s)   Acknowledgment Regarding Purchaser's Purchase of Shares. The
Company acknowledges and agrees that each of the Purchaser is acting solely in

                                                                              10

<PAGE>

the capacity of an arm's length purchaser with respect to this Agreement and the
transactions contemplated hereby. The Company further acknowledges that neither
the Purchaser nor the Manager 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 advice given by any Purchaser or any of
their respective representatives or agents in connection with this Agreement and
the transactions contemplated hereby is merely incidental to such Purchaser's
purchase of the Shares. The Company further represents to the Purchaser that the
Company's decision to enter into this Agreement has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.

            (t)   Patents and Trademarks. The Company and the Subsidiaries have,
or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights that are necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure to
so have could have a Material Adverse Effect (collectively, the "Intellectual
Property Rights"). Neither the Company nor any Subsidiary has received a written
notice that the Intellectual Property Rights used by the Company or any
Subsidiary violates or infringes upon the rights of any Person. To the knowledge
of the Company, all such Intellectual Property Rights are enforceable and there
is no existing infringement by another Person of any of the Intellectual
Property Rights.

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

            (v)   Regulatory Permits. The Company and the Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not, individually or in the aggregate, have or
result in a Material Adverse Effect ("Material Permits"), and neither the
Company nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any Material Permit.

            (w)   Transactions With Affiliates and Employees. Except as set
forth in SEC Reports, none of the officers or directors of the Company and, to
the knowledge of the Company, none of the employees of the Company is presently
a party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

                                                                              11

<PAGE>

            (x)   Solvency. Following consummation of the transactions
contemplated hereby, based on the financial condition of the Company as of the
Closing Date, (i) the Company's fair saleable value of its assets exceeds the
amount that will be required to be paid on or in respect of the Company's
existing debts and other liabilities (including known contingent liabilities) as
they mature and (ii) the Company's assets do not constitute unreasonably small
capital to carry on its business for the current fiscal year as now conducted
and as proposed to be conducted including its capital needs taking into account
the particular capital requirements of the business conducted by the Company,
and projected capital requirements and capital availability thereof, after
taking into account all anticipated uses of the cash, would be sufficient to pay
all amounts on or in respect of its debt when such amounts are required to be
paid. The Company does not intend to incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of cash to be
payable on or in respect of its debt).

            (y)   Going Concern. Following consummation of the transactions
contemplated hereby, the Company and the Subsidiaries have no knowledge (after
taking into account the proceeds received by the Company from the sale of the
Shares) that the Company's independent public accountants, will issue an audit
letter containing a "going concern" opinion in connection with the Company's
quarterly report on Form 10-Q pursuant to Section 13 or 15(d) under the Exchange
Act for the period ended September 30, 2003 or otherwise.

            (z)   Internal Accounting Controls. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
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.

3.2         Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company as follows:

            (a)   Organization; Authority. (i) if the Purchaser is not a natural
person: (A) the Purchaser is an entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization with the
requisite corporate or partnership power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder, and (B) the
purchase by the Purchaser of the Shares has been duly authorized by all
necessary action on the part of such Purchaser. This Agreement has been duly
executed and delivered by such Purchaser and constitutes the valid and binding
obligation of the Purchaser, enforceable against it in accordance with its
terms.

            (b)   Investment Intent. The Purchaser is acquiring the Shares as
principal for its own account for investment purposes only and not with a view

                                                                              12

<PAGE>

to or for distributing or reselling such Shares or any part thereof, without
prejudice, however, to the Purchaser's right, subject to the provisions of this
Agreement, at all times to sell or otherwise dispose of all or any part of such
Shares pursuant to an effective registration statement under the Securities Act
or under an exemption from such registration and in compliance with applicable
federal and state securities laws. Nothing contained herein shall be deemed a
representation or warranty by the Purchaser to hold Shares for any period of
time.

            (c)   Status. At the time the Purchaser was offered the Shares it or
its Affiliates were, and at the date hereof it is, an "accredited investor" as
defined in Rule 501(a) under the Securities Act, as evidenced by the Purchaser's
completion of the Statement of Accredited Investor attached hereto as Exhibit E.

            (d)   Investment Experience. The Purchaser, either alone or together
with its representatives and Affiliates, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Shares, and has so
evaluated the merits and risks of such investment. The Affiliates of the
Purchaser are all able to bear the economic risk of an investment in the Shares
and are all able to afford a complete loss of such investment.

            (e)   General Solicitation. The Purchaser is not purchasing the
Shares as a result of any advertisement, article, notice or other communication
regarding the Shares published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement. The Purchaser either (i)
conducted substantial negotiations with the Company relating to a proposed
investment in the Company prior to the filing of the Company's registration
statement on Form SB-2 in January of 2004 (the "Form SB-2"), or (ii) was
introduced to the Company by a person that had conducted substantial
negotiations with the Company relating to a proposed investment in the Company
prior to the filing of the Company's registration statement on Form SB-2 in
January of 2004.

            (f)   Company Information. The Purchaser has had an opportunity to
discuss the Company's business, management and financial affairs with directors,
officers and management of the Company and has had the opportunity to review the
Company's operations and facilities. The Purchaser has also had the opportunity
to ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment.

            (g)   Certain Fees. The Company shall not be liable to pay any
brokerage or finder's fees or commissions to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by this Agreement.

                                                                              13

<PAGE>

                                   ARTICLE IV
                         OTHER AGREEMENTS OF THE PARTIES

4.1         Transfer Restrictions.

            (a)   Shares may only be disposed of pursuant to an effective
registration statement under the Securities Act or pursuant to an available
exemption from the registration requirements of the Securities Act, and in
compliance with any applicable state securities laws. In connection with any
transfer of Shares other than pursuant to an effective registration statement or
to the Company or pursuant to Rule144(k), except as otherwise set forth herein,
the Company may require the transferor to provide to the Company an opinion of
counsel selected by the transferor, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration under the Securities Act. Notwithstanding
the foregoing, the Company hereby consents to and agrees to register on the
books of the Company and with its Transfer Agent, without any such legal
opinion, any transfer of Shares by a Purchaser to an Affiliate of the Purchaser,
provided that the transferee certifies to the Company that it is an "accredited
investor" as defined in Rule 501(a) under the Securities Act.

            (b)   The Purchaser and the Manager each agree to the imprinting, so
long as is required by this Section 4.1(b), of the following legend on any
certificate evidencing Shares, including Shares that may be distributed to any
Members of the Purchaser:

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
REASONABLY ACCEPTABLE TO THE COMPANY. NOTWITHSTANDING THE FOREGOING, THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY SUCH SECURITIES.

            (c)   Certificates evidencing Shares shall not be required to
contain such legend or any other legend (i) while a Registration Statement
covering the resale of such Shares is effective under the Securities Act, or
(ii) following any valid sale of such Shares pursuant to Rule 144 so long as
Purchaser has completed and filed Form 144 with the Commission and provided
evidence satisfactory to the Company of compliance with Rule 144, or (iii) if
such Shares are eligible for sale under Rule 144(k) and Purchaser is not, and
has not been during the 90 days preceding such sale, an Affiliate of the
Company, or (iv) if such legend is not required under applicable requirements of
the Securities Act (including judicial interpretations and pronouncements issued

                                                                              14

<PAGE>

by the Staff of the Commission). The Company shall cause its counsel to issue
the legal opinion included in the Transfer Agent Instructions to the Transfer
Agent on the Effective Date. Following the Effective Date or at such earlier
time as a legend is no longer required for certain Shares, the Company will use
reasonable efforts to, but in no event later than five Trading Days following
the delivery by a Purchaser to the Company or the Transfer Agent of a legended
certificate representing such Shares, deliver or cause to be delivered to such
Purchaser a certificate representing such Shares that is free from all
restrictive and other legends. The Company may not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge
the restrictions on transfer set forth in this Section.

            (d)   The Company acknowledges and agrees that a Purchaser may from
time to time pledge or grant a security interest in some or all of the Shares in
connection with a bona fide margin agreement or other loan or financing
arrangement secured by the Shares and, if required under the terms of such
agreement, loan or arrangement, such Purchaser may transfer pledged or secured
Shares to the pledgees or secured parties. Such a pledge or transfer would not
be subject to approval of the Company and no legal opinion of the pledgee,
secured party or pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the appropriate Purchaser's expense,
the Company will execute and deliver such reasonable documentation as a pledgee
or secured party of Shares may reasonably request in connection with a pledge or
transfer of the Shares, including the preparation and filing of any required
prospectus supplement under Rule 424(b)(3) of the Securities Act or other
applicable provision of the Securities Act to appropriately amend the list of
selling stockholders thereunder.

4.2         Furnishing of Information. As long as the Purchaser or any Member of
the Purchaser owns Shares, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act. Not more often than once every 90 days, upon the request of
any Purchaser, the Company shall deliver to the Purchaser a written
certification of a duly authorized officer as to whether it has complied with
the preceding sentence. As long as any Purchaser owns Shares, if the Company is
not required to file reports pursuant to such laws, it will prepare and furnish
to the Purchaser and make publicly available in accordance with paragraph (c) of
Rule 144 such information as is required for the Purchaser to sell the Shares
under Rule 144. The Company further covenants that it will take such further
action as any holder of Shares may reasonably request to satisfy the provisions
of Rule 144 applicable to the issuer of securities relating to transactions for
the sale of securities pursuant to Rule 144.

4.3         Integration; Waiver of Rescission Right. The Company shall not, and
shall use its best efforts to ensure that no Affiliate of the Company shall,
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Shares in a manner that would require
the registration under the Securities Act of the sale of the Shares to the
Purchaser. Purchaser acknowledges that the Company has conducted several
unregistered offerings of securities subsequent to the filing of the Form SB-2
and that the Securities and Exchange Commission or other governmental agencies
may take the position that (a) the offering and sale of the Shares hereunder
should be integrated with (i) such prior offerings, (ii) the concurrent offering

                                                                              15

<PAGE>

by the Company of Shares pursuant to a purchase agreement with terms and
conditions substantially similar to the terms and conditions of this Agreement
and of warrants (collectively, the "Concurrent Offering"), or (iii) the offering
of shares pursuant to the Form SB-2; and (b) as a result of such integration the
Purchaser may have the right to rescind the purchase and sale of the Shares
hereunder and receive a refund of the purchase price (the "Rescission Right").
The Purchaser hereby waives any Rescission Right and discharges the Company from
any obligation to make or consummate an offer to acquire the Shares in
connection with a Rescission Right and any breach of this Section 4.3 arising
out of the integration described in clause (a) of this paragraph.

4.4         Reservation and Listing of Shares. The Company shall maintain a
reserve from its duly authorized shares of Common Stock for issuance pursuant to
the Transaction Documents in such amount as may be required to fulfill its
obligations in full under the Transaction Documents. In the event that at any
time the then authorized shares of Common Stock are insufficient for the Company
to satisfy its obligations in full under the Transaction Documents, the Company
shall promptly take such actions as may be required to increase the number of
authorized shares. Following the Effective Date, the Company shall in the time
and manner required by its Trading Market, prepare and file with such Trading
Market an additional shares listing application covering the number of shares of
Common Stock issuable under the Transaction Documents and shall take all steps
necessary to cause such shares of Common Stock to be approved for listing on its
Trading Market as soon as possible.

4.5         Subsequent Placements.

            (a)   Until the Effective Date (the "Blockout Period"), the Company
will not, directly or indirectly, offer, sell, grant any option to purchase, or
otherwise dispose of (or announce any offer, sale, grant or any option to
purchase or other disposition of) any of its or the Subsidiaries' equity or
equity equivalent securities, including without limitation any debt, preferred
stock or other instrument or security that is, at any time during its life and
under any circumstances, convertible into or exchangeable or exercisable for
Common Stock or Common Stock Equivalents (any such offer, sale, grant,
disposition or announcement being referred to as a "Subsequent Placement").

            (b)   The Blockout Period set forth in the preceding Section 4.5(a)
shall be extended for the number of Trading Days during such period in which (i)
trading in the Common Stock is suspended by any Trading Market, (ii) the
Registration Statement is not effective, or (iii) the prospectus included in the
Registration Statement may not be used by the Purchaser for the resale of
Registrable Shares thereunder.

            (c)   From the end of the Blockout Period until the 18th month
anniversary thereof, the Company will not, directly or indirectly, effect any
Subsequent Placement unless the Company shall have first complied with this
Section 4.5(c).

                  (i)         The Company shall deliver to the Purchaser a
written notice (the "Offer") of any proposed or intended issuance or sale or
exchange of the securities being offered (the "Offered Shares") in a Subsequent
Placement, which Offer shall (w) identify and

                                                                              16

<PAGE>

describe the Offered Shares, (x) describe the price and other terms upon which
they are to be issued, sold or exchanged, and the number or amount of the
Offered Shares to be issued, sold or exchanged, (y) identify the Persons or
entities (if known) to which or with which the Offered Shares are to be offered,
issued, sold or exchanged and (z) offer to issue and sell to or exchange with
the Purchaser a pro rata portion of the Offered Shares equal to (A) the
aggregate Purchase Price paid by the Purchaser divided by (B) the sum of (i) the
aggregate principal amount of the debentures issued pursuant to the Omicron
Financing and converted in Common Stock prior to the date of the Subsequent
Financing, (ii) 64.171% of the aggregate Purchase Price paid by the Purchaser
pursuant to Section 2.1(a) of this Agreement for the Shares at the Per Share
Purchase Price, and (iii) the aggregate amount paid by the Purchasers for all of
the Shares issued in the Vertical Ventures Financing (the "Basic Amount").

                  (ii)        To accept an Offer, in whole or in part, the
Purchaser must deliver a written notice to the Company prior to the end of the
ten (10) Trading Day period of the Offer, setting forth all or any portion of
the Purchaser's Basic Amount that the Purchaser elects to purchase (the "Notice
of Acceptance").

                  (iii)       The Company shall have ten (10) Trading Days from
the expiration of the period set forth in Section 4.5(c)(ii) above (the
"Subsequent Placement Closing Period") to issue, sell or exchange all or any
part of such Offered Shares as to which a Notice of Acceptance has not been
given by the Purchaser (the "Refused Shares"), but only to the offerees
described in the Offer (if so described therein) and only upon terms and
conditions (including, without limitation, unit prices and interest rates) that
are not more favorable to the acquiring Person or Persons or less favorable to
the Company than those set forth in the Offer. However, if the stock appreciates
by more than 15% during the Subsequent Placement Closing Period (or such shorter
period from the expiration of the period set forth in Section 4.5(c)(ii) above
through the date the Company sets to issue, sell or exchange all or any portion
of the Refused Shares), then the Purchaser will have 1 Trading Day to elect to
issue a Notice of Acceptance in accordance with Section 4.5(c)(ii) above
relating to the Refused Shares. The Company and the Purchaser agree that the
Subsequent Placement Closing Period shall be extended until the expiration of
the 1 Trading Day period in the immediately preceding sentence.

                  (iv)        In the event the Company shall propose to sell
less than all the Refused Shares (any such sale to be in the manner and on the
terms specified in Section 4.5(c)(iii) above), then the Purchaser may, at its
sole option and in its sole discretion, reduce the number or amount of the
Offered Shares specified in its Notice of Acceptance to an amount that shall be
not less than the number or amount of the Offered Shares that the Purchaser
elected to purchase pursuant to Section 4.5(c)(ii) above multiplied by a
fraction, (i) the numerator of which shall be the number or amount of Offered
Shares the Company actually proposes to issue, sell or exchange (including
Offered Shares to be issued or sold to Purchaser pursuant to Section 4.5(c)(ii)
above prior to such reduction) and (ii) the denominator of which shall be the
original amount of the Offered Shares. In the event that any Purchaser so elects
to reduce the number or amount of Offered Shares specified in its Notice of
Acceptance, the Company may not issue, sell or exchange more than the reduced
number or amount of the Offered Shares unless and until such securities have
again been offered to the Purchaser in accordance with Section 4.5(c)(i) above.

                                                                              17

<PAGE>

                  (v)         Upon the closing of the issuance, sale or exchange
of all or less than all of the Refused Shares, the Purchaser shall acquire from
the Company, and the Company shall issue to the Purchaser, the number or amount
of Offered Shares specified in the Notices of Acceptance, as reduced pursuant to
Section 4.5(c)(iv) above if the Purchaser have so elected, upon the terms and
conditions specified in the Offer. The purchase by the Purchaser of any Offered
Shares is subject in all cases to the preparation, execution and delivery by the
Company and the Purchaser of a purchase agreement relating to such Offered
Shares reasonably satisfactory in form and substance to the Purchaser and its
respective counsel.

                  (vi)        Any Offered Shares not acquired by the Purchaser
or other Persons in accordance with Section 4.5(c)(iii) above may not be issued,
sold or exchanged until they are again offered to the Purchaser under the
procedures specified in this Agreement.

            (d)   The restrictions contained in Sections 4.5(a) and (c) shall
not apply to Excluded Stock.

4.6         Securities Laws Disclosure; Publicity. The Company shall, on the
Closing Date, issue press release acceptable to the Purchaser disclosing all
material terms of the transactions contemplated hereby. On the Closing Date, the
Company shall file a Current Report on Form 8-K with the Commission (the "8-K
Filing") describing the terms of the transactions contemplated by the
Transaction Documents and including as exhibits to such Current Report on Form
8-K this Agreement, in the form required by the Exchange Act. Thereafter, the
Company shall timely file any filings and notices required by the Commission or
applicable law with respect to the transactions contemplated hereby and provide
copies thereof to the Purchaser promptly after filing. Except with respect to
the 8-K Filing and the press release referenced above (a copy of which will be
provided to the Purchaser for their review as early as practicable prior to its
filing), the Company shall, at least two Trading Days prior to the filing or
dissemination of any disclosure required by this paragraph, provide a copy
thereof to the Purchaser for their review. The Company and the Purchaser shall
consult with each other in issuing any press releases or otherwise making public
statements or filings and other communications with the Commission or any
regulatory agency or Trading Market with respect to the transactions
contemplated hereby, and neither party shall issue any such press release or
otherwise make any such public statement, filing or other communication without
the prior consent of the other, except if such disclosure is required by law, in
which case the disclosing party shall promptly provide the other party with
prior notice of such public statement, filing or other communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of the Purchaser or any Member of the Purchaser, or include the name of the
Purchaser or any Member of the Purchaser in any filing with the Commission or
any regulatory agency or Trading Market, without the prior written consent of
the Purchaser and (if applicable) such Member, except to the extent such
disclosure is required by law or Trading Market regulations, in which case the
Company shall provide the Purchaser with prior notice of such disclosure. The
Company shall not, and shall cause each of its Subsidiaries and its and each of
their respective officers, directors, employees and agents not to, provide the

                                                                              18

<PAGE>

Purchaser or any Member of the Purchaser with any material nonpublic information
regarding the Company or any of its Subsidiaries from and after the filing of
the 8-K Filing without the express written consent of such Purchaser. The
Purchaser hereby consents to disclosure of its name in the "Selling Stockholder"
section of the Registration Statement. Neither the Company nor the Purchaser
shall issue any press releases 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 any Purchaser, to make any press
release or other public disclosure with respect to such transactions (i) in
substantial conformity with the 8-K Filing and contemporaneously therewith and
(ii) as is required by applicable law and regulations (provided that in the case
of clause (i) the Purchaser shall be consulted by the Company in connection with
any such press release or other public disclosure prior to its release). Each
press release disseminated since July 17, 2003 did not at the time of release
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.

4.7         Use of Proceeds. Except as set forth on Schedule 4.7, the Company
shall use the net proceeds from the sale of the Shares hereunder for working
capital purposes and not for the satisfaction of any portion of the Company's
debt (other than payment of trade payables and accrued expenses in the ordinary
course of the Company's business and consistent with prior practices), to redeem
any Company equity or equity-equivalent securities or to settle any outstanding
litigation.

4.8         Reimbursement. If any Purchaser or any of its Affiliates or any
officer, director, partner, controlling Person, employee or agent of a Purchaser
or any of its Affiliates (a "Related Person") becomes involved in any capacity
in any Proceeding brought by or against any Person in connection with or as a
result of the transactions contemplated by the Transaction Documents, the
Company will indemnify and hold harmless such Purchaser or Related Person for
its reasonable legal and other expenses (including the costs of any
investigation, preparation and travel) and for any Losses incurred in connection
therewith, as such expenses or Losses are incurred, excluding only Losses that
result directly from such Purchaser's or Related Person's misrepresentation,
gross negligence or willful misconduct. In addition, the Company shall indemnify
and hold harmless the Purchaser and Related Person from and against any and all
Losses, as incurred, arising out of or relating to any breach by the Company of
any of the representations, warranties or covenants made by the Company in this
Agreement or any other Transaction Document, or any allegation by a third party
hat, if true, would constitute such a breach. The conduct of any Proceedings for
which indemnification is available under this paragraph shall be governed by
Section 6.4(c) below. The indemnification obligations of the Company under this
paragraph shall be in addition to any liability that the Company may otherwise
have and shall be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of the Purchaser and any such
Related Persons. The Company also agrees that neither the Purchaser nor any
Related Persons shall have any liability to the Company or any Person asserting
claims on behalf of or in right of the Company in connection with or as a result
of the transactions contemplated by the Transaction Documents, except to the
extent that any Losses incurred by the Company result from the

                                                                              19

<PAGE>

misrepresentation, gross negligence, willful misconduct or breach of any
Transaction Document of or by the applicable Purchaser or Related Person in
connection with such transactions. If the Company breaches its obligations under
any Transaction Document, then, in addition to any other liabilities the Company
may have under any Transaction Document or applicable law, the Company shall pay
or reimburse the Purchaser on demand for all costs of collection and enforcement
(including reasonable attorneys fees and expenses). Without limiting the
generality of the foregoing, the Company specifically agrees to reimburse the
Purchaser on demand for all costs of enforcing the indemnification obligations
in this paragraph.

4.9         Fundamental Changes. In addition to any other rights provided by law
or set forth herein, from and after the date of this Agreement and until the
Effective Date, the Company shall not without first obtaining the approval (by
vote or written consent, as provided by law) of the Purchaser:

            (a)   merge with any other business entity, which results in a
Change of Control;

            (b)   sell a substantial portion of assets not in the ordinary
course of business;

            (c)   increase the authorized number of shares of any class or
series of capital stock of the Company;

            (d)   amend the company's charter or by-laws;

            (e)   purchase, redeem (other than pursuant to equity incentive
agreements with non-officer employees giving the Company the right to repurchase
shares upon the termination of services) or set aside any sums for the purchase
or redemption of, or declare or pay any dividend (including a dividend payable
in stock of the Company) or make any other distribution with respect to, any
shares of capital stock or any other securities that are convertible into or
exercisable for such stock;

            (f)   increase the number of shares issuable pursuant to any stock
option or other equity incentive plan;

            (g)   change the nature of the Company's business to any business
which is fundamentally distinct and separate from the business currently
conducted by the Company; or

            (h)   cause or permit any subsidiary of the Company directly or
indirectly to take any actions described in clauses (a) through (g) above, other
than issuing securities to the Company.

                                    ARTICLE V
                                   CONDITIONS

5.1         Conditions Precedent to the Obligations of the Purchaser. The
obligation of the Purchaser to acquire Shares at the Closing is subject to the
satisfaction or waiver by the Purchaser, at or before the Closing, of each of
the following conditions:

                                                                              20

<PAGE>

            (a)   Representations and Warranties. The representations and
warranties of the Company contained herein shall be true and correct in all
material respects as of the date when made and as of the Closing as though made
on and as of such date; and

            (b)   Performance. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by it at or prior to the Closing, including the conditions set forth in
Section 2.2(a).

5.2         Conditions Precedent to the Obligations of the Company. The
obligation of the Company to sell Shares at the Closing is subject to the
satisfaction or waiver by the Company, at or before the Closing, of each of the
following conditions:

            (a)   Representations and Warranties. The representations and
warranties of the Purchaser contained herein shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made on and as of such date; and

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

            (c)   Receipt of Funds. The Company shall have received immediately
available funds payable to the Company from each Purchaser representing the
Purchaser's Purchase Price for the Shares.

                                   ARTICLE VI
                               REGISTRATION RIGHTS

6.1   Shelf Registration

            (a)   As promptly as possible, and in any event on or prior to the
Filing Date, the Company shall prepare and file with the Commission a "Shelf"
Registration Statement covering the resale of all Registrable Shares for an
offering to be made on a continuous basis pursuant to Rule 415. The Registration
Statement shall be on Form SB-2 (except if the Company is not then eligible to
register for resale the Registrable Shares on Form SB-2, in which case such
registration shall be on another appropriate form in accordance herewith as the
Purchaser may consent) and shall contain (except if otherwise directed by the
Purchaser) the "Plan of Distribution" attached hereto as Exhibit C.

            (b)   The Company shall use its commercially reasonably efforts to
cause the Registration Statement to be declared effective by the Commission as
promptly as possible after the filing thereof, but in any event prior to the
Required Effectiveness Date, and shall use its best efforts to keep the
Registration Statement continuously effective under the

                                                                              21

<PAGE>

Securities Act until the Registrable Shares can be sold pursuant to Rule 144(k)
or such earlier date when all Registrable Shares covered by such Registration
Statement have been sold (the "Effectiveness Period").

            (c)   The Company shall notify the Purchaser in writing promptly
(and in any event within one Trading Day) after receiving notification from the
Commission that the Registration Statement has been declared effective.

            (d)   As promptly as possible, and in any event no later than the
Post-Effective Amendment Filing Deadline, the Company shall prepare and file
with the Commission a Post-Effective Amendment. The Company shall use its best
efforts to cause the Post-Effective Amendment to be declared effective by the
Commission as promptly as possible after the filing thereof, but in any event
prior to the 90th day after the Post-Effective Amendment Filing Deadline. The
Company shall notify each Purchaser in writing promptly (and in any event within
one Trading Day) after receiving notification from the Commission that the
Post-Effective Amendment has been declared effective.

            (e)   Upon the occurrence of any Event (as defined below) and on
every monthly anniversary thereof until the applicable Event is cured, as
partial relief for the damages suffered therefrom by the Purchaser (which remedy
shall not be exclusive of any other remedies available under this Agreement, at
law or in equity), the Company shall pay to the Purchaser an amount in cash, as
liquidated damages and not as a penalty, equal to 0.5% of the aggregate purchase
price paid by the Purchaser hereunder for the first month and 1.0% for each
month thereafter. The payments to which a Purchaser shall be entitled pursuant
to this Section 6.1(d) are referred to herein as "Event Payments". Any Event
Payments payable pursuant to the terms hereof shall apply on a pro-rata basis
for any portion of a month prior to the cure of an Event. In the event the
Company fails to make Event Payments in a timely manner, such Event Payments
shall bear interest at the rate of 1.5% per month (prorated for partial months)
until paid in full.

For such purposes, each of the following shall constitute an "Event":

                  (i)   the Registration Statement is not filed on or prior to
the Filing Date or is not declared effective on or prior to the Required
Effectiveness Date; provided, however, that for the purposes of the Event
Payment under this Section 6.1(e) only, the Company shall have an additional 15
days to cure the failure to declare the Registration Statement effective on or
prior to the Required Effectiveness Date before such Event Payment is due to the
Purchaser under this Section 6.1(e);

                  (ii)  after the Effective Date, a Purchaser is not permitted
to sell Registrable Shares under the Registration Statement (or a subsequent
Registration Statement filed in replacement thereof) for any reason for five or
more Trading Days (whether or not consecutive);

                  (iii) a Post-Effective Amendment is not filed on or prior to
the Post-Effective Amendment Filing Deadline or is not declared effective on or
prior to the 15th Trading Day after the Post-Effective Amendment Filing
Deadline;

                                                                              22

<PAGE>

                  (iv)   after the Effective Date, any Registrable Shares
covered by such Registration Statement are not listed on an Eligible Market;

                  (v)   the Common Stock is not listed or quoted, or is
suspended from trading, on an Eligible Market for a period of five Trading Days
(which need not be consecutive Trading Days); or

                  (vi)  the Company fails for any reason to deliver a
certificate evidencing any Shares to a Purchaser within ten (10) Trading Days
after delivery of such certificate is required pursuant to any Transaction
Document or the exercise rights of the Purchaser pursuant to the Transaction
Documents are otherwise suspended for any reason.

            (f)   Except as described in Schedule 3.1(p) hereto, the Company
shall not, prior to the Effective Date of the Registration Statement, prepare
and file with the Commission a Registration statement relating to an offering
for its own account or the account of others under the Securities Act of any of
its equity securities.

6.2         Registration Procedures. In connection with the Company's
registration obligations hereunder, the Company shall:

            (a)   Not less than three Trading Days prior to the filing of a
Registration Statement or any related Prospectus or any amendment or supplement
thereto (including any document that would be incorporated or deemed to be
incorporated therein by reference), the Company shall (i) Furnish to the
Purchaser, the Manager and any counsel designated by the Purchaser ("Purchaser
Counsel") copies of all such documents proposed to be filed, which documents
(other than those incorporated or deemed to be incorporated by reference) will
be subject to the review of the Purchaser and Purchaser Counsel, and (ii) cause
its officers and directors, counsel and independent certified public accountants
to respond to such inquiries as shall be necessary, in the reasonable opinion of
the Purchaser Counsel, to conduct a reasonable investigation within the meaning
of the Securities Act. The Company shall not file a Registration Statement or
any such Prospectus or any amendments or supplements thereto to which Purchaser
holding a majority of the Registrable Shares shall reasonably object.

            (b)   (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to each Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep the
Registration Statement continuously effective as to the applicable Registrable
Shares for the Effectiveness Period and prepare and file with the Commission
such additional Registration Statements in order to register for resale under
the Securities Act all of the Registrable Shares; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably possible, and (unless further delayed by
reason of responding to SEC financial comments or obtaining current financial
statements) in any event within twenty days, to any comments received from the
Commission with respect to the Registration Statement or any amendment thereto
and as promptly as reasonably possible provide the Purchaser true and complete

                                                                              23

<PAGE>

copies of all correspondence from and to the Commission relating to the
Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Shares covered by the Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Purchaser thereof set forth in the Registration Statement as
so amended or in such Prospectus as so supplemented.

            (c)   Notify the Purchaser of Registrable Shares to be sold and each
Purchaser Counsel as promptly as reasonably possible, and (if requested by any
such Person) confirm such notice in writing no later than one Trading Day
thereafter, of any of the following events: (i) the Commission notifies the
Company whether there will be a "review" of any Registration Statement; (ii) the
Commission comments in writing on any Registration Statement (in which case the
Company shall deliver to the Purchaser a copy of such comments and of all
written responses thereto); (iii) any Registration Statement or any
post-effective amendment is declared effective; (iv) the Commission or any other
Federal or state governmental authority requests any amendment or supplement to
any Registration Statement or Prospectus or requests additional information
related thereto; (v) the Commission issues any stop order suspending the
effectiveness of any Registration Statement or initiates any Proceedings for
that purpose; (vi) the Company receives notice of any suspension of the
qualification or exemption from qualification of any Registrable Shares for sale
in any jurisdiction, or the initiation or threat of any Proceeding for such
purpose; or (vii) the financial statements included in any Registration
Statement become ineligible for inclusion therein or any statement made in any
Registration Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference is untrue in any material respect or any
revision to a Registration Statement, Prospectus or other document is required
so that it will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

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

            (e)   Furnish to each Purchaser and the Purchaser Counsel, without
charge, at least one conformed copy of each Registration Statement and each
amendment thereto, including financial statements and schedules, all documents
incorporated therein by reference, and all exhibits to the extent requested by
such Person promptly after the filing of such documents with the Commission.

            (f)   Promptly deliver to the Purchaser and the Purchaser Counsel,
without charge, as many copies of the Prospectus or Prospectuses (including each
form of prospectus) and each amendment or supplement thereto as such Persons may
reasonably request. The Company hereby consents to the use of such Prospectus
and each amendment or supplement thereto by each of the selling Purchaser in
connection with the valid offering and sale of the Registrable Shares covered by
such Prospectus and any amendment or supplement thereto.

                                                                              24

<PAGE>

            (g)   (i) In the time and manner required by each Trading Market,
prepare and file with such Trading Market an additional shares listing
application covering all of the Registrable Shares; (ii) take all steps
necessary to cause such Registrable Shares to be approved for listing on each
Trading Market as soon as possible thereafter; (iii) provide to the Purchaser
evidence of such listing; and (iv) maintain the listing of such Registrable
Shares on each such Trading Market or another Eligible Market.

            (h)   Prior to any public offering of Registrable Shares, use its
best efforts to register or qualify or cooperate with the Purchaser or any
Member selling Registrable Shares and Purchaser Counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Shares for offer and sale under the
securities or blue sky laws of such jurisdictions within the United States as
any Purchaser requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Shares covered by a
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise subject.

            (i)   Cooperate with the Purchaser to facilitate the timely
preparation and delivery of certificates representing Registrable Shares to be
delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by this Agreement and
applicable securities laws, of all restrictive legends, and to enable such
Registrable Shares to be in such reasonable denominations and registered in such
names as any such Purchaser may request.

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

            (k)   Cooperate with any reasonable due diligence investigation
undertaken by the Purchaser in connection with the sale of Registrable Shares,
including without limitation by making available any documents and information;
provided that the Company will not deliver or make available to any Purchaser
material, nonpublic information unless such Purchaser specifically requests in
advance to receive material, nonpublic information in writing and signs a
confidentiality, non-disclosure and indemnification agreement with respect to
all such non-public information.

                                                                              25

<PAGE>

            (l)   If Holders of a majority of the Registrable Shares being
offered pursuant to a Registration Statement select underwriters for the
offering, the Company shall enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, by providing customary legal opinions, comfort letters and
indemnification and contribution obligations.

            (m) Comply with all applicable rules and regulations of the
Commission.

6.3         Registration Expenses. The Company shall pay (or reimburse the
Purchaser for) all fees and expenses incident to the performance of or
compliance with this Agreement by the Company, including without limitation (a)
all registration and filing fees and expenses, including without limitation
those related to filings with the Commission, any Trading Market and in
connection with applicable state securities or Blue Sky laws, (b) printing
expenses (including without limitation expenses of printing certificates for
Registrable Shares and of printing prospectuses requested by the Purchaser), (c)
messenger, telephone and delivery expenses, (d) fees and disbursements of
counsel for the Company and up to $10,000 in the aggregate for a single
Purchaser's Counsel for all of the Purchasers purchasing in the Concurrent
Offering, (e) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Agreement, and (f) all listing fees to be paid by the Company to the Trading
Market.

6.4   Indemnification.

            (a)   Indemnification by the Company. The Company shall indemnify
and hold harmless the Purchaser, the officers, directors, partners, Members,
agents, investment advisors and employees of each of them, each Person who
controls the Purchaser (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors, partners,
Members, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all Losses, as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained in the Registration Statement, any Prospectus or
any form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, except to the extent, but only to the extent, that (i)
such untrue statements, alleged untrue statements, omissions or alleged
omissions are based solely upon information regarding the Purchaser furnished in
writing to the Company by the Purchaser expressly for use therein, or to the
extent that such information relates to the Purchaser or the Purchaser's
proposed method of distribution of Registrable Shares and was reviewed and
expressly approved in writing by the Purchaser expressly for use in the
Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto or (ii) in the case of an occurrence of an event
of the type specified in Section 6.2(c)(v)-(vii), the use by the Purchaser of an
outdated or defective Prospectus after the Company has notified the Purchaser in
writing that the Prospectus is outdated or defective and prior to the receipt by
the Purchaser of the Advice contemplated in Section 6.5. The Company shall

                                                                              26

<PAGE>

notify the Purchaser promptly of the institution, threat or assertion of any
Proceeding of which the Company is aware in connection with the transactions
contemplated by this Agreement.

            (b)   Indemnification by Purchaser and Members. The Purchaser and
its Members shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of
such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses (as determined by a court of competent jurisdiction
in a final judgment not subject to appeal or review) arising solely out of any
untrue statement of a material fact contained in the Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of failure to comply with all prospectus delivery
requirements upon a re-sale of any Shares or any omission of a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus or form of prospectus or supplement thereto, in the
light of the circumstances under which they were made) not misleading to the
extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by the Purchaser or a
Member to the Company specifically for inclusion in such Registration Statement
or such Prospectus or to the extent that (i) such untrue statements or omissions
are based solely upon information regarding the Purchaser or Member furnished in
writing to the Company by the Purchaser or Member expressly for use therein, or
to the extent that such information relates to the Purchaser or Member or the
Purchaser's or Member's proposed method of distribution of Registrable Shares
and was reviewed and expressly approved in writing by the Purchaser expressly
for use in the Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto or (ii) in the case of an
occurrence of an event of the type specified in Section 6.2(c)(v)-(vii), the use
by the Purchaser or Member of an outdated or defective Prospectus after the
Company has notified the Purchaser or Member in writing that the Prospectus is
outdated or defective and prior to the receipt by the Purchaser of the Advice
contemplated in Section 6.5. In no event shall the liability of any selling
Purchaser or Member hereunder be greater in amount than the dollar amount of the
net proceeds received by the Purchaser or such Member upon the sale of the
Registrable Shares giving rise to such indemnification obligation.

            (c) Conduct of Indemnification Proceedings. If any Proceeding shall
be brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.

                                                                              27

<PAGE>

      An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the
reasonable fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in
writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or
(iii) the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding. All fees
and expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten Trading Days of written notice
thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).

            (d)   Contribution. If a claim for indemnification under Section
6.4(a) or (b) is unavailable to an Indemnified Party (by reasons other than the
specified exclusions to indemnification), then each Indemnifying Party, in lieu
of indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 6.4(c), any reasonable attorneys' or
other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.

                                                                              28

<PAGE>

      The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.4(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6.4(d), the Purchaser shall not
be required to contribute, in the aggregate, any amount in excess of the amount
by which the proceeds actually received by the Purchaser from the sale of the
Registrable Shares subject to the Proceeding exceeds the amount of any damages
that the Purchaser has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. The indemnity and contribution
agreements contained in this Section are in addition to any liability that the
Indemnifying Parties may have to the Indemnified Parties.

6.5         Dispositions. The Purchaser agrees that it will comply with, and
indemnify and hold harmless all relevant Indemnified Parties in connection with
any failure of the Purchaser to comply with, prospectus delivery requirements of
the Securities Act as applicable to it in connection with sales of Registrable
Shares pursuant to the Registration Statement. The Purchaser further agrees
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Sections 6.2(c)(v), (vi) or (vii), the Purchaser will
discontinue disposition of such Registrable Shares under the Registration
Statement until the Purchaser's receipt of the copies of the supplemented
Prospectus and/or amended Registration Statement contemplated by Section 6.2(j),
or until it is advised in writing (the "Advice") by the Company that the use of
the applicable Prospectus may be resumed, and, in either case, has received
copies of any additional or supplemental filings that are incorporated or deemed
to be incorporated by reference in such Prospectus or Registration Statement.
The Company may provide appropriate stop orders to enforce the provisions of
this paragraph.

6.6         No Piggyback on Registrations. Except as set forth on Schedule 6.6
attached hereto, neither the Company nor any of its security holders (other than
the Purchaser in such capacity pursuant hereto) may include securities of the
Company in the Registration Statement other than the Registrable Shares, and the
Company shall not after the date hereof enter into any agreement providing any
such right to any of its security holders.

6.7         Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of the
Registrable Shares and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to the Purchaser written notice of
such determination and if, within fifteen days after receipt of such notice, any
the Purchaser shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Shares the Purchaser
requests to be registered.

                                                                              29

<PAGE>

                                   ARTICLE VII
                                  MISCELLANEOUS

7.1         Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules. At or
after the Closing, and without further consideration, the Company will execute
and deliver to the Purchaser such further documents as may be reasonably
requested in order to give practical effect to the intention of the parties
under the Transaction Documents. Notwithstanding anything to the contrary
herein, Shares may be assigned to any Person in connection with a bona fide
margin account or other loan or financing arrangement secured by such Company
Shares.

7.2         Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 6:30 p.m. (New York City time) on a Trading
Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (c) the Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon actual receipt by the party to whom such notice is required to be given.
The addresses and facsimile numbers for such notices and communications are
those set forth on the signature pages hereof, or such other address or
facsimile number as ay be designated in writing hereafter, in the same manner,
by such Person.

7.3         Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and the Purchaser or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right. Notwithstanding the foregoing,
if and to the extent that Aladdin Investment Advisors, LLC waives a comparable
provision of the Aladdin Investments LLC purchase agreement for the purchase of
common stock executed in connection with the Concurrent Offering, such waiver
shall, without any further action required on the part of Purchaser, constitute
a waiver of the corresponding provision of this Agreement. Purchaser understands
that the preceding sentence may result in the diminution of its rights by virtue
of the unilateral action of Aladdin Investment Advisors, LLC.

7.4         Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed

                                                                              30

<PAGE>

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.

7.5         Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchaser. The Purchaser may assign its
rights under this Agreement to any Person to whom the Purchaser assigns or
transfers any Shares, provided such transferee agrees in writing to be bound,
with respect to the transferred Shares, by the provisions hereof that apply to
the "Purchaser." Notwithstanding anything to the contrary herein, Shares may be
assigned to any Person in connection with a bona fide margin account or other
loan or financing arrangement secured by such Shares.

7.6         No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except that each Related Person is an intended third party
beneficiary of Section 4.8 and each Indemnified Party is an intended third party
beneficiary of Section 6.4 and (in each case) may enforce the provisions of such
Sections directly against the parties with obligations thereunder.

7.7         Governing Law; Venue; Waiver Of Jury Trial. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by and construed and enforced in accordance with the laws of
the state of New York.

THE COMPANY AND THE PURCHASER HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK,
BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY
OR ANY PURCHASER HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION
CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE
ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVE,
AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY
OR ANY PURCHASER, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, OR THAT VENUE OF SUCH SUIT, ACTION OR PROCEEDING
IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY
(WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES
TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD
AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN
SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER
PERMITTED BY LAW. THE COMPANY AND THE PURCHASER HEREBY WAIVE ALL RIGHTS TO A
TRIAL BY JURY.

                                                                              31

<PAGE>

7.8         Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery and/or exercise of
the Shares, as applicable.

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

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

7.11        Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then the
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.

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

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

7.14        Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser hereunder or the Purchaser or any Member enforces or
exercises its rights hereunder or thereunder, and such payment or payments or
the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,

                                                                              32

<PAGE>

recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company by a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

7.15        Adjustments in Share Numbers and Prices. In the event of any stock
split, subdivision, dividend or distribution payable in shares of Common Stock
(or other securities or rights convertible into, or entitling the holder thereof
to receive directly or indirectly shares of Common Stock), combination or other
similar recapitalization or event occurring after the date hereof, each
reference in any Transaction Document to a number of shares or a price per share
shall be amended to appropriately account for such event.

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                                                                              33
<PAGE>

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

                              LMIC, INC.

                              By:____________________________________
                                 Name: Luis P. Negrete
                                 Title: President & CEO

                              Address for Notice:

                              6435 Virginia Manor Road
                              Beltsville, MD 20705
                              Facsimile No.:
                              Telephone No.: (204) 264-8300
                              Attn:

                              ALADDIN INVESTMENTS, LLC
                              (a Delaware limited liability company)
                              By: ALADDIN INVESTMENT ADVISORS, LLC
                              (Manager)

                              By:_________________________________
                                 Name:___________________
                                 Title:

                              Address for Notice:

                              520 Madison Avenue 38th floor
                              New York, New York 10022
                              Telephone No. (212) 570-5959
                              Attn:_________________________

                                                                              34

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