Document:

Comprehensive Healthcare Subscription Agreement

    
       
SUBSCRIPTION
      AGREEMENT

    

    THIS
      SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of November ___,
      2005,
      by
      and among Comprehensive Healthcare Solutions, Inc., a Delaware corporation
      (the
"Company"),
      and the subscribers identified
      on
      the
      signature page hereto (each a "Subscriber" and
      collectively "Subscribers").

    

    WHEREAS,
      the Company and the Subscribers are executing and delivering this Agreement
      in
      reliance upon an exemption from securities registration afforded by the
      provisions of Section 4(2), Section 4(6) and/or Regulation D ("Regulation D")
      as
      promulgated by the United States Securities and Exchange Commission (the
      "Commission") under the Securities Act of 1933, as amended (the "1933
      Act").

    

    WHEREAS,
      the parties desire that, upon the terms and subject to the conditions contained
      herein, the Company shall issue and sell to the Subscribers, as provided herein,
      and the Subscribers, in the aggregate, shall purchase $500,000 (the "Purchase
      Price") of principal amount of promissory notes of the Company ("Note" or
      "Notes") convertible into shares of the Company's common stock, $.10 par value
      (the "Common Stock") at a per share conversion price of $0.25 per share, and
      share purchase warrants (the "Warrants") in the form attached hereto as Exhibits
      A and B respectively, to purchase shares of Common Stock (the "Warrant Shares")
      (the "Offering"). The Notes, shares of Common Stock issuable upon conversion
      of
      the Notes (the "Shares"), the Warrants and the Warrant Shares are collectively
      referred to herein as the "Securities"; and

    

    WHEREAS,
      the Company has entered into a Placement Agency Agreement with Westor Capital
      Group, Inc. (the "Placement Agency Agreement") dated November __,
      2005.

    

    NOW,
      THEREFORE, in consideration of the mutual covenants and other agreements
      contained in this Agreement the Company and the Subscribers hereby agree as
      follows:

    

    1.  Conditions
      to Closing. Subject to the satisfaction or waiver of the terms and conditions
      of this Agreement, on the "Closing Date" (as defined
      in
      Section 2 below), each Subscriber shall purchase and the Company
      shall
      sell to each Subscriber a Note in the principal
      amount designated on the signature page hereto and the
      amount of Warrants determined pursuant
      to
      Section 3 below. The aggregate principal
      amount of the Notes to be purchased by the Subscribers on the Closing Date
      shall, in the aggregate, be equal to the Purchase Price.

    

    2.  Closing.
      The consummation of the transactions contemplated herein shall take place at
      the
offices
      of
      Westor
      Capital Group, Inc. 258 Genesee Street, Suite 601, Utica, New York 13502, upon
      the satisfaction of all conditions to Closing set forth in this Agreement
      ("Closing Date"). At the Closing, the Company shall deliver to each Subscriber
      this Agreement, a Note in a principal amount equal to such Subscriber's
      investment amount and a Warrant, all duly executed by the Company, as well
      as a
      legal opinion form counsel to the Company, in a form acceptable to the
      Subscribers. At the Closing, each Subscriber shall deliver to the Company its
      investment amount in immediately available funds.

     

     

    
      
        
        

      

      
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    3.  Warrants.
      On the Closing Date, the Company will issue and deliver to each Subscriber
      three
      warrants as follows: (i) one “A” Warrant entitling the Subscriber to purchase
      one share of Common Stock for every 3 shares of Common Stock into which the
      Notes would be converted into on the Closing Date. The exercise price to acquire
      a Warrant Share upon exercise of the “A” Warrant shall be $.40 per share; (ii)
      one “B” Warrant entitling the Subscriber to purchase one share of Common Stock
      for every 3 shares of Common Stock into which the Notes would be converted
      into
      on the Closing Date. The exercise price to acquire a Warrant Share upon exercise
      of the “B” Warrant shall be $.80 per share; and, (iii) one “C” Warrant entitling
      the Subscriber to purchase one share of Common Stock for every 3 shares of
      Common Stock into which the Notes would be converted into on the Closing Date.
      The exercise price to acquire a Warrant Share upon exercise of the “C” Warrant
      shall be $1.20 per share.

     

    4.  Subscriber's
      Representations and Warranties. Each Subscriber hereby represents and warrants
      to and agrees with the Company only as to such Subscriber that:

     

    (a)  Organization
      and Standing of the Subscribers. If the Subscriber is an entity, such Subscriber
      is a corporation, partnership or other entity duly incorporated or organized,
      validly existing and in good standing under the laws of the jurisdiction of
      its
      incorporation or organization.

     

    (b)  Authorization
      and Power. Each Subscriber has the requisite power and authority to enter into
      and perform this Agreement and to purchase the Securities being sold to it
      hereunder. The execution, delivery and performance of this Agreement by such
      Subscriber and the consummation by it of the transactions contemplated hereby
      and thereby have been duly authorized by all necessary corporate or partnership
      action, and no further consent or authorization of such Subscriber or its Board
      of Directors, stockholders, partners, members, as the case may be, is
      required.

     

    (c)  No
      Conflicts. The execution, delivery and performance of this Agreement and the
      consummation by such Subscriber of the transactions contemplated hereby do
      not
      (i) conflict with such Subscriber's charter documents or bylaws or other
      organizational documents or (ii) violate law, rule, or regulation, or any order,
      judgment or decree of any court or governmental agency applicable to such
      Subscriber or its properties, except for such conflicts and violations would
      not, individually or in the aggregate, have a material adverse effect on such
      Subscriber. Such Subscriber is not required to obtain any consent, authorization
      or order of, or make any filing or registration with, any court or governmental
      agency in order for it to execute, deliver or perform any of its obligations
      under this Agreement or to purchase the Notes or acquire the Warrants in
      accordance with the terms hereof, provided that for purposes of the
      representation made in this sentence, such Subscriber is assuming and relying
      upon the accuracy of the relevant representations and agreements of the Company
      herein.

     

    (d)  Information
      on Company. Such Subscriber has reviewed the Reports and has been afforded
      (i)
      the opportunity to ask such questions as it has deemed necessary of, and to
      receive answers from, representatives of the Company concerning the terms and
      conditions of the offering of the Securities and the merits and risks of
      investing in the Securities; (ii) access to information about the Company and
      the Subsidiaries and their respective financial condition,

     

     

    
      
        
        

      

      
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results
      of operations, business, properties, management and prospects sufficient
      to
      enable
      it to evaluate its investment; and (iii) the opportunity to obtain such
      additional information that the Company possesses or can acquire without
      unreasonable effort
      or
      expense that is necessary to make an informed investment decision with respect
      to the investment. Neither such inquiries nor any other investigation conducted
      by or on behalf of such Subscriber or its representatives or counsel shall
      modify, amend or affect
      such
      Subscriber's right to rely on the truth, accuracy and completeness of the
      Reports and the Company's representations and warranties contained in this
      Agreement. Such Subscriber understands that its investment in the Securities
      involves a high degree of risk. Each Subscriber is able to bear the risk of
      an
      investment in the Securities including, without limitation, the risk of total
      loss of its investment. Such Subscriber has sought such accounting, legal and
      tax advice as it has considered necessary to make an informed investment
      decision with respect to its acquisition of the Securities.

    

    (e)  Information
      on Subscriber. The Subscriber is, and will be at the time of the exercise of
      the
      Warrants,
      an
      "accredited investor", as such term is defined
      in
      Regulation D promulgated by the Commission under the 1933 Act, is
      experienced
      in
      investments and business
      matters,
      has
      made investments of a speculative nature and has
      purchased securities of United States publicly-owned companies
      in
      private placements in the past and,
      with
      its representatives, has such knowledge and experience
      in financial,
      tax
      and other
      business matters
      as to
      enable the Subscriber
      to
      utilize the information made available by the Company
      to
      evaluate the merits and risks
      of
and to
      make
an
      informed
      investment decision with respect to the proposed purchase, which represents
      a
      speculative investment. The information set forth on the signature page hereto
      regarding the Subscriber is accurate. Such Subscriber is not a registered
      broker-dealer under Section 15 of the Securities Exchange Act of 1934, as
      amended (the "1934 Act"). Such Subscriber does not have any agreement
      or understanding, directly or indirectly, with any Person
      to
      distribute
      any of
      the
      Securities

    

    (f)  Investment
      Intent: Such Subscriber is acquiring the Securities as principal for its
own
      account for investment purposes only and not
      with
      a view to or for distributing or reselling
      such
      Securities or any part
      thereof,
      without prejudice, however, to such Subscriber's right at all times to sell
      or
      otherwise dispose of all or any part
      of such
      Securities in compliance
      with
      applicable federal and state securities laws. Subject to the immediately
      preceding sentence, nothing contained herein shall be deemed a representation
      or
      warranty by such Subscriber to hold the Securities for any period
      of
      time. Such Subscriber is acquiring the Securities
      hereunder in the ordinary
      course
      of its business.

    

    (g)  Shares
      Legend. The Shares and the Warrant Shares shall bear the following or similar
      legend for as long as is required pursuant to this Agreement:

    

    "THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED FOR
      SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW
      OR

     

    

     

     

    
      
        
        

      

      
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    AN
      OPINION OF COUNSEL REASONABLY SATISFACTORY TO COMPREHENSIVE HEALTHCARE
      SOLUTIONS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED."

    

    (h)  Warrants
      Legend. The Warrants shall bear the following or similar legend:

    

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

    

    (i)  Note
      Legend. The Note shall bear the following legend:

    

    "THIS
      NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
      COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED
      FOR
      SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO COMPREHENSIVE HEALTHCARE SOLUTIONS, INC. THAT SUCH REGISTRATION
      IS NOT REQUIRED.

    

    (j)  Communication
      of Offer. The offer
      to
      sell
      the Securities was directly communicated to such Subscriber by the Company
      and/or its agents. At no time was such Subscriber presented with or solicited
      by
      any leaflet,
      newspaper
      or magazine article, radio or television advertisement, or any other form of
      general advertising or solicited or invited to attend a promotional meeting
      otherwise than in connection and concurrently with such
      communicated

    offer.

    

    (k)  Enforceability.
      This Agreement has been duly authorized and executed
      by such Subscriber
      and,
      when
      delivered by the Subscriber, will become Subscriber's valid and binding
      agreement enforceable against Subscriber in accordance
      with
      their terms, subject to bankruptcy,

     

    (h)  

     

     

     

     

    
      
        
        

      

      
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    insolvency,
      fraudulent transfer, reorganization, moratorium and similar laws of general
      applicability relating to or affecting creditors' rights generally and to
      general principles of equity.

     

    (l)  Restricted
      Securities. Such Subscriber understands that the Securities have not been
      registered under the 1933 Act and such Subscriber will not sell, offer to sell,
      assign, pledge, hypothecate or otherwise transfer any of the Securities unless
      pursuant to an effective registration statement under the 1933 Act or under
      an
      exemption from such registration requirements. Accordingly, Securities must
      be
      held indefinitely unless a subsequent disposition is registered under the 1933
      Act or any applicable state securities laws or is exempt from such registration.
      Notwithstanding anything to the contrary contained in this Agreement, such
      Subscriber may transfer (without restriction and without the need for an opinion
      of counsel) the Securities to its Affiliates (as defined below) provided that
      each such Affiliate is an "accredited Subscriber" under Regulation D and such
      Affiliate agrees to be bound by the terms and conditions of this Agreement.
      For
      the purposes of this Agreement, an "Affiliate" of any person or entity means
      any
      other person or entity directly or indirectly controlling, controlled by or
      under direct or indirect common control with such person or entity. Affiliate
      includes each subsidiary of the Company. For purposes of this definition,
      "control" means the power to direct the management and policies of such person
      or firm, directly or indirectly, whether through the ownership of voting
      securities, by contract or otherwise.

     

    (m)  Limited
      Ownership. The purchase by such Subscriber of the Note and Warrant issuable
      to
      it at the Closing will not result in such Subscriber (individually or together
      with other Person with whom such Subscriber has identified, or will have
      identified, itself as part of a "group" in a public filing made with the
      Commission involving the Company's securities) acquiring, or obtaining the
      right
      to acquire, in excess of 19.999% of the outstanding shares of Common Stock
      or
      the voting power of the Company on a post transaction basis that assumes that
      the Closing shall have occurred. Such Subscriber does not presently intend
      to,
      alone or together with others, make a public filing with the Commission to
      disclose that it has (or that it together with such other persons have)
      acquired, or obtained the right to acquire, as a result of the Closing (when
      added to any other securities of the Company that it or they then own or have
      the right to acquire), in excess of 19.999% of the outstanding shares of Common
      Stock or the voting power of the Company on a post transaction basis that
      assumes that the Closing shall have occurred.

     

    (n)  No
      Governmental Review. Each Subscriber understands that no United States federal
      or state agency or any other governmental or state agency has passed on or
      made
      recommendations or endorsement of the Securities or the suitability of the
      investment in the Securities nor have such authorities passed upon or endorsed
      the merits of the offering of the Securities.

     

    (o)  Correctness
      of Representations. The foregoing representations and warranties of such
      Subscriber are true and correct as of the date hereof and, unless such
      Subscriber otherwise
      notifies
      the Company prior to the Closing Date shall be true and correct as of the
      Closing Date.

     

    (p)  Survival.
      The foregoing representations and warranties shall survive the Closing
      Date.

     

     

     

     

     

    
      
        
        

      

      
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    The
      Company acknowledges and agrees that no Subscriber has made or makes any
      representations or warranties with respect to the transactions contemplated
      hereby other than those specifically set forth in this Section 4.

    

    5.
      Company Representations and Warranties. Except as set forth in the Disclosure
      Schedule (attached hereto as Attachment 1) (the parties understand and agree
      that an item disclosed under a particular schedule shall only qualify the
      Section referenced in the heading to such particular schedule, and shall not
      modify or qualify any other schedule not referenced in such schedule heading),
      the Company represents and warrants to and agrees with each Subscriber
      that:

    

    (a)  Due
      Incorporation. The Company is a corporation duly organized, validly existing
      and
      in good standing under the laws of the jurisdiction of its incorporation and
      has
      the requisite corporate power to own its properties and to carry on its business
      is disclosed in the Reports. The Company is duly qualified as a foreign
      corporation to do business and is in good standing in each jurisdiction where
      the nature of the business conducted or property owned by it makes such
      qualification necessary, other than those jurisdictions in which the failure
      to
      so qualify would not have a Material Adverse Effect. For purpose of this
      Agreement, a "Material Adverse Effect" shall mean any of (i) a material and
      adverse effect on the legality, validity or enforceability of any of this
      Agreement, any Note, Warrant, Share or Warrant Share (collectively, the
      "Transaction Documents"), (ii) a material and adverse effect on the results
      of
      operations, assets, prospects, business or condition (financial or otherwise)
      of
      the Company and the Subsidiaries, taken as a whole, or (iii) an adverse
      impairment to the Company's ability to perform on a timely basis its obligations
      under any Transaction Document.

    

    (b)  Outstanding
      Stock. All issued and outstanding
      shares of capital stock of the Company
      has
      been duly authorized and validly
      issued and are fully paid and nonassessable.

    

    (c)  Authority;
      Enforceability. This Agreement, the Note, the Warrants, and the Escrow
      Agreement, and any other agreements delivered together with this Agreement
      or in
      connection herewith (collectively "Transaction Documents") have been duly
      authorized, executed and delivered by the Company and are valid and binding
      agreements enforceable in accordance with their terms, subject to bankruptcy,
      insolvency, fraudulent transfer, reorganization, moratorium and similar laws
      of
      general applicability relating to or affecting creditors' rights generally
      and
      to general principles of equity. The Company has full corporate power and
      authority necessary to enter into and deliver the Transaction Documents and
      to
      perform its obligations thereunder.

    

    (d)  Additional
      Issuances. There are no outstanding agreements or preemptive or similar rights
      affecting the Company's common stock or equity and no outstanding rights,
      warrants or options to acquire, or instruments convertible into or exchangeable
      for, or agreements or understandings with respect to the sale or issuance of
      any
      shares of common stock or equity of the Company or other equity interest in
      the
      Company except as described on Schedule 5(d).

     

     

     

    
      
        
        

      

      
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    (e)  Consents.
      No consent, approval, authorization or order of any court, governmental agency
      or body or arbitrator having jurisdiction over the Company, or any of its
      Affiliates, the Over The Counter Bulletin Board ("The OTCBB") nor the Company's
      shareholders is required for the execution by the Company of the Transaction
      Documents and compliance and performance by the Company of its obligations
      under
      the Transaction Documents, including, without limitation, the issuance and
      sale
      of the Securities.

     

    (f)  No
      Violation or Conflict. Assuming the representations and warranties of the
      Subscribers in Section 4 are true and correct, neither the issuance and sale
      of
      the Securities nor the performance of the Company's obligations under this
      Agreement and all other agreements entered into by the Company relating thereto
      by the Company will:

     

    (i)  violate,
      conflict with, result in a breach of, or constitute a default (or an event
      which
      with the giving of notice or the lapse of time or both would be reasonably
      likely to constitute a default) under (A) the articles or certificate of
      incorporation, charter or bylaws of the Company, (B) to the Company's knowledge,
      any decree, judgment, order, law, treaty, rule, regulation or determination
      applicable to the Company of any court, governmental agency or body, or
      arbitrator having jurisdiction over the Company or over the properties or assets
      of the Company or any of its Affiliates, (C) the terms of any bond, debenture,
      note or any other evidence of indebtedness, or any agreement, stock option
      or
      other similar plan, indenture, lease, mortgage, deed of trust or other
      instrument to which the Company or any of its Affiliates is a party, by which
      the Company or any of its Affiliates is bound, or to which any of the properties
      of the Company or any of its Affiliates is subject, or (D) the terms of any
      "lock-up" or similar provision of any underwriting or similar agreement to
      which
      the Company, or any of its Affiliates is a party except the violation, conflict,
      breach, or default of which would not have a Material Adverse Effect;
      or

     

    (ii)  result
      in
      the creation or imposition of any lien, charge or encumbrance upon the
      Securities or any of the assets of the Company or any of its Affiliates;
      or

     

    (iii)  result
      in
      the activation of any anti-dilution rights or a reset or repricing of any debt
      or security instrument of any other creditor or equity holder of the Company,
      nor result in the acceleration of the due date of any obligation of the Company;
      or

     

    (iv)  result
      in
      the activation of any piggy-back registration rights of any person or entity
      holding securities of the Company or having the right to receive securities
      of
      the Company.

     

     

    (i)  

     

    
      
        
        

      

      
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(g)    
      The Securities. The Securities upon issuance:

    

    (i)  are,
      or
      will be, free and clear of any security interests, liens, claims or other
      encumbrances, subject to restrictions upon transfer under the 1933 Act and
      any
      applicable state securities laws;

    

    (ii)  have
      been, or will be, duly and validly authorized and on the date of issuance of
      the
      Shares and upon exercise of the Warrants, the Shares and Warrant Shares will
      be
      duly and validly issued, fully paid and nonassessable or if registered pursuant
      to the 1933 Act, and resold pursuant to an effective registration statement
      will
      be free trading and unrestricted);

    

    (iii)  will
      not
      have been issued or sold in violation of any preemptive or other similar rights
      of the holders of any securities of the Company; and

    

    (iv)  will
      not
      subject the holders thereof to personal liability by reason of being such
      holders.

    

    (h)
      Litigation. There is no pending or, to the best knowledge of the Company,
      threatened action, suit, proceeding or investigation before any court,
      governmental agency or body, or arbitrator having jurisdiction over the Company,
      or any of its Affiliates
      that
      would affect the execution by the Company or the performance by the Company
      of
      its obligations under the Transaction Documents. Except as disclosed on the
      Disclosure Schedule or in the Reports, there is no pending or, to the best
      knowledge of the Company, basis for or threatened action, suit, proceeding
      or
      investigation before any court, governmental agency or body, or arbitrator
      having jurisdiction over the Company, or any of its Affiliates
      which
      litigation if adversely determined would have a Material Adverse
      Effect.

    

    (i)
      Reporting Company. The Company is eligible to register the resale of its Common
      Stock for resale by the Subscribers under Form SB-2 promulgated under the 1933
      Act. The Company is a publicly-held company subject to reporting obligations
      pursuant to Section 13 of the 1934 Act and has a class of common shares
      registered pursuant to Section 12(g) of the 1934 Act. Pursuant to the provisions
      of the 1934 Act, the Company has timely filed
      with
      the
      Commission all reports and other materials required to be filed
      thereunder
      during the preceding twelve months (collectively, the "Reports").

    

    (j)
      No
      Market
      Manipulation. The Company has not taken, and will not take, directly or
      indirectly, any action designed to, or that might reasonably be expected to,
      cause or result in stabilization or manipulation of the price of the Common
      Stock to facilitate the sale or resale of the Securities or affect the price
      at
      which the Securities may be issued or resold.

    

    (k)
      Information Concerning Company. The Subscribers have not been provided with
      any
      material non-public information concerning the Company, except as the terms
      and

     

    

     

     

    
      
        
        

      

      
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    conditions
      of the transactions contemplated hereby may constitute such information. The
      Company understands and confirms that the Subscribers will rely on the
      representations and covenants herein effecting transactions in securities of
      the
      Company. All disclosure provided to the Subscribers regarding the Company,
      its
      business and the transactions contemplated hereby, furnished by or on behalf
      of
      the Company (including the Company's representations and warranties set forth
      in
      this Agreement) 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 light of the circumstances under which they
      were
      made, not misleading. The Reports contain all material information relating
      to
      the Company and its operations and financial condition as of their respective
      dates which information is required to be disclosed therein. Since the date
      of
      the financial statements included in the Reports, and except as modified in
      other Reports filed prior to the date of this Agreement, there has been no
      event
      or occurrence that may have or result in a Material Adverse Event relating
      to
      the Company's business, financial condition or affairs. The Reports do not
      contain any 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 not
      misleading in light of the circumstances when made.

    

    (l)  Stop
      Transfer. The Securities, when issued, will be restricted securities. The
      Company will not issue any stop transfer order or other order impeding the
      sale,
      resale or delivery of any of the Securities, except as may be required by any
      applicable federal or state securities laws and unless contemporaneous notice
      of
      such instruction is given to the Subscriber.

    

    (m)  Defaults.
      The Company is not in violation of its articles of incorporation or bylaws.
      The
      Company is (i) not in default under or in violation of any agreement or
      instrument to which it is a party or by which it or any of its properties are
      bound or affected, which default or violation would have a Material Adverse
      Effect, (ii) not in default with respect to any order of any court, arbitrator
      or governmental body or subject to or party to any order of any court or
      governmental authority arising out of any action, suit or proceeding under
      any
      statute or other law respecting antitrust, monopoly, restraint of trade, unfair
      competition or similar matters, or (iii) not in violation of any statute, rule
      or regulation of any governmental authority which violation would have a
      Material Adverse Effect.

    

    (n)  No
      Integrated Offering. Neither the Company, nor any of its Affiliates, nor any
      person acting on its or their behalf, has directly or indirectly made any offers
      or sales of any security or solicited any offers to buy any security under
      circumstances that would cause the offer of the Securities pursuant to this
      Agreement to be integrated with prior offerings by the Company for purposes
      of
      the 1933 Act or any applicable stockholder approval provisions, including,
      without limitation, under the rules and regulations of the Bulletin Board.
      Nor
      will the Company or any of its Affiliates take any action or steps that would
      cause the offer or issuance of the Securities to be integrated with other
      offerings. The Company will not conduct any offering other than the transactions
      contemplated hereby that will be integrated with the offer or issuance of the
      Securities.

    

    (o)  No
      General Solicitation; Private Placement. Neither the Company, nor any of its
      Affiliates, nor to its knowledge, any person acting on its or their behalf,
      has
      engaged in any form of general solicitation or general advertising (within
      the
      meaning of Regulation D under the 1933

     

     

     

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Act)
      in
      connection with the offer or sale of the Securities. Assuming the accuracy
      of
      the Subscribers' representations and warranties set forth in Sections 4(d)-(f),
      no registration under the 1933 Act is required for the offer and sale of the
      Shares and Warrant Shares by the Company to the Subscribers under the
      Transaction Documents.

    

    (p)  Listing.
      The Company's common stock is listed on the Over The Counter Bulletin Board.
      The
      Company has not received any oral or written notice that its common stock is
      not
      eligible nor will become ineligible for quotation on the OTCBB nor that its
      common stock does not meet all requirements for the continuation of such
      quotation and the Company satisfies all the requirements for the continued
      listing of its common stock on the OTCBB.

    

    (q)  No
      Undisclosed Liabilities. The Company
      has no
      liabilities or obligations which are material,
      individually or in the aggregate, which are not disclosed in the
      Reports
      and Other
      Written
      Information, other than
      those
      incurred in the ordinary course of the Company's
      businesses since December 31, 2004 and which,
      individually or in the aggregate, would reasonably be expected to have a
      Material Adverse Effect.

    

    (r)  No
      Undisclosed Events or Circumstances. Since December 31, 2004, no event or
      circumstance has occurred or exists with respect to the Company or its
      businesses, properties, operations or financial condition, that, under
      applicable law, rule or regulation, requires public disclosure
      or announcement prior to the date hereof by the Company but which has not been
      so
      publicly
      announced or disclosed in the Reports.

    

    (s)  Capitalization.
      The authorized and outstanding capital stock of the Company as of the date
      of
      this Agreement and the Closing Date (not including the Securities) are set
      forth
      on Schedule 5(s). Except as set forth on Schedule 5(s), there are no options,
      warrants, or rights to subscribe to, securities, rights or obligations
      convertible into or exchangeable for or giving any right to subscribe for any
      shares of capital stock of the Company or any of its Subsidiaries. All of the
      outstanding shares of Common Stock of the Company have been duly and validly
      authorized and issued and are fully paid and nonassessable.

    

    (t)  Dilution;
      Hedging. The Company acknowledges and agrees that the issuance of the Securities
      will have a potential dilutive effect on the equity holdings of other holders
      of
      the Company's equity or rights to receive equity of the Company. The board
      of
      directors of the Company
      has concluded, in its good faith business judgment that the issuance of the
      Securities is
      in the
      best interests of the Company. The Company specifically acknowledges that its
      obligation to issue the Shares upon conversion of the Notes, and the Warrant
      Shares upon exercise of the Warrants
      is absolute regardless of the dilution such issuance may have on the ownership
      interests
      of other
      shareholders of the Company or parties entitled to receive equity of the
      Company. Subject to compliance with applicable securities laws, the Subscribers
      may enter into lawful hedging transactions with third parties, which may in
      turn
      engage in short sales of the Securities in the course of hedging the position
      they assume and the Subscribers may also enter into short positions or other
      derivative transactions relating to the Securities, or interests in the
      Securities, and deliver the Securities, or interests in the Securities, to
      close
      out their short or other positions or otherwise settle short sales or other
      transactions, or loan or pledge the Securities, or interests in the Securities,
      to third parties that in turn may dispose of these Securities.

     

     

     

    
      
        
        

      

      
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    (u)  No
      Disagreements with Accountants and Lawyers. There are no disagreements of any
      kind presently existing, or reasonably anticipated by the Company to arise,
      between the Company and the accountants and lawyers formerly or presently
      employed by the Company, including but not limited to disputes or conflicts
      over
      payment owed to such accountants and lawyers.

     

    (v)  Investment
      Company. The Company is not an Affiliate of an "investment company" within
      the
      meaning of the Investment Company Act of 1940, as amended.

     

    (w)  Subsidiary
      Represents. The Company makes each of the representations contained in Sections
      5(a), (b), (d), (f), (h), (k), (m), (q) through (s), (u) and (w) of this
      Agreement, as same relate to each Subsidiary of the Company. For purposes of
      this Agreement, "Subsidiary" means, with respect to any entity at any date,
      any
      corporation, limited or general partnership, limited liability company, trust,
      estate, association, joint venture or other business entity) of which more
      than
      50% of (i) the outstanding capital stock having (in the absence of
      contingencies) ordinary voting power to elect a majority of the board of
      directors or other managing body of such entity, (ii) in the case of a
      partnership or limited liability company, the interest in the capital or profits
      of such partnership or limited liability company or (iii) in the case of a
      trust, estate, association, joint venture or other entity, the beneficial
      interest in such trust, estate, association or other entity business is, at
      the
      time of determination, owned or controlled directly or indirectly through one
      or
      more intermediaries, by such entity.

     

    (x)  Correctness
      of Representations. The Company represents that the foregoing representations
      and warranties are true and correct as of the date hereof in all material
      respects, and,
      unless the Company otherwise notifies the Subscribers prior to each Closing
      Date, shall be
      true and
      correct in all material respects as of each Closing Date.

     

    (y)  Title
      to
      Assets. The Company and its subsidiaries have good and marketable title in
      fee
      simple to all real property owned by them that is material to their respective
      businesses and good and marketable title in all personal property owned by
      them
      that is material to their respective businesses, 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 its subsidiaries. Any real property
      and
      facilities held under lease by the Company and its subsidiaries are held by
      them
      under valid, subsisting and enforceable leases of which the Company and its
      subsidiaries are in compliance, except as could not, individually or in the
      aggregate, have or reasonably be expected to result in a Material Adverse
      Effect.

     

    (z)  Patents
      and Trademarks. The Company and its 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 Reports and which the failure to so have could, individually
      or
      in the aggregate, have or reasonably be expected to result in a Material Adverse
      Effect (collectively, the "Intellectual Property Rights"). Neither the Company
      nor any subsidiary has received a written notice that the Intellectual Property
      Rights used by the

     

     

     

     

    
      
        
        

      

      
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    Company
      or any subsidiary violates or infringes upon the rights of any person. Except
      as
      set forth
      in
      the Reports, 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.

    

    (aa)
      Insurance. The Company and its 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
      its subsidiaries are engaged. The Company has no reason to believe that it
      will
      not be able to renew its and its subsidiaries' 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 on terms consistent with
      market for the Company's and such subsidiaries' respective lines of
      business.

    

    (bb)
      Internal Accounting Controls. The Company and its 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 United States 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. The Company has established disclosure
      controls and procedures (as defined in 1934 Act Rules 13a-15(e) and 15d-15(e))
      for the Company and designed such disclosure controls and procedures to ensure
      that material information relating to the Company, including its subsidiaries,
      is made known to the certifying officers by others within those entities,
      particularly during the period in which the Company's Form 10-K, 10-KSB, 10-Q,
      or 10-QSB, as the case may be, is being prepared. The Company's certifying
      officers have evaluated the effectiveness of the Company's controls and
      procedures in accordance with Item 307 of Regulation S-K under the 1934 Act
      for
      the Company's most recently ended fiscal quarter or fiscal year-end (such date,
      the "Evaluation Date"). The Company presented in its most recently filed Form
      10-KSB or Form 10-QSB the conclusions of the certifying officers about the
      effectiveness of the disclosure controls and procedures based on their
      evaluations as of the Evaluation Date. Since the Evaluation Date, there have
      been no significant changes in the Company's internal controls (as such term
      is
      defined in Item 308(c) of Regulation S-K under the 1934 Act) or, to the
      Company's knowledge, in other factors that could significantly affect the
      Company's internal controls.

    

    (cc)
      Solvency. Based on the financial condition of the Company as of the Closing
      Date
      (and assuming that the Closing shall have occurred), (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, (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, and (iii) the current cash flow
      of the Company, together with the proceeds the Company would receive, were
      it to
      liquidate all of its assets, after taking into account all anticipated uses
      of
      the cash, would be

     

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    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).

    

    (dd)
      Survival. The foregoing representations and warranties shall survive the
      Closing.

    

    6.  Regulation
      D Offering. The offer and issuance of the Securities to the Subscribers is
      being
      made pursuant to the exemption from the registration provisions of the 1933
      Act
      afforded by Section 4(2) or Section 4(6) of the 1933 Act and/or Rule 506 of
      Regulation D promulgated thereunder.
      On the Closing Date, the Company will provide an opinion reasonably acceptable
      to
      Subscriber from the Company's legal counsel opining on the availability of
      an
      exemption from registration under the 1933 Act as it relates to the offer and
      issuance of the Securities and other matters reasonably requested by
      Subscribers. A form of the legal opinion is annexed hereto as Exhibit C. The
      Company will provide, at the Company's expense, such other legal opinions in
      the
      future as are reasonably necessary for the issuance and resale of the Common
      Stock issuable upon conversion of the Notes and exercise of the Warrants
      pursuant to an effective registration statement.

    

    7.  Adjustments
      ad Redemption. The Conversion Price, Warrant exercise price and amount of Shares
      issuable upon conversion of the Notes and exercise of the Warrants shall be
      adjusted as described in this Agreement, the Notes and Warrants. The Note and
      Warrants shall not be redeemable or callable except as described in the
      Note.

     

                    
      8.  Broker/Legal
      Fees.

    

    (a)  Broker's
      Fee. The Company on the one hand, and each Subscriber (for itself only) on
      the
      other hand, agree to indemnify the other against and hold the other harmless
      from any and all liabilities to any persons claiming brokerage commissions
      or
      finder's fees on account of services purported to have been rendered on behalf
      of the indemnifying party in connection with this Agreement or the transactions
      contemplated hereby and arising out of such party's actions. The Company
      represents that there are no parties entitled to receive fees, commissions,
      or
      similar payments from the Company in connection with the transactions described
      in this Agreement except Westor Capital Group, Inc. ("Broker"), which the
      Company is obligated to compensate pursuant to a separate
      agreement.

    

    (b)  Legal
      Fees. In addition to the Commission, Fees and Warrants
      payable to the Placement Agent, the Company
      shall
      pay to Westor Capital Group a sum not to exceed $20,000 as reimbursement for
      accountable legal and due diligence expenses incurred in connection with the
      Offering.

    

    9.1.
      Covenants of the Company. The Company covenants and agrees with the Subscribers
      as follows:

    

    (a)
      Stop
      Orders. The Company will advise the Subscribers, promptly after it receives
      notice of issuance by the Commission, any state securities commission or any
      other regulatory

     

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    authority
      of any stop order or of any order preventing or suspending any offering of
      any
securities
      of the Company, or of the suspension of the qualification of the Common Stock
      of
      the Company
      for offering or sale in any jurisdiction, or the initiation of any proceeding
      for any such
      purpose.

    

    (b)  Listing.
      The Company shall promptly secure the listing of the shares of Common Stock
      and
      the Warrant Shares upon each national securities exchange, or automated
      quotation system upon which they are or become eligible for listing (subject
      to
      official notice of issuance) and shall maintain such listing so long as any
      Warrants are outstanding. The Company will maintain the listing of its Common
      Stock on the Over The Counter Bulletin Board, Nasdaq SmallCap Market, Nasdaq
      National Market System, Bulletin Board, or New York Stock Exchange whichever
      of
      the foregoing is at the time the principal trading exchange or market for
the
      Common Stock (the "Principal Market"), and will comply in all respects with
      the
      Company's
      reporting, filing and other obligations under the bylaws or rules of the
      Principal Market, as applicable. The Company will provide the Subscribers copies
      of all notices it receives notifying the Company of the threatened and actual
      delisting of the Common Stock from any Principal Market,
      but not any information that is material, non-public information unless such
      information
      is also
      promptly publicly disclosed. As of the date of this Agreement and the Closing
      Date, the Bulletin Board is and will be the Principal Market.

    

    (c)  Market
      Regulations. The Company shall notify the Commission, the Principal Market
      and
      applicable state authorities, in accordance with their requirements, of the
      transactions contemplated by this Agreement, and shall take all other necessary
      action and proceedings as may be required and permitted by applicable law,
      rule
      and regulation, for the legal and valid issuance of the Securities to the
      Subscribers and promptly provide copies thereof to Subscriber.

    

    (d)  Reporting
      Requirements. From the date of this Agreement and until the sooner of (i) two
      (2) years after the Closing Date, or (ii) until all the Shares and Warrant
      Shares have been resold or transferred by all the Subscribers pursuant to the
      Registration Statement or pursuant to Rule 144, without regard to volume
      limitation, the Company will (A) cause its Common Stock to continue to be
      registered under Section 12(b) or 12(g) of the 1934 Act, (B) comply in all
      respects with its reporting and filing obligations under the 1934 Act, (C)
      comply with all reporting requirements that are applicable to an issuer with
      a
      class of shares registered pursuant to Section 12(b) or 12(g) of the 1934 Act,
      as applicable, and (D) comply with all requirements related to any registration
      statement filed pursuant to this Agreement. The Company will not take any action
      or file any document (whether or not permitted by the 1933 Act or the 1934
      Act
      or the rules thereunder) to terminate or suspend such registration or to
      terminate or suspend its reporting and filing obligations under said acts until
      two (2) years after the Closing Date. Until the earlier of the resale of the
      Common Stock and the Warrant Shares by each Subscriber or two (2) years after
      the Warrants have been exercised, the Company will continue the listing or
      quotation of the Common Stock on a Principal Market and will comply in all
      respects with the Company's reporting, filing and other obligations under the
      bylaws or rules of the Principal Market. The Company agrees to timely file
      a
      Form D with respect to the Securities if required under Regulation D and to
      provide a copy thereof to each Subscriber promptly after such
      filing.

     

     

    
      
        
        

      

      
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    (e)  Use
      of
      Proceeds. The proceeds of the Offering will be employed by the Company for
      the
      purposes set forth on Schedule 9.1(e) hereto. A deviation of more than 10%
      of
      any single stated use of proceeds or a deviation in the aggregate of more than
      25% will be an Event of Default under the Note. Except as set forth on Schedule
      9.1(e), the Purchase Price may not and will not be used for accrued and unpaid
      officer and director salaries, payment of financing related debt, redemption
      of
      outstanding notes or equity instruments of the Company nor non-trade obligations
      outstanding on a Closing Date.

     

    (f)  Reservation.
      Prior to the Closing Date, the Company undertakes to reserve, pro rata, on
      behalf of each holder of a Note or Warrant, from its authorized but unissued
      common stock,
      a
      number of common shares equal to 175% of the amount of Common Stock necessary
      to
      allow
      each holder of a Note to be able to convert all such outstanding Notes and
      interest and reserve the amount of Warrant Shares issuable upon exercise of
      the
      Warrants. Failure to have sufficient shares reserved pursuant to this Section
      9.1(f) for three (3) consecutive business days or ten (10) days in the aggregate
      shall be a material default of the Company's obligations under this
      Agreement.

     

    (g)  Taxes.
      From the date of this Agreement and until the sooner of (i) two (2) years after
      the Closing Date, or (ii) until all the Shares and Warrant Shares have been
      resold or transferred by all the Subscribers pursuant to the Registration
      Statement or pursuant to Rule 144, without regard to volume limitations, the
      Company will promptly pay and discharge, or cause to be paid and discharged,
      when due and payable, all lawful taxes, assessments and governmental charges
      or
      levies imposed upon the income, profits, property or business of the Company;
      provided, however, that any such tax, assessment, charge or levy need not be
      paid if the validity thereof shall currently be contested in good faith by
      appropriate proceedings and if the Company shall have set aside on its books
      adequate reserves with respect thereto, and provided, further, that the Company
      will pay all such taxes, assessments, charges or levies forthwith upon the
      commencement of proceedings to foreclose any lien which may have attached as
      security therefore.

     

    (h)  Insurance.
      From the date of this Agreement and until the sooner of (i) two (2) years after
      the Closing Date, or (ii) until all the Shares and Warrant Shares have been
      resold or transferred by all the Subscribers pursuant to the Registration
      Statement or pursuant to Rule 144, without regard to volume limitations, the
      Company will keep its assets which are of an insurable character insured by
      financially sound and reputable insurers against loss or damage by fire,
      explosion and other risks customarily insured against by companies in the
      Company's line of business, in amounts sufficient to prevent the Company from
      becoming a co-insurer and not in any event less than one hundred percent (100%)
      of the insurable value of the property insured; and the Company will maintain,
      with financially sound and reputable insurers, insurance against other hazards
      and risks and liability to persons and property to the extent and in the manner
      customary for companies in similar businesses similarly situated and to the
      extent available on commercially reasonable terms.

     

    (i)  Books
      and
      Records. From the date of this Agreement and until the sooner of (i) two (2)
      years after the Closing Date, or (ii) until all the Shares and Warrant Shares
      have been resold or transferred by all the Subscribers pursuant to the
      Registration Statement or pursuant to

     

     

     

     

    
      
        
        

      

      
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    Rule
      144,
      without regard to volume limitations, the Company will keep true records and
      books of
      account in which full, true and correct entries will be made of all dealings
      or
      transactions in relation
      to its business and affairs in accordance with generally accepted accounting
      principles
      applied
      on a consistent basis.

    

    (j)  Governmental
      Authorities. From the date of this Agreement and until the sooner of (i) two
      (2)
      years after the Closing Date, or (ii) until all the Shares and Warrant Shares
      have been resold or transferred by all the Subscribers pursuant to the
      Registration Statement or pursuant to Rule 144, without regard to volume
      limitations, the Company shall duly observe and conform in all material respects
      to all valid requirements of governmental authorities relating to the conduct
      of
      its business or to its properties or assets.

    

    (k)  Intellectual
      Property. From the date of this Agreement and until the sooner of (i) two (2)
      years after the Closing Date, or (ii) until all the Shares and Warrant Shares
      have been resold
      or
      transferred by all the Subscribers pursuant to the Registration Statement or
      pursuant to
      Rule
      144, without regard to volume limitations, the Company shall maintain in full
      force and effect its corporate existence, rights and franchises and all licenses
      and other rights to use intellectual property owned or possessed by it and
      reasonably deemed to be necessary to the conduct of its business.

    

    (l)  Properties.
      From the date of this Agreement and until the sooner of (i) two (2) years after
      the Closing Date, or (ii) until all the Shares and Warrant Shares have been
      resold or transferred by all the Subscribers pursuant to the Registration
      Statement (as defined in Section 11.1(iv) hereof) or pursuant to Rule 144,
      without regard to volume limitations, the Company will keep its properties
      in
      good repair, working order and condition, reasonable wear and tear excepted,
      and
      from time to time make all necessary and proper repairs, renewals, replacements,
      additions and improvements thereto; and the Company will at all times comply
      with each provision of all leases to which it is a party or under which it
      occupies property if the breach of such provision could reasonably be expected
      to have a Material Adverse Effect.

    

    (m)  Confidentiality/Public
      Announcement. From the date of this Agreement and until the sooner of (i) two
      (2) years after the Closing Date, or (ii) until all the Shares and Warrant
      Shares have been resold or transferred by all the Subscribers pursuant to the
      Registration Statement or pursuant to Rule 144, without regard to volume
      limitations, the Company agrees that except in connection with a Form 8-K or
      the
      Registration Statement, it will not disclose publicly or privately the identity
      of the Subscribers unless expressly agreed to in writing by a Subscriber or
      only
      to the extent required by law and then only upon five days prior notice to
      Subscriber. In any event and subject to the foregoing, the Company shall file
      a
      Form 8-K (and attach thereto the Transaction Documents) and issue a press
      release describing the Offering no later than the Closing Date. In the Form
      8-K
      or press release, the Company will specifically disclose the amount of common
      stock outstanding immediately after the Closing. A form of the proposed Form
      8-K
      or press release to be employed in connection with the Offering is annexed
      hereto as Exhibit D.

    

    (n)  Further
      Registration Statements. Except for a registration statement filed on behalf
      of
      the Subscribers pursuant to Section 11 of this Agreement and the entity
      identified on Schedule

     

     

    
      
        
        

      

      
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    9.1(n)
      hereto, the Company will not file any registration statements or amend any
      already filed registration statement, including but not limited to Form S-8,
      with the Commission or with state regulatory
      authorities without the consent of the Subscriber until the Registration
      Statement shall
      have
      been current and available for use in connection with the public resale of
      the
      Shares and Warrant Shares for 60 days ("Exclusion Period"). The Exclusion Period
      will be tolled during the pendency of an Event of Default as defined in the
      Note
      and for any period of time as the Registration Statement is not available to
      the
      Subscribers for the resale of Shares and Warrant Shares.

    

    (o)  Blackout.
      The Company undertakes and covenants that until the end of the Exclusion Period,
      the Company will not enter into any acquisition, merger, exchange or sale or
      other transaction that could have the effect of delaying the effectiveness
      of
      any pending registration statement or causing an already effective registration
      statement to no longer be effective or current for a period twenty (20) or
      more
      days.

    

    (p)  Non-Public
      Information. The Company covenants and agrees that neither it nor any other
      person acting on its behalf will provide any Subscriber or its agents or counsel
      with any
      information that the Company believes constitutes material non-public
      information, unless
      prior
      thereto such Subscriber shall have agreed in writing to receive such
      information. The Company understands and confirms that each Subscriber shall
      be
      relying on the foregoing representations in effecting transactions in securities
      of the Company.

    

    10.
      Covenants of the Company and Subscriber Regarding Indemnification.

    

    (a)  The
      Company agrees to indemnify, hold harmless, reimburse and defend the
      Subscribers, the Subscribers' officers, directors, agents, Affiliates, control
      persons, and principal shareholders, against any claim, cost, expense,
      liability, obligation, loss or damage (including reasonable legal fees) of
      any
      nature, incurred by or imposed upon the Subscriber or any such person which
      results, arises out of or is based upon (i) any material misrepresentation
      by
      Company or breach of any warranty by Company in this Agreement or in any
      Exhibits or Schedules attached hereto, or other agreement delivered pursuant
      hereto; or (ii) after any applicable notice and/or cure periods, any breach
      or
      default in performance by the Company of any covenant or undertaking to be
      performed by the Company hereunder, or any other agreement entered into by
      the
      Company and Subscriber relating hereto.

    

    (b)  Each
      Subscriber agrees to indemnify, hold harmless, reimburse and defend the Company
      and each of the Company's officers, directors, agents, Affiliates, control
      persons against any claim, cost, expense, liability, obligation, loss or damage
      (including reasonable legal fees)
      of
      any nature, incurred by or imposed upon the Company or any such person which
      results,
      arises
      out of or is based upon (i) any material misrepresentation by such Subscriber
      in
      this Agreement or in any Exhibits or Schedules attached hereto, or other
      agreement delivered pursuant hereto; or (ii) after any applicable notice and/or
      cure periods, any breach or default in performance by such Subscriber of any
      covenant or undertaking to be performed by such Subscriber hereunder, or any
      other agreement entered into by the Company and Subscribers relating
      hereto.

     

     

    
      
        
        

      

      
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    (c)  In
      no
      event shall the liability of any Subscriber
      or permitted
      successor hereunder or under any Transaction Document or other agreement
      delivered in connection herewith be greater in amount than
      the
      dollar amount of the net proceeds actually received by such Subscriber upon
      the
      sale of Registrable Securities (as defined herein).

    

    (d)  The
      procedures set forth in Section 11.6 shall apply to the indemnification set
      forth in Sections 10(a) and 10(b) above.

    

    

    11.
      Registration Rights

    

    11.1.
      Registration Rights. The Company hereby grants the following registration rights
      to holders of the Securities.

    

    (i)  The
      Company shall file with the Commission a Form SB-2 registration statement (the
      "Registration Statement") (or such other form that it is eligible to use) in
      order to register the Registrable Securities for resale and distribution under
      the 1933 Act not later than thirty (30) days after the Closing Date (the "Filing
      Date"), and cause to be declared effective not later than ninety (90) days
      after
      the Filing Date (the "Effective Date"). The Company will register not less
      than
      a number of shares of common stock in the aforedescribed registration statement
      that is equal to 175% of the Shares issuable upon conversion of the Notes and
      all of the Warrant Shares issuable pursuant to this Agreement upon exercise
      of
      the Warrants. The Registrable Securities shall be reserved and set aside
      exclusively for the benefit of each Subscriber and Warrant holder, pro rata,
      and
      not issued, employed or reserved for anyone other than each such Subscriber
      and
      Warrant holder. The Registration Statement will immediately be amended or
      additional registration statements will be immediately filed by the Company
      as
      necessary to register additional shares of Common Stock to allow the public
      resale of all Common Stock included in and issuable by virtue of the Registrable
      Securities. Without the written consent of the Subscriber, no securities of
      the
      Company other than the Registrable Securities will be included in the
      Registration Statement except as described on Schedule 11.1 hereto. It shall
      be
      deemed a Non-Registration Event if at any time after the date the Registration
      Statement is declared effective by the Commission ("Actual Effective Date")
      the
      Company has registered for unrestricted resale on behalf of the Subscriber
      less
      than 125% of the amount of Common Shares issuable upon full conversion of all
      sums due under the Notes and 100% of the Warrant Shares issuable upon exercise
      of the Warrants.

    

    (ii)  If
      the
      Company at any time proposes to register any of its securities under the 1933
      Act for sale to the public, whether for its own account or for the account
      of
      other security holders
      or both, except with respect to registration statements on Forms S-4, S-8 or
      another form
      not
      available for registering the Registrable Securities for sale to the public,
      provided the Registrable Securities are not otherwise registered for resale
      by
      the Subscribers or Holder pursuant to an effective registration statement,
      each
      such time it will give at least fifteen (15) days' prior written notice to
      the
      record holder of the Registrable Securities of its intention so to do. Upon
      the
      written request of the holder, received by the Company within ten (10) days
      after the giving of any such notice by the Company, to register any of the
      Registrable Securities not previously registered, the Company will cause such
      Registrable Securities as to which

     

     

     

    
      
        
        

      

      
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    registration
      shall have been so requested to be included with the securities to be covered
      by
      the registration statement proposed to be filed by the Company, all to the
      extent required to permit the sale or other disposition of the Registrable
      Securities so registered by the holder of such Registrable Securities (the
      "Seller" or "Sellers"). In the event that any registration pursuant to this
      Section 11.1(ii) shall be, in whole or in part, an underwritten public offering
      of common stock of the Company, the number of shares of Registrable Securities
      to be included in such an underwriting
      may be reduced by the managing underwriter if and to the extent that the
      Company and
      the
      underwriter shall reasonably be of the opinion that such inclusion would
      adversely affect
      the
      marketing of the securities to be sold by the Company therein; provided,
      however, that the Company shall notify the Seller in writing of any such
      reduction. Notwithstanding the foregoing provisions, or Section 11.4 hereof,
      the
      Company may withdraw or delay or suffer a delay of any registration
      statement referred to in this Section 11.1(ii) without thereby incurring any
      liability to
      the
      Seller.

    

    (iii)
      If,
      at the time any written request for registration is received by the
      Company
      pursuant
      to Section 11.1(i), the Company has determined to proceed with the actual
      preparation and filing of a registration statement under the 1933 Act in
      connection with the proposed offer and sale for cash of any of its securities
      for the Company's own account and the Company actually does file such other
      registration statement, such written request shall be deemed to have been given
      pursuant to Section 11.1(ii) rather than Section 11.1(i), and the rights of
      the
      holders of Registrable Securities covered by such written request shall be
      governed by Section 11.1(ii).

    

    11.2.
      Registration Procedures. If and whenever the Company is required by the
provisions
      of Section 11.1(i) or 11.1(ii)to effect the registration of any Registrable
      Securities
      under
      the 1933 Act, the Company will, as expeditiously as possible:

    

    (a)  subject
      to the timelines provided in this Agreement, prepare and file with the
      Commission a registration statement required by Section 11, with respect to
      such
      securities and use its best efforts to cause such registration statement to
      become and remain effective for the period of the distribution contemplated
      thereby (determined as herein provided), promptly provide to the holders of
      the
      Registrable Securities copies of all filings and Commission letters of comment
      (but not any information that is material, non-public information unless such
      information is also promptly publicly disclosed) and notify Subscribers (by
      telecopier and by e-mail
      addresses provided by Subscribers) on or before 6 pm ET on the same business
      day
      that the
      Company
      receives notice that (i) the Commission has no comments or no further comments
      on the
      Registration Statement, and (ii) the registration statement has been declared
      effective (failure
      to
      timely provide notice as required by this Section 11.2(a) shall be a material
      breach of the Company's obligation and an Event of Default as defined in the
      Notes and a Non-Registration Event as defined in Section 10.4 of this
      Agreement);

    

    (b)  prepare
      and file with the Commission such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as may
      be
      necessary to keep such registration statement effective until such registration
      statement has been effective for a period of two (2) years, and comply with
      the
      provisions of the 1933 Act with respect to the disposition of all of the
      Registrable Securities covered by such registration statement in

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    accordance
      with the Sellers' intended method of disposition set forth in such registration
      statement for such period;

    

    (c)  furnish
      to the Sellers, at the Company's expense, such number of copies of the
      registration statement and the prospectus included therein (including each
      preliminary prospectus) as such persons reasonably may request in order to
      facilitate the public sale or their disposition of the securities covered by
      such registration statement;

    

    (d)  use
      its
      commercially reasonable best efforts
      to
      register or qualify the Registrable Securities
      covered by such registration statement under the securities
      or
      "blue sky" laws of such jurisdictions as the Sellers shall request in writing,
      provided, however, that the Company
      shall
      not for any such
      purpose be required to qualify generally to transact
      business as a foreign corporation in any jurisdiction
      where it is not so qualified or to consent to general service of process in
      any such
      jurisdiction;

    

    (e)  if
      applicable, list the Registrable Securities covered by such registration
      statement with any securities exchange on which the Common Stock of the Company
      is then listed;

    

    (f)  immediately
      notify the Sellers when a prospectus relating thereto is required to be
      delivered under the 1933 Act, of the happening of any event of which the Company
      has knowledge as a result of which the prospectus contained in such registration
      statement, as then in effect, includes an untrue statement of a material fact
      or
      omits to state a material fact required to be stated therein or necessary to
      make the statements therein not misleading in light of the circumstances then
      existing; and

    

    (g)  provided
      same would not be in violation of the provision of Regulation FD under the
      1934
      Act, make available for inspection by the Sellers, and any attorney, accountant
      or other agent retained by the Seller or underwriter, all publicly available,
      non-confidential financial and other records, pertinent corporate documents
      and
      properties of the Company, and cause the Company's officers, directors and
      employees to supply all publicly available, non-confidential information
      reasonably requested by the seller, attorney, accountant or agent in connection
      with such registration statement.

    

    11.3.
      Provision of Documents. In connection with each registration described
      in
      this Section 11, each Seller will furnish
      to
      the Company
      in
      writing such information and representation
      letters
      with
      respect to itself and the
      proposed distribution by it as reasonably shall be necessary in order to assure
      compliance
      with
      federal and applicable
      state securities laws.

    

    11.4.
      Non-Registration Events. The Company and the Subscribers agree that the Sellers
      will suffer damages if the Registration Statement is not filed by the Filing
      Date and not declared effective by the Commission by the Effective Date, and
      any
      registration statement required under Section 11.1(ii) is not filed within
      30
      days after written request and declared effective by the Commission within
      90
      days after such request, and maintained in the manner and within the time
      periods contemplated by Section 11 hereof, and it would not be feasible to
      ascertain the extent of such damages with precision. Accordingly, if (A) the
      Registration

     

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    Statement
      is not filed on or before the Filing Date, (B) is not declared effective on
      or
      before the Effective Date, (C) the Registration Statement is not declared
      effective within three (3) business days after receipt by the Company or its
      attorneys of a written or oral communication from the Commission that the
      Registration Statement will not be reviewed or that the Commission has no
      further comments, (D) if the registration statement described in Sections or
      11.1(ii) is not filed within 30 days after such written request, or is not
      declared effective within 90 days after such written request, or (E) any
      registration statement described in Sections 11.1(i) or 11.1(ii) or is filed
      and
      declared effective but shall thereafter cease to be effective (without being
      succeeded within fifteen (15) business days by an effective replacement or
      amended registration statement) for a period of time which shall exceed 30
      days
      in the aggregate per year (defined as a period of 365 days commencing on the
      date the Registration Statement is declared effective) or more than 20
      consecutive days (each such event referred to in clauses A through E of this
      Section 11.4 is referred to herein as a "Non-Registration Event"), then the
      Company shall deliver to the holder of Registrable Securities, as Liquidated
      Damages, an amount equal to one percent (1%) for each thirty (30) days or part
      thereof, thereafter of the Purchase Price of the Notes acquired by such holder
      hereunder. The Company must pay the Liquidated Damages in cash or an amount
      equal to one hundred and fifty percent (150%) of such cash Liquidated Damages
      if
      paid in additional shares of registered unlegended free-trading shares of Common
      Stock. Such Common Stock shall be valued at a per share value equal to the
      average of the five (5) lowest closing bid prices of the Common Stock as
      reported by Bloomberg L.P. for the twenty (20) trading days preceding the first
      day of each thirty (30) day or shorter period for which Liquidated Damages
      are
      payable. The Liquidated Damages must be paid within ten (10) days after the
      end
      of each thirty (30) day period or shorter part thereof for which Liquidated
      Damages are payable. In the event a Registration Statement is filed by the
      Filing Date but is withdrawn prior to being declared effective by the
      Commission, then such Registration Statement will be deemed to have not been
      filed. All oral or written and accounting comments received from the Commission
      relating to the Registration Statement must be responded to within ten (10)
      business days. Failure to timely respond to Commission comments is a
      Non-Registration Event for which Liquidated Damages shall accrue and be payable
      by the Company to the holders of Registrable Securities at the same rate set
      forth above. The Company and Subscribers agree that they will extend the date
      on
      which liquidated damages begin for up to 45 days if the delay in the Effective
      Date is due to any review undertaken by the SEC and the Company has demonstrated
      that it has used its best efforts in filing the registration statement and
      responding to the SEC. Notwithstanding the foregoing, the Company shall not
      be
      liable to the Subscriber under this Section 11.4 for any events or delays
      occurring as a consequence of the acts or omissions of the Subscribers contrary
      to the obligations undertaken by Subscribers in this Agreement. Liquidated
      Damages will not accrue nor be payable pursuant to this Section 11.4 nor will
      a
      Non-Registration Event be deemed to have occurred for times during which
      Registrable Securities are transferable by the holder of Registrable Securities
      pursuant to Rule 144(k) under the 1933 Act.

    

    11.5.
      Expenses. All expenses incurred by the Company in complying with Section 11,
      including, without limitation, all registration and filing fees, printing
      expenses, fees and disbursements of counsel and independent public accountants
      for the Company, fees and expenses (including reasonable counsel fees) incurred
      in connection with complying with state securities or "blue sky" laws, fees
      of
      the National Association of Securities Dealers, Inc., transfer taxes, fees
      of
      transfer agents and registrars, costs of insurance and fee of one counsel for
      all

     

    

     

    
      
        
        

      

      
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    Sellers
      are called "Registration Expenses." All underwriting discounts and selling
      commissions applicable to the sale of Registrable Securities, including any
      fees
      and disbursements of one counsel to the Seller, are called "Selling Expenses."
      The Company will pay all Registration Expenses in connection with the
      registration statement under Section 11. Selling Expenses in connection with
      each registration statement under Section 11 shall be borne by the Seller and
      may be apportioned among the Sellers in proportion to the number of shares
      sold
      by the Seller relative to the number of shares sold under such registration
      statement or as all Sellers thereunder may agree.

    

    11.6.
      Indemnification and Contribution.

    

    (a)  In
      the
      event of a registration of any Registrable Securities under the 1933 Act
      pursuant to Section 11, the Company will, to the extent permitted by law,
      indemnify and hold harmless the Seller, each officer of the Seller, each
      director of the Seller, each underwriter of such Registrable Securities
      thereunder and each other person, if any, who controls such Seller or
      underwriter within the meaning of the 1933 Act, against any losses, claims,
      damages or liabilities, joint or several, to which the Seller, or such
      underwriter or controlling person may become subject under the 1933 Act or
      otherwise, insofar as such losses, claims, damages or liabilities (or actions
      in
      respect thereof) arise out of or are based upon any untrue statement or alleged
      untrue statement of any material fact contained in any registration statement
      under which such Registrable Securities was registered under the 1933 Act
      pursuant to Section 11, any preliminary prospectus or final prospectus contained
      therein, or any amendment or supplement thereof, or arise out of or are based
      upon the omission or alleged omission to state therein a material fact required
      to be stated therein or necessary to make the statements therein not misleading
      in light of the circumstances when made, and will subject to the provisions
      of
      Section 11.6(c) reimburse the Seller, each such underwriter and each such
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action; provided, however, that the Company shall not be liable
      to
      the Seller to the extent that any such damages arise out of or are based upon
      an
      untrue statement or omission made in any preliminary prospectus if (i) the
      Seller failed to send or deliver a copy of the final prospectus delivered by
      the
      Company to the Seller with or prior to the delivery of written confirmation
      of
      the sale by the Seller to the person asserting the claim from which such damages
      arise, (ii) the final prospectus would have corrected such untrue statement
      or
      alleged untrue statement or such omission or alleged omission, or (iii) to
      the
      extent that any such loss, claim, damage or liability arises out of or is based
      upon an untrue statement or alleged untrue statement or omission or alleged
      omission so made in conformity with information furnished by any such Seller,
      or
      any such controlling person in writing specifically for use in such registration
      statement or prospectus.

    

    (b)  In
      the
      event of a registration of any of the Registrable Securities under the 1933
      Act
      pursuant to Section 11, each Seller severally but not jointly will, to the
      extent permitted by law, indemnify and hold harmless the Company, and each
      person, if any, who controls the Company within the meaning of the 1933 Act,
      each officer of the Company who signs the registration statement, each director
      of the Company, each underwriter and each person who controls any underwriter
      within the meaning of the 1933 Act, against all losses, claims, damages or
      liabilities, joint or several, to which the Company or such officer, director,
      underwriter or

     

     

     

    
      
        
        

      

      
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    controlling
      person may become subject under the 1933 Act or otherwise, insofar as such
      losses, claims, damages or liabilities (or actions in respect thereof) arise
      out
      of or are based upon any untrue statement or alleged untrue statement of any
      material fact contained in the registration statement under which such
      Registrable Securities were registered under the 1933 Act pursuant to Section
      11, any preliminary prospectus or final prospectus contained therein, or any
      amendment or supplement thereof, or arise out of or are based upon the omission
      or alleged omission to state therein a material fact required to be stated
      therein or necessary to make the statements therein not misleading, and will
      reimburse the Company and each such officer, director, underwriter and
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action, provided, however, that the Seller will be liable hereunder
      in any such case if and only to the extent that any such loss, claim, damage
      or
      liability arises out of or is based upon an untrue statement
      or alleged untrue statement or omission or alleged omission made in reliance
      upon and
      in
      conformity with information pertaining to such Seller, as such, furnished in
      writing to the Company by such Seller specifically for use in such registration
      statement or prospectus, and provided, further, however, that the liability
      of
      the Seller hereunder shall be limited to the net proceeds actually received
      by
      the Seller from the sale of Registrable Securities covered by such registration
      statement.

    

    (c)  Promptly
      after receipt by an indemnified party hereunder of notice of the commencement
      of
      any action, such indemnified party shall, if a claim in respect thereof is
      to be
      made against the indemnifying party hereunder, notify the indemnifying party
      in
      writing thereof, but the omission so to notify the indemnifying party shall
      not
      relieve it from any liability which it may have to such indemnified party other
      than under this Section 11.6(c) and shall only relieve it from any liability
      which it may have to such indemnified party under this Section 11.6(c), except
      and only if and to the extent the indemnifying party is prejudiced by such
      omission. In case any such action shall be brought against any indemnified
      party
      and it shall notify the indemnifying party of the commencement thereof, the
      indemnifying party shall be entitled to participate in and, to the extent it
      shall wish, to assume and undertake the defense thereof with counsel
      satisfactory to such indemnified party, and, after notice from the indemnifying
      party to such indemnified party of its election so to assume and undertake
      the
      defense thereof, the indemnifying party shall not be liable to such indemnified
      party under this Section 11.6(c) for any legal expenses subsequently incurred
      by
      such indemnified party in connection with the defense thereof other than
      reasonable costs of investigation and of liaison with counsel so selected,
      provided, however, that, if the defendants in any such action include both
      the
      indemnified party and the indemnifying party and the indemnified party shall
      have reasonably concluded that there may be reasonable defenses available to
      it
      which are different from or additional to those available to the indemnifying
      party or if the interests of the indemnified party reasonably may be deemed
      to
      conflict with the interests of the indemnifying party, the indemnified parties,
      as a group, shall have the right to select one separate counsel and to assume
      such legal defenses and otherwise to participate in the defense of such action,
      with the reasonable expenses and fees of such separate counsel and other
      expenses related to such participation to be reimbursed by the indemnifying
      party as incurred.

    

    (d)  In
      order
      to provide for just and equitable
      contribution
      in
      the event of joint liability under the 1933 Act in any case
      in
      which either (i) a Seller, or any controlling
      person of a

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

     

    Seller,
      makes a claim for indemnification pursuant to this Section 11.6 but it is
      judicially determined (by the entry of a final judgment or decree by a court
      of
      competent jurisdiction and the expiration of time to appeal or the denial of
      the
      last right of appeal) that such indemnification may not be enforced in such
      case
      notwithstanding the fact that this Section 11.6 provides for indemnification
      in
      such case, or (ii) contribution under the 1933 Act may be required on the part
      of the Seller or controlling person of the Seller in circumstances for which
      indemnification is not provided under this Section 11.6; then, and in each
      such
      case, the Company and the Seller will contribute to the aggregate losses,
      claims, damages or liabilities to which they may be subject (after contribution
      from others) in such proportion so that the Seller is responsible only for
      the
      portion represented by the percentage that the public offering price of its
      securities offered by the registration statement bears to the public offering
      price of all securities offered by such registration statement, provided,
      however, that, in any such case, (y) the Seller will not be required to
      contribute any amount in excess of the public offering price of all such
      securities sold by it pursuant to such registration statement; and (z) no person
      or entity guilty of fraudulent misrepresentation (within the meaning of Section
      11(f) of the 1933 Act) will be entitled to contribution from any person or
      entity who was not guilty of such fraudulent misrepresentation.

    

    11.7.
      Delivery of Unlegended Shares.

    

    (a)  Neither
      the Shares nor the Warrant Shares shall contain any legend, including the legend
      set forth in Section 4(g), provided (i) a registration statement (including
      the
      Registration Statement) covering the resale of such security is effective under
      the Securities Act, or (ii) following any sale of such Shares or Warrant Shares
      pursuant to Rule 144, or (iii) if such Shares or Warrant Shares are eligible
      for
      sale under Rule 144(k), or (iv) if such legend is not required under applicable
      requirements of the Securities Act (including judicial interpretations and
      pronouncements issued by the Staff of the Commission). A holder of Shares or
      Warrant Shares may, by notice to the Company, require the Company to reissue
      any
      Shares or Warrant Shares previously issued, so that new Shares or Warrant Shares
      do not contain any legends. Within five (5) business days (such third (3rd)
      business day being the "Unlegended Shares Delivery Date") after the business
      day
      on which the Company has received such holder's request to remove legends,
      the
      Company shall deliver, and shall cause legal counsel selected by the Company
      to
      deliver to its transfer agent (with copies to Subscriber) an appropriate
      instruction and opinion of such counsel, directing the delivery of shares of
      Common Stock without any legends, including the legend set forth in Section
      4(g)
      above, reissuable pursuant to any effective and current Registration Statement
      described in Section 11 of this Agreement or pursuant to Rule 144 under the
      1933
      Act (the "Unlegended Shares"); and the Company shall cause the transmission
      of
      the certificates representing the Unlegended Shares together with a legended
      certificate representing the balance of the submitted Shares certificate, if
      any, to the Subscriber at the address specified in the notice of sale, via
      express courier, by electronic transfer or otherwise on or before the Unlegended
      Shares Delivery Date. Transfer fees shall be the responsibility of the
      Seller.

    

    (b)  In
      lieu
      of delivering physical certificates representing the Unlegended Shares, if
      the
      Company's transfer agent is participating in the Depository Trust Company
      ("DTC") Fast Automated
      Securities Transfer program, upon request of a Subscriber, so long as the
      certificates
      therefor
      do not bear a legend and the Subscriber is not obligated to return such
      certificate for the

     

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    placement
      of a legend thereon, the Company shall cause its transfer agent to
      electronically transmit
      the Unlegended Shares by crediting the account of Subscriber's prime Broker
      with
      DTC
      through
      its Deposit Withdrawal Agent Commission system. Such delivery must be made
      on or
      before the Unlegended Shares Delivery Date.

    

    (c)  The
      Company understands that a delay in the delivery of the Unlegended Shares
      pursuant to Section 11 hereof later than two business days after
      the
      Unlegended Shares Delivery Date could result in economic loss to a Subscriber.
      As compensation to a Subscriber for such loss, the Company agrees to pay late
      payment fees (as liquidated damages and not as a penalty) to the Subscriber
      for
      late delivery of Unlegended Shares in the amount of $20 per business day
after
      the
      Delivery Date for each $10,000 of purchase price of the Unlegended Shares
      subject to the delivery default. If during any 365 day period, the Company
      fails
      to deliver Unlegended Shares as required by this Section 11.7 for an aggregate
      of thirty (30) days, then each Subscriber or assignee holding Securities subject
      to such default may, at its option, require the Company to redeem all or any
      portion of the Shares and Warrant Shares subject to such default at a price
      per
      share equal to 120% of the Purchase Price of such Common Stock and Warrant
      Shares ("Unlegended Redemption Amount"). The amount of the liquidated damages
      described above that have accrued or paid for the twenty day period prior to
      the
      receipt by the Subscriber of the Unlegended Redemption Amount shall be credited
      against the Unlegended Redemption Amount. The Company shall pay any payments
      incurred under this Section in immediately available funds upon
      demand.

    

    (d)  In
      addition to any other rights available to a Subscriber, if the Company fails
      to
      deliver to a Subscriber Unlegended Shares as required pursuant to this
      Agreement, and after
      the
      Unlegended Shares Delivery Date the Subscriber purchases (in an open market
      transaction or
      otherwise) shares of common stock to deliver in satisfaction of a sale by such
      Subscriber of the shares of Common Stock which the Subscriber was entitled
      to
      receive from the Company (a "Buy-In"), then the Company shall pay in cash to
      the
      Subscriber (in addition to any remedies available to or elected by the
      Subscriber) the amount by which (A) the Subscriber's total purchase price
      (including brokerage commissions, if any) for the shares of common stock so
      purchased exceeds (B) the aggregate purchase price of the shares of Common
      Stock
      delivered to the
      Company for reissuance as Unlegended Shares together with interest thereon
      at a
      rate of 15%
      per
      annum, accruing until such amount and any accrued interest thereon is paid
      in
      full (which amount shall be paid as liquidated damages and not as a penalty).
      For example, if a Subscriber purchases shares of Common Stock having a total
      purchase price of $11,000 to cover a Buy-In with respect to $10,000 of purchase
      price of shares of Common Stock delivered to the Company for reissuance as
      Unlegended Shares, the Company shall be required to pay the Subscriber $1,000,
      plus interest. The Subscriber shall provide the Company written notice
      indicating the amounts payable to the Subscriber in respect of the
      Buy-In.

    

    (e)  In
      the
      event a Subscriber shall request delivery of Unlegended Shares as described
      in
      Section 11.7 and the Company is required to deliver such Unlegended Shares
      pursuant to Section 11.7, the Company may not refuse to deliver Unlegended
      Shares based on any claim that such Subscriber or any one associated or
affiliated
      with
      such
      Subscriber has been engaged in any violation of law, or for any other reason,
      unless, an injunction or temporary restraining order from a court, on notice,
      restraining and or enjoining delivery of such

     

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    Unlegended
      Shares or exercise of all or part
      of said
      Warrant
      shall
      have been sought and obtained
      and the
      Company
      has
      posted a surety bond for the benefit of such Subscriber
      in
      the amount of 120% of the amount of the aggregate purchase price of the Common
      Stock and Warrant
      Shares
      which are subject to the injunction or temporary restraining order, which bond
      shall remain in effect until the completion of arbitration/litigation of the
      dispute and the proceeds of which shall be payable to such Subscriber
      to
      the extent Subscriber
      obtains judgment in Subscriber's
      favor.

    

    12.
      (a)
      Right of First Refusal. Until the later of 365 days after the date that the
      Registration Statement has been effective for the resale of all the Registrable
      Securities the Subscribers shall be given not less than seven (7) business
      days
      prior written notice of any proposed sale by the Company of its common stock
      or
      other securities or debt obligations, except in connection with (i) full or
      partial consideration in connection with a strategic merger, consolidation
      or
      purchase of substantially all of the securities or assets of corporation or
      other entity, and (ii) the Company's issuance of securities in connection with
      strategic license agreements and other partnering arrangements so long as such
      issuances are not for the purpose of raising capital, (iii) the Company's
      issuance of Common Stock or the issuance or grants of options to purchase Common
      Stock pursuant to the Company's stock option plans and employee stock purchase
      plans as they now exist, which copies of such plans have been delivered to
      the
      Subscribers (iv) as a result of the exercise of options or warrants or
      conversion of convertible notes or preferred stock which are granted or issued
      pursuant to this Agreement, (v) the payment of any interest on the Notes and
      (vi) as has been described in the Reports or Other Written Information filed
      with the Commission or delivered to the Subscribers prior to the Closing Date
      (collectively the foregoing are "Excepted Issuances"). The Subscribers who
      exercise their rights pursuant to this Section 12(a) shall have the right during
      the seven (7) business days following receipt of the notice to purchase such
      offered common stock, debt or other securities in accordance with the terms
      and
      conditions set forth in the notice of sale in the same proportion to each other
      as their purchase of Notes in the Offering. In the event such terms and
      conditions are modified during the notice period, the Subscribers shall be
      given
      prompt notice of such modification and shall have the right during the seven
      (7)
      business days following the notice of modification, whichever is longer, to
      exercise such right. After the expiration of such seven (7) business day period,
      should the Subscriber choose not to exercise its right pursuant to this Section
      12(a), the Company shall, within twenty-one (21) days, publicly announce either
      the entering into of definitive agreements (and attach such agreements along
      with such public filing) with respect to such proposed sale of Common Stock
      (or
      equivalents thereof or securities convertible into Common Stock) by the Company
      or the termination of such transaction.

    

    (b)
      Favored Nation Provision. Except for the Excepted Issuances, if at any time
      Notes are outstanding the Company shall offer, issue or agree to issue any
      common stock or securities convertible into or exercisable for shares of common
      stock (or modify any of the foregoing which may be outstanding) to any person
      or
      entity at a price per share or conversion or exercise price per share which
      shall be less than the Conversion Price in respect of the Shares, or if less
      than the Warrant exercise price in respect of the Warrant Shares, without the
      consent of each Subscriber holding Notes, Shares, and/or Warrants, then the
      Company shall issue, for each such occasion, additional shares of Common Stock
      to each Subscriber so that the average per share purchase price of the shares
      of
      Common Stock issued to the Subscriber (of only the Common Stock or Warrant
      Shares still owned by the Subscriber) is equal to such other lower price
      per

     

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    share
      and
      the Conversion Price and Warrant Exercise Price shall automatically be reduced
      to such other lower price per share. The average Purchase Price of the Shares
      and average exercise price in relation to the Warrant Shares shall be calculated
      separately for the Shares and Warrant Shares. The foregoing calculation and
      issuance shall be made separately for Shares received upon conversion and
      separately for Warrant Shares. The delivery to the Subscriber of the additional
      shares of Common Stock shall be not later than the closing date of the
      transaction giving rise to the requirement to issue additional shares of Common
      Stock. The Subscriber is granted the registration rights described in Section
      11
      hereof in relation to such additional shares of Common Stock except that the
      Filing Date and Effective Date vis-a-vis such additional common shares shall
      be,
      respectively, the sixtieth (60) and one hundred and twentieth (120) date
after
      the
      closing date giving rise to the requirement to issue the additional shares
      of
      Common Stock. For purposes of the issuance and adjustment described in this
      paragraph, the issuance of any security of the Company carrying the right to
      convert such security into shares of Common Stock or of any warrant, right
      or
      option to purchase Common Stock shall result in the issuance of the additional
      shares of Common Stock upon the issuance of such convertible security, warrant,
      right or option and again at any time upon any subsequent issuances of shares
      of
      Common Stock upon exercise of such conversion or purchase rights if such
      issuance is at a price lower than the Conversion Price in effect upon such
      issuance. The rights of the Subscriber set forth in this Section 12 are in
      addition to any other rights the Subscriber has pursuant to this Agreement,
      the
      Note, any Transaction Document, and any other agreement referred to or entered
      into in connection herewith.

    

    (c)
      Offering Restrictions. With the exception of an investment in an amount of
      up to
      $1,500,000 from Barron Equities upon the completion of the Company’s
      pending
      acquisition, the Company will not enter into an agreement to nor issue any
      equity, convertible debt or other securities convertible into common stock
      or
      equity of the Company nor modify any of the foregoing which may be outstanding
      at anytime for up to 180 days after
      the
      Registration Statement has been declared effective, for so long as any Notes
      are
      outstanding, without written consent of the Investors.

     

    (d)  Additional
      Registration Statements. In the event, whether due to anti-dilution provisions
      or otherwise, Common Stock becomes issuable pursuant to a Note, which is not
      then registered pursuant to a Registration Statement, the Company shall then
      file
      an
      additional Registration Statement registering such Common Stock for resale
      by
      the Subscribers. The liquidated damages referenced in Section 11.4 herein shall
      apply with respect to the Company's obligations to register such Common
      Stock.

    

    (e)  Option
      Plan Restrictions. The only officer,
      director,
      employee and consultant stock option or stock incentive plan currently in effect
      or contemplated by the Company has been submitted to the Subscribers. No other
      plan will be adopted nor may any options or equity not included in such plan
      be
      issued for so long as any sum is outstanding under the Note.

    

    (f)  Maximum
      Exercise of Rights. In the event the exercise of the right described in Section
      12(a) would result in the issuance of an amount of common stock of the Company
      that would exceed the maximum amount that may be issued to a Subscriber
      calculated in the manner

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    described
      in Section 2.3 of the Note, then the issuance
      of
      such additional shares of common stock of the Company
      to such
      Subscriber
      will
      be deferred in whole or in part
      until
      such time as such Subscriber
      is
      able to beneficially own such common stock without exceeding the maximum amount
      set forth
      calculated in the manner described
      in
      Section 2.3 of the Note. The determination of when such common stock may be
      issued shall be made by each Subscriber as to only such Subscriber.

    

    13.
      Miscellaneous.

    

    (a)  Notices.
      All notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: (i) if to the Company, to: Comprehensive Healthcare
      Solutions, Inc., 45 Ludlow Street, Suite 602, Yonkers, NY 10705, Attn: John
      Treglia, CEO, telecopier number: (914) 375-2994, with a copy by telecopier
      only
      to: Anslow & Jaclin, LLP, 195 Route 9 South, Suite 204, Manalapan, NJ 07726,
      telecopier number: (732) 577-1188, (ii) if to the Subscribers, to: the one
      or
      more addresses and telecopier numbers indicated on the signature pages hereto,
      with an additional copy by telecopier only to:,
      and
      (iii) if to the Broker, to: Westor Capital, Inc., 258 Genesee Street, Suite
      601,
      Utica, NY 13502, Attn: Richard H. Bach, President, telecopier number: (315)
      733-9355, with an additional copy to Kogan & Associates, LLC, 39 Broadway,
      Suite 2250, NY,NY 10006, telecopier number (212) 482-8104.

    

    (b)  Entire
      Agreement; Assignment. This Agreement and other documents delivered in
      connection herewith represent the entire agreement between the parties hereto
      with respect to the subject matter hereof. No right or obligation of the Company
      shall be assigned without prior notice to and the written consent of the
      Subscribers.

    

    (c)  Amendments;
      Waivers; No Additional Consideration. No provision of this Agreement may be
      waived or amended except in a written
      instrument signed by the Company and the
      Subscribers holding a majority of the Shares. 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.
      No
      consideration shall be

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    offered
      or paid to any Investor
      to amend or consent to a waiver or modification of any provision
      of any Transaction
      Document unless the same consideration is also offered to all Subscribers
      who
      then hold Shares.

    

    (d)  Counterparts/Execution.
      This Agreement may be executed in any number of counterparts and by the
      different signatories hereto on separate counterparts, each of which,
when
      so
      executed, shall be deemed an original, but all such counterparts shall
      constitute but one and
      the
      same instrument. This Agreement may be executed by facsimile signature and
      delivered
      by
      facsimile transmission.

    

    (e)  Law
      Governing this Agreement. This Agreement shall be governed by and construed
      in
      accordance with the laws of the State of New York without regard to conflicts
      of
      laws principles that would result in the application of the substantive laws
      of
      another jurisdiction. Any action brought by either party against the other
      concerning the transactions contemplated by this Agreement shall be brought
      only
      in the state courts of New York or in the federal courts located in the state
      of
      New York. The parties and the individuals executing this Agreement and other
      agreements referred to herein or delivered in connection herewith on behalf
      of
      the Company agree to submit to the jurisdiction of such courts and waive trial
      by jury. The prevailing party shall be entitled to recover from the other party
      its reasonable attorney's fees and costs. In the event that any provision of
      this Agreement or any other agreement delivered in connection herewith is
      invalid or unenforceable under any applicable statute or rule of law, then
      such
      provision shall be deemed inoperative to the extent that it may conflict
      therewith and shall be deemed modified to conform with such statute or rule
      of
      law. Any such provision which may prove invalid or unenforceable under any
      law
      shall not affect the validity or enforceability of any other provision of any
      agreement.

     

    (f)  Specific
      Enforcement, Consent to Jurisdiction. The Company and Subscriber acknowledge
      and
      agree that irreparable damage would occur in the event that any of the
provisions
      of this Agreement were not performed in accordance with their specific terms
      or
      were
      otherwise breached. It is accordingly agreed that the parties shall be entitled
      to one or more preliminary and final injunctions to prevent or cure breaches
      of
      the provisions of this Agreement and to enforce specifically the terms and
      provisions hereof, this being in addition to any other remedy to which any
      of
      them may be entitled by law or equity. Subject to Section 13(d) hereof,
each
      of
      the Company, Subscriber and any signator hereto in his personal capacity hereby
      waives,
      and
      agrees not to assert in any such suit, action or proceeding, any claim that
      it
      is not personally subject to the jurisdiction in New York of such court, that
      the suit, action or proceeding is brought in an inconvenient forum or that
      the
      venue of the suit, action or proceeding is improper. Nothing in this Section
      shall affect or limit any right to serve process in any other manner permitted
      by law.

    

    (g)  Independent
      Nature of Subscribers. The Company acknowledges that the obligations of each
      Subscriber under the Transaction Documents are several and not joint with the
      obligations of any other Subscriber, and no Subscriber shall be responsible
      in
      any way for the performance of the obligations of any other Subscriber under
      the
      Transaction Documents. The Company acknowledges that each Subscriber has
      represented that the decision of each

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    Subscriber
      to purchase Securities has been made by such Subscriber independently of any
      other Subscriber and independently of any information, materials, statements
      or
      opinions as to the business, affairs,
      operations,
      assets, properties, liabilities, results of operations, condition (financial
      or
      otherwise) or prospects of the Company which may have been made or given by
      any
      other Subscriber or by any agent or employee of any other Subscriber, and no
      Subscriber or any of its agents or employees shall have any liability to any
      Subscriber (or any other person) relating to or arising from any such
      information, materials, statements or opinions. The Company acknowledges that
      nothing contained in any Transaction Document, and no action taken by any
      Subscriber pursuant hereto or thereto (including, but not limited to, the (i)
      inclusion of a Subscriber in the Registration Statement and (ii) review by,
      and
      consent to, such Registration Statement by a Subscriber) shall be deemed to
      constitute the Subscribers as a partnership, an association, a joint venture
      or
      any other kind of entity, or create a presumption that the Subscribers are
      in
      any way acting in concert or as a group with respect to such obligations or
      the
      transactions contemplated by the Transaction Documents. The Company acknowledges
      that each Subscriber shall be entitled to independently protect and enforce
      its
      rights, including without limitation, the rights arising out of the Transaction
      Documents, and it shall not be necessary for any other Subscriber to be joined
      as an additional party in any proceeding for such purpose. The Company
      acknowledges that it has elected to provide all Subscribers with the same terms
      and Transaction Documents for the convenience of the Company and not because
      Company was required or requested to do so by the Subscribers. The Company
      acknowledges that such procedure with respect to the Transaction Documents
      in no
      way creates a presumption that the Subscribers are in any way acting in concert
      or as a group with respect to the Transaction Documents or the transactions
      contemplated thereby.

    

    (h)  Business/Calendar
      Days. Unless otherwise indicated, references to days in the Transaction
      Documents will refer to calendar days.

    

    (i)  Liquidated
      Damages. Wherever liquidated damages are due and payable pursuant to this
      Agreement, the parties agree that such liquidated damages are: (i) not a penalty
      and (ii) not the sole remedy of such Subscriber, and that such Subscriber is
      entitled to pursue such damages as it may be entitled to at law, including
      specific
      performance,
      provided the amount of any such liquidated damages that have been paid shall
      be
      offset against any such other damages that may be awarded. The Company and
      each
      Subscriber agree that monetary damages would not provide adequate compensation
      for any losses incurred by reason of a breach by it of any of the provisions
      of
      this Agreement and hereby further agrees that, in the event of any action for
      specific
      performance
      in respect of such breach, it shall waive the defense that a remedy at law
      would
      be adequate.

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT

    

    

    Please
      acknowledge your acceptance of the foregoing Subscription Agreement by signing
      and returning a copy to the undersigned whereupon it shall become a binding
      agreement between us.

    

    COMPREHENSIVE
      HEALTHCARE SOLUTIONS, INC., a Delaware corporation

    

    

    By:     
      /s/ John H. Treglia

    JOHN
      TREGLIA

    CEO

    

    Dated:
      11/4/05, 2005

    

    

    SUBSCRIBER:

    

    NITE
      CAPITAL LP

    

    By:
      /s/
      Keith A Goodman

    Name:
      Keith A. Goodman

    Title:
      Manager of the General Partner

    Address:                  
      NITE
      CAPITAL, LP

    100
      EAST
      COOK AVENUE, STE 201

    LIBERTYVILLE,
      IL 60048

    

    Telephone:
      847-968-2655

    

    Facsimile: 847-968-2648

    

    Email:
      Keith@nitecapital.com

    

    Note
      Principal: $100,000.00 
      Warrants

    

    

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    LIST
      OF
      EXHIBITS AND SCHEDULES

    

    Attachment
      1 Disclosure Schedule 

    

    Exhibit
      A Form
      of
      Convertible Note

    

    Exhibit
      B1 Form of Warrant A 

    

    Exhibit
      B2 Form of Warrant B 

    

    Exhibit
      B3 Form of Warrant C

    

    Exhibit
      C Form
      of
      Public Announcement and Form 8-K

    

    Exhibit
      D Form
      of
      Legal Opinion

    

    Schedule
      5(d) Additional Issuances

    

    Schedule
      5(s) Capitalization/Additional Issuances 

    

    Schedule
      9.1(e) Use of Proceeds

    

    Schedule
      9.1(n) Further Registration Statements 

    

    Schedule
      11.1 Additional
      Securities to be RegisteredComprehensive Associates LLC Warrant 3

    THIS
      CONVERTIBLE DEBENTURE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
      HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “ACT”),
      OR APPLICABLE STATE SECURITIES LAWS AND NO INTEREST THEREIN MAY BE SOLD,
      TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS (1) A REGISTRATION STATEMENT WITH
      RESPECT TO SUCH SECURITIES SHALL BE EFFECTIVE UNDER THE ACT AND ANY APPLICABLE
      STATE SECURITIES LAWS OR (2) SUCH SECURITIES ARE TRANSFERRED PURSUANT TO RULE
      144 PROMULGATED UNDER THE ACT (OR ANY SUCCESSOR RULE) OR (3) COMPREHENSIVE
      HEALTHCARE SOLUTIONS, INC. SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO IT THAT NO VIOLATION OF THE ACT WILL BE INVOLVED IN SUCH
      TRANSFER. 

    

    COMPREHENSIVE
      HEALTHCARE SOLUTIONS, INC.

    

    CONVERTIBLE
      DEBENTURE

    

    $35,000

    

    August
      3, 2005

    

    The
      undersigned, COMPREHENSIVE
      HEALTHCARE SOLUTIONS, INC.,
      a
      Delaware corporation (the “Company”),
      with
      offices at 45 Ludlow Street, Suite 602, Yonkers, New York 10705, promises to
      pay
      to the order of COMPREHENSIVE
      ASSOCIATES LLC,
      a New
      York limited liability company (together with its successors and assigns, the
      “Holder”),
      on
      January 30, 2006 (the “Maturity
      Date”),
      at
      the offices of the Holder located at 64 Shelter Lane, Roslyn, New York 11577,
      or
      at such other place as the Holder may designate to the Company, in writing,
      the
      principal amount of THIRTY-FIVE
      THOUSAND DOLLARS
      ($35,000),
      together with interest thereon at the rate of six percent (6.0%)
      per
      annum from the date hereof.

     

    SECTION
      1. PAYMENT OF PRINCIPAL AND INTEREST.

     

    Unless
      earlier converted in accordance with the terms of Section 2 below
      or redeemed and prepaid in accordance with the terms of Section 3 below,
      the entire outstanding principal amount of this Debenture, together with any
      accrued interest thereon (the “Outstanding
      Amount”),
      shall
      be due and payable on the Maturity Date, in cash. 

     

    SECTION
      2. CONVERSION.

     

    (a)  Conversion
      Right.

     

    (i)  At
      any
      time after the date hereof, and from time to time until this Debenture is paid
      in full, the Holder may, in its sole discretion, convert all or any portion
      of
      the Outstanding Amount (the “Conversion
      Right”)
      into
      such number of shares (the “Conversion
      Shares”)
      of
      common stock of the Company, par value $.10 per share (“Common
      Stock”),
      that
      shall be obtained by dividing the portion of the Outstanding Amount to be
      converted by thirty-five cents ($0.35), subject to adjustment as provided below
      in this Section 2 (the “Conversion
      Price”).
      

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (ii)  The
      Holder shall be entitled to exercise the Conversion Right from time to time
      as
      to the Outstanding Amount upon written notice to the Company (the “Conversion
      Notice”),
      which
      notice shall be in the form attached hereto as Annex I.
      The
      date upon which the conversion shall be effective (the “Conversion
      Date”)
      will
      be the date specified in the Conversion Notice. The Holder will be deemed the
      record holder of the Conversion Shares on the Conversion Date whether or not
      the
      Company or its transfer agent is then open for business. Within one (1) day
      of
      the Conversion Date, the Company shall issue appropriate stock certificates
      to
      the Holder (or such other person or entity designated by the Holder)
      representing the aggregate number of Conversion Shares due to the Holder as
      a
      result of such conversion.
      The
      Company shall take all other necessary or appropriate actions in connection
      with
      or to effect such conversion.

     

    (iii)  The
      Company shall, at all times, reserve and keep available out of its authorized
      capital stock, solely for the purposes of issuance upon conversion of this
      Debenture, such number of its shares of Common Stock as shall be issuable upon
      the conversion of this Debenture; and if at any time the number of authorized
      shares of Common Stock shall not be sufficient to effect the conversion of
      this
      Debenture, the Company will take such corporate action as may be necessary
      to
      increase its authorized but unissued shares of Common Stock to such number
      of
      shares as shall be sufficient for such purpose; the Company shall have analogous
      obligations with respect to any other securities or property issuable upon
      conversion of this Debenture. As long as this Debenture shall be outstanding,
      the Company shall use its best efforts to cause all the shares of Common Stock
      issuable upon conversion of this Debenture to be listed and/or quoted on all
      securities exchanges and/or Nasdaq or other medium on which such shares may
      then
      be listed.

     

    (b)  Below
      Conversion Price Issuance; Stock Dividends, Etc.

     

    (i)  Sale
      of Shares Below Conversion
      Price.

     

    (A)  If
      at any
      time or from time to time after the
      date
      hereof
      the Company issues or sells shares of Common Stock or Common Stock Equivalents
      (as hereinafter defined) (other than as a dividend or other distribution on
      any
      class of stock as provided in Section 2(b)(ii)
      below,
      or
      a subdivision or combination of shares as provided in Section 2(b)(iii)
      below)
      for an Effective
      Price (as hereinafter defined) that is less than the Conversion
      Price then in effect, then, and in each such case, the then existing
Conversion
      Price shall be reduced, as of the opening of business on the date of
such
      issue or sale,
      to the
      Effective Price. For purposes hereof, 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (I)  a
      “Common
      Stock Equivalent”
shall
      mean each share of Common Stock into which securities or property or rights
      are
      convertible, exchangeable or exercisable for or into shares of Common Stock,
      or
      otherwise entitle the holder thereof to receive, directly or indirectly, any
      of
      the foregoing (provided
      that the
      Conversion Price shall be adjusted to reflect any termination of such
      instruments prior to the exercise of the Conversion Right); and

    

    (II)  the
      “Effective
      Price”
of
      

    

    (A)  a
      Common
      Stock Equivalent shall mean the sum of (x) the fair market value of the
      consideration paid for such security plus (y) the fair market value of the
      minimum consideration, if any, to be paid for the conversion, exercise or
      exchange of such security for or into each share of Common Stock, in each case
      on a per share of Common Stock basis (provided
      that the
      Conversion Price shall be adjusted to reflect adjustments to the Effective
      Price
      based upon any change in such minimum consideration to be paid prior to the
      exercise of the Conversion Right); and 

    

    (B)  a
      share
      of Common Stock issued by the Company (other than upon the conversion, exercise
      or exchange of Common Stock Equivalents) shall be the fair market value of
      the
      consideration paid for such share of Common Stock.

    (B)  Consideration
      Received for Securities.
      For the
      purpose of making any adjustment required under this Section 2(b)(i),
      the
      consideration received by the Company for any issue or sale of securities shall
      (x) to
      the
      extent it consists of cash, be computed at the gross amount of cash received
      by
      the Company prior to deduction of any underwriting or similar commissions,
      compensation or concessions paid or allowed by the Company in connection with
      such
      issue or sale and
      without deduction of any expenses payable by the Company, and
      (y) to
      the
      extent it consists of property other than cash, be computed at the fair market
      value of that property as determined, in good faith, by the Board of Directors,
      and if
      additional
      shares of Common Stock and/or Common Stock Equivalents
      are
      issued or sold together with other stock or securities or other assets of the
      Company for a consideration which covers both, be computed as the portion of
      the
      consideration so received that may be reasonably determined, in good faith,
      by
      the Board of Directors to be allocable to such additional shares of Common
      Stock
and/or
      Common Stock Equivalents, which determination shall be subject to the approval
      of the
      Holder; provided
      that, in
      the event the Holder does not agree with the Company’s determination of the
      value of such consideration, the parties shall mutually agree upon and appoint
      an appraiser, which shall be commissioned to investigate the value of the
      property to be distributed and shall submit a notice of an appraisal of that
      value to the Company and to the
      Holder within thirty (30) days of such commission. The appraiser shall be
      instructed to determine such value without regard to income tax consequences
      to
      the recipient as a result of receiving consideration other than cash. The value
      determined by the appraiser shall be conclusive. The expense of the appraisal
      process shall be borne by the Company. 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (ii)  Adjustment
      for Common Stock Dividends and Distributions.
      If, at
      any time after the date hereof, the Company makes, or fixes a record date for
      the determination of holders of Common Stock entitled to receive, a dividend
      or
      other distribution payable in additional shares of Common Stock or Common Stock
      Equivalents, in each such event, the Conversion
      Price that is then in effect shall be decreased as of the time of such issuance
      or, in the event such record date is fixed, as of the
      close
      of business on such record date,
      by
      multiplying the Conversion
      Price then in effect by a fraction (A) the
      numerator of which is the total number of shares of Common Stock and Common
      Stock Equivalents issued and outstanding immediately prior to the time of such
      issuance or the
      close
      of business on such record date,
      and
(B) the
      denominator of which is the total number of shares of Common Stock and Common
      Stock Equivalents issued and outstanding immediately prior to the time of such
      issuance or the
      close
      of business on such record date plus
      the
      number of shares of Common Stock or Common Stock Equivalents issuable in payment
      of such dividend or distribution; provided,
      however,
      that if
      such record date is fixed and such dividend is not fully paid or if such
      distribution is not fully made on the date fixed therefor, the Conversion
      Price shall be recomputed accordingly as of the
      close
      of business on such record date and
      thereafter the Conversion
      Price shall be adjusted pursuant to this Section 2(b)(ii) to reflect the
      actual payment of such dividend or distribution.

     

    (iii)  Adjustments
      for Stock Splits, Stock Subdivisions and Combinations.
      If, at
      any time after the date hereof, the Company subdivides or combines the Common
      Stock, (A) in
      the
      case of a subdivision (including a stock split), the Conversion
      Price in effect immediately
      prior to such event
      shall be proportionately decreased and the number of shares of Common Stock
      issuable hereunder shall be proportionately increased, and (B) in
      the
      case of a combination (including a reverse stock split), the Conversion
      Price in effect immediately
      prior to such event
      shall be proportionately increased and the number of shares of Common Stock
      issuable hereunder shall be proportionately decreased. Any adjustment under
      this
      Section 2(b)(iii)
      shall
      become effective at the
      close
      of business on the date the
      subdivision or combination becomes effective.

     

    (iv)  Adjustments
      for Reclassification, Reorganization, Merger, Consolidation and
      Sale.
      In case
      of (A) any
      reclassification, reorganization, change or conversion of securities of the
      Common Stock (other than a change in par value, or from par value to no par
      value) into other shares or securities of the Company, or (B) any
      merger or consolidation of the Company with or into another entity (other than
      a
      merger or consolidation with another entity in which the Company is the
      acquiring and the surviving entity and that does not result in any
      reclassification or change of the Common Stock),
      or
(C) any
      sale
      of all or substantially all the assets of the Company, the
      Holder shall have the right to receive, in lieu of the shares of Common Stock
      into
      which this Debenture is convertible, the kind and amount of shares of stock
      and
      other securities, money and property receivable upon such reclassification,
      reorganization, change, merger, consolidation or sale upon conversion by the
      Holder of the maximum number of shares of Common Stock into which this Debenture
      could
      have been converted immediately
      prior to such reclassification,
      reorganization, change, merger, consolidation or sale, all subject to further
      adjustment as provided herein or with respect to such other securities or
      property by the terms thereof. The provisions of this clause (iv)
      shall
      similarly attach to successive reclassifications, reorganizations, changes,
      mergers, consolidations and sales.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)  Other
      Distributions.
      In
      the
      event the Company provides the holders of its Common Stock with consideration
      that is not otherwise addressed in this Section 2
      (including,
      without limitation, declaring a distribution payable in securities, assets,
      cash
      or evidences of indebtedness issued by other persons or the Company (excluding
      cash dividends declared and paid by the Company out of retained earnings),
      then,
      in each such case, the
      Holder shall be entitled to a pro rata
      share of
      any such distribution as though the Holder was a holder of the number of shares
      of Common Stock of the Company issuable upon the conversion of this Debenture
      in
      whole as of the record date fixed for the determination of the holders of Common
      Stock of the Company entitled to receive such distribution.

     

    (d)  Recapitalizations.
      If at
      any time there occurs a recapitalization of the Common Stock (other than a
      subdivision, combination, merger, consolidation or sale of assets provided
      for
      in this Section 2),
      the
      Holder shall
      be
      entitled to receive upon conversion of this Debenture the
      number of shares of capital stock or other securities or property of the Company
      or otherwise, to which a holder of the Common Stock deliverable upon conversion
      would have been entitled on such recapitalization. In any such case, appropriate
      adjustment shall be made in the application of the provisions of this Section
      2
      with
      respect to the rights of the Holder after
      the
      recapitalization to the end that the provisions of this Section 2
      (including
      adjustment of the Conversion
      Price then in effect and the number of shares issuable upon conversion of this
      Debenture)
      shall
      be applicable after that event as nearly equivalent as may be
      practicable.

     

    (e)  No
      Impairment.
      The
      Company shall not, by amendment of its Certificate of Incorporation or By-laws
      or through any reorganization, recapitalization, transfer of assets,
      consolidation, merger, dissolution, issue or sale of securities or any other
      voluntary action, avoid or seek to avoid the observance or performance of any
      of
      the terms to be observed or performed hereunder by the Company, but will at
      all
      times in good faith assist in the carrying out of all the provisions of this
      Section 2 and in the taking of all such action as may be necessary or
      appropriate in order to protect the rights of the Holder against
      impairment.

     

    (f)  Notice
      of Adjustments.
      Whenever there shall be any change pursuant to this Section 2, the Company
      shall
      prepare a certificate setting forth, in reasonable detail, the event requiring
      the change and the kind and amount of shares of stock and other securities,
      money and property subsequently issuable upon a conversion hereof. Such
      certificate shall be signed by its chief financial officer and shall be
      delivered to the Holder or such other person as the Holder or any successor
      notice recipient may designate.

     

    (g)  Fractional
      Shares; Rounding.
      No
      fractional shares of Common Stock will be issued in connection with any
      conversion hereunder, but in lieu of such fractional shares, the number of
      shares of Common Stock to be received by the Holder upon conversion shall
be
      rounded up to the nearest whole share.
      All
      calculations under this Section 2 shall be made to the nearest cent or to
      the nearest one-hundredth of a share, as the case may be.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (h)  Registration
      Rights.
      Pursuant to a Registration Rights Agreement of even date between the Company
      and
      the Holder, the Holder has been granted certain registration rights with respect
      to the resale of the Conversion Shares. 

     

     

    SECTION
      3. REDEMPTION.

     

    The
      Company may, at its option, elect to redeem and prepay all or any portion of
      the
      outstanding principal of this Debenture, provided that all accrued interest
      thereon is paid simultaneously with the principal payment redeemed and prepaid.
      The redemption price shall be one hundred ten percent (110%) of the principal
      amount of the Debenture redeemed, plus accrued interest thereon. Any such
      election to redeem and prepay this Debenture shall be exercised by providing
      written notice thereof to the Holder (the “Redemption
      Notice”)
      not
      less than thirty (30) days prior to the date fixed in such notice as the date
      for redemption (the “Redemption
      Date”).
      The
      Redemption Notice shall indicate the principal amount to be redeemed and
      prepaid. Notwithstanding the foregoing, (a) the Holder may exercise its
      Conversion Right pursuant to Section 2 hereof at any time prior to the
      Redemption Date, (b) no Redemption Notice may be sent unless and until a
      registration statement covering the resale of the Conversion Shares (the
“Registration
      Statement”)
      has
      been filed with the Securities and Exchange Commission and such Registration
      Statement is current and effective and (c) the Company shall not be permitted
      to
      redeem and prepay any portion of the outstanding principal amount of this
      Debenture if the Registration Statement is not current and effective on the
      Redemption Date.

     

    SECTION
      4. EVENTS OF DEFAULT.

     

    The
      occurrence of any of the following events shall constitute an event of default
      (an “Event
      of Default”):

    

    (a)  a
      default
      in the payment of any portion of the principal amount of this Debenture, when
      and as the same shall become due and payable, whether on the Maturity Date,
      the
      Redemption Date or otherwise;

     

    (b)  a
      default
      in the payment of any accrued and unpaid interest on this Debenture, when and
      as
      the same shall become due and payable;

     

    (c)  a
      breach
      by the Company of any of its representations and warranties or other obligations
      under this Debenture and the failure to cure such breach within ten (10) days
      after written notice thereof by the Holder;

     

    (d)  the
      failure by the Company at ay time to reserve and keep available out of its
      authorized stock, solely for the purposes of issuance upon conversion of this
      Debenture, such number of its shares of Common Stock as shall be issuable upon
      the conversion of this Debenture;

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (e)  the
      failure by the Company to timely file any report pursuant to the Securities
      Exchange Act of 1934, as amended;

     

    (f)  at
      any
      time after the nine (9) month anniversary of the date hereof, the Registration
      Statement is not effective and current;

     

    (g)  the
      Company’s Common Stock is not listed on either the OTC Bulletin Board, Nasdaq or
      a national securities exchange;

     

    (h)  John
      Treglia is no longer serving as Chief Executive Officer of the
      Company;

     

    (i)  Paul
      Rothman is no longer serving as President of the Company;

     

    (j)  a
      distress, execution, sequestration or other process is levied or enforced upon
      the Company or sued out against, in each case, a material part of its property
      which is not discharged or challenged within sixty (60) days;

     

    (k)  the
      Company is unable to generally pay its debts as they mature or become
      due;

     

    (l)  the
      Company ceases wholly or substantially to carry on its business or dissolves;
      

     

    (m)  the
      Company shall make a general assignment for the benefit of creditors, or shall
      admit in writing its general inability to pay, or shall generally fail to pay,
      its debts as they mature or become due, or shall petition or apply
      for the
      appointment of a trustee or other custodian, liquidator or receiver of the
      Company or of any substantial part of the assets of the Company, or shall
      commence any case or other proceeding relating to the Company under any
      bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
      dissolution or liquidation or similar law of any jurisdiction, now or hereafter
      in effect, or shall take any action to authorize or in furtherance of any of
      the
      foregoing, or if any such petition or application shall be filed or any such
      case or other proceeding shall be commenced against the Company; or

     

    (n)  a
      decree
      or
      order is
      entered appointing any such trustee, custodian, liquidator or receiver or
adjudicating the
      Company
      bankrupt or insolvent, or approving a petition in any such case or other
      proceeding, or a decree or order for relief is entered in respect of the Company
      in an involuntary case under federal bankruptcy laws as now or hereafter
      constituted.

     

    SECTION
      5. REMEDIES IN THE EVENT OF DEFAULT.

     

    (a)  In
      the
      case of an Event of Default, the Holder may in its sole discretion demand that
      the Outstanding Amount shall be and become immediately due and payable in cash
      whereupon the same shall become immediately due and payable. 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    (b)  The
      Company hereby waives demand and presentment for payment, notice of nonpayment,
      protest and notice of protest, diligence, filing suit, and all other notices
      

    

    (c) Should
      the indebtedness represented by this Debenture or any part thereof be collected
      at law or in equity, or in bankruptcy, receivership or any other court
      proceedings (whether at the trial or appellate level), or should this Debenture
      be placed in the hands of any agent or attorneys for collection upon default
      or
      maturity, the Company agrees to pay, in addition to all other amounts due and
      payable hereunder, all costs and expenses of collection or attempting to collect
      this Debenture, including reasonable attorneys’ fees.

    

    (d)  In
      the
      case of an Event of Default, this Debenture shall bear interest after such
      default at an interest rate of sixteen percent (16%) per annum.

    

    SECTION
      6. REPRESENTATIONS AND WARRANTIES. 

     

    The
      Company represents and warrants to the Holder as follows:

     

    (a)  The
      Company has all requisite corporate power and authority to authorize and execute
      this Debenture and the certificates evidencing the Conversion Shares and to
      perform all obligations and undertakings under this Debenture; 

     

    (b)  This
      Debenture has been duly authorized and executed by the Company and is a valid
      and binding obligation of the Company enforceable in accordance with its
      terms;

     

    (c)  The
      Conversion Shares have been duly authorized and reserved for issuance by the
      Company and, when issued in accordance with the terms hereof, will be validly
      issued, fully paid and nonassessable; 

     

    (d)  Neither
      execution and delivery of this Debenture, nor the issuance of the Conversion
      Shares upon the conversion of this Debenture in accordance with the terms
      hereof, will be inconsistent with the Company’s Certificate of Incorporation or
      By-laws, as amended, and do not and will not constitute a default under any
      indenture, mortgage, contract or other instrument, judgment, decree or order
      to
      which the Company is a party or by which it is bound; and

     

    (e)  The
      authorized capital stock of the Company consists of 20,000,000 shares of Common
      Stock, of which 14,255,470 shares are issued and outstanding. There are no
      subscriptions, options, warrants, rights, calls or other commitments to which
      the Company is a party, or by which it is bound, calling for the issuance,
      sale,
      transfer or other disposition of any class of securities of the Company and
      there are no outstanding securities or instruments of the Company convertible
      into or exchangeable for shares of Common Stock or any other securities of
      the
      Company.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SECTION
      7. COVENANTS OF THE COMPANY.

     

    (a)  The
      Company shall not incur any indebtedness for money borrowed which shall rank
      senior to this Debenture as to priority of payment. 

     

    (b)  The
      Company agrees that it will not sell, or enter into any agreement to sell,
      shares of its Common Stock or any Common Stock Equivalents for an Effective
      Price that is less than fifty
      cents ($.50) per share (the “Threshold
      Price”)
      (as
      such Threshold Price is adjusted for the events set forth in subparagraphs
      (ii),
      (iii) and (iv) of Section 2(b)),
      without
      the prior consent of the Holder, which consent shall not be unreasonably
      withheld. Any consent given by the Holder shall not impair or otherwise affect
      the Holder’s rights under Section 2 hereof, including, without limitation, the
      anti-dilution adjustments provided for therein.

     

    SECTION
      8. MISCELLANEOUS.

     

    (a)  This
      Debenture and all of the provisions hereof shall be binding upon and inure
      to
      the benefit of the Company, the Holder and their respective successors and
      assigns. All or any part of this Debenture may be assigned or transferred by
      the
      Holder and its assigns and transferees.

    

    (b)  All
      notices, demands and requests of any kind to be delivered to any party in
      connection with this Debenture shall be in writing and shall be deemed to have
      been duly given if personally or hand delivered or if sent by a recognized
      overnight delivery courier or by registered or certified mail, return receipt
      requested and postage prepaid, or by facsimile transmission addressed as
      follows:

     

    (i)  if
      to the
      Company, to:

     

    Comprehensive
      Healthcare Solutions, Inc.

    45
      Ludlow
      Street, Suite 602

    Yonkers,
      New York 10705

    Attention:
      John H. Treglia, Chairman of the Board & Chief Executive
      Officer

    Facsimile:
      (914) 375-3696

    

    with
      a
      copy to:

    

    Anslow
      & Jaclin, LLP

    195
      Route
      9, Suite 204

    Manalapan,
      New Jersey 07726

    Attention:
      Gregg E. Jaclin, Esq.

    Facsimile:
      (732) 577-1188

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    (ii)   
if
      to the
      Holder, to:

    Comprehensive
      Associates LLC

    64
      Shelter Lane

    Roslyn,
      New York 11577

    Attention:
      Robyn Schreiber

    Facsimile:
      (516) 621-9172

    

    with
      a
      copy to:

    

    Certilman
      Balin Adler & Hyman, LLP

    90
      Merrick Avenue, 9th Floor

    East
      Meadow, New York 11554

    Attention:
      Fred Skolnik, Esq.

    Facsimile:
      (516) 296-7111

    

    or
      to
      such other address as the party to whom notice is to be given may have furnished
      to the other party hereto in writing in accordance with provisions of this
      Section 8. Any such notice or communication shall be deemed to have been
      effectively given (i) in the case of personal or hand delivery, on the date
      of such delivery, (ii) in the case of a recognized overnight delivery
      courier, on the business day after the date when sent, (iii) in the case of
      mailing, on the third business day following that day on which the piece of
      mail
      containing such communication is posted and (iv) in the case of facsimile
      transmission, on the date of transmission.

    

    (c)  This
      Debenture represents the entire agreement between the parties hereto with
      respect to the subject matter thereof. This Debenture may not be modified or
      amended, or any of the provisions hereof waived, except by written agreement
      of
      the Company and the Holder.

    

    (d)  This
      Debenture shall be governed by and construed in accordance with the internal
      laws of the State of New York, without giving effect to principles of conflicts
      of laws. 

    

    (e)  The
      invalidity of any of the provisions of this Debenture shall not invalidate
      or
      otherwise affect any of the other provisions of this Debenture, which shall
      remain in full force and effect. 

    

    (f)  Notwithstanding
      anything to the contrary contained in this Debenture, the rate of interest
      payable on this Debenture shall never exceed the maximum rate of interest
      permitted under applicable law.

    

    (g)  The
      Company acknowledges and agrees that the obligations under this Debenture are
      unconditional and are not subject to any defense, counterclaim or right of
      offset or setoff.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    (h)  All
      payments made under this Debenture shall be made by electronic funds wire
      transfer in accordance with the wire transfer instructions submitted by the
      Holder as the first payment method option; however, the Holder may designate
      that payments may be made by bank or certified check, at the offices of the
      Holder set forth herein or such other place as the Holder shall designate in
      writing to the Company.

    

    (i)  The
      Company covenants to the Holder that upon receipt of a description of
      circumstances reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Debenture and, in the case of any such loss,
      theft or destruction, upon receipt of an indemnity reasonably satisfactory
      to
      the Company, or in the case of any such mutilation upon surrender and
      cancellation of such Debenture, the Company will make and deliver a new
      Debenture, of like tenor, in lieu of the lost, stolen, destroyed or mutilated
      Debenture .

    

    (j)  The
      descriptive headings of the several sections and paragraphs contained in this
      Debenture are for reference purposes only and shall not affect in anyway the
      meaning or interpretation of this Debenture .

    

    (k)  The
      Company acknowledges that it has been represented by counsel in connection
      with
      this Debenture. Accordingly, any rule or law or any legal decision that would
      require the interpretation of any claimed ambiguities in this Debenture against
      the party that drafted it has no application and is expressly waived by the
      Company. The provisions of this Debenture shall be interpreted in a reasonable
      manner to give effect to the intent of the parties hereto.

    

    {Remainder
      of page intentionally left blank. Signature page
      follows.}

    

    

    
      
        
          

        

         

      

      
         

        
          

        

      

      
         

        
          

        

      

    

    IN
      WITNESS WHEREOF, the
      Company has executed and delivered this Debenture on the date first above
      written.

    

    

    COMPREHENSIVE
      HEALTHCARE SOLUTIONS, INC.

    

     

    

    By:
      ________________________________________

    John
      Treglia,

     Chairman
      of the Board & Chief Executive Officer 

    

    

    
      
        
          

        

         

      

      
         

        
          

        

      

      
         

        
          

        

      

    

    ANNEX
      I

    

    

    FORM
      OF CONVERSION NOTICE

    

    

    

    

    To:
      Comprehensive Healthcare Solutions, Inc. 

    

    

    The
      undersigned owner of this Convertible Debenture hereby exercises the option
      to
      convert this Debenture, or the portion hereof below designated, into shares
      of
      Common Stock of Comprehensive Healthcare Solutions, Inc. in accordance with
      the
      terms of this Debenture and directs that the shares issuable and deliverable
      upon the conversion be issued and delivered to the registered holder hereof
      or
      its designee as indicated below.

    

    

    Dated:
      ________________________________   

    

     

    

    

    By: 
      __________________________________________      

     

    Address:
      ______________________________________      

    

     

    

    Taxpayer
      Identification No.: _______________________

    

    Amount
      to
      be Converted: $                                                       
          

    

    Effective
      Date of Conversion: ______________________   

     

    Name
      in
      which Shares

    are
      to be
      Issued:  _______________________________

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