Document:

EXHIBIT 4.1

CONSULTING AND OPTION AGREEMENT

This Agreement (this “Agreement”) is effective as of the 25th day of July 2003, (the “Effective Date”) between Emisphere Technologies, Inc., a Delaware corporation having its principal place of business at 765 Old Saw Mill River Road, Tarrytown, New York 10591 (the “Corporation”), and Ten Pine Advisors, LLC, a New York limited liability company having its principal place of business at 627 Harris Road, Bedford Hills, New York 10507 (“TEN PINE” or “Consultant”).

WHEREAS, the Consultant assists in the development of business relationships and provides equity advice to publicly traded entities, and has agreed to provide consulting services to the Corporation in connection with the development of business relationships and to serve as an equity advisor, as well as provide recommendations and counsel in this discipline to the Corporation; and 

WHEREAS, both parties are sensitive to the need to avoid all areas where there may be a conflict of interest.

NOW, THEREFORE, in consideration of the premises and mutual covenants and conditions herein contained, the Corporation and the Consultant hereby agree as follows:

1. Retainer.

The Corporation agrees to retain the Consultant on a consulting basis and the Consultant agrees to serve the Corporation as a consultant upon the terms and conditions hereafter set forth. The retainer includes full compensation for all administrative and any other consulting services to be rendered by the Consultant, who is retained only for the purpose and to the extent set forth in this Agreement.

2. Term.

The term of this Agreement shall commence on the Effective Date, and shall continue until july31, 2004, unless sooner terminated as hereinafter provided, or as extended by mutual written agreement of both parties.

3. Compensation and Expenses.

A. The Corporation agrees to compensate the Consultant for services rendered hereunder to the Corporation in the following manner:

	
  
 
  	
  
1. The   Corporation hereby grants to the Consultant effective on July 25, 2003 (the   “Grant Date”) an option to purchase Ten Thousand (10,000) shares of common   stock of the Corporation, par value $.01 per share (“Common Stock”) at an   exercise price equal to the closing sale price of the Corporation’s Common   Stock on July 25, 2003, as quoted on The Nasdaq Stock Market (the “June 19   Market Price”) (such option hereinafter referred to as the “Tranche 1   Option”). The Tranche 1 Option shall be immediately vested and exercisable   and shall expire on June 18, 2004.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
2. The   Corporation hereby grants to the Consultant effective on the Grant Date an   option to purchase Twenty Thousand (20,000) shares of Common Stock at an   exercise price equal to 125% of the July 25 Market Price (such option   hereinafter referred to as the “Tranche 2 Option”). The Tranche 2 Option   shall be immediately vested and exercisable and shall expire on July 24,   2006.
  
	
   
  	
  
 
  
	
  
 
  	
  
3. The   Corporation hereby grants to the Consultant effective on the Grant Date an   option to purchase Twenty Thousand (20,000) shares of Common Stock at an   exercise price equal to 125% of the July 25 Market Price (such option   hereinafter referred to as the “Tranche 3 Option”). The Tranche 3 Option   shall be immediately vested and exercisable and shall expire on July 24,   2008.
  

	
  
 
  	
  
4. The   Tranche 1 Option, Tranche 2 Option and Tranche 3 Option granted pursuant to   this Paragraph A of Article 3 are (i) hereinafter collectively referred to as   the “Options”, (ii) not intended to be incentive stock options within the   meaning of Section 422 of the Internal Revenue Code of 1986, as amended,   (iii) governed solely and exclusively by all the provisions of this Article   3, Paragraph A and (iv) not being granted pursuant to any equity plan of the   Corporation in effect as of the Grant Date.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
5. The   Options shall be exercisable by the Consultant by delivery to the Corporation   of a written or electronic notice stating the number of whole shares of   Common Stock to be purchased pursuant to this Agreement and accompanied by   payment of the full exercise price of the shares of Common Stock to be   purchased. Such notice shall also identify the Option being exercised as a   Tranche 1 Option, Tranche 2 Option or Tranche 3 Option. The exercise price of   the Options shall be paid in cash or by certified check or bank draft payable   to the order of the Corporation. Shares purchased upon the exercise of any of   the Options are hereinafter referred to as “Option Shares.”
  
	
   
  	
  
 
  
	
  
 
  	
  
6. The   Options are non-transferable by the Consultant, provided, however, that the   Corporation agrees that in the event of the death or permanent disability of   Douglas Bermingham (“Bermingham”), the Consultant’s sole member, the Options   shall continue to remain exercisable despite any resulting change in the   ownership or control of the Consultant. The Consultant shall have no rights   as a stockholder with respect to any shares covered by the Option until the   date when the Consultant is entered as a stockholder upon the records of the   duly authorized transfer agent of the Corporation. No adjustment shall be   made for dividends (ordinary or extraordinary, whether in cash, securities or   property) or distributions or other rights for which the record date is prior   to the date a stock certificate is issued. In the event of any change in   corporate capitalization (including, but not limited to, a change in the   number of shares of
Common Stock outstanding), such as a stock split, reverse   stock split, stock dividend, combination or reclassification of the Common   Stock, or any other increase or decrease in the number of issued shares of   Common Stock effected without receipt of consideration by the Corporation,   the number and kind of shares subject to the Option and/or the exercise price   per share may be appropriately adjusted by the Corporation consistent with   such change and consistent with similar adjustments made under any equity   plan of the Corporation in effect as of the date of such event. The   determination of the Corporation regarding any adjustment will be final and   conclusive.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
7. In   connection with the retention of the Consultant and receipt by the Consultant   of the Options and the Option Shares, the Consultant hereby represents,   warrants and covenants to the Corporation as follows:
  

	
  
 
  	
  
 
  	
  
(a) The   Consultant is receiving the Options and Option Shares solely for his own   account for investment and not with a view to or for sale in connection with   any distribution of the Option Shares or any portion thereof and not with any   present intention of selling, offering to sell or otherwise disposing of or   distributing the Option Shares or any portion thereof in any transaction   other than a transaction exempt from registration under the Securities Act of   1933, as amended (the “Securities Act”). The Consultant also represents that   the entire legal and beneficial interest of the Option Shares is being   acquired purchased, and will be held, for the Consultant’s account only, and   neither in whole or in part for any other person. The Consultant either has a   preexisting business or personal relationship with the Corporation or one or   more of its officers, directors or controlling persons, or by reason of the   Consultant’s
business or financial experience or the business or financial   experience of the Consultant’s professional advisors who are unaffiliated   with and who are not compensated by the Corporation or any affiliate or   selling agent of the Corporation, directly or indirectly, could be reasonably   assumed to have the capacity to evaluate the merits and risks of an   investment in the Corporation and to protect the Consultant’s own interests   in connection with this transaction.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
(b) The   Consultant’s principal place of business is as set forth in preamble to this   Agreement.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(c) The   Consultant has heretofore discussed the Corporation and its plans, operations   and financial condition with the Corporation’s officers and has heretofore   received all such information as the Consultant has deemed necessary and   appropriate to enable the Consultant to evaluate the financial risk inherent   in making an investment in the Options and the Option Shares, and the   Consultant has received satisfactory and complete information concerning the   business and financial condition of the Corporation in response to all   inquiries in respect thereof.
  

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(d) The   Consultant realizes that the Options and the Option Shares will be a highly   speculative investment and involve a high degree of risk, and the Consultant   is able, without impairing his financial condition, to hold the Options and   the Option Shares for an indefinite period of time and to suffer a complete   loss on the Consultant’s investment,
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(e) The   Consultant understands and acknowledges that:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
(i) The   Options may not be transferred, and the sale of the Option Shares has not   been registered under the Securities Act, and the Option Shares must be held   indefinitely unless subsequently registered under the Securities Act or an   exemption from such registration is available (such as Rule 144 under the   Securities Act); except as set forth herein, the Corporation is under no   obligation to register the Option Shares;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
(ii) The   share certificate representing the Option Shares will be stamped with the   legends specified below; and
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
(iii) The   Corporation will make a notation in its records of the aforementioned   restrictions on transfer and legends.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(f) The   Consultant understands that the Option Shares are restricted securities   within the meaning of Rule 144 promulgated under the Securities Act; that the   exemption from registration under Rule 144 will not be available in any event   for at least one (1) year from the date of purchase and payment in full of   the Option Shares, (i.e., upon exercise of an option with respect to   particular Option Shares and payment in full of the exercise price) and even   then will not be available unless (i) a public trading market then exists for   the Common Stock of the Corporation, (ii) adequate information concerning the   Corporation is then available to the public, and (iii) other terms and   conditions of Rule 144 are complied with; and that any sale of the Option   Shares may be made only in limited amounts in accordance with such terms and   conditions. There can be no assurance that the requirements of Rule 144 will   be met, or that the Option Shares will
ever be saleable.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(g) Without   in any way limiting the Consultant’s representations set forth above, the   Consultant further agrees that the Consultant shall in no event make any   disposition of all or any portion of the Option Shares unless and until (x)   there is then in effect a Registration Statement under the Securities Act   covering such proposed disposition and such disposition is made in accordance   with said Registration Statement; (y) the resale provisions of Rule 144 are   available (based on an opinion of counsel satisfactory to the Corporation);   or (z)(1) the Consultant shall have notified the Corporation of the proposed   disposition and shall have furnished the Corporation with a detailed   statement of the circumstances surrounding the proposed disposition and (2)   the Consultant shall have furnished the Corporation with an opinion of   counsel satisfactory to the Corporation to the effect that such disposition   will not require registration of such
Option Shares under the Securities Act.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(h) The   Consultant understands and agrees that the Corporation shall cause the legend   set forth below or a legend substantially equivalent thereto, to be placed   upon any certificate(s) evidencing ownership of the Option Shares together   with any other legends that may be required by state or federal securities   laws:
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
“THE   SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES   ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE   TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE   ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE   CORPORATION, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN   COMPLIANCE THEREWITH.”
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(i) The   Consultant agrees that, in order to ensure compliance with the restrictions   referred to herein, the Corporation may issue appropriate “stop transfer”   instructions to its transfer agent, if any, and that, if the Corporation   transfers its own securities, it may make appropriate notations to the same   effect in its own records.
  

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(j) The   Corporation shall not be required (i) to transfer on its books any of the   Option Shares that have been sold or otherwise transferred in violation of   any of the provisions of this Agreement or (ii) to treat as owner of such   Option Shares or to accord the right to vote or pay dividends to any   consultant or other transferee to whom such Option Shares shall have been so   transferred.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(k) Each of   the Consultant and Bermingham is an “accredited investor” as defined in Rule   501 (a) under the Securities Act. Each of the Consultant and Douglas   Bermingham has complied, and will continue to comply, with all applicable   laws and regulations with respect to all of the transactions contemplated by   this Agreement.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(l) There is   no action, suit, proceeding, arbitration, citation, summons or subpoena   (civil, criminal, regulatory, or otherwise of a like nature, in law or in   equity), claim, demand, grievance, inquiry or investigation, including,   without limitation, under the Securities Act (collectively, “Actions”),   pending against the Consultant and/or Bermingham (or, to the best knowledge   of the Consultant, any basis therefor or threat thereof) and there have never   been any Actions against the Consultant and/or Bermingham.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(m) The   Consultant has complied, and will continue to comply, with its policy to   inform each party that it contacts on behalf of any of its clients   (including, without limitation, the Corporation) that the Consultant receives   compensation in connection with the provision of its services to such   clients.
  

	
  
 
  	
  
8. If the   Corporation at any time proposes to register any of its Common Stock under   the Securities Act for the account of any person other than the Corporation   by registration on any forms (other than a registration statement on Form S 4   or S 8 or an offering to existing security holders of the Corporation,   including (without limitation) pursuant to rights distributed to existing   security holders or pursuant to a dividend reinvestment plan, or any other   registration which is not appropriate for the registration of Option Shares),   whether or not pursuant to registration rights granted to other holders of   its securities, it shall give prompt written notice to the Consultant of its   intention to do so and the Consultant rights (if any) under this Agreement,   which notice, in any event, shall be given at least twenty (20) days prior to   the initial filing of such proposed registration. Upon the written request of   the Consultant receiving notice
of such proposed registration made within   five (5) business days after the receipt of any such notice the Corporation   shall include in such registration statement such Option Shares as the   Consultant shall set forth in such request (provided that the Corporation   need not provide the notice described above with respect thereto or include   in any registration statement any Option Shares that at the time such notice   would otherwise be required to be given may be sold pursuant to Rule 144 under   the Securities Act; provided, that,
  

	
  
 
  	
  
(a) prior to   the effective date of the registration statement filed in connection with   such registration, promptly following receipt of notification by the   Corporation from the managing underwriter of the estimated price at which   such securities are expected to be sold, the Corporation shall so advise the   Consultant of such price, and if such price is below the minimum price which   the Consultant shall have indicated to be acceptable, the Consultant shall   then have the right irrevocably to withdraw its request to have its Option   Shares included in such registration statement, by delivery of written notice   of such withdrawal to the Corporation within three (3) business days of its   being advised of such price, without prejudice to the rights of the   Consultant to include Option Shares in any future registration (or   registrations) pursuant to this Agreement;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
(b) if at   any time after giving written notice of its intention to register any   securities and prior to the effective date of the registration statement   filed in connection with such registration, the Corporation shall determine   for any reason not to register or to delay registration of such securities,   the Corporation shall give written notice of such determination within five   (5) business days to the Consultant and (i) in the case of a determination   not to register, shall be relieved of its obligation to register any Option   Shares in connection with such registration, without prejudice, however, to   the rights of any holder to include Option Shares in any future registration   (or registrations) pursuant to this Agreement and (ii) in the case of a   determination to delay registering, shall be permitted to delay registering   any Option Shares, for the same period as the delay in registering such other   securities;
  

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(c) if such   registration involves an underwritten public offering, the Consultant shall   sell its Option Shares on the same terms and conditions as those that apply   to the other shares of Common Stock sold in such registered offering;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
(d) the   Corporation may require the Consultant to furnish the Corporation such   information regarding the Consultant and the distribution of the securities   covered by the registration statement as the Corporation may from time to   time reasonably request and as is required by applicable laws and regulations   to include in the registration statement (the “Consultant Information”); and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
(e) the   Consultant agrees that as of the date that a final prospectus is made   available to it for distribution to prospective purchasers of Common Stock   (including the Option Shares) it shall cease to distribute copies of any   preliminary prospectus prepared in connection with the offer and sale of such   registered Common Stock (including the Option Shares). The Consultant further   agrees that, upon receipt of notice from the Corporation, the Consultant   shall forthwith discontinue the Consultant’s disposition of Option Shares   pursuant to the registration statement relating to the Option Shares until   such Consultant’s receipt of further notice from the Corporation that such   disposition may recommence using such prospectus as amended or supplemented   by the Corporation.
  

	
  
 
  	
  
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(a) If the   Consultant participates pursuant to this Agreement in a registered offering   of securities that are to be distributed by or through one or more   underwriters, the Corporation shall use its commercially reasonable efforts   to arrange for such underwriters to include all of the Option Shares to be offered   and sold by the Consultant among the securities of the Corporation to be   distributed by such underwriters; provided, that, if the managing underwriter   of such underwritten offering shall advise the Corporation in writing that if   all the Option Shares requested to be included in such registration were so   included, in its opinion, the aggregate number and type of securities   proposed to be included in such registration would exceed the number and type   of securities which could be sold in such offering within a price range   acceptable to the Corporation (such writing to state the basis of such   opinion and the approximate number and type
of securities which may be   included in such offering without such effect), then the Corporation shall   include in such registration, to the extent of the number and type of   securities which the Corporation is so advised can be sold in such offering   within a price range acceptable to the Corporation, (i) first, securities   that the Corporation proposes to issue and sell for its own account, and (ii)   second, the Common Stock (including Option Shares) requested to be registered   by other holders of Common Stock, pro rata among the Consultant and such   other holders of Common Stock on the basis of the aggregate number of shares   of Option Shares and other Common Stock requested to be so registered.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(b) The   Consultant expressly agrees that if it elects to participate in an offering   of Common Stock that is underwritten, it will enter into an underwriting   agreement with the Corporation and the underwriters of such offering which   shall be on usual and customary terms (including, without limitation,   representations and warranties as to ownership and the transfer of title to   the Option Shares, indemnification and contribution for losses resulting from   misstatements or omissions relating to the Consultant Information and   “lock-up” arrangements with respect to any Option Shares not sold in the   offering; provided, that such arrangement shall not restrict sales of the   Common Stock by the Consultant for a period that is longer than the period   applicable to the Corporation and any other holder of Common Stock   participating in such registered offering).
  

B. The Consultant’s Employer Identification number is 03-0519145, which is requested and shall be used by the Corporation solely for the purpose of preparing a Form 1099 as required by law. Compensation shall not be subject to withholding taxes or other employment taxes as required with respect to compensation paid because the Consultant is an independent contractor. In addition, the Consultant shall indemnify and hold harmless the Corporation from any and all liability, claims and demands for all payments required by any applicable unemployment and disability insurance, selfemployment taxes, social security, income tax and other withholdings, deductions and payments required by federal or state or local laws, or otherwise authorized from or based upon payments made to the Consultant in connection with providing services pursuant to this Agreement. The Options granted pursuant to Paragraphs 1A and the reimbursement of expenses pursuant to Paragraph C each of
this Article 3 represent the full payment due the Consultant under the terms of this Agreement.

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C. The Corporation shall pay directly or shall reimburse the Consultant for all reasonable and necessary out-of-pocket expenses incurred by the Consultant. The Consultant shall not be paid for any travel time. Any direct or indirect expenses exceeding ONE THOUSAND ($1,000.00) DOLLARS in the aggregate during any one (1) month period shall require the prior written consent of the Corporation. In all events, reimbursable expenses must be directly related to the business of the Corporation, unless otherwise agreed to in advance by the parties hereto in a separate writing.

4. Services

A. The Consultant agrees to serve the Corporation faithfully and shall devote such time as the Consultant determines is required to perform the services hereunder to the business of the Corporation. The Consultant shall perform its duties hereunder during regular office hours at the offices of the Corporation or at a site agreed upon by the parties. In addition to the time set forth above, the Consultant shall provide additional time to the Corporation by telephone and/or other means of electronic communication and/or in writing, as is reasonably requested by the Corporation. In the event that the Consultant is unable to conform to a reasonable working schedule established by the Corporation hereunder, the parties shall have the right to terminate this Agreement pursuant to Article 8 of this Agreement.

B. The Consultant agrees to render advice and services in connection with the development of business relationships and equity advice, perform activities associated with the concept of an “equity advisor”, and provide advice and recommendations with regard to business relationships, advice on overall strategy, and counsel and recommendations on items submitted for the Consultant’s review.

5. Corporation’s Authority.

The Consultant agrees to observe and comply with the rules and regulations of the Corporation as adopted by the Corporation’s Board of Directors either orally or in writing, respecting the performance of the Consultant’s duties; and to carry out and to perform orders, directions and policies stated by the Corporation to the Consultant from time to time, either orally or in writing, provided, however, that the Consultant shall determine the manner of carrying out the professional duties hereunder. The Consultant’s relationship with the Corporation during the term of this Agreement shall be that of an independent contractor. The Consultant shall have no authority to contract with any third party on behalf of the Corporation or create any obligation on behalf of the Corporation. Neither party has any authority to make any statement, representation, or commitment of any kind or to take any action binding upon the other party, without the other
party’s specific prior written authorization. Nothing contained in the Agreement shall be construed to constitute the Consultant as a partner, employee, representative or agent of the Corporation and none of the Consultant nor its officers, employees or affiliates shall hold itself out as such. Neither the Consultant nor any of the Consultant’s employees shall be an employee of the Corporation and accordingly shall not be eligible or entitled to participate in or enroll in any employee benefit plan or arrangement of the Corporation, including without limitation any pension, stock, bonus, profit-sharing, savings, health, medical, or similar benefit plan or arrangement the Corporation may from time to time provide to its eligible employees, nor receive any distributions from or with respect to any such plan or arrangement.

6. Confidentiality.

A. During the course of this Agreement, the Consultant will be exposed to data and information which is confidential and proprietary to the Corporation, which includes but is not limited to, trade secrets, privileged records, proprietary information, data, case report forms, laboratory work sheets, slides, research, reports, results, material, investigations, experiments, developmental work, experimental work, work in progress, plans, proposals, codes, and all concepts or ideas, materials or information related to the business, products, or operation of the Corporation, whether in written, verbal, physical, electronic, tangible or intangible form, made available, disclosed, or otherwise made known to the Consultant as a result of services to be rendered under this Agreement (hereinafter “EM1SPHERE Confidential Information” or “Confidential Information”).

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B. The Consultant acknowledges and agrees that the Corporation is entitled to prevent the disclosure of EMISPHERE Confidential Information. As a portion of the consideration for the compensation being paid by the Corporation to the Consultant, the Consultant agrees, except for purposes of this Agreement and the services rendered, to hold in strictest confidence and to maintain as confidential all EMISPHERE Confidential Information obtained from the Corporation or developed by the Consultant for the Corporation and shall not use for any purpose, commercial or otherwise, or disclose to any third parties any EMISPHERE Confidential Information. The Consultant acknowledges that EMISPHERE Confidential Information is the sole and exclusive property of the Corporation. The Consultant is not permitted to use any such EMISPHERE Confidential Information for teaching, research or publication purposes.

C. The Consultant agrees to disclose only such information that the Consultant is legally free to disclose and agrees that the Corporation shall have the right, without further payment other than as set forth in Section 3 above, to freely use any and all information disclosed by the Consultant to the Corporation. The Consultant shall avoid all circumstances and actions, which place the Consultant in a position of divided loyalty with regard to obligations under this Agreement. All Confidential Information disclosed to the Consultant by the Corporation, as well as any information generated by the Consultant pursuant to the execution of services hereunder, shall be maintained by the Consultant in strictest confidence. Accordingly, the Consultant will only use the Confidential Information furnished by the Corporation for the purpose of fulfilling its obligations under this Agreement.

D. The above restrictions shall not prevent the Consultant from disclosing or using in any manner, information that the Consultant can show by written records:

(i) was in the public domain at the time of disclosure; or

(ii) becomes part of the public domain, except by breach of this Agreement by the Consultant; or

(iii) was in the Consultant’s possession at the time of such disclosure, as demonstrated by contemporaneous written records, and which was not acquired, directly or indirectly, from the Corporation; or

(iv) is received without restriction on use or disclosure from a third party who is under no such restriction; or

(v) is required by law, regulation or court order to be disclosed, provided prompt notice is given to the Corporation to allow it the opportunity to obtain appropriate protection of Confidential Information.

E. All obligations of confidentiality and nondisclosure set forth in this Agreement will survive, without limitation, the expiration or earlier termination of this Agreement for any reason.

7. Ownership and Retention by Corporation.

A. The Consultant shall timely communicate in full detail and disclose all data, information, reports, results and other work product collected, generated, prepared or derived by the Consultant during the course of or as a result of Services performed by the Consultant pursuant to this Agreement (“Data”). All Data shall be and remain the sole and exclusive property of the Corporation, and shall be treated as EMISPHERE Confidential Information. All Data, discoveries, inventions, improvements, new uses, processes, copyrights, trade secrets, techniques, and compounds, whether patentable or not, arising from advice provided and/or services rendered under this Agreement (collectively referred to hereinafter as “Inventions”), shall be the sole and exclusive property of the Corporation with full right of ownership, title, and interest thereto.

B. The Consultant shall promptly disclose to the Corporation any Inventions arising hereunder. The Consultant represents that any employees, agents, and consultants of the Consultant have agreed to assign to the Consultant all Inventions made by such employee, agent or consultant in the course of his or her employment. The Consultant hereby agrees to unconditionally assign and hereby assigns to the Corporation without the payment of additional compensation to the Consultant any and all right, title and interest in and to any Inventions. The Consultant shall fully cooperate with the Corporation in obtaining and maintaining, at the Corporation’s sole cost and expense, any registration or other protection as may be available with respect to such Inventions, and shall execute all documents reasonably deemed necessary by the Corporation for purposes of procuring and maintaining such patent protection,

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and all documents necessary for assigning Inventions to the Corporation. The Corporation shall be free to exploit both the registration or other rights or protections it holds as a result of the services provided hereunder as well as any other results of the services provided hereunder without any additional compensation to the Consultant. All works authored by the Consultant under this Agreement shall be deemed or treated as “works for hire” to the extent permitted by Federal Copyright Law. The Consultant may not use, publish, communicate, divulge or disclose any such information that has been designated as Confidential Information. Project results, findings, reports, notebook records, raw data and any other information arising out of the performance of this Agreement will not be released, published or referred to, in whole or in part, by the Consultant or any affiliates.

C. Neither party shall use the name or logo of the other party, nor the names of any of the other party’s employees in any publication or presentation in a public forum of work performed or reported under this Agreement or in any publicity, advertising or news release without the prior written permission of the other party.

D. At the completion of advice provided and/or services rendered by the Consultant, all original Data, regardless of the method of storage or retrieval, shall at the direction and written request of the Corporation be delivered to the Corporation and all additional copies held by the Consultant shall be erased or destroyed.

E. The Consultant represents to the Corporation that he is not a party to any agreement that would prevent him from fulfilling his obligations under this Agreement. During the term of this Agreement, the Consultant agrees he will not enter into any agreement to provide services, which would prevent him, in any way, from providing the services contemplated under this Agreement.

F. All obligations imposed on the Consultant by this Article 7 of this Agreement will survive, without limitation, the expiration or earlier termination of this Agreement for any reason.

8. Termination.

A. This Agreement shall be terminated upon the happening of any of the following events:

(i) when the Corporation and the Consultant shall mutually agree, in writing to terminate the Agreement or July 31, 2004, whichever is earlier; or

(ii) within ten (10) days after receipt of written notice from either party canceling this Agreement (with or without cause); or

(iii) in the event that the Consultant, in the opinion of an officer of the Corporation, engages in misconduct or a breach of this Agreement of such a material nature as to render the Consultant’s relationship with the Company professionally detrimental to the employees of the Corporation or to the Corporation.

9. Notices.

Notices and requests for reimbursement pursuant to Paragraph C of Article 3 and other communication shall be in writing and shall be deemed to have been received upon the hand delivery thereof, or if sent by courier or overnight mail, or by certified, return receipt mail, postage prepaid, and addressed to the party at the address given below, or such other address as may be designated in writing, five (5) days after the mailing thereof if mailed in the State of New York, or eight (8) days after the mailing thereof if mailed outside the State of New York,

	
  If to the   Corporation, to:
  	
  
If to the   Consultant, to:
  
	
  
Michael M. Goldberg
  	
  
Douglas Bermingham
  
	
  
Emisphere   Technologies, Inc
  	
  
Ten Pine   Advisors, LLC
  
	
  
765 Old Saw   Mill River Road
  	
  
627 Harris   Road
  
	
  
Tarrytown,   NY 10591
  	
  
Bedford   Hills, New York 10507
  

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10. Indemnification and Warranties.

The Consultant agrees to defend, indemnify and hold harmless the Corporation, its officers, agents, employees, executors and assigns with respect to any and all claims, damages, judgments, actions and causes of action, arising out of the negligent acts or omissions, or intentional or willful misconduct of the Consultant, including without limitation, the acts of its employees, or activities contrary to the (a) relevant material and recommendations of the Corporation, or (b) use of EMISPHERE Confidential Information, by the Consultant, including all costs, expenses and attorney’s fees incurred in the defense of any and all claims and/or litigation.

11. Waiver and Invalid Provisions

The failure to enforce any right or provision herein shall not constitute a waiver of that right or provision. No failure or delay by the Corporation in exercising any right, power or privilege hereunder shall operate as a waiver hereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof. If any provisions herein are found to be unenforceable, it is the intent of the parties that such provisions be replaced, reformed or narrowed so that their original business purpose can be accomplished to the extent permitted by law. The validity or unenforceability of any particular provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, and the Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted.

12. Other Documents

If at any time, the Consultant exercises the Options granted to him pursuant to this Agreement or otherwise purchases Common Stock then the Consultant agrees to sign documents submitted to him by the Corporation, from time to time, pertaining to stock trading restrictions based upon Securities and Exchange Regulations and Insider Trading prohibitions and designed to protect the Corporation from liability incurred as a result of a breach of any such regulation by the Consultant.

13. Construction.

This Agreement shall be governed by, construed, interpreted, applied and enforced in accordance with the laws of the State of New York applicable to contracts to be performed fully within the State of New York, exclusive of its conflicts of laws provisions. The Consultant consents to personal jurisdiction and service and venue in any Federal or State Court within the State of New York for the purpose of any action or suit arising out of this Agreement.

14. Genders and Usage.

As used in this Agreement, any gender shall be construed as including all other genders, and the singular shall be construed as including the plural and the plural the singular, as the sense requires.

15. Amendment

No amendment to any provision of this Agreement shall be effective unless in writing and signed by each party. This Agreement may not be changed, amended or supplemented, except in a writing signed by the parties.

16. Assignment.

This Agreement may not be assigned or transferred, nor may any of the rights or obligations of any of the parties hereunder be assigned or delegated, by a party without the prior written consent of the other party, which consent shall not be unreasonably withheld.

9

17 Entire Agreement; Governing Law

This instrument shall be governed and construed in accordance with the laws of the State of New York (without regard to conflict of law principles thereof) and contains the entire agreement of the parties. This Agreement supersedes all prior oral or written representations, negotiations and understandings between the parties relating to subject matter within this Agreement and may be executed in counterparts (including, by facsimile), and each such counterpart shall be deemed an original and shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date first above written by their respective officers duly authorized and empowered.

	
  
Emisphere Technologies, lnc.
  	
  
 
  	
  
Ten Pine Advisors, LLC
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
By:
  	
  
/s/ Michael   Goldberg
  	
  
 
  	
  
By:
  	
  
/s/ Douglas   Bermingham
  

10EXHIBIT 4.50

                                FORM OF DEBENTURE

THE  SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD
IN  RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS.  THE
SECURITIES ARE SUBJECT TO RESTRICTIONS OF TRANSFERABILITY AND RESALE AND MAY NOT
BE  TRANSFERRED  OR  RESOLD  EXCEPT  AS  PERMITTED  UNDER  SUCH LAWS PURSUANT TO
REGISTRATION  OR  AN EXEMPTION THEREFROM.  THE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS  OF  THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING MATERIALS.
ANY  REPRESENTATION  TO  THE  CONTRARY  IS  UNLAWFUL.

AMOUNT                                                     $50,000
DEBENTURE  NUMBER                                  July  2005  101
ISSUANCE  DATE                                     July  20,  2005
MATURITY  DATE                                     July  20,  2010

     FOR  VALUE  RECEIVED, Network Installation Corp., a Nevada corporation (the
"Company"),  hereby  promises to pay PRESTON CAPITAL PARTNERS  (the "Holder") on
July  20,  2010,  (the  "Maturity Date"), the principal amount of Fifty Thousand
Dollars  ($50,000)  U.S., and to pay interest on the principal amount hereof, in
such  amounts,  at  such times and on such terms and conditions as are specified
herein.

Article  1          Interest

     The  Company  shall  pay  interest  on  the unpaid principal amount of this
Debenture  (the  "Debenture") at the time of each conversion until the principal
amount  hereof  is  paid in full or has been converted. The Debentures shall pay
six  percent (6%) cumulative interest, in cash or in shares of common stock, par
value $.001 per share, of the Company ("Common Stock"), at the Company's option,
at  the time of each conversion. The closing shall be deemed to have occurred on
the  date  the  funds (less escrow fees, attorney fees and those amounts payable
pursuant  to  the terms sheet) are received by the Company (the "Closing Date").
If  the interest is to be paid in cash, the Company shall notify Investor on the
date of conversion, and make such payment on the next business day following the
date of conversion.   If the interest is to be paid in Common Stock, said Common
Stock  shall  be  delivered  to the Holder, or per Holder's instructions, within
three (3) business days of the date of conversion. The Debentures are subject to
automatic  conversion  at the end of four (4) years from the date of issuance at
which time all Debentures outstanding will be automatically converted based upon
the  formula  set  forth  in  Section  3.2.

Article  2          Method  of  Payment

     This  Debenture  must be surrendered to the Company in order for the Holder
to  receive  payment of the principal amount hereof.  The Company shall have the
option  of  paying the interest on this Debenture in United States dollars or in
Common Stock upon conversion pursuant to Article 1 hereof.  The Company may draw
a check for the payment of interest to the order of the Holder of this Debenture
and  mail  it  to  the  Holder's address as shown on the Register (as defined in
Section  8.2  below).  Interest  and  principal  payments  shall  be  subject to
withholding  under  applicable  United  States  Federal Internal Revenue Service
Regulations.

Article  3          Conversion.  Conversion  shall  only  be  allowed  under the
following  terms  and  only with the approval of Dutchess Private Equities Fund,
LPIn  the event the Holder convers without Dutchess' approval, the Holder shall
be subject to a lockup from any future conversions until Dutchess is no longer a
Holder.
Article  4

Section  4.1     Conversion  Privilege

(a)     The  Holder  of  this  Debenture shall have the right to convert it into
shares  of  Common  Stock  at  any time following the Closing Date and  which is
before  the  close  of  business  on  the  Maturity Date, except as set forth in
Section  3.1(c)  below.  The  number of shares of Common Stock issuable upon the
conversion  of this Debenture is determined pursuant to Section 4.2 and rounding
the  result  to  the  nearest  whole  share.

(b)     This Debenture may not be converted, whether in whole or in part, except
     in  accordance  with  Article  3.

(c)     In the event all or any portion of this Debenture remains outstanding on
     the  Maturity  Date,  the  unconverted  portion  of  such  Debenture  will
automatically  be  converted  into  shares  of  Common Stock on such date in the
manner  set  forth  in  Section  3.2.

Section  4.2     Conversion  Procedure.

(a)     Conversion  Procedures.  The  face  amount  of  this  Debenture  may  be
converted,  in  whole  or  in  part,  any time following the Closing Date.  Such
conversion shall be effectuated by surrendering to the Company, or its attorney,
     this Debenture to be converted together with a facsimile or original of the
signed  Notice  of  Conversion which evidences Holder's intention to convert the
Debenture  indicated.  The  date  on which the Notice of Conversion is effective
("Conversion  Date")  shall  be  deemed  to  be the date on which the Holder has
delivered  to  the  Company  a  facsimile  or  original  of the signed Notice of
Conversion, as long as the original Debenture(s) to be converted are received by
the  Company  within  five  (5) business days thereafter.  At such time that the
original  Debenture  has  been submitted to the Company, the Holder can elect to
whether  a  reissuance of the debenture is warranted, or whether the Company can
retain  the  Debenture  as to a continual conversion by Holder.  Notwithstanding
the  above,  any Notice of Conversion received by 4:00 P.M. EST, shall be deemed
to  have  been  received  the  previous  business  day.  Receipt  being  via  a
confirmation  of  time  of  facsimile  of  the  Holder.

(b)     Common Stock to be Issued.     Upon the conversion of any Debentures and
     upon  receipt  by the Company or its attorney of a facsimile or original of
Holder's  signed  Notice  of  Conversion the Company shall instruct its transfer
agent  to  issue  stock certificates without restrictive legend or stop transfer
instructions,  if  at  that  time  the  Registration Statement has been declared
effective  (or  with proper restrictive legend if the Registration Statement has
not  as  yet  been declared effective), in such denominations to be specified at
conversion  representing the number of shares of Common Stock issuable upon such
conversion,  as  applicable.   The  Company  shall  act  as  Registrar and shall
maintain an appropriate ledger containing the necessary information with respect
to  each  Debenture. The Company warrants that no instructions, other than these
instructions,  have  been  given or will be given to the transfer agent and that
the  Common  Stock  shall otherwise be freely resold, except as may be set forth
herein.

(c)     Conversion  Rate.  Holder is entitled to convert the face amount of this
Debenture,  plus  accrued  interest,  anytime following the Closing Date, at the
lesser  of  (i)  75%  of  the  lowest  closing bid price during the fifteen (15)
trading  days  prior  to  the Conversion Date or (ii) 100% of the average of the
closing  bid  prices  for  the  ten  (10) trading days immediately preceding the
Closing  Date  ("Fixed  Conversion  Price"),  each  being  referred  to  as  the
"Conversion  Price".  No  fractional  shares  or scrip representing fractions of
shares  will be issued on conversion, but the number of shares issuable shall be
rounded  up  or  down,  as  the  case  may  be,  to  the  nearest  whole  share.

(d)     Nothing  contained  in  this  Debenture  shall be deemed to establish or
require the payment of interest to the Holder at a rate in excess of the maximum
     rate  permitted  by  governing law.  In the event that the rate of interest
required  to  be  paid  exceeds the maximum rate permitted by governing law, the
rate  of  interest required to be paid thereunder shall be automatically reduced
to  the  maximum rate permitted under the governing law and such excess shall be
returned  with  reasonable  promptness  by  the  Holder  to  the  Company.

(e)     It  shall  be the Company's responsibility to take all necessary actions
and  to  bear  all  such  costs  to  issue  the Common Stock as provided herein,
including  the  responsibility and cost for delivery of an opinion letter to the
transfer  agent,  if  so  required.  The person in whose name the certificate of
Common  Stock is to be registered shall be treated as a shareholder of record on
and  after  the conversion date. Upon surrender of any Debentures that are to be
converted  in  part, the Company shall issue to the Holder a new Debenture equal
to  the  unconverted  amount,  if  so  requested  in  writing  by  Holder.

(f)     Within  three  (3)  business  days  after  receipt  of the documentation
referred to above in Section 3.2(a), the Company shall deliver a certificate, in
     accordance  with  Section  3.2(c)  for the number of shares of Common Stock
issuable  upon  the conversion.  In the event the Company does not make delivery
of  the  Common  Stock,  as instructed by Holder, within three (3) business days
after  the  Conversion  Date, then in such event the Company shall pay to Holder
one percent (1%) in cash, of the dollar value of the Debentures being converted,
compounded  daily, per each day after the third (3rd) business day following the
Conversion  Date  that  the  Common  Stock  is  not  delivered to the Purchaser.

                The  Company acknowledges that its failure to deliver the Common
Stock  within  three  (3) business days after the Conversion Date will cause the
Holder  to  suffer  damages  in  an  amount that will be difficult to ascertain.
Accordingly,  the  parties  agree  that  it  is  appropriate  to include in this
Debenture a provision for liquidated damages.  The parties acknowledge and agree
that  the  liquidated damages provision set forth in this section represents the
parties' good faith effort to quantify such damages and, as such, agree that the
form  and  amount  of  such  liquidated  damages  are  reasonable  and  will not
constitute  a  penalty.  The payment of liquidated damages shall not relieve the
Company  from  its obligations to deliver the Common Stock pursuant to the terms
of  this  Debenture.

              To  the extent that the failure of the Company to issue the Common
Stock pursuant to this Section 3.2(f) is due to the unavailability of authorized
but unissued shares of Common Stock, the provisions of this Section 3.2(f) shall
not  apply  but  instead  the  provisions  of  Section  3.2(g)  shall  apply.

              The  Company  shall  make any payments incurred under this Section
3.2(f)  in  immediately  available funds within three (3) business days from the
date the Common Stock is fully delivered.  Nothing herein shall limit a Holder's
right  to  pursue  actual  damages  or  cancel  the conversion for the Company's
failure  to  issue  and  deliver  Common  Stock  to  the Holder within three (3)
business  days  after  the  Conversion  Date.

(g)     The  Company  shall  at  all  times reserve (or make alternative written
arrangements  for  reservation or contribution of shares) and have available all
Common  Stock  necessary  to meet conversion of the Debentures by all Holders of
the entire amount of Debentures then outstanding. If, at any time Holder submits
     a  Notice of Conversion and the Company does not have sufficient authorized
but  unissued  shares  of Common Stock (or alternative shares of Common Stock as
may  be  contributed by Stockholders) available to effect, in full, a conversion
of  the  Debentures  (a  "Conversion  Default",  the  date of such default being
referred to herein as the "Conversion Default Date"), the Company shall issue to
the Holder all of the shares of Common Stock which are available, and the Notice
of  Conversion  as to any Debentures requested to be converted but not converted
(the  "Unconverted Debentures"), may be deemed null and void upon written notice
sent  by  the  Holder  to the Company.  The Company shall provide notice of such
Conversion  Default  ("Notice of Conversion Default") to all existing Holders of
outstanding  Debentures,  by  facsimile,  within  three (3) business day of such
default  (with  the original delivered by overnight or two day courier), and the
Holder  shall  give notice to the Company by facsimile within five business days
of  receipt  of  the  original  Notice  of Conversion Default (with the original
delivered  by overnight or two day courier) of its election to either nullify or
confirm  the  Notice  of  Conversion.

     The Company agrees to pay to all Holders of outstanding Debentures payments
for  a  Conversion  Default  ("Conversion  Default  Payments")  in the amount of
(N/365)  x (.24) x the initial issuance price of the outstanding and/or tendered
but  not  converted  Debentures held by each Holder where N = the number of days
from the Conversion Default Date to the date (the "Authorization Date") that the
Company  authorizes  a  sufficient  number  of  shares of Common Stock to effect
conversion  of  all  remaining  Debentures.  The  Company  shall  send  notice
("Authorization  Notice")  to  each  Holder  of  outstanding  Debentures  that
additional  shares  of Common Stock have been authorized, the Authorization Date
and  the  amount  of Holder's accrued  Conversion Default Payments.  The accrued
Conversion  Default  shall  be  paid in cash or shall be convertible into Common
Stock  at  the  Conversion  Rate,  upon written notice sent by the Holder to the
Company, which Conversion Default shall be payable as follows:  (i) in the event
Holder  elects to take such payment in cash, cash payments shall be made to such
Holder  of  outstanding  Debentures  by  the fifth day of the following calendar
month,  or  (ii)  in  the event Holder elects to take such payment in stock, the
Holder  may  convert  such  payment amount into Common Stock  at  the conversion
rate  set  forth in Section 3.2(c) at any time after the 5th day of the calendar
month  following the month in which the Authorization Notice was received, until
the  expiration  of  the  mandatory  four  (4)  year  conversion  period.

     The  Company  acknowledges that its failure to maintain a sufficient number
of authorized but unissued shares of Common Stock to effect in full a conversion
of the Debentures will cause the Holder to suffer damages in an amount that will
be  difficult  to  ascertain.  Accordingly,  the  parties  agree  that  it  is
appropriate  to  include  in  this Agreement a provision for liquidated damages.
The  parties  acknowledge  and  agree  that the liquidated damages provision set
forth in this section represents the parties' good faith effort to quantify such
damages  and, as such, agree that the form and amount of such liquidated damages
are  reasonable  and  will  not constitute a penalty.  The payment of liquidated
damages shall not relieve the Company from its obligations to deliver the Common
Stock  pursuant  to the terms of this Debenture.  Nothing herein shall limit the
Holder's  right to pursue actual damages for the Company's failure to maintain a
sufficient  number  of  authorized  shares  of  Common  Stock.

(h)     If,  by  the  third  (3rd) business day after the Conversion Date of any
portion  of  the  Debentures to be converted (the "Delivery Date"), the transfer
agent  fails  for  any reason to deliver the Common Stock upon conversion by the
Holder  and  after  such  Delivery Date, the Holder purchases, in an open market
transaction  or otherwise, shares of Common Stock (the "Covering Shares") solely
in  order  to  make  delivery  in  satisfaction of a sale of Common Stock by the
Holder (the "Sold Shares"), which delivery such Holder anticipated to make using
     the  Common  Stock issuable upon conversion (a "Buy-In"), the Company shall
pay  to  the  Holder, in addition to any other amounts due to Holder pursuant to
this  Debenture,  and  not  in  lieu  thereof,  the Buy-In Adjustment Amount (as
defined  below).  The  "Buy  In  Adjustment  Amount"  is the amount equal to the
excess,  if  any,  of (x) the Holder's total purchase price (including brokerage
commissions,  if  any)  for the Covering Shares over (y) the net proceeds (after
brokerage  commissions, if any) received by the Holder from the sale of the Sold
Shares.  The  Company  shall  pay  the Buy-In Adjustment Amount to the Holder in
immediately  available  funds within five (5) business days of written demand by
the  Holder.  By  way of illustration and not in limitation of the foregoing, if
the  Holder  purchases  shares  of  Common  Stock  having a total purchase price
(including  brokerage  commissions) of $11,000 to cover a Buy-In with respect to
shares  of  Common  Stock  it  sold  for  net  proceeds  of  $10,000, the Buy-In
Adjustment  Amount  which the Company will be required to pay to the Holder will
be  $1,000.

(i)     Prospectus and Other Documents. The Company shall furnish to Holder such
     number  of  prospectuses and other documents incidental to the registration
of the shares of Common Stock underlying the Debentures, including any amendment
of  or  supplements  thereto.

(j)     Limitation  on Issuance of Shares. If the Company's Common Stock becomes
listed  on  the Nasdaq SmallCap Market after the issuance of the Debentures, the
Company  may  be limited in the number of shares of Common Stock it may issue by
virtue  of  (X)  the number of authorized shares or (Y) the applicable rules and
regulations  of  the  principal  securities  market on which the Common Stock is
listed  or  traded,  including,  but  not  necessarily  limited  to, NASDAQ Rule
4310(c)(25)(H)(i)  or  Rule  4460(i)(1), as may be applicable (collectively, the
"Cap  Regulations").  Without  limiting  the  other  provisions thereof, (i) the
Company  will  take  all steps reasonably necessary to be in a position to issue
shares of Common Stock on conversion of the Debentures without violating the Cap
     Regulations  and  (ii)  if,  despite  taking  such steps, the Company still
cannot  issue such shares of Common Stock without violating the Cap Regulations,
the  holder  of  a  Debenture  which  cannot  be  converted as result of the Cap
Regulations  (each  such  Debenture,  an "Unconverted Debenture") shall have the
right  to  elect  either  of  the  following  remedies:

     (x)  if  permitted  by  the  Cap  Regulations, require the Company to issue
shares  of Common Stock in accordance with such holder's Notice of Conversion at
a  conversion  purchase  price equal to the average of the closing bid price per
share  of  Common  Stock  for  any five (5) consecutive trading days (subject to
certain  equitable  adjustments for certain events occurring during such period)
during the sixty (60) trading days immediately preceding the Conversion Date; or

     (y)  require the Company to redeem each Unconverted Debenture for an amount
(the  "Redemption Amount"), payable in cash, equal to the sum of (i) one hundred
thirty-three  percent  (133%) of the principal of an Unconverted Debenture, plus
(ii) any accrued but unpaid interest thereon through and including the date (the
"Redemption  Date")  on  which  the  Redemption  Amount  is  paid to the holder.

     A  holder  of  an Unconverted Debenture may elect one of the above remedies
with  respect  to  a  portion of such Unconverted Debenture and the other remedy
with  respect  to  other  portions of the Unconverted Debenture.  The Debentures
shall  contain  provisions  substantially  consistent with the above terms, with
such additional provisions as may be consented to by the Holder.  The provisions
of  this section are not intended to limit the scope of the provisions otherwise
included  in  the  Debentures.

(k)     Limitation  on  Amount  of  Conversion  and  Ownership.  Notwithstanding
anything  to  the  contrary  in  this Debenture, in no event shall the Holder be
entitled  to convert that amount of Debenture, and in no event shall the Company
permit  that  amount of conversion, into that number of shares, which when added
to  the sum of the number of shares of Common Stock beneficially owned, (as such
term  is  defined  under Section 13(d) and Rule 13d-3 of the Securities Exchange
Act  of  1934, as may be amended, (the "1934 Act")), by the Holder, would exceed
4.99%  of  the  number  of  shares of Common Stock outstanding on the Conversion
Date,  as  determined  in  accordance with Rule 13d-1(j) of the 1934 Act. In the
event  that  the  number  of shares of Common Stock outstanding as determined in
accordance  with  Section  13(d)  of the 1934 Act is different on any Conversion
Date  than it was on the Closing Date, then the number of shares of Common Stock
outstanding  on  such  Conversion  Date shall govern for purposes of determining
whether the Holder would be acquiring beneficial ownership of more than 4.99% of
     the  number  of shares of Common Stock outstanding on such Conversion Date.

(l)     Legend.  The  Holder acknowledges that each certificate representing the
Debentures,  and the Common Stock unless registered pursuant to the Registration
Rights  Agreement,  shall  be  stamped  or  otherwise  imprinted  with  a legend
substantially  in  the  following  form:

THE  SECURITIES  EVIDENCED  BY  THIS  CERTIFICATE  MAY  NOT  BE OFFERED OR SOLD,
TRANSFERRED,  PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (i) PURSUANT
TO  AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED,  (ii)  TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR
RULE  UNDER  SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) IF AN
EXEMPTION  FROM  REGISTRATION  UNDER  SUCH  ACT  IS  AVAILABLE.

     (m)  Prior  to  conversion  of  all  the  Debentures,  if  at  any time the
conversion  of  all  the Debentures and exercise of all the Warrants outstanding
would  result  in  an  insufficient  number of authorized shares of Common Stock
being  available  to  cover all the conversions, then in such event, the Company
will  move  to  call and hold a shareholder's meeting or have shareholder action
with  written  consent  of  the proper number of shareholders within thirty (30)
days  of  such  event, or such greater period of time if statutorily required or
reasonably necessary as regards standard brokerage house and/or SEC requirements
and/or  procedures,  for  the purpose of authorizing additional shares of Common
Stock  to  facilitate  the  conversions.   In  such  an  event management of the
Company  shall  recommend  to  all shareholders to vote their shares in favor of
increasing  the  authorized  number of shares of Common Stock. Management of the
Company  shall vote all of its shares of Common Stock in favor of increasing the
number  of  shares  of authorized Common Stock.  Company represents and warrants
that  under  no  circumstances will it deny or prevent Holder's right to convert
the  Debentures  as  permitted under the terms of this Subscription Agreement or
the  Registration  Rights  Agreement.  Nothing  in  this Section shall limit the
obligation of the Company to make the payments set forth in Section 3.2(g).  The
investor,  at  their  option,  may  request  the  company to authorize and issue
additional  shares  if the investor feels it is necessary for conversions in the
future  In  the event the Company's shareholder's meeting does not result in the
necessary authorization, the Company shall redeem the outstanding Debentures for
an  amount  equal  to (x) the sum of the principal of the outstanding Debentures
plus  accrued  interest  thereon  multiplied  by  (y)  133%.

Section  4.3     Fractional  Shares.  The  Company  shall  not  issue fractional
shares of Common Stock, or scrip representing fractions of such shares, upon the
     conversion of this Debenture.  Instead, the Company shall round up or down,
as  the  case  may  be,  to  the  nearest  whole  share.

Section  4.4     Taxes  on  Conversion.  The  Company shall pay any documentary,
stamp  or  similar  issue  or  transfer tax due on the issue of shares of Common
Stock  upon the conversion of this Debenture.  However, the Holder shall pay any
such  tax  which  is  due because the shares are issued in a name other than its
name.

Section  4.5     Company to Reserve Stock.  The Company shall reserve the number
of  shares  of Common Stock required pursuant to and upon the terms set forth in
the  Subscription  Agreement  to  permit  the conversion of this Debenture.  All
shares of Common Stock which may be issued upon the conversion hereof shall upon
     issuance be validly issued,  fully paid and nonassessable and free from all
taxes,  liens  and  charges  with  respect  to  the  issuance  thereof.

Section  4.6     Restrictions  on  Sale.  This Debenture has not been registered
under  the  Securities  Act of 1933, as amended, (the "Act") and is being issued
under Section 4(2) of the Act and Rule 506 of Regulation D promulgated under the
     Act.  This  Debenture  and  the  Common  Stock issuable upon the conversion
thereof may only be sold pursuant to registration under or an exemption from the
Act.

Section  4.7     Mergers,  Etc.  If  the  Company  merges  or  consolidates with
another corporation or sells or transfers all or substantially all of its assets
     to  another  person  and  the  holders  of the Common Stock are entitled to
receive  stock,  securities  or property in respect of or in exchange for Common
Stock,  then  as a condition of such merger, consolidation, sale or transfer, it
may thereafter be converted on the terms and subject to the conditions set forth
above  into the kind and amount of stock, securities or property receivable upon
such merger, consolidation, sale or transfer by a holder of the number of shares
of  Common Stock into which this Debenture might have been converted immediately
before  such  merger,  consolidation,  sale  or transfer, subject to adjustments
which  shall  be  as  nearly  equivalent  as  may  be practicable to adjustments
provided  for  in  this  Article  3.

Section  4.8     Company  Mandatory Redemption. The Company, at its sole option,
shall have the right to exercise a "Mandatory Redemption" to redeem, in whole or
     in  part,  the outstanding amount of the Debenture, as follows: The Company
must  notify  the  Holder  in  writing,  via  facsimile transmission, that it is
exercising its right of Mandatory Redemption.  The Company shall not be entitled
to  exercise  a  Mandatory  Redemption  of  any  amount  being converted once it
receives  a  Notice  of  Conversion,  unless  it  is  for  the balance remaining
unconverted  on  the Debenture. In the event the Company exercises such right of
Mandatory  Redemption  the Company shall pay the Holder in U.S. currency 110% of
that  portion  of the Debenture being redeemed, plus accrued but unpaid interest
and  liquidated  damages,  if  any.  The  redemption amount shall be paid to the
Holder  within  five  (5)  calendar days of the date the Holder receives written
notice  from  the  Company of the Mandatory Redemption notice and if not paid in
such time the Company shall not be entitled to any further Mandatory Redemption.
The  Investor  at  its  sole  option  retains the right to decline any Mandatory
Redemption  from  the  company.

Article  5          Mergers
     The  Company  shall  not  consolidate  or  merge  into,  or transfer all or
substantially  all  of  its assets to, any person, unless such person assumes in
writing  the  obligations  of  the  Company under this Debenture and immediately
after  such transaction no Event of Default exists.  Any reference herein to the
Company  shall  refer  to  such  surviving  or  transferee  corporation  and the
obligations  of  the  Company  shall  terminate  upon  such  written assumption.

Article  6        Reports
     The  Company  will mail to the Holder hereof at its address as shown on the
Register  a  copy  of any annual, quarterly or current report that it files with
the  Securities  and Exchange Commission promptly after the filing thereof and a
copy  of  any annual, quarterly or other report or proxy statement that it gives
to  its  shareholders  generally at the time such report or statement is sent to
shareholders.

Article  7          Defaults  and  Remedies

Section  7.1     Events  of  Default.  An  "Event  of Default" occurs if (a) the
Company  does  not  make  the  payment  of  the  principal  of this Debenture by
conversion into Common Stock within ten (10) business days of the Maturity Date,
     upon  redemption  or  otherwise,  (b)  the Company does not make a payment,
other  than  a  payment  of  principal,  for a period of three (3) business days
thereafter,  (c) any of the Company's representations or warranties contained in
the Subscription Agreement or this Debenture were false when made or the Company
fails  to  comply with any of its other agreements in the Subscription Agreement
or this Debenture and such failure continues for the period and after the notice
specified  below,  (d)  the  Company  pursuant  to  or within the meaning of any
Bankruptcy  Law  (as hereinafter defined):  (i) commences a voluntary case; (ii)
consents  to the entry of an order for relief against it in an involuntary case;
(iii)  consents to the appointment of a Custodian (as hereinafter defined) of it
or  for  all  or  substantially  all  of  its  property  or (iv) makes a general
assignment  for  the  benefit  of  its  creditors  or  (v)  a court of competent
jurisdiction  enters  an  order or decree under any Bankruptcy Law that:  (A) is
for  relief against the Company in an involuntary case; (B) appoints a Custodian
of the Company or for all or substantially all of its property or (C) orders the
liquidation  of  the  Company,  and  the order or decree remains unstayed and in
effect for sixty (60) calendar days, (e) the Company's Common Stock is suspended
or  no  longer  listed  on  any  recognized  exchange  including  electronic
over-the-counter  bulletin  board  for in excess of five (5) consecutive trading
days.  As  used in this Section 7.1, the term "Bankruptcy Law" means Title 11 of
the  United  States  Code  or any similar federal or state law for the relief of
debtors.  The term "Custodian" means any receiver, trustee, assignee, liquidator
or  similar official under any Bankruptcy Law.  A default under clause (c) above
is  not  an  Event of Default until the holders of at least 25% of the aggregate
principal  amount  of  the  Debentures  outstanding  notify  the Company of such
default  and the Company does not cure it within thirty (30) business days after
the  receipt  of  such notice, unless the Company commences to cure such default
within  such  period, which must specify the default, demand that it be remedied
and  state that it is a "Notice of Default". Prior to the expiration of the time
for  curing  a  default as set forth in the preceding sentence, the holders of a
majority in aggregate principal amount of the Debentures at the time outstanding
(exclusive  of  Debentures  then  owned  by  the  Company  or  any subsidiary or
affiliate)  may,  on  behalf  of the holders of all of the Debentures, waive any
past Event of Default hereunder (or any past event which, with the lapse of time
or  notice  and  lapse of time designated in subsection (a), would constitute an
Event  of  Default  hereunder)  and  its  consequences,  except a default in the
payment of the principal of or interest on any of the Debentures. In the case of
any  such  waiver, such default or Event of Default shall be deemed to have been
cured for every purpose of this Debenture and the Company and the holders of the
Debentures  shall  be  restored  to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or  impair  any  right  consequent  thereon.

Section  7.2     Acceleration.  If an Event of Default occurs and is continuing,
the  Holder  hereof by notice to the Company may declare the remaining principal
amount  of this Debenture, together with all accrued interest and any liquidated
damages,  to be due and payable.  Upon such declaration, the remaining principal
amount  shall  be  due  and  payable  immediately.

Section  7.3     Seniority,  No  indebtedness  of  the Company is senior to this
Debenture in right of payment, whether with respect to interest, damages or upon
     liquidation  or  dissolution  or  otherwise.

Article  8          Registered  Debentures

Section  8.1     Record Ownership.  The Company, or its attorney, shall maintain
a register of the holders of the Debentures (the "Register") showing their names
     and  addresses  and  the serial numbers and principal amounts of Debentures
issued to them.  The Register may be maintained in electronic, magnetic or other
computerized form.  The Company may treat the person named as the Holder of this
Debenture  in  the Register as the sole owner of this Debenture.   The Holder of
this  Debenture  is  the  person  exclusively  entitled  to  receive payments of
interest  on  this  Debenture,  receive  notifications  with  respect  to  this
Debenture, convert it into Common Stock and otherwise exercise all of the rights
and  powers  as  the  absolute  owner  hereof.

Section  8.2     Worn  or  Lost  Debentures.  If  this  Debenture  becomes worn,
defaced  or  mutilated  but  is still substantially intact and recognizable, the
Company  or  its  agent  may  issue  a  new  Debenture  in  lieu hereof upon its
surrender.   Where  the  Holder  of this Debenture claims that the Debenture has
been  lost,  destroyed  or  wrongfully  taken,  the  Company  shall  issue a new
Debenture  in  place  of  the  original  Debenture  if the Holder so requests by
written  notice  to  the  Company  actually received by the Company before it is
notified  that  the Debenture has been acquired by a bona fide purchaser and the
Holder  has delivered to the Company an indemnity bond in such amount and issued
by  such  surety as the Company deems satisfactory together with an affidavit of
the Holder setting forth the facts concerning such loss, destruction or wrongful
     taking  and  such  other  information  in  such  form  with  such  proof or
verification  as  the  Company  may  request.

Article  9          Notice.

     Any  notices,  consents,  waivers  or  other  communications  required  or
permitted  to  be given under the terms of this Debenture must be in writing and
will  be  deemed  to  have  been  delivered  (i)  upon  receipt,  when delivered
personally;  (ii)  upon receipt, when sent by facsimile (provided a confirmation
of  transmission is mechanically or electronically generated and kept on file by
the  sending  party);  or  (iii)  one  (1)  day  after deposit with a nationally
recognized  overnight  delivery  service, in each case properly addressed to the
party  to  receive  the  same.  The  addresses  and  facsimile  numbers for such
communications  shall  be:

If  to  the  Company:

     Jeffrey  Hultman,  CEO
     Network  Installations  Corp
     15235  Alton  Parkway,  Suite  200
     Irvine,  CA  92618
     Telephone:  949-753-7551
     Facsimile:  949-753-7499

If  to  the  Holder:

     At  the  address  listed  in  the  Questionnaire.

     Each  party  shall provide five (5) business days prior notice to the other
party  of  any  change  in  address,  phone  number  or  facsimile  number.

Article  10          Time
     Where  this  Debenture  authorizes  or requires the payment of money or the
performance  of  a  condition  or obligation on a Saturday or Sunday or a public
holiday,  or authorizes or requires the payment of money or the performance of a
condition or obligation within, before or after a period of time computed from a
certain date, and such period of time ends on a Saturday or a Sunday or a public
holiday,  such  payment  may be made or condition or obligation performed on the
next  succeeding  business day, and if the period ends at a specified hour, such
payment  may  be made or condition performed, at or before the same hour of such
next  succeeding  business  day,  with  the  same force and effect as if made or
performed  in  accordance  with  the  terms of this Debenture.  A "business day"
shall  mean  a day on which the banks in New York are not required or allowed to
be  closed.

Article  11          No  Assignment

     This  Debenture  shall  not  be  assignable.

Article  12          Rules  of  Construction.
     In  this  Debenture,  unless  the  context otherwise requires, words in the
singular  number include the plural, and in the plural include the singular, and
words  of the masculine gender include the feminine and the neuter, and when the
sense  so  indicates,  words  of the neuter gender may refer to any gender.  The
numbers  and  titles  of  sections  contained  in the Debenture are inserted for
convenience  of  reference  only, and they neither form a part of this Debenture
nor are they to be used in the construction or interpretation hereof.  Wherever,
in  this  Debenture, a determination of the Company is required or allowed, such
determination  shall  be  made  by  a  majority of the Board of Directors of the
Company and if it is made in good faith, it shall be conclusive and binding upon
the  Company  and  the  Holder  of  this  Debenture.

Article  13          Governing  Law
     The validity, terms, performance and enforcement of this Debenture shall be
governed  and construed by the provisions hereof and in accordance with the laws
of  the  Commonwealth  of  Massachusetts  applicable  to  agreements  that  are
negotiated,  executed,  delivered  and  performed  solely in the Commonwealth of
Massachusetts.

Article  14          Litigation

DISPUTES  SUBJECT  TO  ARBITRATION  GOVERNED  BY  MASSACHUSETTS  LAW
--------------------------------------------------------------------

     All  disputes  arising  under  this  agreement  shall  be  governed  by and
interpreted  in  accordance  with the laws of the Commonwealth of Massachusetts,
without regard to principles of conflict of laws.  The parties to this agreement
will  submit all disputes arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
("AAA").  The  arbitrator  shall  be selected by application of the rules of the
AAA, or by mutual agreement of the parties, except that such arbitrator shall be
an  attorney  admitted to practice law in the Commonwealth of Massachusetts.  No
party  to  this agreement will challenge the jurisdiction or venue provisions as
provided  in  this  section.

     IN  WITNESS WHEREOF, the Company has duly executed this Debenture as of the
date  first  written  above.
                         NETWORK  INSTALLATION  CORP.

                        By:    /s/  Jeffrey  R.  Hultman
                               -------------------------
                        Name:  Jeffrey  R.  Hultman
                        Title: CEO

                              PRESTON  CAPITAL  PARTNERS

                         By:    /s/  John  P.  Wykoff
                                ----------------------
                         Name:  John  P.  Wykoff
                         Title: A  Managing  Member

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