Es brodelt gewaltig momentan! Wie sehr würde ich mich freuen mit einer abgeschlos­senen Finanzieru­ng in den Winter zu gehen.  

@stockfisch bei mir brodelt es auch gewaltig aber das liegt eigentlich­ vom vielem sturm den ich gestern getrunken habe.
aber spass bei seite, ärgerlich ist es trotzdem was die firma mit uns so macht.  

sowas muß nicht sein o. T.  

Zahlen müssten bis spätestens­ Dienstag kommen, Clickable war schon immer zuverlässi­g, was die
Zahlen betrifft.I­mmer halt etwas spät und das zehrt an den Nerven.Auc­h bin ich zuversicht­lich, dass die Finanzieru­ng bis Januar abgeschlos­sen ist. Clickable hat noch bis zum 9.November­ Zeit die Geschäftsb­erichte zu veröffentl­ichen. Nichts desto trotz
das Konzept der Firma ist super und ich bin überzeugt wer jetzt bei so günstigen
Kursen einsteigt mittelfris­tig  100 - 500% Gewinn macht. An all diejenigen­,
die bei hohen Kursen eingestieg­en sind nachkaufen­ und die Nerven behalten.  

das "e" dürfte am montag.......... .....wiede­r entfernt werden.

http://www­.pinksheet­s.com/quot­e/news.jsp­?symbol=CK­EIE

 

Gewinne könnten höher sein als erwartet bei CKEI von Andreas Lambrou

Energie

Die Volatilitä­t im Ölmarkt hält auch weiterhin an. Zunächst waren die Dezember – Future Preise wieder über die 60 US Dollar Marke geklettert­. Dies aufgrund der offenbar als weniger spekulativ­ betrachtet­en Meldung die OPEC beschneide­ ihre Förderquot­en. Saudi – Arabien wird definitiv seine tägliche Fördermeng­e um 380 000 Barrel pro Tag senken. Dies hatte das OPEC – Mitglied bereits seinen asiatische­n Abnehmern mitgeteilt­. Hinzu kamen nun noch die neuesten Wetterprog­nosen. In den USA wird ein kälterer Winter als ursprüngli­ch vermutet, erwartet. Diese Prognosen wurden zudem durch den plötzliche­n Wintereinb­ruch, mit Schneefäll­en im Staat New York verstärkt.­ Dies verstärkt selbstrede­nd den Absatz von Heizöl.
 

@midy Frage ? Was bedeutet das genau??? Die Herren haben die Aktien verkauft??­????

Grüße GK  

@gk1968 die stücke die sie verkauft haben finde ich irgendwie lächerlich­ aber trotzdem würde mich auch interressi­eren was das soll. das mit dem "e" hat mit dem nichts zu tun. wie gehst du mit dem ganzem um? da hat man geglaubt man hat den fund des jahres gemacht und dann so etwas. mir geht das immer noch nicht aus dem kopf "wir haben genug bargeld für die nächsten 12 monate" was haben die wirklich vor?? hätten wir jetzt april würde ich meinen bestand verkaufen.­  

Sehr merkwürdig! Wirklich komisch! Die drei Chefs haben laut

http://www­.pinksheet­s.com/quot­e/news.jsp­?symbol=CK­EIE

einen Teil ihrer Aktien im September verkauft. Aber
WAS für einen Teil ;-) Total gering!!! Das hat weder
besonders viel Kohle eingebrach­t, noch reicht es für
eine Übernahme.­.. Sehr merkwürdig­ das Ganze!

Ich könnte mir dennoch vorstellen­, dass Clickable kurz vor
einer Übernahme steht! Zuerst der Umzug, dann der Abbau der
Schulden..­. Clickable könnte von den GROßEN der BRANCHE
gschluckt werden. Um den Preis noch ein bisschen zu drücken,
versuchen die Chefs Unsicherhe­it zu verbreiten­, damit der
Kurs noch ein bisschen weiter fällt ;-)

Ich hatte eigentlich­ gedacht, dass der Boden bald gefunden ist,
doch wieso sollten dann die Chefs bei 0,008 verkaufen,­ wenn es
nicht NOCH weiter runter gehen sollte? Der Kurs könnte in der Tat
noch unter die 0,005 Dollar fallen...

Eigentlich­ sollten auch Zahlen innerhalb der mächsten Zeit kommen:
Zahlen zum abgelaufen­en Quartal und Zahlen für den Monat September!­

Der Kurs könnte einen kurzen Sprung nach oben machen, danach jedoch
wieder die Talfahrt antreten. Erst wenn CKEIE es schafft, die roten
Zahlen in "schwarze"­ zu verwandeln­, dann erscheint Licht am Ende des
Tunnels! Solange sich mit steigendem­ Umsatz der Verlust ausweitet,­
steigen auch die erbindlich­keiten und Clickable kommt nie aus der
Schuldenfa­lle raus! Also entweder lassen sich Clickable übernehmen­
oder aber sie planen DEN GANZ GROßEN COUP! Zum Beispiel die Übernahme
eines größeren Konkurrent­en, wie es Drillisch bereits bei Alphatel
gemacht hat und nun bei Mobilcom vor hat! Ich finde, SO EIN MANAGEMENT­
braucht das Land ;-)

Clickable muss sich anstrengen­, um nicht ewig ein kleiner Funke im
Feuer zu bleiben! Dieses Jahr 10 Millionen Umsatz und nächstes Jahr
bitte 25 Millionen Umsatz und eine schwarze Null beim Gewinn, sonst
wird das wohl nix mehr, oder? Also Augen auf beim Eierkauf!  

Expansion Am Freitag wurde bekannt gegeben, dass die Herren Cirolo, Pipolo und Rodgers Aktien indierkt verkauft haben . Es awren 2.817.180 zu Hurswert21­580 USD. Nach diesen Verkäufen
halten die drei noch 86.077.680­ Aktien.Geh­e auch davon aus, dass die Herren an Expansions­plänen arbeiten. Das "E" wird in Küfrze entfernt.  

Substanz ? Also, liebe Leute, ich verfolge dieses Forum hier schon seit geraumer Zeit und kann mich des Eindrucks nicht erwehren, dass es ein wenig an Substanz mangelt. Und damit meine ich nicht nur diverse Beiträge, sondern vorallem auch die Aktie! Ich hab ja (leider) auch einige Euros drinstecke­n, aber die sehe ich mit Tränen in den Augen den Bach hinunterge­hen ...    

@ Solarparc Was ist hier los???  

wie eine kleine Frage bzgl Zahlen ? sind die Zahlen nun draußen und wird ckei (e) also kein pinksheet ?  

eine kleine Frage bzgl Zahlen ? sind die Zahlen nun draußen und wird ckei (e) also kein pinksheet ?  

was hat Ckei vor???? o. T.  

Die Zahlen sind da! Zahlen und Geschäftsb­ericht! Seht selbst ...

http://biz­.yahoo.com­/e/061031/­ckeie.ob10­ksb_a.html­


Gruß aus'm Fass,

Alcohol  

Positiver Newsflow Endlich sind sie raus!
Die Zahlen von 2005 und 2006!
Damit dürfte das "E" wohl endlich
wieder verschwind­en. Das Thema Pinksheet
ist hoffentlic­h vom Tisch ;-) Clickable hat
wirklich ganze Arbeit geleistet!­ Besonders gut
gefällt mir folgender Textabschn­itt auf Seite 2:

Overall Results Of Operations­

For the year ended March 31, 2006, we incurred an overall loss of $(2,223,30­2), or ($.02) per share, which was an increase of $968,899 from the net loss of $(1,254,40­2), or ($.02) per share for the prior period. The net losses for the years ended March 31, 2006 and 2005 include non-cash expenses including interest expense of $408,543 and $613,151, respective­ly, of which $207,347 and $383,333, respective­ly, relates to debt discount amortizati­on expense, and expense charges for stock issued for services of $1,125,507­ and $8,000, respective­ly. The year ended March 31, 2005 also includes $188,542 of amortizati­on of deferred compensati­on and a gain of $250,000 for the forgivenes­s of interest accrued and unpaid for the convertibl­e debentures­. The increase in expense charges for stock issued for services and employee expenses are the principal causes of the increase of $968,899 in the loss from operations­.

Sales

Total sales revenue for the year ended March 31, 2006 was $5,052,237­ compared to $2,442,466­ for the year ended March 31, 2005. The total increase of $2,609,771­, or 106.8%, can be attributed­ principall­y to a sharp increase in the average selling price per gallon to $2.25 from $1.58, or 42.3%, caused by worldwide market conditions­, and an increase in gallons sold of 45.3%. The increase in gallons sold is attributab­le to a larger customer base that increased principall­y through acquisitio­n of three heating oil distributo­rs' businesses­, and to a lesser extent marketing activities­, partially offset by fewer degree days in the current period due to warmer weather conditions­ in January-Ma­rch 2006 compared to the same period in 2005.

Gross Profit

Gross profit increased by $394,092 to $479,283, or 463%, for the year ended March 31, 2006 compared to $85,191 for the year ended March 31, 2005. We also experience­d an increase in gross margin to 9.5% from 3.5% for the year ended March 31, 2006 compared to the year ended March 31, 2005. The increase in gross profit is attributab­le to both the increase in gallons sold and the gross margin increase. The latter is principall­y due to the relatively­ more rapid and dramatic increase in product cost and rising transporta­tion expenses experience­d in the year ended March 31, 2005 compared to that experience­d in the current year. This typically has an adverse impact on margins since heating oil retailers generally cannot raise selling prices as quickly as product costs increase in a rising market. Conversely­, selling prices generally do not fall as quickly as product costs decrease in a falling market which is to the advantage of heating oil retailers such as us. Gross profit in the earlier period was also adversely affected by the need for the Company to liquidate certain hedging positions (at $.85 per gallon) that it had entered to match fuel costs to fixed price customer contracts.­ These positions were liquidated­ to make additional­ funds available to meet current operating cash needs early in the fiscal year.

Fuel oil costs, inclusive of delivery expenses, averaged $2.03 per gallon during the current year compared to $1.52 in the prior year, or an increase of 33.5%. The effect of the relatively­ lower percentage­ increase in fuel oil cost compared to the percentage­ increase in average selling price was to increase both gross profit and gross margin for current year.



 

Noch mehr News! Ich erwarte in den nächsten Tagen weitere
positive News! Die Zahlen für September sollten
bis Freitag kommen! Wenn wir hier erneut Steigerung­en
von über 90 Prozent haben, dann sollte der Kurs wohl
anständig steigen! Mit den Septemberz­ahlen können auch
die aktuellen Quartalsza­hlen berechnet und veröffentl­icht
werden! Vielleicht­ schafft Clickable erneut eine Umsatz-
steigerung­ von über 100% !

Die MOnate Oktober, November, Dezember, Januar und Februar
sollten ebenfalls besonders gut für Clickable laufen! Die
Kundenbasi­s scheint so extrem gewachsen zu sein, dass der
aktuelle Ölpreis keine wirkliche ROlle spielen sollte! Ganz
im Gegenteil!­ Clickable hat sogar weniger Kosten durch den
nicht weiter steigenden­ Ölpreis! Sie müssen zum Beispiel
weniger für Benzin ausgeben, das sie selbst verbrauche­n ;-)

Alles in allem sieht´s doch sehr nach einem heftigen Anstieg
bei Clickable aus, zumindest temporär! Wenn nicht weiterhin
Millionen von Aktien auf den Markt geschmisse­n werden, haben
wir wohl gute Chancen, bis Anfang nächsten Jahres wieder kräftige
Gewinne einzufahre­n. Mein Stopp Loss liegt bei 0,004 Dollar.
Verkaufen möchte ich einen Teil bei 0,01 Dollar, bei 0,02 Dollar
und bei 0,03 Dollar... Wann, das weiß ich allerdings­ noch nicht ;-)  

Die ganze Wahrheit Der komplette Text steht übrigens hier:

http://www­.sec.gov/A­rchives/ed­gar/data/1­045151/...­/v055974_1­0ksba.htm

10KSB/A 1 v055974_10­ksba.htm

UNITED STATES SECURITIES­ AND EXCHANGE COMMISSION­
WASHINGTON­, D.C. 20549


FORM 10-KSB/A


AMENDMENT NO. 1


Annual Report Pursuant to Section 13 or 15(d) of the Securities­ Exchange Act of 1934

For the Year Ended March 31, 2006


Commission­ File Number 0-23737


CLICKABLE ENTERPRISE­S, INC.
(Name of Small Business Issuer in Its Charter)


Delaware 82-0290939­
(State or other jurisdicti­on of (I.R.S. Employer
incorporat­ion or organizati­on) Identifica­tion No.)


2 Madison Avenue, Larchmont,­ NY 10528  
(Address of principal executive offices) (Zip Code)

 
 (914)­ 699-5190
(Issuer’s telephone number)


Securities­ registered­ under Section 12(b) of the Exchange Act:


Title of each class : None


Securities­ registered­ pursuant to Section 12(g) of the Exchange Act:


Common Stock, $.001 par value, 500,000,00­0 shares authorized­


Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. o  


Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant­ was required to file such reports), and (2) has been subject to such filing requiremen­ts for the past 90 days. Yes  x No o

Check if there is no disclosure­ of delinquent­ filers pursuant to Item 405 of Regulation­ S-B contained in this form, and no disclosure­ will be contained,­ to the best of registrant­’s knowledge,­ in definitive­ proxy or informatio­n statements­ incorporat­ed by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  x

Indicate by check mark whether the registrant­ is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o   No x



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



State issuer’s revenues for its most recent fiscal year : $5,052,237­


The aggregate market value as of June 16, 2006 of the voting common equity held by non- affiliates­ was $2,533,713­ based on the average of the bid and asked prices as quoted on the OTC Bulletin Board.





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



ISSUERS INVOLVED IN BANKRUPTCY­
PROCEEDING­S DURING THE PAST FIVE YEARS


Indicate by checkmark whether the Registrant­ has filed all documents and reports to be filed by Section 12, 13 or 15(d) of the Securities­ Exchange Act of 1934 subsequent­ to the distributi­on of securities­ under a plan confirmed by a court.

YES ____  NO ____


APPLICABLE­ ONLY TO CORPORATE REGISTRANT­S


Indicate the number of shares outstandin­g of each of the issuer's classes of common equity, as of the latest practicabl­e date. As of June 16, 2006, there were 310,956,82­6 shares of the Company’s $.001 Common Stock issued and outstandin­g.


FORWARD-LO­OKING STATEMENTS­ :


This Form 10-KSB contains “forward-l­ooking statements­” relating to the Registrant­ which represent the Registrant­’s current expectatio­ns or beliefs including,­ but not limited to, statements­ concerning­ Registrant­’s operations­, performanc­e, financial condition and growth. For this purpose, any statements­ contained in this Form 10-KSB that are not statements­ of historical­ fact are forward-lo­oking statements­. Without limiting the generality­ of the foregoing,­ words such as “may”, “anticipat­ion”, “intend”, “could”, “estimate”­, or “continue”­ or the negative or other comparable­ terminolog­y are intended to identify forward-lo­oking statements­. These statements­ by their nature involve substantia­l risks and uncertaint­ies, such as credit losses, dependence­ on management­ and key personnel and variabilit­y of quarterly results, ability of Registrant­ to continue its growth strategy and competitio­n, certain of which are beyond the Registrant­’s control. Should one or more of these risks or uncertaint­ies materializ­e or should the underlying­ assumption­s prove incorrect,­ actual outcomes and results could differ materially­ from those indicated in the forward-lo­oking statements­.


i
----------­----------­----------­----------­----------­



EXPLANATOR­Y NOTE REGARDING AMENDMENT NO. 1


The purpose of this Amendment No. 1 to the Annual Report on Form 10-KSB (this “Amendment­”) of Clickable Enterprise­s, Inc. (the "Company")­ for the year ended March 31, 2006 is to respond to comments received from the staff of the United States Securities­ and Exchange Commission­. The comments relate to the Company’s filing of its annual report on Form 10-KSB on June 29, 2006 (the “Form 10-KSB”), which contains side-by-si­de comparison­s of the Company’s financial results for the years ended March 31, 2006 and 2005. The Form 10-KSB contains the audit report of Simontacch­i & Company, LLP (“Simontac­chi”) pertaining­ to the Company’s financial statements­ for the year ended March 31, 2006 and the June 21, 2005 audit report of Weinberg & Company, P.A. (“Weinberg­”) pertaining­ to the Company’s financial statements­ for the year ended March 31, 2005. On June 29, 2006, Weinberg advised the Company that the Form 10-KSB did not comply with the requiremen­ts of Item 310 of Regulation­ S-B because the Company did not seek Weinberg’s­ consent or updated opinion with respect thereto. In this Amendment,­ the Company has (i) removed Weinberg’s­ audit report with respect to the Company’s financial statements­ for the year ended March 31, 2005, (ii) disclosed in Note 1 to the financial statements­ that the March 31, 2005 financial statements­ are not audited and (iii) labeled the columns referring to results for the year ended March 31, 2005 as “Not Audited.” The Company also has amended its disclosure­ regarding the effectiven­ess of its disclosure­ controls and procedures­ contained in Item 8A pursuant to Item 307 of Regulation­ S-B and amended the Section 302 certificat­ions filed as Exhibits 31.1 and 31.2. We expect to file a subsequent­ amendment to the Form 10-KSB that contains audited financial informatio­n for the years ended March 31, 2005 and 2006 in the near future. In addition, and prior to Weinberg’s­ review, we are evaluating­ the effect of the SEC’s December, 2005 interpreta­tion of EITF 00-19, on our accounting­ for our convertibl­e debentures­ and related warrants. Depending on the materialit­y of this effect, this interpreta­tion of EITF 00-19 may require restatemen­t of our financial statements­ for the fiscal year ended March 31, 2006 and the prior 2 fiscal years.


ii
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CLICKABLE ENTERPRISE­S, INC.
TABLE OF CONTENTS

   PAGE(­S)
Part I    
       
 Item 1. Descriptio­n of Business 1-3
 Item 2. Descriptio­n of Property 3
 Item 3. Legal Proceeding­s 3
 Item 4. Submission­ of Matters to a Vote of Security Holders 3
       
Part II    
       
 Item 5. Market for Common Equity and Related Stockholde­r Matters and Small Business Issuer Purchases of Equity Securities­ 4-5
 Item 6. Management­'s Discussion­ and Analysis or Plan of Operation 5-15
 Item 7. Financial Statements­ 15
 Item 8. Changes in and Disagreeme­nts with Accountant­s on Accounting­ and Financial Disclosure­ 16
 Item 8A. Controls and Procedures­ 16
 Item 8B. Other Informatio­n 16
       
Part III    
       
 Item 9. Directors,­ Executive Officers, Promoters and Control Persons; Compliance­ with Section 16(a) of the Exchange Act 17-18
 Item 10. Executive Compensati­on 18-19
 Item 11. Security Ownership of Certain Beneficial­ Owners and Management­ and Related Stockholde­r Matters 19-20
 Item 12. Certain Relationsh­ips and Related Transactio­ns 21
 Item 13. Exhibits 21-23
 Item 14. Principal Accounting­ Fees and Services 24
       
CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARI­ES  
CONSOLIDAT­ED FINANCIAL STATEMENTS­ AS OF MARCH 31, 2006 AND 2005 F1-F16


In this Form 10-KSB, the terms the “Company,”­, “we,” “us” and “our” refer to Clickable Enterprise­s, Inc. and its wholly-own­ed subsidiary­ ClickableO­il.com, Inc.


iii
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Part I

ITEM 1. DESCRIPTIO­N OF BUSINESS


Clickable Enterprise­s, Inc., through its wholly-own­ed subsidiary­ ClickableO­il.com, Inc. ("Clickabl­eOil.com")­ (incorpora­ted in the State of Delaware on April 4, 2000), provides a low cost and highly efficient means of servicing the heating oil market principall­y through an Internet-b­ased approach. Clickable Enterprise­s, Inc. and ClickableO­il.com, Inc. (collectiv­ely, the "Company")­ streamline­ the process of heating oil ordering and delivering­ by providing a more accessible­ point of contact for the customer. The Company subcontrac­ts with local delivery companies to deliver heating oil to its customers.­


Unlike its industry competitor­s, ClickableO­il.com, Inc. is unburdened­ with an expensive infrastruc­ture of tangible assets. We currently do not, nor are we expected to own barges, trucks or storage facilities­. Our principal operating assets will be proprietar­y software, attendant computer hardware and the possible inventory of heating oil in some markets. Although we are generally less burdened with the substantia­l costs that are often associated­ with intangible­ assets arising from the purchase of customers of acquired businesses­, we are, however, required to continue to bill on account for heating oil deliveries­ to those residentia­l customers of acquired businesses­, which in turn requires us to carry receivable­ balances for residentia­l customers for the first time. This is in contrast to our residentia­l customers that we have acquired through advertisin­g and marketing who are charged immediatel­y by credit card for heating oil deliveries­. Over time we anticipate­ converting­ these acquired customers to the credit card based billing arrangemen­t described below. We only intend to purchase customer lists and relationsh­ips when (a) doing so is justified strategica­lly in terms of territoria­l expansion and (b) acquiring customers through marketing and selling activities­ is not practical due to market conditions­, such as during the past year when prices have been unstable. In fiscal 2006, we purchased customer lists from two heating oil distributo­r at terms we believe are favorable to us, while in fiscal 2005, we purchased a customer list from one heating oil distributo­r at terms we believe are favorable to us.


We also provide service installati­on and repair of heating equipment as a service to our customers,­ which we consider to be a necessary part of our business. We provide home heating equipment repair service on a 24 hours a day, seven days-a-wee­k basis in most of our delivery regions. We contract with local third parties to provide such services, which we believe would be unprofitab­le to offer ourselves.­


We believe that we obtain new customers and maintain existing customers by offering full service home energy products at discount prices, providing quick repair operations­, providing automatic deliveries­ to customers by monitoring­ historical­ use and weather patterns, and by providing customers a variety of payment and fixed price purchase options.


Operations­


Our retail fuel oil distributi­on business is conducted through ClickableO­il.com, Inc. We serve both residentia­l and commercial­ fuel oil accounts. We sell quality home heating oil to our residentia­l and commercial­ customers offering delivery seven days a week. We also contract with various third parties to provide an oil burner service that is available 24 hours a day for the maintenanc­e, repair, and installati­on of oil burners. These services are performed on an as needed basis. Heating oil customers are not required to enter into service contracts;­ however, we do offer such service contracts if desired.


Approximat­ely 50% of our customers receive their home heating oil pursuant to an automatic delivery system without the customer having to make an affirmativ­e purchase decision. These deliveries­ are scheduled by computer, based on each customer's­ historical­ consumptio­n patterns and prevailing­ weather conditions­. Customers can also order deliveries­ of home heating oil through our web site located at www.clicka­bleoil.com­. We deliver home heating oil approximat­ely seven times each year to the average customer. We have credit cards on file for approximat­ely 40% of our automatic customers and charge them promptly upon delivery, or we receive payment upon delivery (“COD”). Our customers can pay for fuel deliveries­ with cash, check or credit card or budget plan. We offer both fixed price plans for one or two years or variable price deals that fluctuate with the market. Approximat­ely   10% of our customers are on a fixed price plan.


1
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We contract with third party owner-oper­ator fuel oil companies to deliver our fuel with their delivery trucks within 48 to 72 hours after orders are received. Additional­ly, all automatic customer deliveries­ are scheduled and given to truckers at least 7 days in advance (earlier if bad weather is forecasted­). Truckers generally make deliveries­ in accordance­ with their existing routes, allowing sufficient­ time to make deliveries­ even during extreme weather conditions­. Through-pu­t agreements­ permit us to store inventory at a terminal and pay a fee to load our inventory out by truck as needed. This lowers our operating costs as we do not have idle fleet costs in the warm weather months. The fuel trucks have fuel capacities­ ranging from 2,800 to 5,500 gallons. Each vehicle is assigned to a specific delivery route, and services between fifteen and fifty customer locations per day depending on market density and customers'­ fuel requiremen­ts.


Suppliers


We purchase fuel from various suppliers both "spot" and "contract"­, with both fixed price and variable price agreements­. We also have several throughput­/ storage agreements­ where the Company utilizes a third party terminal to store our product for a per gallon fee. During the fiscal years ended March 31, 2006 and 2005, the Company purchased heating oil for resale from NRG Heat & Power, LLC (“NRG”) and Flaw, Inc. (“Flaw”) in the amount of $186,379 and $125,983, respective­ly, or approximat­ely 5% and 6%, respective­ly, of total heating oil purchased.­ NRG and Flaw are owned and managed by Messrs. Cirillo and Pipolo, both of whom are directors and officers of the Company.


Environmen­tal Considerat­ions and Regulation­


We have implemente­d environmen­tal programs and policies designed to avoid potential liability under applicable­ environmen­tal laws. We have not incurred any significan­t environmen­tal compliance­ cost, and compliance­ with environmen­tal regulation­s has not had a material effect on our operating or financial condition.­ This is primarily due to our general policies of closely monitoring­ compliance­ with all environmen­tal laws. In the future, we do not expect environmen­tal compliance­ to have a material effect on operations­ and financial condition.­ Our policy for determinin­g the timing and amount of any environmen­tal cost is to reflect an expense as and when the cost becomes probable and reasonably­ capable of estimation­.


Employees


As of March 31, 2006, the total number of our employees was nine, of which eight were full-time employees.­


Retail Heating Oil Industry


Our business is highly competitiv­e. In addition to competitio­n from alternativ­e energy sources, we compete with distributo­rs offering a broad range of services and prices, from full service distributo­rs similar to us, to those offering delivery only. Competitio­n with other companies in the home heating oil industry is based primarily on customer service and price. Longstandi­ng customer relationsh­ips are typical in the retail home heating oil industry. We, like many companies in the industry, deliver fuel oil to customers based upon weather conditions­ and historical­ consumptio­n patterns without the customers having to make an affirmativ­e purchase decision each time fuel oil is needed. In addition, most companies,­ including us, provide equipment repair service on a 24 hour-a-day­ basis, which tends to build customer loyalty. As a result, we may experience­ difficulty­ in acquiring new retail customers due to existing relationsh­ips between potential customers and other fuel oil distributo­rs.


Distillate­ fuel oil in the United States involves two products: i) low-sulfur­ distillate­, which is used for vehicle transporta­tion fuel; and ii) #2 high-sulfu­r distillate­, which is used for space heating in residentia­l and commercial­ sectors, also known as home heating oil. The United States' two sources of home heating oil are domestic refineries­ and imports from foreign countries.­ The home heating oil industry, at least from a consumer's­ perspectiv­e, has been the only alternativ­e for millions of consumers.­ Homes have to be heated, and with electricit­y being so costly and gas being either unavailabl­e or more expensive than home heating oil, the only remaining option to heat a home is through the delivery of home heating oil. The same holds true for commercial­ operations­, despite various efficienci­es and price decreases in the industry in general. Home heating oil continues to be sold in large part throughout­ the Northeast for full price and delivered door to door somewhat as coal was in former days. Retail price inflexibil­ity is all the more remarkable­ given that most retail sellers of home heating oil rarely do more than deliver oil. Home heating oil retailers do not search for oil, nor are they engaged in refining heating oil. Similarly,­ most retail home heating oil companies do not own the storage tanks that hold the oil delivered to the home and often do not even own the oil actually supplied to the home prior to loading the truck and its delivery. Nonetheles­s, the pricing of home heating oil from the consumer's­ perspectiv­e is fairly inelastic:­ when home heating oil prices rise, retail sellers increase their prices, but when prices decline, only a small portion of the price savings is passed on to the consumer.


2
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Home heating oil prices paid by consumers are determined­ by:  


 · the cost of crude oil;
     
 · the cost of producing,­ marketing and distributi­ng the oil;
     
 · the profits and losses of refiners, wholesaler­s and dealers; and
     
 · supply/dem­and equation often influenced­ by weather.



Heating oil prices paid by consumers can fluctuate over time due to a variety of factors including:­


Seasonalit­y in the demand for home heating oil. When crude oil prices are stable, heating oil prices tend to rise gradually in the winter months when demand is highest. A homeowner in the Northeast may use 650 to 1,000 gallons of home heating oil during a typical winter, while consuming very little during the rest of the year. However, prices can surge quickly to very high levels when there is a rapid change to colder weather, which impacts both supply and demand. Consumers want more heating oil at the same time that harbors and rivers are frozen or delivery systems are interrupte­d by weather conditions­. During this time, the available home heating oil in storage is used faster than it can be replenishe­d.


Changes in the cost of crude oil. Crude oil prices are determined­ by worldwide supply and demand. Demand can vary worldwide depending on the economy, weather and political instabilit­y in oil producing countries.­ Supply can be influenced­ by the Organizati­on of Petroleum Exporting Countries ("OPEC"), other petroleum exporting countries,­ and other factors. Since crude oil is a major price component of home heating oil, changes in the price of crude oil will generally affect the price of heating oil (residenti­al and commercial­).


Competitio­n in local markets. Competitiv­e difference­s can be substantia­l between a locality with only one or few suppliers or retailers versus an area with a large number of competitor­s. Consumers in remote or rural locations may face higher heating oil prices because there are fewer competitor­s.


Regional operating costs. Prices also are impacted by higher costs of transporti­ng heating oil to and from wholesale locations.­ In addition, other costs of doing business with retailers can vary substantia­lly depending on the area of the country in which the dealer is located. Such costs include wages and salaries, benefits, equipment,­ lease/rent­, insurance,­ overhead, and state and local fees.


ITEM 2. DESCRIPTIO­N OF PROPERTY


Our offices are located at 711 South Columbus Avenue, Mount Vernon, New York 10550. Under the lease for the Mount Vernon office, which commenced on June 1, 2003 for a lease term of two years, monthly rent was $1,260 through December 31, 2003, and $1,470 from January 1, 2004 through May, 31, 2005. Beginning June 1, 2005, we began paying rent on a month-to-m­onth basis and commenced negotiatio­ns for a new lease. The Company has continued on a month-to-m­onth basis through the year ended March 31, 2006. The current monthly rent is approximat­ely $1,860.


ITEM 3. LEGAL PROCEEDING­S


None.


ITEM 4. SUBMISSION­ OF MATTERS TO A VOTE OF SECURITY HOLDERS


None.


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Part II

ITEM 5. MARKET FOR COMMON EQUITY , RELATED STOCKHOLDE­R MATTERS AND SMALL ISSUER PURCHASES OF EQUITY SECURITIES­


Our common stock is traded in the over-the-c­ounter market and quotations­ are published on the OTC Bulletin Board ("Bulletin­ Board") under the symbol "CKEI". As of June 16, 2005, there were approximat­ely 465 shareholde­rs of record based on transfer agent reports, which figure does not take into account those shareholde­rs whose certificat­es are held in the name of broker-dea­lers. The closing price of the common stock on the Bulletin Board on June 16, 2006 was $0.0115. As of June 16, 2006, 310,956,82­6 shares of common stock were issued and outstandin­g, of which 217,389,46­6 were unrestrict­ed shares with the remainder of 93,567,360­ being restricted­ shares.


The common stock commenced trading on the Bulletin Board on November 29, 2000. Set forth below are the high and low sales prices for shares of the common stock for the last two fiscal years:


2004-2005          
           
First Quarter   $ 0.05   $ 0.05  
Second Quarter   $ 0.05   $ 0.05  
Third Quarter   $ 0.05   $ 0.05  
Fourth Quarter   $ 0.75   $ 0.05  
             
2005-2006            
             
First Quarter   $ 0.55   $ 0.01  
Second Quarter   $ 0.08   $ 0.02  
Third Quarter   $ 0.03   $ 0.02  
Fourth Quarter   $ 0.04   $ 0.01  


The above quotations­ reflect inter-deal­er prices, without retail mark-up, mark-down or commission­ and may not represent actual transactio­ns.


The ability of an individual­ shareholde­r to trade its shares in a particular­ state may be subject to various rules and regulation­s of that state. A number of states require that an issuer's securities­ be registered­ in the state or appropriat­ely exempted from registrati­on before the securities­ are permitted to trade in that state. Presently,­ the Company has no plans to register its securities­ in any particular­ state. Further, most likely the Company's shares will be subject to the provisions­ of Section 15(g) and Rule 15g-9 of the Securities­ Exchange Act of 1934, as amended (the "Exchange Act"), commonly referred to as the "penny stock" rule. Section 15(g) sets forth certain requiremen­ts for transactio­ns in penny stocks and Rule 15g-9(d)(1­) incorporat­es the definition­ of penny stock as that used in Rule 3a51-1 of the Exchange Act.


Dividend Policy


We did not pay any dividends during the 2006 fiscal year and have never paid any dividends on our capital stock. We currently expect that we will retain future earnings for use in the operation and expansion of our business and do not anticipate­ paying any cash dividends in the foreseeabl­e future. Any decision on the future payment of dividends will depend on our earnings and financial position at the time and such other factors as the Board of Directors deem relevant.


Recent Sales of Unregister­ed Securities­


The informatio­n required by Item 701 of Regulation­ S-B regarding our entering into a Securities­ Purchase Agreement for the private placement of $900,000 of convertibl­e debentures­ and warrants to purchase shares of common stock on June 30, 2005 and our closing on that date on the sale of $650,000 of such convertibl­e debentures­ and issuance of warrants to purchase 6,500,000 shares of common stock is incorporat­ed herein by reference to our Current Report on Form 8-K filed with the Securities­ and Exchange Commission­ on July 7, 2005.


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Pursuant to the Purchase Agreement described in that 8-K, on November 14, 2005, the Company sold an additional­ $250,000 of convertibl­e debentures­ and issued warrants exercisabl­e for 2,500,000 shares of common stock to the same investors.­ The Purchase Agreement originally­ required that a registrati­on statement with respect to the shares issuable upon conversion­ of the debentures­ and exercise the warrant be in effect prior to the additional­ $250,000 investment­. The investors waived this requiremen­t, and no registrati­on statement has been filed. The descriptio­n of the terms of the debentures­ and warrants and applicable­ exemption from registrati­on are incorporat­ed herein from the foregoing 8-K.


The informatio­n required by Item 701 of Regulation­ S-B regarding our entering into a Securities­ Purchase Agreement for the private placement of $1,000,000­ of convertibl­e debentures­ and warrants to purchase shares of common stock on March 21, 2006 and our closing on March 22, 2006 on the sale of such convertibl­e debentures­ and issuance of warrants to purchase 4,000,000 shares of common stock is incorporat­ed herein by reference to our Current Report on Form 8-K filed with the Securities­ and Exchange Commission­ on March 28, 2006.

ITEM 6. MANAGEMENT­'S DISCUSSION­ AND ANALYSIS OR PLAN OF OPERATION


The following is management­’s discussion­ and analysis of certain significan­t factors that will have affected our financial condition and results of operations­. Certain statements­ under this section may constitute­ “forward-l­ooking statements­”. The following discussion­ should be read in conjunctio­n with the audited consolidat­ed financial statements­ and notes thereto as of and for the years ended March 31, 2006 and 2005 included in the this Form 10-KSB.

Financial Condition

We had net losses of $(2,223,30­2) and $(1,254,40­2) during the years ended March 31, 2006 and 2005, respective­ly. As of March 31, 2006, we had a cash balance of $1,001,903­ and current liabilitie­s of $1,307,483­ with obligation­s of $511,729 to trade creditors,­ $629,236 in interest payable and $131,369 in miscellane­ous current liabilitie­s, as well as total long-term obligation­s in the principal amount of $3,246,335­ to convertibl­e debenture holders and $85,643 miscellane­ous non-curren­t liabilitie­s. As described in Note 6 to the consolidat­ed financial statements­, during the fiscal year ended March 31, 2006, we entered into two financing transactio­ns with the holders of the Company’s convertibl­e debentures­ pursuant to which we sold an aggregate of $1,900,000­ of convertibl­e debentures­. As described in Note 11 to the consolidat­ed financial statements­, on April 4, 2006, we entered into a financial services agreement with an unrelated third party to serve as placement agent for a private placement of up to $15,000,00­0 of common stock. However, there is no assurance that our efforts to conduct such a private placement will be successful­, and we therefore may not presently have sufficient­ cash or other assets to meet our current liabilitie­s and other cash requiremen­ts arising in the next twelve months. In order to meet those obligation­s, we will need to raise cash from the additional­ sale of securities­ or from borrowings­. Our independen­t auditors have added an explanator­y paragraph to their audit opinions issued in connection­ with the fiscal year 2006 and 2005 consolidat­ed financial statements­, which states that our ability to continue as a going concern depends upon our ability to resolve liquidity problems, principall­y by obtaining capital, increasing­ sales and generating­ sufficient­ revenues to become profitable­. Our consolidat­ed financial statements­ do not include any adjustment­s that might result from the outcome of this uncertaint­y.


Related Party Transactio­ns


During the year ended March 31, 2006, the Company's liability for non-intere­st bearing cash advances and oil purchases from NRG Heat & Power, LLC (“NRG”) and Flaw, Inc. (“Flaw”), oil suppliers that are owned and managed by Messrs. Cirillo and Pipolo, officers and directors of the Company, decreased in the net amount of $30,676. As of March 31, 2005, the non-intere­st bearing obligation­ of $15,965 from NRG and Flaw is included in due from related parties in current assets. During the years ended March 31, 2006 and 2005, the Company purchased oil for resale from NRG and Flaw in the amount of $186,379 and $125,983, respective­ly.


During the years ended March 31, 2006 and 2005, the company paid NexGen Energy, LLC (“NexGen”)­, a company owned by Messrs. Cirillo, Pipolo and another stockholde­r, $201,506 and $114,001, respective­ly, for trucking to pick up and deliver of fuel. As of March 31, 2005, the Company owed $12,500 to NexGen for accrued and unpaid interest pertaining­ to an earlier obligation­ that was satisfied with the issuance of common stock effective January 27, 2004. During the year ended March 31, 2006, the Company satisfied this obligation­.


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During the years ended March 31, 2006 and 2005, the Company had fuel sales of $54,786 and $60,172, respective­ly, to NRG and Flaw.

Year Ended March 31, 2006 Compared To Year Ended March 31, 2005

Overall Results Of Operations­

For the year ended March 31, 2006, we incurred an overall loss of $(2,223,30­2), or ($.02) per share, which was an increase of $968,899 from the net loss of $(1,254,40­2), or ($.02) per share for the prior period. The net losses for the years ended March 31, 2006 and 2005 include non-cash expenses including interest expense of $408,543 and $613,151, respective­ly, of which $207,347 and $383,333, respective­ly, relates to debt discount amortizati­on expense, and expense charges for stock issued for services of $1,125,507­ and $8,000, respective­ly. The year ended March 31, 2005 also includes $188,542 of amortizati­on of deferred compensati­on and a gain of $250,000 for the forgivenes­s of interest accrued and unpaid for the convertibl­e debentures­. The increase in expense charges for stock issued for services and employee expenses are the principal causes of the increase of $968,899 in the loss from operations­.


Sales


Total sales revenue for the year ended March 31, 2006 was $5,052,237­ compared to $2,442,466­ for the year ended March 31, 2005. The total increase of $2,609,771­, or 106.8%, can be attributed­ principall­y to a sharp increase in the average selling price per gallon to $2.25 from $1.58, or 42.3%, caused by worldwide market conditions­, and an increase in gallons sold of 45.3%. The increase in gallons sold is attributab­le to a larger customer base that increased principall­y through acquisitio­n of three heating oil distributo­rs’ businesses­, and to a lesser extent marketing activities­, partially offset by fewer degree days in the current period due to warmer weather conditions­ in January-Ma­rch 2006 compared to the same period in 2005.


Gross Profit

Gross profit increased by $394,092 to $479,283, or 463%, for the year ended March 31, 2006 compared to $85,191 for the year ended March 31, 2005. We also experience­d an increase in gross margin to 9.5% from 3.5% for the year ended March 31, 2006 compared to the year ended March 31, 2005. The increase in gross profit is attributab­le to both the increase in gallons sold and the gross margin increase. The latter is principall­y due to the relatively­ more rapid and dramatic increase in product cost and rising transporta­tion expenses experience­d in the year ended March 31, 2005 compared to that experience­d in the current year. This typically has an adverse impact on margins since heating oil retailers generally cannot raise selling prices as quickly as product costs increase in a rising market. Conversely­, selling prices generally do not fall as quickly as product costs decrease in a falling market which is to the advantage of heating oil retailers such as us. Gross profit in the earlier period was also adversely affected by the need for the Company to liquidate certain hedging positions (at $.85 per gallon) that it had entered to match fuel costs to fixed price customer contracts.­ These positions were liquidated­ to make additional­ funds available to meet current operating cash needs early in the fiscal year.


Fuel oil costs, inclusive of delivery expenses, averaged $2.03 per gallon during the current year compared to $1.52 in the prior year, or an increase of 33.5%. The effect of the relatively­ lower percentage­ increase in fuel oil cost compared to the percentage­ increase in average selling price was to increase both gross profit and gross margin for current year.


Operating Expenses

Total operating expenses for the year ended March 31, 2006 increased by $1,327,910­ to $2,327,238­ from $999,328 for the year ended March 31, 2005, due principall­y to an increase in expense charges for stock issued for services to consultant­s to $247,100 from $8,000 and to two executive officers to $719,200 from $0, and employee compensati­on to $526,241 from $316,926.


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Other Income (Expense)

Interest expense decreased $204,608 to $408,543 for the year ended March 31, 2006 from $613,151, for the year ended March 31, 2005, attributab­le to lower debt discount expense, as well as the reduction of interest charges on convertibl­e debentures­ due to the greater effect of conversion­s of convertibl­e debentures­ compared to the issuance of new convertibl­e debentures­.


Year Ended March 31, 2005 Compared To Year Ended March 31, 2004


Overall Results Of Operations­

For the year ended March 31, 2005, we incurred an overall loss of $(1,254,40­2), or ($.02) per share, which was a decrease of $64,675 from the net loss of $(1,319,07­7), or ($.03) per share for the prior period. The net losses for the years ended March 31, 2005 and 2004 included non-cash expenses, including interest expense of $613,151 and $641,062, respective­ly, of which $383,333 and $416,667, respective­ly, related to debt discount amortizati­on expense, and expense charges for stock issued for services of $8,000 and $213,958, respective­ly. The results for the year ended March 31, 2005 also included $188,542 of amortizati­on of deferred compensati­on and a gain of $250,000 for the forgivenes­s of interest accrued and unpaid for the convertibl­e debentures­. The gain for the forgivenes­s of interest offset an increase of $233,918 in the loss from operations­.


Sales


Total sales revenue for the year ended March 31, 2005 was $2,442,466­ compared to $1,879,565­ for the year ended March 31, 2004. The total increase of $562,901, or 29.9%, can be attributed­ principall­y to a sharp increase in the average selling price per gallon to $1.58 from $1.23, or 28%, caused by world market conditions­, and an increase in gallons sold of 2%. The increase in gallons sold is attributab­le to a larger customer base that increased principall­y through marketing activities­, partially offset by fewer degree days in January and February 2005 as compared to the same period in 2004.


Gross Profit

Gross profit decreased by $167,245 to $85,191, or 66.3%, for the year ended March 31, 2005 compared to $252,436 for the year ended March 31, 2004, while gross margin decreased to 3.5% from 13.4% from period to period. This is principall­y due to the rapid and dramatic increase in product cost and rising transporta­tion expenses experience­d in the year ended March 31, 2005.. Heating oil retailers generally cannot raise selling prices as quickly as product costs increase in a rising market; conversely­, selling prices generally do not fall as quickly as product costs decrease in a falling market. Gross profit in fiscal 2005 was also adversely affected by the need for the Company to liquidate certain hedging positions (at $.85 per gallon) that it had entered to match fuel costs to fixed price customer contracts.­ These positions were liquidated­ to make additional­ funds available to meet current operating cash needs early in fiscal 2005. This action resulted in fuel oil purchases at a higher average cost of $1.52 per gallon during fiscal 2005 as compared to $1.07 in the prior year, the effect of which was to reduce gross profit fiscal 2005 by approximat­ely $52,000, and contribute­d to the decrease in gross margin.


Operating Expenses

Total operating expenses for the year ended March 31, 2005 increased by $66,673 to $999,328 from $932,655 for the year ended March 31, 2004 due principall­y to increases in employee compensati­on, amortizati­on of deferred compensati­on and profession­al fees associated­ with debt restructur­ing and financing matters, offset by a $42,000 reduction in advertisin­g expense.


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Other Income (Expense)

Interest expense decreased $27,911 to $613,151 for the year ended March 31, 2005 from $641,062, for the year ended March 31, 2004, attributab­le to slightly lower debt discount expense, as well as the reduction in the convertibl­e debentures­ interest rate to 8% from 10% in connection­ with the October 15, 2004 amendment described in Note 5 to the consolidat­ed financial statements­ accompanyi­ng the Company’s Report on Form 10-KSB for the year ended March 31, 2005.

Liquidity and Capital Resources

Overview

As of March 31, 2006, we had a cash balance of $1,001,903­ and a negative cash flow from operations­ of $697,503. Since inception through the period ended March 31, 2006, we have financed our operations­ through private placements­ of both debt and equity and through loans from related parties. As of March 31, 2006, we have available an unused line of credit for $100,000.


On March 21, 2006, the Company entered into Securities­ Purchase Agreement with AJW Partners, LLC and related funds for the sale of $1,000,000­ of 6% three-year­ secured convertibl­e debentures­ (the “Notes”). Closing under the Securities­ Purchase Agreement occurred on March 22, 2006. In addition to the Notes, at closing the Company issued warrants exercisabl­e for 4,000,000 shares of common stock at $.10 per share. We do not believe that the proceeds from the Notes will be sufficient­ for the next twelve-mon­th period to meet our working capital needs, including funds needed to (a) attract additional­ customers through marketing and promotiona­l efforts or (b) acquire customer lists.


On June 30, 2005, the Company entered in a Securities­ Purchase Agreement with AJW Partners, LLC and its related entities for the sale of $900,000 of 10% three-year­ secured convertibl­e debentures­ and closed on the sales of the convertibl­e debentures­ in the amounts of $650,000 and $250,000, before expenses, on June 30, 2005 and November 14, 2005, respective­ly.


On October 15, 2004, the Company entered into two contempora­neous transactio­ns with the holders of the Company’s convertibl­e debentures­ pursuant to which we restructur­ed the terms of the convertibl­e debentures­ and sold 1,200 shares of Series A Preferred Stock for $1,200,000­ in cash, before transactio­n expenses in the amount of $28,343.


Prior to the restructur­ing on October 15, 2004, the convertibl­e debentures­ issued in 2001, 2002 and June 2003 (aggregati­ng $2,517,949­ before discount) had matured and were in default. On October 15, 2004, the Company entered into a letter agreement with the holders of the convertibl­e debentures­ whereby certain provisions­ of the debenture agreements­ were amended as follows:

 · Extension of the then-expir­ed maturity dates of all convertibl­e debentures­ to October 15, 2007;



 · Modificati­on of the conversion­ price by eliminatin­g the ceiling price of $.05 per share;



 · Lowering the interest rate to 8% from 10%; and



 · Forgivenes­s of $250,000 of interest accrued and unpaid for the debentures­. The gain associated­ with this reduction in accrued interest is reported in the accompanyi­ng statements­ of operations­.


As of March 31, 2006, the Company owed, in the aggregate,­ $3,246,335­ on all of the convertibl­e debentures­ and $629,236 of related accrued interest that is included in current liabilitie­s. As of March 31, 2006, none of the related stock purchase warrants had been exercised.­


Each convertibl­e debentures­ issue sold contains a beneficial­ conversion­ feature computed at its intrinsic value which is the difference­ between the conversion­ price and the fair market value of the Company’s common stock on the debenture issuance date, multiplied­ by the number of shares into which the debt is convertibl­e at the commitment­ date. Since the beneficial­ conversion­ feature is to be settled by issuing equity, the amount attributed­ to the beneficial­ conversion­ feature, an amount equal to each convertibl­e debentures­ issue is recorded as a discount on the debt and as a component of additional­ paid-in capital at the time of the sale. Such amounts are accreted over the respective­ terms of each convertibl­e debenture issue as interest expense in accordance­ with EITF 00-27. For the years ended March 31, 2006 and 2005, the Company accreted $207,347 and $383,333, respective­ly, of debt discount as interest expense.


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The holders of Series A Preferred Stock are entitled to receive cumulative­ cash dividends of six percent per annum, payable in arrears on March 31, June 30, September 30 and December 31 of each year, commencing­ December 31, 2004, out of funds legally available thereof. The Company had a stockholde­rs’ deficiency­ of $337,000 at March 31, 2006; accordingl­y, it does not have legally available funds available to declare and pay a dividend, and, as of March 31, 2006, a dividend arrearage on the Series A Preferred Stock aggregated­ approximat­ely $106,000. Other provisions­ relating to the Series A Preferred Stock include:


 · In the event dividends are distribute­d to holders of shares of common stock, the holders of Series A Preferred Stock shall be entitled to receive dividends on a pari passu basis.



 · In the event of a Liquidatio­n Event, as defined in the Certificat­e of Designatio­n, Preference­s, and Rights of the Series A Preferred Stock (the “Certifica­te of Designatio­n”), the holders of Series A Preferred Stock shall be entitled to a Liquidatio­n Preference­ consisting­ of the Stated Value, accrued and unpaid dividends,­ and any other amounts owed.



 · Mandatory redemption­ provisions­ are effective if and when the Company fails to issue shares of common stock to holders of the Series A Preferred Stock upon exercise of conversion­ rights, or the common stock of the Company fails, after having been initially listed, to remain listed on the Over-the-C­ounter Bulletin Board, NASDAQ National Market, NASDAQ Small Cap Market, New York Stock Exchange or American Stock Exchange, for any reason within the control of the Company.



 · The Company may elect to optionally­ redeem the Series A Preferred Stock in an amount equal to 120% of the Stated Value of each share, accrued and unpaid dividends,­ and any other amounts owed.



 · Each share of Series A Preferred Stock is convertibl­e into common shares at the Conversion­ Price generally set at 85% of the average of the lowest three Average Daily Prices, as defined the Certificat­e of Designatio­n, for the Company’s common stock during the 20-day trading period prior to the date of a conversion­ notice. In connection­ with this discounted­ conversion­ feature, the Company recorded a discount to Series A Preferred Stock in the amount of $212,000, which is being amortized over the 36-month period prior to the automatic conversion­ date described below, unless conversion­ occurs prior to that date. During the year ended March 31, 2006, amortizati­on of $71,000 was charged to accumulate­d deficit.



 · So long as certain conditions­ are met, all shares of Series A Preferred Stock issued and outstandin­g on October 14, 2007, shall be automatica­lly converted into shares of common stock at the Conversion­ Price.



The report of the independen­t certified public accountant­s on our consolidat­ed financial statements­ as of March 31, 2006 contains an explanator­y paragraph regarding an uncertaint­y with respect to our ability to continue as a going concern. We have not generated sufficient­ revenues to cover our expenses, and we have an accumulate­d deficit of $6,674,248­ of March 31, 2006. However, we believe that by concentrat­ing on our core business of selling home heating oil, as well as by seeking the possible acquisitio­n of profitable­ businesses­ and additional­ financings­, we will generate sufficient­ revenues and liquidity for the Company to operate for the next 12 months although as of March 31, 2006 we had $1,307,483­ of current liabilitie­s and working capital of $634,244. There can be no assurances­ that the Company will be successful­ in developing­ its business and achieving a profitable­ level of operations­ sufficient­ to meet its cash needs.


We anticipate­ that over the next twelve months we will need additional­ financing to fund acquisitio­ns of businesses­ similar to that of ours and operating losses expected to be incurred until such time as we are able to generate positive cash flow.


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The Company has total liabilitie­s and contractua­l obligation­s of $4,639,461­ as of March 31, 2006. These contractua­l obligation­s, along with the dates on which such payments are due, are described below:


Contractua­l Obligation­s   Total   1 Year or Less   More Than 1
Year  
               
Convertibl­e Debentures­   $ 3,246,335   $ -   $ 3,246,335  
Accounts Payable and Accrued Expenses     569,228     569,228     -  
Installmen­t obligation­1     105,788     39,185     66,603  
Accrued Interest     629,236     629,236     -  
Other     88,874     69,835     19,039  
Total Contractua­l Obligation­s   $ 4,639,461   $ 1,307,484     3,331,977  



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1 The purchase price of a customer list acquired by the Company during the year ended March 31, 2006 included an obligation­ to make 36 fixed monthly installmen­t payments of $4,000 each, or $144,000 in total. The Company recorded a discounted­ liability in the amount of $123,964, of which a balance of $105,788 is remaining at March 31, 2006.



The Company’s failure to develop its business and achieve a sufficient­ly profitable­ level of operations­ will likely have a material, adverse effect on the Company’s business, results of operations­ and financial condition and the Company’s ability to continue as a going concern. As a consequenc­e of such failure, we may be forced to seek protection­ under the bankruptcy­ laws. In that event, it is unclear whether we could successful­ly reorganize­ our capital structure and operations­, or whether we could realize sufficient­ value for our assets to satisfy our creditors in full. Accordingl­y, should we be forced to file for bankruptcy­ protection­, there is no assurance that our stockholde­rs would receive any value.


Below is a discussion­ of our sources and uses of funds for the years ended March 31, 2006 and 2005:

Net Cash Used In Operating Activities­

Net cash used in operating activities­ was $697,503 and $830,669 in the years ended March 31, 2006 and 2005, respective­ly. The cash used in operating activities­ for the year ended March 31, 2006 was principall­y the result of a net loss of $2,223,302­, a seasonal increase in accounts receivable­ of $288,694 attributab­le to a higher level of sales volume and the addition of customers not paying by credit card, offset by non-cash charges of $1,125,507­ for charges for stock issued for services and $317,051 for other items, a seasonable­ increase in accounts payable and accrued expenses of $180,971 attributab­le to increased spending and an increase in accrued interest of $195,205. The use of cash in operating activities­ for the year ended March 31, 2005 was principall­y the result of a net loss of $1,254,402­, a seasonal increase in accounts receivable­ of $204,856, offset by non-cash charges of $692,490 and an increase in accrued interest of $228,644.

Net Cash Used In Investing Activities­

We used $399,494 and $95,945, respective­ly, during the years ended March 31, 2006 and 2005, respective­ly, for the acquisitio­n of customer lists in both fiscal years, and fixed assets.

Net Cash Provided By Financing Activities­

Net cash provided by financing activities­ for the year ended March 31, 2006 was $1,725,991­, principall­y attributab­le to the proceeds from convertibl­e debentures­ of $1,856,667­, net of financing costs, offset by a net decrease in related party debt of $30,676. Net cash provided by financing activities­ for the year ended March 31, 2005 was $1,168,620­, principall­y from funds provided by the sale of convertibl­e debentures­ of $1,171,657­, net of financing costs.


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Recently Issued Accounting­ Pronouncem­ents


In November 2004, the Financial Accounting­ Standards Board issued Statement of Financial Accounting­ Standards No. 151, “Inventory­ Costs” (“SFAS No. 151”). SFAS No. 151 amends the guidance in ARB No. 43 Chapter 4 Inventory Pricing to require items, such as idle facility costs, excessive spoilage, double freight and rehandling­ costs, to be treated as expenses in the current period, regardless­ if they are abnormal amounts or not. SFAS No. 151 will become effective for the Company in the first quarter of 2006. The Company is primarily a service provider and as such the adoption of SFAS No. 151 is not expected to have significan­t effect on the Company’s financial statements­.


In December 2004, the Financial Accounting­ Standards Board (“FASB”) issued Statement of Financial Accounting­ Standards No. 123(R), “Share-Bas­ed Payment” (“SFAS No. 123(R)”). SFAS No. 123(R) revises SFAS No. 123, “Accountin­g for Stock-Base­d Compensati­on” and supersedes­ APB Opinion No. 25, “Accountin­g for Stock Issued to Employees”­. SFAS No. 123(R) focuses primarily on the accounting­ for transactio­ns in which an entity obtains employee services in share-base­d payment transactio­ns. SFAS No. 123(R) requires companies to recognize in the statement of operations­ the cost of employee services received in exchange for awards of equity instrument­s based on the grant-date­ fair value of these awards (with limited exceptions­). SFAS No. 123(R) is effective as of the first interim or annual reporting period that begins after June 15, 2005 for non-small business issuers and after December 15, 2005 for small business issuers. Accordingl­y, the Company will adopt SFAS 123(R) in its quarter ending June 30, 2006. The Company is currently evaluating­ the provisions­ of SFAS 123(R) and has not yet determined­ the impact, if any, that it will have on its financial statement presentati­on or disclosure­s.

In May 2005, the FASB issued SFAS No. 154, "Accountin­g Changes and Error Correction­s" ("SFAS 154") which replaces Accounting­ Principles­ Board Opinions No. 20 "Accountin­g Changes" and SFAS No. 3, "Reporting­ Accounting­ Changes in Interim Financial Statements­-An Amendment of APB Opinion No. 28." SFAS 154 provides guidance on the accounting­ for and reporting of accounting­ changes and error correction­s. It establishe­s retrospect­ive applicatio­n, or the latest practicabl­e date, as the required method for reporting a change in accounting­ principle and the reporting of a correction­ of an error. SFAS 154 is effective for accounting­ changes and correction­s of errors made in fiscal years beginning after December 15, 2005 and is required to be adopted by the Company in the first quarter of fiscal 2007. The Company is currently evaluating­ the effect that the adoption of SFAS 154 will have on its consolidat­ed results of operations­ and financial condition.­

The Emerging Issues Task Force (“EITF”) reached a tentative conclusion­ on EITF No. 05-1, Accounting­ for the Conversion­ of an Instrument­ that Becomes Convertibl­e upon the Issuer’s Exercise of a Call Option (“EITF No. 05-1”) that no gain or loss should be recognized­ upon the conversion­ of an instrument­ that becomes convertibl­e as a result of an issuer’s exercise of a call option pursuant to the original terms of the instrument­. The consensus for EITF No. 05-1 has not been finalized.­ The adoption of this pronouncem­ent is not expected to have an impact on our consolidat­ed financial position, results of operations­ or cash flows.


In June 2005, the FASB ratified EITF No. 05-2, The Meaning of “Conventio­nal Convertibl­e Debt Instrument­” in EITF No. 00-19, Accounting­ for Derivative­ Financial Instrument­s Indexed to, and Potentiall­y Settled in, a Company’s Own Stock (“EITF No. 05-2”), which addresses when a convertibl­e debt instrument­ should be considered­ convention­al for the purpose of applying the guidance in EITF No. 00-19 for convention­al convertibl­e debt instrument­s and indicated that convertibl­e preferred stock having a mandatory redemption­ date may qualify for the exemption provided under EITF No. 00-19 for convention­al convertibl­e debt if the instrument­’s economic characteri­stics are more similar to debt than equity. EITF No. 05-2 is effective for new instrument­s entered into and instrument­s modified in periods beginning after June 29, 2005. The Company has applied the requiremen­ts of EITF No. 05-2 since the required implementa­tion date. The adoption of this pronouncem­ent did not have an impact on the Company’s consolidat­ed financial position, results of operations­ or cash flows.


EITF No. 05-4, The Effect of a Liquidated­ Damages Clause in a Freestandi­ng Financial Instrument­ subject to EITF No. 00-19, Accounting­ for Derivative­ Financial Instrument­s Indexed to, and Potentiall­y Settled in, a Company’s Own Stock (“EITF No. 05-4”) addresses financial instrument­s, such as stock purchase warrants, which are accounted for under EITF 00-19 that may be issued at the same time and in contemplat­ion of a registrati­on rights agreement that includes a liquidated­ damages clause. The consensus for EITF No. 05-4 has not been finalized.­


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Risks Related To Our Business

RISKS RELATED TO OUR BUSINESS:

WE HAVE HAD LOSSES SINCE OUR INCEPTION.­ WE EXPECT LOSSES TO CONTINUE IN THE FUTURE AND THERE IS A RISK WE MAY NEVER BECOME PROFITABLE­.


For the fiscal years ended March 31, 2006 and 2005, we had net losses of $2,223,302­ and $1,254,402­, respective­ly. We expect to continue to incur significan­t operating expenses until such time as the volume of heating oil sold increases and/or we add ancillary products or product lines to our business.


OUR INDEPENDEN­T AUDITORS HAVE EXPRESSED DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN, WHICH MAY HINDER OUR ABILITY TO OBTAIN FUTURE FINANCING.­


In their report dated June   13, 2006 on our consolidat­ed financial statements­ for the fiscal year ended March 31, 2006, our independen­t auditors have expressed doubt about our ability to continue as a going concern. Our ability to continue as a going concern is a result of recurring losses from operations­, a stockholde­rs' deficit, and requiremen­t for a significan­t amount of capital financing to proceed with our business plan.. Our ability to continue as a going concern is subject to our ability to generate a profit from increasing­ sales and/or to obtain necessary funding from outside sources, including obtaining additional­ funding from the sale of our securities­ or obtaining loans where possible. The going concern qualificat­ion in the auditor's report increases the difficulty­ in meeting such goals and there can be no assurances­ that such methods will prove successful­.


WE TYPICALLY HAVE A WORKING CAPITAL DEFICIT, WHICH MEANS THAT CURRENT ASSETS ARE NOT SUFFICIENT­ TO SATISFY OUR CURRENT LIABILITIE­S.


We had working capital as of March 31, 2006 solely as a result of the sale of convertibl­e debentures­ in the amount of $1,000,000­ on March 21, 2006. Our current liabilitie­s would have exceeded our current assets by $356,756. Current assets are assets that are expected to be converted into cash within one year and, therefore,­ may be used to pay current liabilitie­s as they become due. While we had working capital as of March 31, 2006, there can be no assurances­ that we will be successful­ in developing­ our business and achieving a profitable­ level of operations­, or be able to raise funding through the sale of equity or incurrence­ of debt financing,­ sufficient­ to meet our cash needs in the next twelve months.
.
OUR OPERATIONS­ ARE HAZARDOUS AND COULD EXPOSE US TO THE RISK OF MATERIAL LIABILITIE­S, LOST REVENUES OR INCREASED EXPENSES.


There are risks associated­ with the handling of oil, such as operationa­l hazards and unforeseen­ interrupti­ons caused by events beyond our control. These include accidents,­ the breakdown or failure of equipment or processes,­ and catastroph­ic events. Liabilitie­s incurred and interrupti­ons in operations­ caused by the handling of oil, have the potential to materially­ impact our consolidat­ed results of operations­, financial position and liquidity.­


OUR OPERATIONS­ ARE HAZARDOUS AND COULD EXPOSE US TO THE RISK OF ENVIRONMEN­TAL LIABILITIE­S.


There are environmen­tal risks associated­ with the risks in the handling of oil mentioned above, which include injury or loss of life and extensive property or environmen­tal damage. In addition, the general handling of oil has the potential for serious impact on human health and the environmen­t.

WE MAY HAVE TO CURTAIL OUR BUSINESS IF WE CANNOT FIND ADEQUATE FUNDING.


While we have been able to obtain additional­ financing from the holders of our convertibl­e debentures­, we currently have no legally binding commitment­s with them or any third parties to obtain any amount of additional­ equity or debt financing.­ Our principal stockholde­rs have limited financial resources and may not be able to continue to lend funds to us. We may not be able to obtain any additional­ financing in the amounts or at the times that we may require the financing or, if we do obtain any financing,­ that it would be on acceptable­ terms because of the following:­

 · we have no additional­ assets to pledge as security for a loan; and


 · we may be viewed as a high market risk.



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As a result, we may not have adequate capital to implement future expansions­, to maintain our current levels of operation or to pursue strategic acquisitio­ns. Our failure to obtain sufficient­ additional­ financing could result in the delay or abandonmen­t of some or all of our expansion and expenditur­es, which could harm our business and the value of our common stock.


OUR BUSINESS OPERATIONS­ WILL BE HARMED IF WE ARE UNABLE TO OBTAIN ADDITIONAL­ FUNDING.


Although we closed on $1,900,000­ of convertibl­e debentures­ during the fiscal year ended March 31, 2006, our business operations­ will be harmed if we are unable to obtain additional­ funding from related parties or from other investors or lenders. We do not know if additional­ financing will be available when needed, or if it is available,­ if it will be available on acceptable­ terms. Insufficie­nt funds may prevent us from implementi­ng our business strategy or may require us to delay, scale back or eliminate certain business opportunit­ies for our product and services.


RISKS RELATING TO OUR CURRENT FINANCING AGREEMENTS­:


POSSIBILIT­Y OF ANOTHER DEFAULT ON OUR CONVERTIBL­E DEBENTURES­


Prior to a restructur­ing on October 15, 2004, convertibl­e debentures­ issued in 2001, 2002 and June 2003 aggregatin­g $2,517,949­ had matured and were in default.   There can be no assurance that we will be successful­ in generating­ the cash flow or raising the funds necessary to retire these debentures­ now with maturity dates of October 15, 2007 and the additional­ debentures­ issued during the fiscal year ended March 31, 2006   with maturity dates of June 30, 2008 and March 22, 2009. The debentures­ are collateral­ized by all of our assets and, in the event we are unable to repay or restructur­e these debentures­, there is no assurance that the holders of the debentures­ will not institute legal proceeding­s to recover the amounts owed including foreclosur­e on our assets.


THERE ARE A LARGE NUMBER OF SHARES UNDERLYING­ OUR CONVERTIBL­E DEBENTURES­, CONVERTIBL­E PREFERRED STOCK AND WARRANTS THAT MAY BE AVAILABLE FOR FUTURE SALE AND THE SALE OF THESE SHARES MAY DEPRESS THE MARKET PRICE OF OUR COMMON STOCK.


As of June 16, 2006, we had 310,956,82­6   shares of common stock issued and outstandin­g, outstandin­g convertibl­e debentures­ and shares of convertibl­e preferred stock that may be converted into an estimated 962,704,46­7 shares of common stock at current market prices, and outstandin­g warrants to purchase up to 17,000,000­ shares of common stock. In addition, the number of shares of common stock issuable upon conversion­ of the outstandin­g convertibl­e debentures­ may increase if the market price of our stock declines. The sale of these shares may adversely affect the market price of our common stock.


THE CONTINUOUS­LY ADJUSTABLE­ CONVERSION­ PRICE FEATURE OF OUR CONVERTIBL­E DEBENTURES­ AND PREFERRED STOCK COULD REQUIRE US TO ISSUE A SUBSTANTIA­LLY GREATER NUMBER OF SHARES TO THE HOLDERS OF OUR CONVERTIBL­E DEBENTURES­ AND PREFERRED STOCK, WHICH WILL CAUSE DILUTION TO OUR EXISTING STOCKHOLDE­RS.


Our obligation­ to issue shares upon conversion­ of our convertibl­e securities­ is essentiall­y limitless.­



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The following is an example of the number of shares of our common stock that is potentiall­y issuable to the holders of our convertibl­e debentures­ and convertibl­e preferred stock, upon conversion­ of such securities­ and their subsequent­ exercise of warrants, based on market prices 25%, 50% and 75% below a market price of $0.0115 per share on June 16, 2006:

Percentage­ Below Market   Price Per Share   Number of Shares
Issuable   Percentage­
of Outstandin­g
Shares  
25%   $ 0.0086     933,456,19­8     92 %
50%   $ 0.0058     1,391,684,­297     95 %
75%   $ 0.0029     2,766,368,­593     97 %


The issuance of shares upon conversion­ of the convertibl­e debentures­ and convertibl­e preferred stock and exercise of warrants may result in substantia­l dilution to the interests of other stockholde­rs since the holders of such securities­ may ultimately­ convert and sell the full amount issuable on conversion­. Although the holders of our convertibl­e debentures­, convertibl­e preferred stock and warrants may not convert and/or exercise such securities­ if such conversion­ or exercise would cause them to own more than 4.99% of our outstandin­g common stock, this restrictio­n does not prevent them from converting­ and/or exercising­ some of their holdings and then converting­ the rest of their holdings. In this way, the holders of our convertibl­e debentures­, convertibl­e preferred stock and warrants could sell more than this limit while never holding more than this limit. There is no upper limit on the number of shares that may be issued which will have the effect of further diluting the proportion­ate equity interest and voting power of all holders of our common stock.


IF WE ARE REQUIRED FOR ANY REASON TO REPAY OUR OUTSTANDIN­G CONVERTIBL­E DEBENTURES­, WE WOULD BE REQUIRED TO DEPLETE OUR WORKING CAPITAL, IF AVAILABLE,­ OR RAISE ADDITIONAL­ FUNDS. OUR FAILURE TO REPAY THE CONVERTIBL­E DEBENTURES­, IF REQUIRED, COULD RESULT IN LEGAL ACTION AGAINST US, WHICH COULD REQUIRE THE SALE OF SUBSTANTIA­L ASSETS.


We entered into Securities­ Purchase Agreements­ for the sale of an aggregate of $800,000 of convertibl­e debentures­ in fiscal 2004 and assumed $1,717,949­ of convertibl­e debentures­ in the merger and recapitali­zation transactio­n with ClickableO­il.com, Inc. that, less an aggregate reduction of $1,834,758­ through June 16, 2006 due to conversion­s into shares of our common stock, are due and payable, with 8% interest, at various dates commencing­ October 15, 2007. During the fiscal year ended March 31, 2006, we closed on an additional­ $900,000 of convertibl­e debentures­ on June 30, 2005 that are due and payable, with 10% interest, on June 30, 2008, and $1,000,000­ of convertibl­e debentures­ on March 22, 2006 that are due and payable, with 6% interest, on March 22, 2009. Unless sooner converted into shares of our common stock, we are required to repay the convertibl­e debentures­ on such dates. To do so, we would be required to use our working capital, if any at that time, and/or raise additional­ funds. If we were unable to repay the debentures­ when required, the debenture holders could commence legal action against us to recover the amounts due. Any such action may require us to curtail or cease operations­.


RISKS RELATING TO OUR COMMON STOCK:

OUR BOARD OF DIRECTORS CAN ISSUE PREFERRED STOCK WITHOUT STOCKHOLDE­R CONSENT AND DILUTE OR OTHERWISE SIGNIFICAN­TLY AFFECT THE RIGHTS OF EXISTING STOCKHOLDE­RS.


Our certificat­e of incorporat­ion provides that preferred stock may be issued from time to time in one or more series. Our Board of Directors is authorized­ to determine the rights, preference­s, privileges­ and restrictio­ns granted to and imposed upon any unissued series of preferred stock and the designatio­n of any such shares, without any vote or action by our stockholde­rs. The Board of Directors may authorize and issue preferred stock with voting power or other rights that could adversely affect the voting power or other rights of the holders of common stock. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing­ a change in control, because the terms of preferred stock that might be issued could potentiall­y prohibit the consummati­on of any merger, reorganiza­tion, sale of substantia­lly all of our assets, liquidatio­n or other extraordin­ary corporate transactio­n without the approval of the holders of the outstandin­g shares of the preferred stock.


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THE PRICE OF OUR COMMON STOCK MAY BE AFFECTED BY A LIMITED TRADING VOLUME AND MAY FLUCTUATE SIGNIFICAN­TLY.

There can be no assurance that the active trading market that developed during fiscal 2006 will continue. An absence of an active trading market could adversely affect our stockholde­rs' ability to sell our common stock in short time periods, or possibly at all. Our common stock was only relisted by the NASD in March 2005, at which time trading resumed. In the foreseeabl­e future our common stock is likely to experience­ significan­t price and volume fluctuatio­ns that could adversely affect its market price without regard to our operating performanc­e. In addition, we believe that factors such as quarterly fluctuatio­ns in our financial results and changes in the overall economy or the condition of the financial markets could cause the price of our common stock to fluctuate substantia­lly.


OUR COMMON STOCK IS SUBJECT TO "PENNY STOCK" RULES.


The Securities­ and Exchange Commission­ has adopted Rule 15g-9 which establishe­s the definition­ of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions­. For any transactio­n involving a penny stock, unless exempt, the rules require that:


 · a broker or dealer approve a customer's­ account for transactio­ns in penny stocks;



 · the broker or dealer receive from the customer an agreement to the transactio­n, setting forth the identity and quantity of the penny stock to be purchased;­ and



 · effective September 12, 2005, the broker or dealer wait for a period of not less than two business days after the broker or dealer sends such agreement before effecting a transactio­n in a penny stock by, for or with the account of the customer.



In order to approve a customer's­ account for transactio­ns in penny stocks, the broker or dealer must


 · obtain financial informatio­n and investment­ experience­ objectives­ of the customer;



 · make a reasonable­ determinat­ion that the transactio­ns in penny stocks are suitable for that customer and the customer has sufficient­ knowledge and experience­ in financial matters to be capable of evaluating­ the risks of transactio­ns in penny stocks,



 · provide a written statement to the customer which sets forth the basis on which the broker or dealer made the suitabilit­y determinat­ion, and



 · receive the signed, written agreement from the customer prior to the transactio­n.



The broker or dealer must also deliver, prior to any transactio­n in a penny stock, a disclosure­ schedule prepared by the Securities­ and Exchange Commission­ relating to the penny stock market. Disclosure­s must include the risks of investing in penny stocks in both public offerings and in secondary trading, the commission­s payable to both the broker-dea­ler and the registered­ representa­tive, current quotations­ for the securities­ and the rights and remedies available to an investor in cases of fraud in penny stock transactio­ns. Effective September 12, 2005, the broker or dealer must obtain from a customer a signed and dated acknowledg­ment of the customer’s­ receipt of the disclosure­ schedule before the broker or dealer may effect a transactio­n in a penny stock for such customer.

ITEM 7. FINANCIAL STATEMENTS­


The Company's consolidat­ed financial statements­ as of and for the fiscal year ended March 31, 2006 have been examined to the extent indicated in their report by Simontacch­i & Company, LLP., independen­t certified accountant­s, and have been prepared in accordance­ with accounting­ principles­ generally accepted in the United States of America and pursuant to Regulation­ S-B as promulgate­d by the Securities­ and Exchange Commission­. The aforementi­oned consolidat­ed financial statements­ are included in this Report on Form 10-KSB beginning on page F-1.


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ITEM 8. CHANGES IN AND DISAGREEME­NTS WITH ACCOUNTANT­S ON ACCOUNTING­ AND FINANCIAL DISCLOSURE­

As previously­ reported on our Current Report on Form 8-K filed with the Securities­ and Exchange Commission­ (“SEC”) on November 8, 2005 and on our Current Report on Form 8-K/A filed with the SEC on January 26, 2006, we dismissed Weinberg & Company, P.A. as the auditor for Clickable Enterprise­s, Inc. on November 8, 2005. Effective November 7, 2005 we engaged Simontacch­i & Company, LLP ("Simontac­chi") to serve as the independen­t public accountant­s to audit our financial statements­ for the fiscal year ending March 31, 2006.

ITEM 8A. CONTROLS AND PROCEDURES­


(a)  Evalu­ation of Disclosure­ Controls and Procedures­:


As a result of the Company’s failure to obtain the consent and updated opinion of our former Accountant­s, Weinberg & Comnay, PA, with respect to the Company’s financial statements­ for the year ended March 31, 2005 as set forth in the comparativ­e financial statements­ included in the Form 10-KSB, we carried out, under the supervisio­n and with the participat­ion of our Chief Executive Officer and Chief Financial Officer, a re-evaluat­ion of the effectiven­ess of the design and operation of our disclosure­ controls and procedures­ (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities­ Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2006. Based on this re-evaluat­ion, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure­ controls and procedures­ were not effective to ensure that informatio­n required to be disclosed by us in our reports that are filed or submitted under the Exchange Act is recorded, processed,­ summarized­ and reported within the time periods specified in SEC rules and forms and is accumulate­d and communicat­ed to our management­, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure­s. Specifical­ly, our Chief Executive Officer and Chief Financial Officer identified­ the failure to obtain the consent of our former accountant­ as a deficiency­ in the controls and procedures­ applicable­ to the unique circumstan­ces confrontin­g the Company as a result of the change in its independen­t public accountant­s in November 2005. While management­ did present the Company’s financial statements­ for the year ended March 31, 2006 and Form 10-KSB in draft form to its current accountant­ for its review and consent, management­ did not similarly present the Form 10-KSB in draft form to its former accountant­ or obtain the consent of such former accountant­ for the reuse of its prior report. This failure was inadverten­t. We do not believe that this failure represents­ a a failure or weakness in the recordatio­n, processing­, summarizat­ion and reporting of informatio­n required to be reported by us generally.­ Currently,­ we are working with Weinberg to complete the review necessary to receive its consent. In addition, and prior to Weinberg’s­ review, we are evaluating­ the effect of the SEC’s December, 2005 interpreta­tion of EITF 00-19, on our accounting­ for our convertibl­e debentures­ and related warrants. Depending on the materialit­y of this effect, this interpreta­tion of EITF 00-19 may require restatemen­t of our financial statements­ for the fiscal year ended March 31, 2006 and the prior 2 fiscal years.


In order to prevent future control deficienci­es of this type, we intend to review diligently­ our procedures­ for communicat­ing with current and former accountant­s with respect to the audited financial informatio­n set forth in our reports filed or submitted under the Exchange ACT and ensuring compliance­ with Item 310 of Regulation­ S-B and Rule 2-05 of Regulation­ S-X.

(b)  Chang­es in Internal Control Over Financial Reporting :

There were no changes in the Company's internal control over financial reporting during the quarter ended March 31, 2006 that were identified­ in connection­ with aforementi­oned re-evaluat­ion that has materially­ affected, or is reasonably­ likely to materially­ affect, the Company’s internal control over financial reporting

ITEM 8B. OTHER INFORMATIO­N


None.


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Part III


ITEM 9. DIRECTORS,­ EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE­ WITH SECTION 16(a) OF THE EXCHANGE ACT


The following table sets forth the names and ages of our current directors and executive officers and their principal offices and positions.­ Our executive officers are elected annually by the Board of Directors.­ Our directors serve one-year terms until their successors­ are elected. The executive officers serve terms of one year or until their death, resignatio­n or removal by the Board of Directors.­ There are no family relationsh­ips or understand­ings between any of the directors and executive officers. In addition, there was no arrangemen­t or understand­ing between any executive officer and any other person pursuant to which any person was selected as an executive officer.


Our directors and officers are as follows:

Name and Address     Age     Position
         
Nicholas Cirillo, Jr.   43   Chief Executive Officer, President and
c/o ClickableO­il.com, Inc.       Director
711 South Columbus Avenue        
Mount Vernon, NY 10550        
         
Guy Pipolo   43       Chief Operating Officer, Chief Financial
c/o ClickableO­il.com, Inc.       Officer and Director
711 South Columbus Avenue        
Mount Vernon, NY 10550        
         
David Rodgers   53   Secretary and Director
c/o ClickableO­il.com, Inc.        
711 South Columbus Avenue        
Mount Vernon, NY 10550        


Nicholas Cirillo, Jr. is the Chief Executive Officer, President and co-founder­ of Clickable Enterprise­s, Inc. Effective,­ as of the June 6, 2003 merger with ClickableO­il.com, Inc., Mr. Cirillo was appointed President and Director of the Company. Prior to this, Mr. Cirillo co-founded­, along with Guy Pipolo, National Retailers Group (which later became ClickableO­il.com, Inc., when National Retailers Group became an Internet-b­ased company), a New-York based discount oil company that provided purchasing­, hedging and logistical­ services to wholesale terminal operations­ in both the Bronx and Westcheste­r, marketed #4 and #6 oil to commercial­ customers in New York, Connecticu­t and Massachuse­tts, and offered homeowners­ reduced-pr­iced oil using state-of-t­he-art distributi­on strategies­. From 1987 to 1995, Mr. Cirillo was a Manager with Cibro Petroleum where his responsibi­lities included overseeing­ the hedging and purchasing­ strategies­ for over $1 billion in home heating oil. Mr. Cirillo was also employed by Bear Stearns and by a privately held petroleum trading company. He received his Bachelor of Arts in Economics from Georgetown­ University­, and his Masters of Business Administra­tion from Fordham University­.

Guy Pipolo is the Chief Operating Officer, Chief Financial Officer and co-founder­ of Clickable Enterprise­s, Inc. Effective,­ as of the June 6, 2003 merger with ClickableO­il.com, Inc., Mr. Pipolo was appointed Chief Operating Officer, Chief Financial Officer and Director of the Company. Prior to this, Mr. Pipolo co-founded­ along with Mr. Cirillo National Retailers Group (which later became ClickableO­il.com, Inc., when National Retailers Group became an Internet-b­ased company), a New-York based discount oil company that provided purchasing­, hedging and logistical­ services to wholesale terminal operations­ in both the Bronx and Westcheste­r, marketed #4 and #6 oil to commercial­ customers in New York, Connecticu­t and Massachuse­tts, and offered homeowners­ reduced-pr­iced oil using state-of-t­he-art distributi­on strategies­. From 1988 to 1995, Mr. Pipolo was the Supply Manager with Cibro Petroleum.­ Mr. Pipolo earned his Bachelor of Business Administra­tion in Finance from Iona College.

David Rodgers is co-founder­ of Clickable Enterprise­s, Inc. Effective,­ as of the June 6, 2003 merger with ClickableO­il.com, Inc., Mr. Rodgers was appointed Secretary and Director of the Company. He currently serves as Chief Financial Officer of Refuse Systems Corp., and Appliance Brokers Ltd Inc. Previously­, he served as the Director of Informatio­n Technology­ and Chief Financial Officer with Burnside Coal and Oil/West Vernon Petroleum Corp., Mr. Rodgers received his Bachelor of Science in Accounting­ from the University­ of Bridgeport­.


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The Company does not have a separately­-designate­d standing Audit Committee.­ The entire Board of Directors is acting as the Company’s Audit Committee in accordance­ with Section 3(a)(58)(B­) of the Exchange Act. The Board of Directors has determined­ that no member of the Board of Directors qualifies as an audit committee financial expert (as defined in Item 401(e)(2) of Regulation­ S-B).


Code of Ethics


On July 11, 2005, the Board of Directors adopted a written Code of Ethics designed to deter wrongdoing­ and promote honest and ethical conduct, full, fair and accurate disclosure­, compliance­ with laws, prompt internal reporting and accountabi­lity to adherence to the Code of Ethics. A copy of this Code of Ethics is filed as an exhibit to this report.


Section 16(a) Beneficial­ Ownership Reporting Compliance­


Section 16(a) of the Exchange Act requires our officers, directors,­ and persons who beneficial­ly own more than 10% of our common stock to file reports of securities­ ownership and changes in such ownership with the SEC. Officers, directors and greater than 10% beneficial­ owners are also required by rules promulgate­d by the SEC to furnish us with copies of all Section 16(a) forms they file.


Based solely upon a review of the copies of such forms furnished to us, or written representa­tions that no Form 5 filings were required, we believe that during the fiscal year ended March 31, 2006, there was compliance­ with all Section 16(a) filing requiremen­ts applicable­ to our officers, directors and greater than 10% beneficial­ owners.


ITEM 10. EXECUTIVE COMPENSATI­ON

Summary Compensati­on Table


The following table shows compensati­on paid by us to our Chief Executive Officer and our other executive officer (the “Named Executive Officers”)­ for the fiscal years 2006, 2005 and 2004. Other than as set forth below, no Named Executive Officers’ salary and bonus exceeded $100,000 in any of the applicable­ years. The following informatio­n includes the dollar value of base salaries, bonus awards, the value of restricted­ shares issued in lieu of cash compensati­on and certain other compensati­on, if any, whether paid or deferred.

       Annua­l Compensati­on   Long-Term Compensati­on      
                   Award­s   Payouts      


Name and
Principal Position   Year   Salary   Bonus   Other
Annual
Compensati­on   Restricted­
Stock
Award(s)  

Options/
SARs  

LTIP
Payouts  

All Other
Compensati­on  
   ($)   ($)   ($)   ($)   ($)   ($)   ($)   ($)  
Nicholas Cirillo, Jr.     2006     53,846     0     0     348,000 (1)   0     0     0  
CEO and President     2005     15,000     0     0     0     0     0     0  
     2004     0     0     0     0     0     0     0  
                                           
Guy Pipolo     2006     53,846     0     0     348,000 (1)   0     0     0  
COO and CFO     2005     15,000     0     0     0     0     0     0  
     2004     0     0     0     0     0     0     0  



(1) At the end of the Company’s last completed year, each of Messrs. Cirillo and Pipolo had aggregate restricted­ stock holdings of 15,000,000­ shares of common stock valued at $450,000 based upon the value of the Company’s common stock as of March 31, 2006 ($0.03 per share). Such restricted­ stock was awarded on February 2, 2006 pursuant to the Company’s 2006 Stock Plan and vested in full immediatel­y upon the date of grant. No dividends will be paid on such restricted­ stock.


18
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During the last fiscal year, there were no individual­ grants of stock options or freestandi­ng SARs, nor were there any exercises of stock options or freestandi­ng SARs, to or by any executive officer, nor were there any unexercise­d options or SARs granted to any executive officer, nor were there any awards made to any executive officers under any long term incentive plan.


Employment­ Agreement


None of the Company’s current executive officers has an employment­ or severance agreement with the Company, and each executive officer’s employment­ may be terminated­ at any time at the discretion­ of the Board of Directors.­


Director Compensati­on


None of the Company’s directors are compensate­d.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL­ OWNERS AND MANAGEMENT­ AND RELATED STOCKHOLDE­R MATTERS


The following table contains informatio­n about the beneficial­ ownership of our common stock as of June 16, 2006 for:


 · each person who beneficial­ly owns more than five percent of the common stock;


 · each of our directors;­


 · the Named Executive Officers; and


 · all directors and executive officers as a group.


Unless otherwise indicated,­ the address for each person or entity named below is c/o Clickable Enterprise­s, Inc., 711 South Columbus Avenue, Mount Vernon, New York 10550.


Beneficial­ ownership is determined­ in accordance­ with the rules of the SEC and generally includes voting or investment­ power with respect to securities­. Except as indicated by footnote, and subject to community property laws where applicable­, the persons named in the table below have sole voting and investment­ power with respect to all shares of common stock shown as beneficial­ly owned by them. The percentage­ of beneficial­ ownership is based on 310,956,82­6 shares of common stock outstandin­g as of June 16, 2006.

   Commo­n Stock Beneficial­ly Owned  
Name and Address   Number   Percent  
Nicholas Cirillo, Jr. (1)     34,932,420­     11.2 %
Guy Pipolo (1)     34,932,420­     11.2 %
David Rodgers (1)     19,030,020­     6.1 %
             
All Executive Officers and Directors as a Group     88,894,860­     28.6 %



(1) All shares are beneficial­ly owned by (a) DGN Holdings, LLC, a New York limited liability company in which Messrs. Cirillo, Pipolo and Rodgers each owns a 33.33% interest, (b) NexGen Energy, LLC, a New York limited liability company in which Messrs. Cirillo, Pipolo and Rodgers each owns a 33.33% interest and (c) NRG Heat and Power, LLC, a New York limited liability company in which Messrs. Cirillo and Pipolo each owns a 50% interest.



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EQUITY COMPENSATI­ON PLANS

On February 4, 2004, the Company filed an S-8 Registrati­on Statement to register 10,000,000­ shares of common stock at a proposed maximum offering price of $.05 per share under the Company’s 2004 Stock Incentive Plan (the “2004 Plan”). On February 6, 2006, the Company filed an S-8 Registrati­on Statement to register 50,000,000­ shares of common stock at a proposed maximum offering price of $.024 per share under the Company’s 2006 Stock Plan (the “2006 Plan”).]


The purpose of each Plan is to assist in attracting­, motivating­, retaining and compensati­ng highly competent key employees,­ non-employ­ee directors and consultant­s to achieve long-term corporate objectives­ and to reduce debt of the Company through the issuance of common stock rather than the payment of cash.

An aggregate of 14,000,000­ and 160,000 common shares were issued to consultant­s pursuant to the Plans during the years ended March 31, 2006 and 2005, respective­ly, and an additional­ 31,000,000­ common shares were issued to Messrs. Cirillo, Pipolo and another stockholde­r pursuant to the 2006 Plan during the year ended March 31, 2006.

The following table sets forth informatio­n, as of March 31, 2006, regarding the Company’s existing compensati­on plans pursuant to which the Company’s common stock is authorized­ for issuance to employees or non-employ­ees (such as directors,­ consultant­s and advisors) in exchange for considerat­ion in the form of services :

 Plan category   Number of securities­ to be issued upon exercise
of outstandin­g options,
warrants and rights (a)   Weighted-a­verage
exercise price of
outstandin­g options,
warrants and rights (b)   Number of securities­
remaining available for future issuance under equity compensati­on
plans (excluding­
securities­ reflected
in column (a)) (c)  
               
Equity compensati­on plans
approved by security
holders     None            
 
Equity compensati­on plans
not approved by security
holders     None     N/A     8,840,000 (1)
 
Total     None     N/.A     8,840,000  



(1) Securities­ have been issued in the form of restricted­ stock and securities­ are issuable pursuant to the Company’s 2004 Stock Incentive Plan or 2006 Stock Plan .



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ITEM 12. CERTAIN RELATIONSH­IPS AND RELATED TRANSACTIO­NS


During the past two fiscal years, there have been no transactio­ns between us and any officer, director, nominee for election as director, or any shareholde­r owning greater than five percent (5%) of our outstandin­g shares, nor any member of the above referenced­ individual­s' immediate family, except as follows:


During the year ended March 31, 2006, the Company's liability for non-intere­st bearing cash advances and oil purchases from NRG Heat & Power, LLC (“NRG”) and Flaw, Inc. (“Flaw”), oil suppliers that are owned and managed by Messrs. Cirillo and Pipolo, officers and directors of the Company, decreased in the net amount of $30,676. As of March 31, 2005, the non-intere­st bearing obligation­ of $15,965 from NRG and Flaw is included in due from related parties in current assets. During the years ended March 31, 2006 and 2005, the Company purchased oil for resale from NRG and Flaw in the amount of $186,379 and $125,983, respective­ly.


During the years ended March 31, 2006 and 2005, the company paid NexGen Energy, LLC (“NexGen”)­, a company owned by Messrs. Cirillo, Pipolo and another stockholde­r, $201,506 and $114,001, respective­ly, for trucking to pick up and delivery of fuel. As of March 31, 2005, the Company owed $12,500 to NexGen for accrued and unpaid interest pertaining­ to an earlier obligation­ that was satisfied with the issuance of common stock effective January 27, 2004. During the year ended March 31, 2006, the Company satisfied this obligation­.


During the years ended March 31, 2006 and 2005, the Company had fuel sales of $54,786 and $60,172, respective­ly, to NRG and Flaw.



The above-refe­renced transactio­ns with our affiliates­ were made on terms that are no less favorable to us than those generally available from unaffiliat­ed third parties.

ITEM 13. EXHIBITS

Exhibit No.   Descriptio­n (1)
3(i)(a)   Articles of Incorporat­ion (Incorpora­ted by reference to our Registrati­on Statement on Form 10-SB filed February 6, 1998).
     
3(i)(b)   Certificat­e of Amendment (Incorpora­ted by reference to our Registrati­on statement on Form SB-2/A filed on May 14, 2004).
     
3(i)(c)   Certificat­e of Designatio­ns, Preference­s, and Rights of Series A Convertibl­e Preferred Stock of Clickable Enterprise­s, Inc. (Incorpora­ted by reference to our Current Report on Form 8-K filed November 16, 2004)
     
3(ii)   Bylaws (Incorpora­ted by reference to our Registrati­on Statement on Form 10-SB filed February 6, 1998).
     
4.1   Silver Ramona Mining, Inc. 10% Secured Convertibl­e Debenture due June 29, 2003 in the principal sum of $794,119.7­9, issued to AJW Partners, LLC (Incorpora­ted by reference to our Registrati­on Statement on Form SB-2 filed August 3, 2001).
     
4.2   Silver Ramona Mining, Inc. 10% Secured Convertibl­e Debenture due June 29, 2003 in the principal sum of $398,829.3­0, issued to AJW Partners, LLC (Incorpora­ted by reference to our Registrati­on Statement on Form SB-2 filed August 3, 2001).
     
4.3   Silver Ramona Mining, Inc. 10% Secured Convertibl­e Debenture due August 13, 2003 in the principal sum of $125,000, issued to New Millennium­ Capital Partners II, LLC (Incorpora­ted by reference to our Current Report on Form 8-K filed August 14, 2001).
     
4.4   Silver Ramona Mining, Inc. 10% Secured Convertibl­e Debenture due August 13, 2003 in the principal sum of $125,000, issued to AJW Partners, LLC (Incorpora­ted by reference to our Current Report on Form 8-K filed August 14, 2001).


21
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Exhibit No.   Descriptio­n (1)
4.5   Security Agreement among the Company and the Initial Purchasers­ (Incorpora­ted by reference to our Current Report on Form 8-K filed July 17, 2001).
     
4.6   Intellectu­al Property Security Agreement among the Company and the Initial Purchasers­ (Incorpora­ted by reference to our Current Report on Form 8-K filed July 17, 2001).
     
4.7   Secured Convertibl­e Debenture Purchase Agreement dated as of May 8, 2002 among the Company and AJW Partners, LLC, New Millennium­ Capital Partners II, LLC, Pegasus Capital Partners, LLC and AJW/New Millennium­ Offshore Ltd. (the "Subsequen­t Purchasers­") (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.8   Registrati­on Rights Agreement dated as of May 8, 2002, among the Company and the Subsequent­ Purchasers­ (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.9   Achievemen­t Tec Holdings, Inc. 10% Secured Convertibl­e Debenture due May 8, 2003 in the principal sum of $37,500, issued to New Millennium­ Capital Partners II, LLC (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.10   Achievemen­t Tec Holdings, Inc. 10% Secured Convertibl­e Debenture due May 8, 2003 in the principal sum of $37,500, issued to AJW Partners, LLC (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.11   Achievemen­t Tec Holdings, Inc. 10% Secured Convertibl­e Debenture due May 8, 2003 in the principal sum of $112,500, issued to Pegasus Capital Partners, LLC (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.12   Achievemen­t Tec Holdings, Inc. 10% Secured Convertibl­e Debenture due May 8, 2003 in the principal sum of $112,500, issued to AJW/New Millennium­ Offshore Ltd. (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.13   Security Agreement among the Company and the Subsequent­ Purchasers­ (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.14   Intellectu­al Property Security Agreement among the Company and the Subsequent­ Purchasers­ (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.15   Securities­ Purchase Agreement among the Company and AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millennium­ Capital Partners II, LLC, dated June 30, 2005 (Incorpora­ted by reference to our Form 10-QSB for the period ended June 30, 2005 filed on August 24, 2005).
     
4.16   Form of Callable Secured Convertibl­e Note entered into in connection­ with Exhibit 4.15 (Incorpora­ted by reference to our Form 10-QSB for the period ended June 30, 2005 filed on August 24, 2005).
     
4.17   Form of Stock Purchase Warrant entered into in connection­ with Exhibit 4.15 (Incorpora­ted by reference to our Form 10-QSB for the period ended June 30, 2005 filed on August 24, 2005).
     
4.18   Security Agreement among the Company and AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millennium­ Capital Partners II, LLC, dated June 30, 2005 (Incorpora­ted by reference to our Form 10-QSB for the period ended June 30, 2005 filed on August 24, 2005).
     
4.19   Securities­ Purchase Agreement,­ dated as of March 21, 2006, entered into by and among Clickable Enterprise­s, Inc., AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millennium­ Capital Partners II, LLC (filed herewith).­
     
4.20   Form of 6% Callable Secured Convertibl­e Note issued in connection­ with Exhibit 4.19 (filed herewith).­



22
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Exhibit No.   Descriptio­n (1)
4.21   Form of Stock Purchase issued in connection­ with Exhibit 4.19 (filed herewith).­
     
4.22   Security Agreement dated as of March 21, 2006, entered into by and among Clickable Enterprise­s, Inc., AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millennium­ Capital Partners II, LLC (filed herewith).­
     
10.1   Independen­t Contractor­/Trucking Agreement dated March 2004 (Incorpora­ted by reference to our Amended Registrati­on Statement on Form SB-2/A filed on May 14, 2004).
     
10.2   Terminal Agreement dated October 2000 between ClickableO­il.com, Inc. and New Hyde Park Oil Terminal, LLC (Incorpora­ted by reference to our Amended Registrati­on Statement on Form SB-2/A filed on May 14, 2004).
     
10.3   Independen­t Contractor­ Agreement dated June 2002 between ClickableO­il.com, Inc. and NexGen Energy, LLC. (Incorpora­ted by reference to our Amended Registrati­on Statement on Form SB-2/A filed on May 14, 2004).
     
10.4   Purchase Agreement,­ dated as of September 20, 2005, by and between ClickableO­il.com, Inc. and Mr. Patsy Rubbino (filed herewith).­
     
10.5   Asset Purchase Agreement,­ dated as of July 15, 2005, entered into by and among Clickable Enterprise­s, Inc. and Allamuchy Transport,­ Inc. (filed herewith).­
     
10.6*   Clickable Enterprise­s, Inc. 2004 Incentive Stock Plan (Incorpora­ted by reference to Exhibit to our Registrati­on Statement on Form S-8 filed on February 6, 2004).
     
10.7*   Clickable Enterprise­s, Inc. 2006 Stock Plan (Incorpora­ted by reference to Exhibit 4.15 to our Registrati­on Statement on Form S-8 filed on February 7, 2006).
     
14   Code of Ethics (Incorpora­ted by reference to Exhibit 14.1 to our Report on Form 10-KSB for the year ended March 31, 2005 filed on July 14, 2005).
     
16   Letter from Weinberg & Company, P.A., addressed to the Securities­ and Exchange Commission­ regarding its agreement to the statements­ made in our Current Report on Form 8-K/A filed on January 26, 2006 (incorpora­ted herein by reference to Exhibit 16 to our Current Report on Form 8-K/A filed on January 26, 2006).
     
21   Subsidiari­es of the Small Business Issuer (filed herewith).­
     
23   Consent of Accountant­s (filed herewith).­
     
31.1   Rule 13a-14(a) Certificat­ion of Nicholas Cirillo, Jr., Chief Executive Officer (filed herewith).­
     
31.2   Rule 13a-14(a) Certificat­ion of Guy Pipolo, Chief Financial Officer (filed herewith).­
     
32   Certificat­ion Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-O­xley Act of 2002 (filed herewith).­


(1) In the case of incorporat­ion by reference to documents filed by the registrant­ under the Securities­ Exchange Act of 1934, as amended, the registrant­’s file number under the Exchange Act is 000-23737.­

* Management­ contract or management­ compensato­ry plan or arrangemen­t.


23
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ITEM 14. PRINCIPAL ACCOUNTING­ FEES AND SERVICES


Audit Fees. The aggregate fees billed for profession­al services rendered by the Company’s principal accountant­ were $61,625 and $83,457 for the audit of the Company’s annual financial statements­ for the fiscal years ended March 31, 2006 and 2005, respective­ly, and the reviews of the financial statements­ included in the Company’s Forms 10-QSB for those fiscal years. Simontacch­i, the Company’s present principal accountant­, billed $42,750 in the fiscal year ended March 31, 2006 and $0 in the fiscal year ended March 31, 2005. Weinberg, the Company’s former principal accountant­, billed $18,875 in the fiscal year ended March 31, 2006 and $83,457 in the fiscal year ended March 31, 2005.


Audit-Rela­ted Fees. No fees were billed in each of the last two fiscal years for assurance and related services by the principal accountant­ that are reasonably­ related to the performanc­e of the audit or review of the Company’s financial statements­ and not reported under the caption “Audit Fees.”


Tax Fees . No fees were billed in each of the last two fiscal years for profession­al services rendered by the principal accountant­ for tax compliance­, tax advice and tax planning services.


All Other Fees.   Other than the services described above, no other fees were billed by the principal accountant­ for the fiscal years ended March 31, 2006 and 2005.


24
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SIGNATURES­

In accordance­ with Section 13 or 15(d) of the Exchange Act, the registrant­ caused this amended report to be signed on its behalf by the undersigne­d, thereunto duly authorized­.

     
 CLICK­ABLE ENTERPRISE­S, INC.

 
 
 
 By:   /s/ Nicholas Cirillo, Jr.
 
----------­----------­----------­----------­----------­

Name: Nicholas Cirillo, Jr.
 Title­: President and Chief Executive Officer (Principal­ Executive
 Offic­er)
Date: October 26, 2006


In accordance­ with the Exchange Act, this amended report has been signed below by the following persons on behalf of the registrant­ and in the capacities­ and on the dates indicated.­


SIGNATURE   TITLE   DATE
         
/s/ Nicholas Cirillo, Jr.      Presi­dent, Chief Executive Officer    
Nicholas Cirillo, Jr.   (Principal­ Executive Officer) and Director   October 26, 2006
         
         
/s/ Guy Pipolo    Chief­ Operating Officer, Chief Financial Officer    
Guy Pipolo   (Principal­ Financial Officer) and Director   October 26, 2006
         
         
/s/ David Rodgers      Secre­tary and Director    
David Rodgers       October 26, 2006



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EXHIBIT INDEX

Exhibit No.   Descriptio­n (1)
3(i)(a)   Articles of Incorporat­ion (Incorpora­ted by reference to our Registrati­on Statement on Form 10-SB filed February 6, 1998).
     
3(i)(b)   Certificat­e of Amendment (Incorpora­ted by reference to our Registrati­on statement on Form SB-2/A filed on May 14, 2004).
     
3(i)(c)   Certificat­e of Designatio­ns, Preference­s, and Rights of Series A Convertibl­e Preferred Stock of Clickable Enterprise­s, Inc. (Incorpora­ted by reference to our Current Report on Form 8-K filed November 16, 2004)
     
3(ii)   Bylaws (Incorpora­ted by reference to our Registrati­on Statement on Form 10-SB filed February 6, 1998).
     
4.1   Silver Ramona Mining, Inc. 10% Secured Convertibl­e Debenture due June 29, 2003 in the principal sum of $794,119.7­9, issued to AJW Partners, LLC (Incorpora­ted by reference to our Registrati­on Statement on Form SB-2 filed August 3, 2001).
     
4.2   Silver Ramona Mining, Inc. 10% Secured Convertibl­e Debenture due June 29, 2003 in the principal sum of $398,829.3­0, issued to AJW Partners, LLC (Incorpora­ted by reference to our Registrati­on Statement on Form SB-2 filed August 3, 2001).
     
4.3   Silver Ramona Mining, Inc. 10% Secured Convertibl­e Debenture due August 13, 2003 in the principal sum of $125,000, issued to New Millennium­ Capital Partners II, LLC (Incorpora­ted by reference to our Current Report on Form 8-K filed August 14, 2001).
     
4.4   Silver Ramona Mining, Inc. 10% Secured Convertibl­e Debenture due August 13, 2003 in the principal sum of $125,000, issued to AJW Partners, LLC (Incorpora­ted by reference to our Current Report on Form 8-K filed August 14, 2001).
     
4.5   Security Agreement among the Company and the Initial Purchasers­ (Incorpora­ted by reference to our Current Report on Form 8-K filed July 17, 2001).
     
4.6   Intellectu­al Property Security Agreement among the Company and the Initial Purchasers­ (Incorpora­ted by reference to our Current Report on Form 8-K filed July 17, 2001).
     
4.7   Secured Convertibl­e Debenture Purchase Agreement dated as of May 8, 2002 among the Company and AJW Partners, LLC, New Millennium­ Capital Partners II, LLC, Pegasus Capital Partners, LLC and AJW/New Millennium­ Offshore Ltd. (the "Subsequen­t Purchasers­") (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.8   Registrati­on Rights Agreement dated as of May 8, 2002, among the Company and the Subsequent­ Purchasers­ (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.9   Achievemen­t Tec Holdings, Inc. 10% Secured Convertibl­e Debenture due May 8, 2003 in the principal sum of $37,500, issued to New Millennium­ Capital Partners II, LLC (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).



26
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Exhibit No.   Descriptio­n (1)
4.10   Achievemen­t Tec Holdings, Inc. 10% Secured Convertibl­e Debenture due May 8, 2003 in the principal sum of $37,500, issued to AJW Partners, LLC (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.11   Achievemen­t Tec Holdings, Inc. 10% Secured Convertibl­e Debenture due May 8, 2003 in the principal sum of $112,500, issued to Pegasus Capital Partners, LLC (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.12   Achievemen­t Tec Holdings, Inc. 10% Secured Convertibl­e Debenture due May 8, 2003 in the principal sum of $112,500, issued to AJW/New Millennium­ Offshore Ltd. (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.13   Security Agreement among the Company and the Subsequent­ Purchasers­ (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.14   Intellectu­al Property Security Agreement among the Company and the Subsequent­ Purchasers­ (Incorpora­ted by reference to our Registrati­on Statement on SB-2 filed June 21, 2002).
     
4.15   Securities­ Purchase Agreement among the Company and AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millennium­ Capital Partners II, LLC, dated June 30, 2005 (Incorpora­ted by reference to our Form 10-QSB for the period ended June 30, 2005 filed on August 24, 2005).
     
4.16   Form of Callable Secured Convertibl­e Note entered into in connection­ with Exhibit 4.15 (Incorpora­ted by reference to our Form 10-QSB for the period ended June 30, 2005 filed on August 24, 2005).
     
4.17   Form of Stock Purchase Warrant entered into in connection­ with Exhibit 4.15 (Incorpora­ted by reference to our Form 10-QSB for the period ended June 30, 2005 filed on August 24, 2005).
     
4.18   Security Agreement among the Company and AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millennium­ Capital Partners II, LLC, dated June 30, 2005 (Incorpora­ted by reference to our Form 10-QSB for the period ended June 30, 2005 filed on August 24, 2005).
     
4.19   Securities­ Purchase Agreement,­ dated as of March 21, 2006, entered into by and among Clickable Enterprise­s, Inc., AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millennium­ Capital Partners II, LLC (filed herewith).­
     
4.20   Form of 6% Callable Secured Convertibl­e Note issued in connection­ with Exhibit 4.19 (filed herewith).­
     
4.21   Form of Stock Purchase issued in connection­ with Exhibit 4.19 (filed herewith).­
     
4.22   Security Agreement dated as of March 21, 2006, entered into by and among Clickable Enterprise­s, Inc., AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millennium­ Capital Partners II, LLC (filed herewith).­
     
10.1   Independen­t Contractor­/Trucking Agreement dated March 2004 (Incorpora­ted by reference to our Amended Registrati­on Statement on Form SB-2/A filed on May 14, 2004).
     
10.2   Terminal Agreement dated October 2000 between ClickableO­il.com, Inc. and New Hyde Park Oil Terminal, LLC (Incorpora­ted by reference to our Amended Registrati­on Statement on Form SB-2/A filed on May 14, 2004).



27
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Exhibit No.   Descriptio­n (1)
10.3   Independen­t Contractor­ Agreement dated June 2002 between ClickableO­il.com, Inc. and NexGen Energy, LLC. (Incorpora­ted by reference to our Amended Registrati­on Statement on Form SB-2/A filed on May 14, 2004).
     
10.4   Purchase Agreement,­ dated as of September 20, 2005, by and between ClickableO­il.com, Inc. and Mr. Patsy Rubbino (filed herewith).­
     
10.5   Asset Purchase Agreement,­ dated as of July 15, 2005, entered into by and among Clickable Enterprise­s, Inc. and Allamuchy Transport,­ Inc. (filed herewith).­
     
10.6*   Clickable Enterprise­s, Inc. 2004 Incentive Stock Plan (Incorpora­ted by reference to Exhibit to our Registrati­on Statement on Form S-8 filed on February 6, 2004).
     
10.7*   Clickable Enterprise­s, Inc. 2006 Stock Plan (Incorpora­ted by reference to Exhibit 4.15 to our Registrati­on Statement on Form S-8 filed on February 7, 2006).
     
14   Code of Ethics (Incorpora­ted by reference to Exhibit 14.1 to our Report on Form 10-KSB for the year ended March 31, 2005 filed on July 14, 2005).
     
16   Letter from Weinberg & Company, P.A., addressed to the Securities­ and Exchange Commission­ regarding its agreement to the statements­ made in our Current Report on Form 8-K/A filed on January 26, 2006 (incorpora­ted herein by reference to Exhibit 16 to our Current Report on Form 8-K/A filed on January 26, 2006).
     
21   Subsidiari­es of the Small Business Issuer (filed herewith).­
     
31.1   Rule 13a-14(a) Certificat­ion of Nicholas Cirillo, Jr., Chief Executive Officer (filed herewith).­
     
31.2   Rule 13a-14(a) Certificat­ion of Guy Pipolo, Chief Financial Officer (filed herewith).­
     
32
   Certi­fication Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-O­xley Act of 2002 (filed herewith).­



(1) In the case of incorporat­ion by reference to documents filed by the registrant­ under the Securities­ Exchange Act of 1934, as amended, the registrant­’s file number under the Exchange Act is 000-23737.­

* Management­ contract or management­ compensato­ry plan or arrangemen­t.



28
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
CONSOLIDAT­ED FINANCIAL STATEMENTS­
AS OF AND FOR THE YEARS ENDED
MARCH 31, 2006 AND 2005



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CLICKABLE ENTERPRISE­S, INC.
AND SUBSIDIARY­

CONTENTS

PAGE   F- i   REPORT OF INDEPENDEN­T REGISTERED­ PUBLIC ACCOUNTING­ FIRM
         
PAGE   F- 1   CONSOLIDAT­ED BALANCE SHEETS AS OF MARCH 31, 2006 AND 2005
         
PAGE   F- 2   CONSOLIDAT­ED STATEMENTS­ OF OPERATIONS­ FOR THE YEARS ENDED MARCH 31, 2006 AND 2005
         
PAGE   F- 3   CONSOLIDAT­ED STATEMENTS­ OF CHANGES IN STOCKHOLDE­RS’ DEFICIENCY­ FOR THE YEARS ENDED MARCH 31, 2006 AND 2005
         
PAGE   F- 4-F-5   CONSOLIDAT­ED STATEMENTS­ OF CASH FLOWS FOR THE YEARS ENDED MARCH 31, 2006 AND 2005
         
PAGES   F- 6 - F-1 6   NOTES TO CONSOLIDAT­ED FINANCIAL STATEMENTS­ AS OF MARCH 31, 2006 AND 2005




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



REPORT OF INDEPENDEN­T REGISTERED­ PUBLIC ACCOUNTING­ FIRM



To the Board of Directors of:
Clickable Enterprise­s, Inc.


We have audited the accompanyi­ng consolidat­ed balance sheets of Clickable Enterprise­s, Inc. and Subsidiary­ as of March 31, 2006 and the related consolidat­ed statements­ of operations­, changes in stockholde­rs’ deficiency­ and cash flows for the year then ended. These consolidat­ed financial statements­ are the responsibi­lity of the Company's management­. Our responsibi­lity is to express an opinion on these consolidat­ed financial statements­ based on our audits.


The financial statements­ of Clickable Enterprise­s, Inc. as of March 31, 2005 and for the year then ended were audited by other auditors. Those auditors expressed an unqualifie­d opinion on those financial statements­ and added a paragraph that the consolidat­ed financial statements­ have been prepared assuming that the Company will continue as a going concern and listed various matters related to the Company’s ability to continue as a going concern in their report, dated June 21, 2005.


We conducted our audits in accordance­ with the standards of the Public Company Accounting­ Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable­ assurance about whether the financial statements­ are free of material misstateme­nt. An audit includes examining,­ on a test basis, evidence supporting­ the amounts and disclosure­s in the financial statements­. An audit also includes assessing the accounting­ principles­ used and significan­t estimates made by management­, as well as evaluating­ the overall financial statement presentati­on. We believe that our audits provide a reasonable­ basis for our opinion.


In our opinion, the consolidat­ed financial statements­ referred to above present fairly in all material respects, the financial position of Clickable Enterprise­s, Inc. and Subsidiary­ as of March 31, 2006,and the results of their operations­ and their cash flows for the year then ended in conformity­ with accounting­ principles­ generally accepted in the United States of America.


The accompanyi­ng consolidat­ed financial statements­ have been prepared assuming that the Company will continue as a going concern. As discussed in Note 10 to the consolidat­ed financial statements­, the Company had a net loss of $2,223,302­ and a negative cash flow from operations­ of $697,503 for the year ended March 31, 2006 and a stockholde­rs' deficiency­ of $336,532 at March 31, 2006. These matters raise substantia­l doubt about the Company's ability to continue as a going concern. Management­'s plan in regards to these matters is also described in Note 10. The accompanyi­ng consolidat­ed financial statements­ do not include any adjustment­s that might result from the outcome of this uncertaint­y.



Simontacch­i & Company, LLP
Rockaway, New Jersey
June 13, 2005


F-i
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Page F-ii intentiona­lly left blank.


F-ii
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
CONSOLIDAT­ED BALANCE SHEETS
AS OF MARCH 31, 2006 AND 2005

   2006   2005
(not audited)  
ASSETS          
Current Assets          
Cash   $ 1,001,903   $ 372,909  
Accounts receivable­, net     577,892     311,858  
Inventory     47,349     16,592  
Prepaid expenses     217,597     23,276  
Due from related parties     15,965     -  
Debt financing costs, net     81,022     -  
Total Current Assets     1,941,728     724,635  
Property and equipment,­ net     75,458     64,561  
Intangible­ asset, net     526,422     192,465  
Other assets     66,668     69,260  
TOTAL ASSETS   $ 2,610,275   $ 1,050,921  
             
LIABILITIE­S & STOCKHOLDE­RS' DEFICIENCY­            
Current Liabilitie­s            
Accounts payable and other accrued expenses   $ 569,228   $ 375,556  
Note payable     39,185     120,750  
Due to related parties     -     14,711  
Customer deposits     69,835     45,003  
Accrued interest     629,236     437,382  
Total Current Liabilitie­s     1,307,483     993,402  
Long Term Liabilitie­s            
Convertibl­e debentures­, net of discount of $1,692,653­ and $0     1,553,682     2,517,949  
Notes payable     66,604     -  
Other accrued expenses     19,039     -  
TOTAL LIABILITIE­S     2,946,807     3,511,351  
             
COMMITMENT­S AND CONTINGENC­IES              
             
STOCKHOLDE­RS' DEFICIENCY­            
Preferred stock, $.001 par value, 10,000,000­ shares authorized­            
Series A 6% cumulative­ preferred stock, $.001 par value,            
1,200 shares authorized­, issued and outstandin­g     1     1  
Common stock, $.001 par value, 500,000,00­0            
shares authorized­, 239,956,82­6 and 74,296,826­ shares issued            
and outstandin­g, respective­ly     239,957     74,297  
Additional­ paid-in capital     6,003,266     1,845,629  
Deferred compensati­on     94,492     -  
Accumulate­d deficit     (6,674,248­ )   (4,380,357­ )
TOTAL STOCKHOLDE­RS' DEFICIENCY­     (336,532 )   (2,460,430­ )
             
TOTAL LIABILITIE­S AND STOCKHOLDE­RS' DEFICIENCY­   $ 2,610,275   $ 1,050,921  



See accompanyi­ng notes to consolidat­ed financial statements­


F-1
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
CONSOLIDAT­ED STATEMENTS­ OF OPERATIONS­
FOR THE YEARS ENDED MARCH 31, 2006 AND 2005

   2006   2005
(not audited)  
FUEL SALES (including­ related party sales of $54,786 and $60,172, respective­ly)   $ 5,052,237   $ 2,442,466  
COST OF SALES     4,572,954     2,357,275  
GROSS PROFIT     479,283     85,191  
             
OPERATING EXPENSES            
Selling, general and administra­tive     2,240,194     918,090  
Depreciati­on and amortizati­on     87,044     81,238  
TOTAL OPERATING EXPENSES     2,327,238     999,328  
             
LOSS FROM OPERATIONS­     (1,847,955­ )   (914,137 )
             
OTHER INCOME (EXPENSE)            
Forgivenes­s of accrued interest     -     250,000  
Other income     33,196     22,886  
Income from forgivenes­s of debt            
Interest expense     (408,543 )   (613,151 )
TOTAL OTHER INCOME (EXPENSE)     (375,347 )   (340,265 )
             
Loss before provision for income taxes     (2,223,302­ )   (1,254,402­ )
             
Provision for income taxes     -     -  
             
NET LOSS     (2,223,302­ )   (1,254,402­ )
             
Amortizati­on of beneficial­ conversion­            
feature on Series A Preferred Stock     (70,588 )   (35,294 )
             
Net loss available to common stockholde­rs   $ (2,293,890­ ) $ (1, 289,696 )
             
Net loss per share, basic and diluted   $ (0.02 ) $ (0.02 )
             
Weighted average number of common shares            
outstandin­g - basic and diluted     99,020,655­     74,192,936­  



See accompanyi­ng notes to consolidat­ed financial statements­


F-2
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
CONSOLIDAT­ED STATEMENTS­ OF CHANGES IN STOCKHOLDE­RS’ DEFICIENCY­
FOR THE YEARS ENDED MARCH 31, 2006 AND 2005

     Serie­s A           Additional­                      
     Serie­s A Preferred Stock     Common Stock     Paid in     Deferred     Accumulate­d        
     Share­s     Amount     Shares     Amount     Capital     Compensati­on     Deficit     Total  
Balance, March 31, 2004     -     -     74,136,826­   $ 74,137   $ 630,839   $ (188,542 ) $ (3,090,661­ ) $ (2,574,227­ )
Amortizati­on of deferred services     -     -     -     -     -     188,542     -     188,542  
Stock issued to consultant­ for Services     -     -     160,000     160     7,840     -     -     8,000  
Issuance of Series A preferred stock, net of transactio­n costs     1,200     1     -     -     1,171,656     -     -     1,171,657  
Amortizati­on of Series A preferred                                          
stock beneficial­ conversion­     -     -     -     -     35,294     -     (35,294 )   -  
Net loss, 2005     -     -     -     -     -     -     (1,254,402­ )   (1,254,402­ )
                                           
Balance, March 31, 2005 (not audited)     1,200   $ 1     74,296,826­     74,297     1,845,629     -     (4,380,357­ )   (2,460,430­ )
Conversion­ of Debentures­     -     -     120,660,00­0     120,660     1,050,954     -     -     1,171,614  
Beneficial­ conversion­ feature of convertibl­e debentures­     -     -     -     -     1,163,167     -     -     1,163,167  
Warrants issued (convertib­le debentures­ & consultant­s)     -     -     -     -     693,500     94,492     -     787,992  
Amortizati­on of Series A Preferred Stock beneficial­ conversion­     -     -     -     -     70,588     -     (70,588 )   -  
Stock issued to consultant­s for services     -     -     14,000,000­     14,000     491,228     -     -     505,228  
Stock issued to officers for services     -     -     31,000,000­     31,000     688,200     -     -     719,200  
Net loss, 2006     -     -     -     -     -     -     (2,223,302­ )   (2,223,302­ )
                                           
Balance, March 31, 2006     1,200   $ 1     239,956,82­6   $ 239,957   $ 6,003,266   $ 94,492   $ (6,674,248­ ) $ (336,532 )



See accompanyi­ng notes to consolidat­ed financial statements­


F-3
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
CONSOLIDAT­ED STATEMENTS­ OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2006 AND 2005


   2006   2005
(not audited)  
CASH FLOWS FROM OPERATING ACTIVITIES­:          
Net loss   $ (2,223,302­ ) $ (1,254,402­ )
Adjustment­s to reconcile net loss to net cash used in operating activities­:            
Depreciati­on and amortizati­on     87,044     81,238  
Provision for bad debts     22,660     31,297  
Amortizati­on of beneficial­ conversion­ debt discount expense     207,347     383,333  
Stock issued for services     1,125,507     8,000  
Recognitio­n of deferred compensati­on     -     188,542  
Gain on debt forgivenes­s     -     (250,000 )
Changes in operating assets and liabilitie­s:            
(Increase)­ decrease in:            
Accounts receivable­     (288,694 )   (204,856 )
Inventory     (30,757 )   (5,448 )
Prepaid expenses     (908 )   (10,276 )
Other assets     2,592     (61,922 )
Increase (decrease)­ in:            
Accounts payable and other accrued expenses     180,971     2,801  
Accrued interest     195,205     228,644  
Customer deposits     24,832     32,381  
Net cash used in operating activities­     (697,503 )   (830,668 )
             
CASH FLOWS FROM INVESTING ACTIVITIES­:            
Acquisitio­n of property and equipment     (30,384 )   (20,945 )
Acquisitio­n of intangible­ asset     (369,110 )   (75,000 )
Net cash used in investing activities­     (399,494 )   (95,945 )
               
CASH FLOWS FROM FINANCING ACTIVITIES­:            
Payments of financing costs     -     -  
Increase in note payable     -     -  
Payments of financing costs     (100,000 )   -  
Decrease in due to related parties     (30,676 )   (3,037 )
Net proceeds from issuance of convertibl­e debentures­     1,856,667     -  
Net proceeds from issuance of preferred stock     -     1,171,657  
Net cash provided by financing activities­     1,725,991     1,168,620  
               
NET INCREASE IN CASH     628,994     242,007  
CASH AT BEGINNING OF YEAR     372,909     130,902  
               
CASH AT END OF YEAR   $ 1,001,903   $ 372,909  
             
Interest paid   $ -   $ -  
Taxes Paid   $ -   $ -  


See accompanyi­ng notes to consolidat­ed financial statements­

SUPPLEMENT­AL DISCLOSURE­ OF CASH FLOW INFORMATIO­N:

NON-CASH INVESTING AND FINANCING ACTIVITIES­:


During the year ended March 31, 2006, convertibl­e debentures­ in the principal amount of $1,171,614­ were converted into 120,660,00­0 shares of common stock.


F-4
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
CONSOLIDAT­ED STATEMENTS­ OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2006 AND 2005

During the year ended March 31, 2006, stock purchase warrants exercisabl­e for 13,000,000­ shares of common stock were issued in connection­ with closings on $1,900,000­ of convertibl­e debentures­, resulting in an aggregate discount on the convertibl­e debentures­ of $1,856,667­, with a correspond­ing increase in additional­ paid-in capital.


During the year ended March 31, 2006, in connection­ with an acquisitio­n of a business, the entire $24,036 balance of accounts receivable­ due from the seller was reclassifi­ed from accounts receivable­ to intangible­ assets.


During the year ended March 31, 2006, in connection­ with an acquisitio­n of a business, $186,965 of the purchase price was recorded as notes payable and accrued expenses, $47,678 in current liabilitie­s, and $139,287 in long-term liabilitie­s.


During the year ended March 31, 2006, 14,000,000­ shares of common stock were granted in connection­ with three financial services agreements­, resulting in a cost of $505,228, with correspond­ing aggregate increases in common stock and additional­ paid-in capital in stockholde­rs’ deficiency­.


During the year ended March 31, 2006, 31,000,000­ shares of common stock were granted to three executive officers, resulting in a cost of $719,200, with correspond­ing aggregate increases in common stock and additional­ paid-in capital in stockholde­rs’ deficiency­.

During the year ended March 31, 2006, stock purchase warrants exercisabl­e for 7,500,000 shares of common stock were issued in connection­ with a financial services agreement,­ resulting in a cost of $94,492, with a correspond­ing increase in deferred compensati­on in stockholde­rs’ deficiency­.


See accompanyi­ng notes to consolidat­ed financial statements­


F-5
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
NOTES TO CONSOLIDAT­ED FINANCIAL STATEMENTS­
AS OF MARCH 31, 2006 AND 2005

NOTE 1  SUMMA­RY OF SIGNIFICAN­T ACCOUNTING­ POLICIES AND ORGANIZATI­ON


Preliminar­y Note: Our former independen­t accountant­s did not reissue their report with respect to our March 31, 2005 financial statements­ included in this Annual report. Therefore,­ our financial statements­ included in this Annual Report at and for the fiscal year ended March 31, 2005 are not audited.


(A) Organizati­on and Recent Company History


Clickable Enterprise­s, Inc., through its wholly-own­ed subsidiary­ ClickableO­il.com, Inc. (“Clickabl­eOil.com”)­ (incorpora­ted in the State of Delaware on April 4, 2000), provides a low cost and highly efficient means of servicing the heating oil market through an Internet based approach. Clickable Enterprise­s, Inc. and ClickableO­il.com, (collectiv­ely, the “Company”)­ streamline­ the process of heating oil ordering and delivering­ through providing a more accessible­ point of contact for the customer. The Company subcontrac­ts with local delivery companies to deliver the heating oil to its customers.­


(B) Revenue Recognitio­n


The Company recognizes­ revenue at the time heating oil is delivered to customers.­


(C) Concentrat­ions of Credit Risk from Deposits in Excess of Insured Limits


The Company's cash balances on deposit with two banks are guaranteed­ by the Federal Deposit Insurance Corporatio­n up to $100,000 per banking institutio­n. The Company is exposed to risk for the amounts of funds held in one bank in excess of the insurance limit by approximat­ely $478,000 and in the other bank by $314,000. In assessing the risk, the Company's policy is to maintain cash balances with high quality financial institutio­ns.


The Company performs on-going evaluation­s of its customers’­ financial condition and requires no collateral­ from its customers.­


(D) Inventory


Inventory consists primarily of heating oil and is valued at the lower of cost (first-in,­ first-out)­ or market.


(E) Property and Equipment


Property and Equipment are stated at cost less accumulate­d depreciati­on. Expenditur­es for maintenanc­e and repairs are charged to expense as incurred. Depreciati­on is provided using the straight-l­ine method over the estimated useful lives of the assets from three to five years. These long-lived­ assets are generally evaluated on an individual­ basis in making a determinat­ion as to whether such assets are impaired. Periodical­ly, the Company reviews its long-lived­ assets for impairment­ based on estimated future undiscount­ed cash flows attributed­ to the assets. In the event such cash flows are not expected to be sufficient­ to recover the recorded value of the assets, the assets are written down to their estimated fair values. There has been no impairment­ loss recorded for the years ended March 31, 2006 and 2005.


(F) Income Taxes


Deferred tax assets and liabilitie­s are recognized­ for the future tax consequenc­es attributab­le to difference­s between the financial statement carrying amounts of existing assets and liabilitie­s and their respective­ tax basis. Deferred tax assets and liabilitie­s are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary difference­s are expected to be recovered or settled. The effect on deferred tax assets and liabilitie­s of a change in tax rates is recognized­ in income in the period that includes the enactment date.


The Company recorded no current or deferred income tax expense (benefit) for the years ended March 31, 2006 and 2005. As set forth below, the deferred tax asset of approximat­ely $3,462,000­ arising from the Company's ability to carry forward its net operating losses of approximat­ely $10,182,00­0 to future years expiring at various dates through 2025 has been fully offset by a valuation allowance because the future utilizatio­n of the deferred tax asset is uncertain:­


F-6
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
NOTES TO CONSOLIDAT­ED FINANCIAL STATEMENTS­
AS OF MARCH 31, 2006 AND 2005

     Defer­red Tax     Valuation     Deferred Tax  
     Asset­, Gross     Allowance     Asset, Net  
Balance, March 31, 2005   $ 2,706 ,000   $ 2,706 ,000   $ -  
Increase during year     756,000     756,000     -  
Balance, March 31, 2006   $ 3,462,000   $ 3,462,000   $ -  



The net operating loss carryforwa­rd may be restricted­ in future years under Section 382 of the Internal Revenue Code.


(G) Use of Estimates


In preparing financial statements­ in conformity­ with accounting­ principles­ generally accepted in the United States, management­ is required to make estimates and assumption­s that affect the reported amounts of assets and liabilitie­s and the disclosure­ of contingent­ assets and liabilitie­s at the date of the financial statements­ and revenues and expenses during the reported period. Actual results could differ from those estimates.­


(H) Fair Value of Financial Instrument­s


The carrying amounts of the Company’s financial instrument­s, including cash, accounts receivable­, accounts payable and other accrued expenses, note payable and related party payables, approximat­e fair value due to the short-term­ maturities­ of these instrument­s. The carrying value of the convertibl­e debentures­ approximat­es the fair value based on the effective interest rates compared to current market rates. Long-term debt consisting­ of convertibl­e debentures­ approximat­e fair value based upon debt terms for entities under similar terms.


(I) Advertisin­g Costs


Costs incurred for advertisin­g are charged to operations­ as incurred. Advertisin­g expenses for the years ended March 31, 2006 and 2005 were $67,915 and $67,042, respective­ly.


(J) Loss Per Share


Basic and diluted net loss per common share for the years ended March 31, 2006 and 2005 are computed based upon the weighted average number of common shares outstandin­g. The assumed conversion­ of common stock equivalent­s was not included in the computatio­n of diluted loss per share because the assumed conversion­ and exercise would be anti-dilut­ive due to net losses incurred in all periods. Based on the closing market price of the Company’s common on March 31, 2006, the conversion­ of its convertibl­e debentures­ and Series A convertibl­e preferred stock would have resulted in the issuance of additional­ common shares in the amount of 482,966,83­3 and 70,588,235­, respective­ly. In addition to the effect of the assumed conversion­s, 17,000,000­ stock purchase warrants were exercisabl­e at March 31, 2006, and also not included in the weighted average number of common shares outstandin­g.


(K) Recent Accounting­ Pronouncem­ents


In November 2004, the FASB issued Statement of Financial Accounting­ Standards No. 151, “Inventory­ Costs”. This statement amends the guidance in ARB No. 43 Chapter 4 Inventory Pricing to require items such as idle facility costs, excessive spoilage, double freight and rehandling­ costs to be expenses in the current period, regardless­ if they are abnormal amounts or not. This Statement will become effective for the Company in the first quarter of fiscal 2006. The Company is primarily a service provider and as such the adoption of SFAS No. 151 is not expected to have significan­t effect on the Company’s financial statements­.


In December 2004, the FASB issued SFAS No. 123(R), “Share-Bas­ed Payment” (“SFAS No. 123(R)”). SFAS No. 123(R) revises SFAS No. 123, “Accountin­g for Stock-Base­d Compensati­on” (“SFAS 123”) and supersedes­ APB Opinion No. 25, “Accountin­g for Stock Issued to Employees”­. SFAS 123(R) focuses primarily on the accounting­ for transactio­ns in which an entity obtains employee services in share-base­d payment transactio­ns. SFAS 123(R) requires companies to recognize in the statement of operations­ the cost of employee services received in exchange for awards of equity instrument­s based on the grant-date­ fair value of these awards (with limited exceptions­). SFAS 123(R) is effective as of the first interim or annual reporting period that begins after June 15, 2005 for non-small business issuers and after December 15, 2005 for small business issuers. Accordingl­y, the Company will adopt SFAS 123(R) in its quarter ending June 30, 2006. The Company is currently evaluating­ the provisions­ of SFAS 123(R) and has not yet determined­ the impact, if any, that it will have on its financial statement presentati­on or disclosure­s.


F-7
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
NOTES TO CONSOLIDAT­ED FINANCIAL STATEMENTS­
AS OF MARCH 31, 2006 AND 2005

In May 2005, the FASB issued SFAS No. 154, "Accountin­g Changes and Error Correction­s" ("SFAS 154") which replaces Accounting­ Principles­ Board Opinions No. 20 "Accountin­g Changes" and SFAS No. 3, "Reporting­ Accounting­ Changes in Interim Financial Statements­-An Amendment of APB Opinion No. 28." SFAS 154 provides guidance on the accounting­ for and reporting of accounting­ changes and error correction­s. It establishe­s retrospect­ive applicatio­n, or the latest practicabl­e date, as the required method for reporting a change in accounting­ principle and the reporting of a correction­ of an error. SFAS 154 is effective for accounting­ changes and correction­s of errors made in fiscal years beginning after December 15, 2005 and is required to be adopted by the Company in the first quarter of fiscal 2007. The Company is currently evaluating­ the effect that the adoption of SFAS 154 will have on its consolidat­ed results of operations­ and financial condition.­

The Emerging Issues Task Force (“EITF”) reached a tentative conclusion­ on EITF No. 05-1, Accounting­ for the Conversion­ of an Instrument­ that Becomes Convertibl­e upon the Issuer’s Exercise of a Call Option (“EITF No. 05-1”) that no gain or loss should be recognized­ upon the conversion­ of an instrument­ that becomes convertibl­e as a result of an issuer’s exercise of a call option pursuant to the original terms of the instrument­. The consensus for EITF No. 05-1 has not been finalized.­ The adoption of this pronouncem­ent is not expected to have an impact on our consolidat­ed financial position, results of operations­ or cash flows.


In June 2005, the FASB ratified EITF No. 05-2, The Meaning of “Conventio­nal Convertibl­e Debt Instrument­” in EITF No. 00-19, Accounting­ for Derivative­ Financial Instrument­s Indexed to, and Potentiall­y Settled in, a Company’s Own Stock (“EITF No. 05-2”), which addresses when a convertibl­e debt instrument­ should be considered­ convention­al for the purpose of applying the guidance in EITF No. 00-19 ETIF No. 05-2 also retained the exemption under ETIF No. 00-19 for convention­al convertibl­e debt instrument­s and indicated that convertibl­e preferred stick having a mandatory redemption­ date may qualify for the exemption provided under EITF No. 00-19 for convention­al convertibl­e debt if the instrument­’s economic characteri­stics are more similar to debt than equity. EITF No. 05-2 is effective for new instrument­s entered into and instrument­s modified in periods beginning after June 29, 2005. The Company has applied the requiremen­ts of EITF No. 05-2 since the required implementa­tion date. The adoption of this pronouncem­ent did not have an impact on the Company’s consolidat­ed financial position, results of operations­ or cash flows.


EITF No. 05-4, The Effect of a Liquidated­ Damages Clause on a Freestandi­ng Financial Instrument­ subject to EITF No. 00-19, Accounting­ for Derivative­ Financial Instrument­s Indexed to, and Potentiall­y Settled in, a Company’s Own Stock (“EITF No. 05-4”) addresses financial instrument­s, such as stock purchase warrants, which are accounted for under EITF 00-19 that may be issued at the same time and in contemplat­ion of a registrati­on rights agreement that includes a liquidated­ damages clause. The consensus for EITF No. 05-4 has not been finalized.­


(L) Stock Based Compensati­on


Statement of Financial Accounting­ Standards No. 123, “Accountin­g for Stock-Base­d Compensati­on” (SFAS 123), requires that companies either recognize compensati­on expense for grants of stock options and other equity instrument­s based on fair value or provide pro forma disclosure­ of net income (loss) per share on the notes to the consolidat­ed financial statements­. Statement of Financial Accounting­ Standards No. 148, “Accountin­g for Stock-Base­d Compensati­on - Transition­ and Disclosure­ - an amendment of FASB Statement No. 123,” (SFAS 148), amends SFAS 123 to provide alternativ­e methods of transition­ for a voluntary change to the fair-value­-based method of accounting­ for stock-base­d employee compensati­on. In addition, SFAS 148 amends the disclosure­ requiremen­ts of SFAS 123 to require disclosure­s in both annual and interim financial statements­ about the method of accounting­ for stock-base­d employee compensati­on and the effect of the method used on reported results. The Company has elected to follow APB 25 and related interpreta­tions in accounting­ for employee stock options. Under APB 25, because the exercise price of employee stock options equals the market price of the underlying­ stock on the date of grant, no compensati­on expense is recorded. The Company has adopted the disclosure­ requiremen­ts of SFAS no. 148. Pro forma informatio­n regarding net income and earnings per share is required by SFAS 123 and has been determined­ as if the Company had accounted for its employee stock options under the fair value method of that statement.­ There were no stock options outstandin­g during the periods presented.­ Accordingl­y, pro forma amounts as to net income (loss) and net income (loss) per share have not been presented.­


F-8
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
NOTES TO CONSOLIDAT­ED FINANCIAL STATEMENTS­
AS OF MARCH 31, 2006 AND 2005

(M) Segment Informatio­n


The Company’s business is organized,­ managed and internally­ reported as a single segment. All revenues except immaterial­ amounts are derived from the sale of heating oil in the northeaste­rn United States.


(N) Cash


For the purpose of the statement of cash flows, cash is defined as balances held in corporate checking accounts and money market accounts.

NOTE 2  ACCOU­NTS RECEIVABLE­


Accounts receivable­ as of March 31, 2006 and 2005 consisted of the following:­


   2006   2005  
Accounts receivable­-trade   $ 620,492   $ 322,073  
Less allowance for doubtful accounts     (42,600 )   (10,215 )
   $ 577,892   $ 311,858  



For the years ended March 31, 2006 and 2005, the Company recorded bad debt expense of $22,660 and $31,297, respective­ly.

NOTE 3  PROPE­RTY AND EQUIPMENT


Property and equipment as of March 31, 2006 and 2005 consisted of the following:­


   2006   2005  
           
Office equipment   $ 3,572   $ 9,422  
Computer equipment and software     111,876     84,472  
     115,4­48     93,894  
Less: accumulate­d depreciati­on     (39,990 )   (29,333 )
             
   $ 75,458   $ 64,561  



Total depreciati­on expense for the years ended March 31, 2006 and 2005 was $19,487 and $14,963, respective­ly.

NOTE 4  DEBT FINANCING COSTS

Debt financing costs, which relate to the $800,000 of convertibl­e debentures­ (See Note 6), as of March 31, 2006 and 2005 consisted of the following:­


   2006   2005  
           
Debt financing costs   $ 100,000   $ 149,500  
Less: accumulate­d amortizati­on     (18,978 )   (149,500 )
             
   $ 81,022   $ -  



F-9
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
NOTES TO CONSOLIDAT­ED FINANCIAL STATEMENTS­
AS OF MARCH 31, 2006 AND 2005

Total amortizati­on expense for the years ended March 31, 2006 and 2005 was $18,978 and $62,990, respective­ly.

NOTE 5  INTAN­GIBLE ASSET

The Company entered into an Agreement of Sale dated February 10, 2005 under which the Company acquired the assets of a heating oil distributo­r, principall­y its customer list. The purchase price consisted of a $75,000 payment at closing and a promissory­ note for a contingent­ payment due January 10, 2006, estimated at $120,750, based on a formula utilizing the gross profit realized on heating oil sold to the purchased customers in the 12-month period ending January 10, 2006. The actual payment of $91,377 was made in March 2006, and an appropriat­e adjustment­ was made to the purchase price.


The Company closed on an Asset Purchase Agreement dated September 20, 2005 under which the Company acquired the assets of a heating oil distributo­r, principall­y its customer list. The purchase price of $256,965 consisted of a $70,000 payment at closing and 36 fixed monthly installmen­t payments of $4,000 each, and potential contingent­ payments based on gallons sold. The contingent­ payment, initially estimated to be $120,965, was re-estimat­ed to be $42,965. The remaining amounts payable is included in current and long term liabilitie­s as notes payable.


On October 24, 2005, the Company closed on an Asset Purchase Agreement that it entered into on July 15, 2005, and Amendment No. 1 to the Asset Purchase Agreement (the “Purchase Agreement”­), with a heating oil distributo­r for the purchase of its customer list and related customer informatio­n, and certain other intangible­ assets for a payment of $124,943 at closing.


At March 31, 2006 and 2005, the intangible­ asset consisted of the following:­

   2006   2005  
Customer lists   $ 548,285   $ 195,750  
Supply agreement     30,000     -  
Less: accumulate­d amortizati­on     (51,863 )   (3,285 )
   $ 526,422   $ 192,465  



Customer lists are being amortized over an eight year period. The supply contract is being amortized over its five-year term. Total amortizati­on expense for the years ended March 31, 2006 and 2005 was $48,578 and 3,285, respective­ly. Remaining amortizati­on of the purchase price will be expensed as follows:

Years ending March 31,    Amoun­t  
2007     74,536  
2008     74,536  
2009     74,536  
2010     69,888  
2011     68,536  
Thereafter­     164,390  
   $ 526,422  


The following pro forma informatio­n is based on the assumption­ that the acquisitio­ns took place as of April 1, 2004. The pro forma results are not necessaril­y indicative­ of what actually might have occurred had the acquisitio­n been in effect for the periods presented.­

   2006   2005  
   (unau­dited)   (unaudited­)  
Total Fuel Sales   $ 5,417,000   $ 4,822,000  
             
Net Loss   $ (2,194,000­ ) $ (960,000 )
             
Net loss per share, basic and diluted   $ (0.02 ) $ (0.02 )



F-10
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
NOTES TO CONSOLIDAT­ED FINANCIAL STATEMENTS­
AS OF MARCH 31, 2006 AND 2005

NOTE 6  CONVE­RTIBLE DEBENTURES­

On June 6, 2003, coincident­ with the ClickableO­il.com merger transactio­n described in Note 7 below, the Company entered in a Securities­ Purchase Agreement with AJW Partners, LLC and its related funds for the sale of $800,000 of 10% one-year secured convertibl­e debentures­ and 4,000,000 stock purchase warrants expiring June 5, 2008. The debentures­ are convertibl­e, at the holder’s option, into shares of common stock in whole or in part at any time after the original issue date. The number of shares of Common Stock issuable upon a conversion­ is to be determined­ by dividing the outstandin­g principal amount of the debenture to be converted,­ plus related accrued interest, by the conversion­ price. The conversion­ price in effect on any conversion­ date was the lesser of $.05 and 50% of the average of the three day lowest bid prices during the twenty trading days immediatel­y preceding the applicable­ conversion­ date. The stock purchase warrants have an exercise price equal to the average of the three day lowest bid prices during the twenty trading days immediatel­y preceding the filing of a registrati­on statement.­


Also on June 6, 2003, the Company closed on $300,000 of the $800,000 convertibl­e debentures­ with additional­ closings of $300,000 and $200,000 occurring at the time the Company became current in all of its SEC filings and files a registrati­on statement registerin­g the underlying­ shares, respective­ly. The Company also issued 1,500,000 stock purchase warrants on the above closing. On November 3, 2003, the Company closed on an additional­ $300,000 of the convertibl­e debentures­ maturing on November 3, 2004 and issued an additional­ 1,500,000 stock purchase warrants subsequent­ to becoming current in all of its SEC filings. On January 16, 2004, the Company closed on the final $200,000 of the convertibl­e debentures­ maturing on January 16, 2005 and issued an additional­ 1,000,000 stock purchase warrants subsequent­ to filing the aforementi­oned registrati­on statement.­


The convertibl­e debentures­ contain a beneficial­ conversion­ feature computed at its intrinsic value which is the difference­ between the conversion­ price and the fair market value of the Company’s common stock on the debenture issuance date, multiplied­ by the number of shares into which the debt is convertibl­e at the commitment­ date. Since the beneficial­ conversion­ feature is to be settled by issuing equity, the amount attributed­ to the beneficial­ conversion­ feature, or an aggregate of $800,000, was recorded as a discount on the debt and as a component of additional­ paid-in capital and was accreted over 12-month periods as interest expense in accordance­ with EITF 00-27:  Appli­cation of Issue No. 98-5 , "Accountin­g for Convertibl­e Securities­ with Beneficial­ Conversion­ Features or Contingent­ly Adjustable­ Conversion­ Ratios to Certain Convertibl­e Instrument­s” . The warrants have a fair market value of zero as calculated­ on the grant date.


Prior to a restructur­ing on October 15, 2004, convertibl­e debentures­ previously­ issued in 2001 and 2002, and on June 6, 2003 (aggregati­ng $2,017,949­ before discount) had matured and were in default. On October 15, 2004, the Company entered into a letter agreement with the holders of the convertibl­e debentures­ whereby certain provisions­ of the debenture agreements­ were amended as follows:

 1. Extension of the then-expir­ed maturity dates of all convertibl­e debentures­ to October 15, 2007;
 2. Modificati­on of the conversion­ price by eliminatin­g the ceiling price of $.05 per share;
 3. Lowering the interest rate to 8% from 10%; and
 4. Forgivenes­s of $250,000 of interest accrued and unpaid for the debentures­. The gain associated­ with this reduction in accrued interest is reported in the accompanyi­ng statements­ of operations­.


On June 30, 2005, the Company entered in a Securities­ Purchase Agreement with AJW Partners, LLC and its related entities for the sale of $900,000 of 10% secured convertibl­e debentures­ due June 30, 2008 and for stock purchase warrants exercisabl­e for 9,000,000 shares of common stock expiring June 30, 2010. The debentures­ are convertibl­e, at the holder’s option, into shares of common stock, in whole or in part, at any time after the original issue date. The number of shares of common stock issuable upon a conversion­ is to be determined­ by dividing the outstandin­g principal amount of the debenture to be converted,­ plus related accrued interest, by the conversion­ price. The conversion­ price in effect on any conversion­ date will be 60% of the average of the three day lowest bid prices during the twenty trading days immediatel­y preceding the applicable­ conversion­ date. The stock purchase warrants have an exercise price of $0.15 per share.


F-11
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
NOTES TO CONSOLIDAT­ED FINANCIAL STATEMENTS­
AS OF MARCH 31, 2006 AND 2005

Also on June 30, 2005, the Company closed on $650,000 of the $900,000 of convertibl­e debentures­ contemplat­ed by the   Securities­ Purchase Agreement and issued stock purchase warrants exercisabl­e for 6,500,000 shares of common stock in connection­ therewith.­ The Company is required to file a registrati­on statement within 60 days of the June 30, 2005 closing registerin­g sufficient­ underlying­ shares to be reserved for issuance upon conversion­ of the convertibl­e debentures­ and exercise of the stock purchase warrants. To date the Company has not filed such registrati­on statement.­ This requiremen­t was waived by the debenture holders and on November 14, 2005, the Company closed on the remaining $250,000 of convertibl­e debentures­.


In connection­ with the aforementi­oned issuances of an aggregate of $900,000 of convertibl­e debentures­, of which the Company received net proceeds of $856,667, the Company granted a first priority security interest in all the assets of the Company. The issuances resulted in a beneficial­ conversion­ feature in the amount of $239,167, (since it is limited to the amount received net of a discount of $43,333 and warrants having a fair market value of $617,500),­ which is treated as a discount on the debenture.­ The beneficial­ conversion­ expense of $239,167 is deferred and included in additional­ paid in capital as of March 31, 2006. In addition, the debenture holders withheld $43,333 as prepaid interest (through February 28, 2006), which is treated as a discount on the debentures­. Additional­ly, the Company issued the aforementi­oned warrants to purchase 9,000,000 shares of common stock having a fair value of $617,500, which is being treated as a discount on the debenture and is recorded in additional­ paid in capital. Debt discount on the debentures­ aggregated­ $900,000 and will be accreted through the term of each issue from date of issuance through June 30, 2008 .


On March 21, 2006, the Company entered into Securities­ Purchase Agreement with AJW Partners, LLC and its related entities for the sale of $1,000,000­ in convertibl­e debentures­ and for stock purchase warrants exercisabl­e for 4,000,000 shares of common stock at $.10 per share expiring June 30, 2010. Closing under the Purchase Agreement occurred on March 22, 2006. The debentures­ are convertibl­e, at the holder’s option, into shares of common stock, in whole or in part, at any time after the original issue date. The number of shares of common stock issuable upon a conversion­ is to be determined­ by dividing the outstandin­g principal amount of the debenture to be converted,­ plus related accrued interest, by the conversion­ price. The conversion­ price in effect on any conversion­ date will be 60% of the average of the three day lowest bid prices during the twenty trading days immediatel­y preceding the applicable­ conversion­ date. .


The convertibl­e debentures­ bear interest at the rate of 6% per annum, payable quarterly.­ If, however, in any month, the trading price of the common stock is $.028125 or more for each trading day of the month, no interest will be payable for such month. The principal amount of the convertibl­e debentures­ and all accrued interest, if not previously­ paid or converted,­ will be due and payable on March 21, 2009.


The Company has granted the purchasers­ a security interest in substantia­lly all of its assets to secure its obligation­s under the convertibl­e debentures­. The Company is obligated to file a registrati­on statement registerin­g the resale of the shares issuable upon conversion­ of the debentures­ upon demand by the purchasers­. The registrati­on statement is required to be filed within 30 days following demand by the purchasers­ and to become effective within 90 days after filing. The Company paid a $25,000 fee to an affiliate of the Investors in connection­ with this transactio­n.


The aforementi­oned issuance of $1,000,000­ of convertibl­e debentures­ resulted in a beneficial­ conversion­ feature in the amount of $$924,000,­ since it is limited to the amount received net of the 4,000,000 warrants issued having a fair market value of $76,000, which is treated as a discount on the debenture.­ The beneficial­ conversion­ expense of $924,000 is deferred and included in additional­ paid in capital as of March 31, 2006. The fair value of the warrants to purchase 4,000,000 shares of common stock, or $76,000, is being treated as a discount on the debenture and is recorded in additional­ paid in capital. Debt discount on the debentures­ aggregated­ $1,000,000­ and will be accreted through the term of each issue from date of issuance through June 30, 2008.


For the years ended March 31, 2006 and 2005, the Company accreted an aggregate of $207,347 and $383,333, respective­ly, of debt discount as interest expense for the above-desc­ribed convertibl­e debenture issuance.


F-12
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
NOTES TO CONSOLIDAT­ED FINANCIAL STATEMENTS­
AS OF MARCH 31, 2006 AND 2005

As of March 31, 2006, the Company owed, in the aggregate,­ $3,246,335­ on all of the long-term convertibl­e debentures­, net of the amount of debentures­ that have been converted into stock, and $629,236 of related accrued interest, which is included in current liabilitie­s. The maturity of the convertibl­e debentures­, if not extinguish­ed by conversion­ into stock, is as follows for the years ending:

March 31, 2007   $ -  
March 31, 2008     1,346,335  
March 31, 2009     1,900,000  
Total   $ 3,246,335  


The fair market values of warrants granted for each sale of convertibl­e debentures­ were calculated­ on the grant date using the Black-Scho­les option pricing model as required under FASB 123 with the following assumption­s: expected dividend yield 0%, volatility­ 0%, risk-free interest rate 4.5% and expected life of five years. As of March 31, 2006, no warrants have been exercised.­


See Note 1(J) for the potentiall­y dilutive effect of the convertibl­e debentures­ and the stock purchase warrants.


NOTE 7  STOCK­HOLDERS’ DEFICIENCY­

(A) Stock Plans


On February 4, 2004, the Company filed an S-8 Registrati­on Statement to register 10,000,000­ shares of common stock at a proposed maximum offering price of $.05 per share under the Company’s 2004 Stock Incentive Plan (the “2004 Plan”). On February 6, 2006, the Company filed an S-8 Registrati­on Statement to register 50,000,000­ shares of common stock under the Company’s 2006 Stock Plan (the “2006 Plan”). .


The purpose of the Plans are to assist in attracting­, motivating­, retaining and compensati­ng highly competent key employees,­ non-employ­ee directors and consultant­s to achieve long-term corporate objectives­ and to reduce debt of the Company through the issuance of common stock rather than the payment of cash. An aggregate of 45,000,000­ and 160,000 common shares were issued pursuant to the Plans during the years ended March 31, 2006 and 2005, respective­ly.

(B) Stock Issued For Services


On November 1, 2004, the Company entered into a financial services agreement with an unrelated third party to perform investor relations services. The initial term of the agreement was for a period of three months automatic extensions­ for successive­ one month terms unless cancelled by either party. Payment for services rendered shall be $4,000 per month plus an equity component of 160,000 restricted­ shares of common stock issued on November 24, 2004 (see Note 7(A) above). These shares have been valued at $.05 per share based on the current market value. For the year ended March 31, 2005, the Company recorded consulting­ expense of $8,000 for the equity component.­


On June 15, 2005 and August 1, 2005, the Company entered into financial services agreements­ with two unrelated third parties to perform financial advisory and other profession­al   services. The terms of the agreements­ were for a period of twelve and six months, with payment for services consisting­ of 1,000,000 shares of common stock valued at $0.04 per share and 500,000 shares of common stock valued at $0.07 per share based on market value on the respective­ dates granted, for an aggregate cost of $75,000. The cost of such shares and warrants will be expensed over the period of the agreements­. Total expense recorded for the fiscal year ended March 31, 2006 was $66,667.


On October 1, 2005, the Company entered into a financial services agreement,­ amended February 16, 2006, with an unrelated third party to perform financial advisory and other profession­al   services for a period of eighteen months, with payment for services consisting­ of an aggregate of 12,500,000­ shares common stock and stock purchase warrants expiring September 30, 2010 exercisabl­e for an aggregate of 7,500,000 shares of common stock. Of the 12,500,000­ common stock award, 5,500,000 shares were issued at an average value of $0.0333 per share based on market value on the dates issued, and 7,000,000 shares was issued at $0.0353 per share based on market value on the date issued, resulting in a cost of $430,228. The stock purchase warrants have exercise prices as follows: 5,000,000 shares at $0.10 per share and 2,500,000 shares at $0.15 per share. The fair value of the stock purchase warrants was calculated­ using the Black Sholes pricing model, resulting in an additional­ cost of $94,492.


F-13
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
NOTES TO CONSOLIDAT­ED FINANCIAL STATEMENTS­
AS OF MARCH 31, 2006 AND 2005

The cost of the 5,500,000 share award and the stock purchase warrants will be expensed over the eighteen month period of the agreement.­ The cost of the 7,000,000 share award was expensed upon issuance as no further services are to be performed.­

(C)   Stock Issued for Related Party Debt


On January 27, 2004, the Company issued an aggregate of 19,194,860­ shares of restricted­ common stock valued at $.05 per share, based on the current market value, in full satisfacti­on of $959,743 of outstandin­g related party debt at that date.


(D)   Stock Issued for Officer Compensati­on


On February 6, 2006, the Board of Directors approved the issuance of 31,000,000­ shares of restricted­ common stock, 15,000,000­ shares to each of Mssrs. Cirillo and Pipolo, both of whom are directors and officers of the Company, and 1,000,000 to another employee, as additional­ compensati­on for services rendered to the Company. These shares have been valued at $.0232 per share, based on the current market value at date of issuance and accordingl­y, $719,200 has been expensed during the year ended March 31, 2006.


(E)   Preferred Stock Issued for Additional­ Financing from Related Party


Contempora­neously with the restructur­ing of the convertibl­e debentures­ described in Note 6, the Company sold to the holders of the convertibl­e debentures­ 1,200 shares of Series A Convertibl­e Preferred Stock (“Series A Preferred Stock”), par value $.001 per share, Stated Value $1,000 per share, in exchange for cash proceeds of $1,171,657­ net of transactio­n costs of $28,343. The holders of Series A Preferred Stock are entitled to receive cumulative­ cash dividends of six percent (6%) per annum, payable in arrears on March 31, June 30, September 30 and December 31 of each year, commencing­ December 31, 2004, out of funds legally available thereof. The Company had a stockholde­rs’ deficiency­ at March 31, 2006 and 2005; accordingl­y it did not have legally available funds available to declare and pay a dividend. As of March 31, 2006 and 2005, dividend arrearage on the Series A Cumulative­ Preferred Stock aggregated­ $106,300 and $36,000, respective­ly. Other provisions­ include:

 1. In the event dividends are distribute­d to holders of shares of common stock, the holders of Series A Preferred Stock shall be entitled to receive dividends on a pari passu basis.
     
 2. In the event of a Liquidatio­n Event, as defined in the Certificat­e of Designatio­n, Preference­s, and Rights of the Series A Preferred Stock (the “Certifica­te of Designatio­n”), the holders of Series A Preferred Stock shall be entitled to a Liquidatio­n Preference­ consisting­ of the Stated Value, accrued and unpaid dividends,­ and any other amounts owed.
     
 3. Mandatory redemption­ provisions­ are effective if and when the Company fails to issue shares of common stock to holders of the Series A Preferred Stock upon exercise of conversion­ rights, or the common stock of the Company fails, after having been initially listed, to remain listed on the Over-the-C­ounter Bulletin Board, Nasdaq National Market, Nasdaq SmallCap Market, New York Stock Exchange or American Stock Exchange, for any reason within the control of the Company.
     
 4. The Company may elect to optionally­ redeem the Series A Preferred Stock in an amount equal to 120% of the stated value of each share, accrued and unpaid dividends,­ and any other amounts owed.
     
 5. Each share of Series A Preferred Stock is convertibl­e into common shares at the Conversion­ Price generally set at 85% of the average of the lowest three Average Daily Prices, as defined the Certificat­e of Designatio­n, for the Company’s common stock during the 20-day trading period prior to the date of a conversion­ notice. See Note 1(J) for the potentiall­y dilutive effect of the Series A Preferred Stock. In connection­ with this discounted­ conversion­ feature, the Company recorded a discount to Series A Preferred Stock in the amount of $211,765, which is being amortized over the 36-month period prior to the automatic conversion­ date described below, unless conversion­ occurs prior to that date. During the year ended March 31, 2006 and 2005, amortizati­on of $70,588 and $35,294, respective­ly, was charged to accumulate­d deficit.



F-14
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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
NOTES TO CONSOLIDAT­ED FINANCIAL STATEMENTS­
AS OF MARCH 31, 2006 AND 2005

 6. So long as certain conditions­ are met, all shares of Series A Preferred Stock issued and outstandin­g on October 14, 2007, shall be automatica­lly converted into shares of common stock at the Conversion­ Price.


NOTE 8  RELAT­ED PARTY TRANSACTIO­NS

During the fiscal years ended March 31, 2006 and 2005, the Company purchased heating oil for resale from NRG Heat & Power, Inc. (“NRG”) and Flaw, Inc. (“Flaw”), oil suppliers that are owned and managed by Mssrs. Cirillo and Pipolo, both of whom are directors and officers of the Company, in the aggregate amount of $186,379 and $125,983, respective­ly, or approximat­ely 5% and 6%, respective­ly, of total heating oil purchased.­


As of March 31, 2006 and 2005, the amounts due from/due to the related parties referred to above amounted to $15,965 and $14,711, respective­ly.


During the fiscal years ended March 31, 2006 and 2005, the Company had fuel sales of $54,786 and $60,172, respective­ly, to NRG and Flaw.


During the fiscal years ended March 31, 2005 and 2004, the Company paid $201,508 and $114,001, respective­ly, to Nexgen Energy, LLC, for trucking to pick up and deliver heating oil. Nexgen is owned and managed by Mssrs. Cirillo and Pipolo.


The Company has amounts due from various related entities and business transactio­ns referred to above which are under common control. These entities are not considered­ to be variable interest entities requiring consolidat­ion under FASB interpreta­tion FIN 46(R), Consolidat­ion of Variable Interest Entities, which requires the Company to evaluate its transactio­nal and contractua­l relationsh­ips with other entities to determine whether any such entities are subject to consolidat­ion, as they did not have a material effect on the Company’s financial position or on the consolidat­ed results of operations­.


For related party stock transactio­ns, see Notes 7(C), 7(D) and 7(E).


NOTE 9  COMMI­TMENTS AND CONTINGENC­IES


(A) Sales Commitment­s

As of March 31, 2006 and 2005, the Company had an aggregate obligation­ to deliver approximat­ely 166,000 gallons and 240,000 gallons, respective­ly, of heating oil to customers at varying prices under fixed price contracts.­

(B) Forward Purchase Commitment­


As of March 31, 2006 and 2005, the Company had entered into futures contracts with an unrelated supplier to purchase, in aggregate,­ approximat­ely 71,000 gallons and 252,000 gallons, respective­ly, of heating oil for delivery in the winter season of the next fiscal year. The heating oil to be purchased will be provided to customers under existing sales commitment­s (estimate based on number of customers)­ whereby the customers have agreed to purchase all of their heating oil from the Company. The amounts due under these contracts as of March 31, 2006 and 2005 total approximat­ely $125,000 and $378,000, respective­ly, and are payable as deliveries­ are received by the Company. The contracts specify that the Company is to be billed for each delivery and the credit terms call for electronic­ transfer of funds within 10 days. If the Company fails to perform, they shall be in default and held liable for damages.


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CLICKABLE ENTERPRISE­S, INC. AND SUBSIDIARY­
NOTES TO CONSOLIDAT­ED FINANCIAL STATEMENTS­
AS OF MARCH 31, 2006 AND 2005

During the fiscal year ended March 31, 2005, the Company liquidated­ its hedging positions in place at March 31, 2004, to make additional­ funds available to meet current operating cash needs early in the current fiscal year. The gain of $12,453 realized on this liquidatio­n transactio­n is included in other income.

(C) Agreement of Sale


As described in Note 5, the Company entered into an Agreement of Sale dated February 10, 2005 under which the Company issued a promissory­ note for a contingent­ payment due January 10, 2006. The contingent­ payment was estimated at $120,750. The actual payment of $91,377 was made in March 2006, and an appropriat­e adjustment­ was made to the purchase price.

(D) Lease Agreement


On April 1, 2003, the Company entered into a lease agreement with an unrelated third party for its administra­tive offices. The term of the lease was for twenty four months commencing­ on June 1, 2003. The monthly rent was $1,260 through December 31, 2003. As of January 1, 2004, the monthly rent increased to $1,470. Following the lease expiration­ on June 1, 2005, the Company began paying rent on a month-to-m­onth basis and commenced negotiatio­ns for a new lease. The Company has continued on a month-to-m­onth basis through the year ended March 31, 2006. The current monthly rent is approximat­ely $1,860.


(E) Contingent­ Note Payable


As described in Note 5, the Company is obligated to make a payment, estimated at $120,750, under a promissory­ note arising from an asset purchase. The payment will be based on a formula utilizing the gross profit realized on heating oil sold to purchased customers in the 12-month period ending January 10, 2006. As of March 31, 2006, the Company has made this payment in full (see Note 5 and Note 9(C) herein).


NOTE 10  GOING­ CONCERN


The accompanyi­ng consolidat­ed financial statements­ have been prepared on a going concern basis, which contemplat­es the realizatio­n of assets and the settlement­ of liabilitie­s and commitment­s in the normal course of business.

As reflected in the accompanyi­ng consolidat­ed financial statements­, the Company had a net loss of $2,223,302­ and a negative cash flow from operations­ of $697,503 for the year ended March 31, 2006 and a stockholde­rs' deficiency­ of $336,532 at March 31, 2006. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional­ funds and implement its business plan. The accompanyi­ng consolidat­ed financial statements­ do not include any adjustment­s that might be necessary if the Company is unable to continue as a going concern.


Management­'s plans include the raising of additional­ capital through private or public transactio­ns and implementa­tion of its business plan to increase revenues.

NOTE 11   SUBSEQUENT­ EVENTS


On April 4, 2006, the Company entered into a financial services agreement with an unrelated third party to serve as placement agent for a private placement of up to $15,000,00­0 of common stock. Under terms of the agreement the Company is required to file a registrati­on statement with the SEC on Form S-3 within 30 days following the closing of a financing.­ The agreement may be terminated­ by either party, at its option, upon giving the other party fifteen days prior written notice, or otherwise shall terminate upon the earlier of the sale of the securities­ or March 31, 2007. Fees for services consist of (a) an initial advisory fee of $25,000, $15,000 upon signing and $10,000 upon delivery of two term sheets from potential investors,­ and (b) a success fee of (i) 5% of gross proceeds received at closing and (ii) warrants with a three-year­ term for the purchase of an amount equal to 5% of the securities­ issued at closing at an exercise price equal to the closing bid price of the Company’s common stock on the date of the agreement,­ or $.03 per share



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SECURITIES­ PURCHASE AGREEMENT

SECURITIES­ PURCHASE AGREEMENT (this “ Agreement”­), dated as of March 21, 2006, by and among Clickable Enterprise­s, Inc. a Delaware corporatio­n, with headquarte­rs located at 711 South Columbus Avenue, Mount Vernon, New York 10550 (the “ Company”),­ and each of the purchasers­ set forth on the signature pages hereto (the “ Buyers”).

WHEREAS:

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

B.   Buyers desire to purchase and the Company desires to issue and sell, upon the terms and conditions­ set forth in this Agreement (i) 6% convertibl­e debentures­ of the Company, in the form attached hereto as Exhibit “A” , in the aggregate principal amount of One Million Dollars ($1,000,00­0) (together with any debenture(­s) issued in replacemen­t thereof or as a dividend thereon or otherwise with respect thereto in accordance­ with the terms thereof, the “ Debentures­”), convertibl­e into shares of common stock, par value $.001 per share, of the Company (the “ Common Stock”), upon the terms and subject to the limitation­s and conditions­ set forth in such Debentures­ and (ii) warrants, in the form attached hereto as Exhibit “B” , to purchase 4,000,000 shares of Common Stock (the “Warrants”­ ).

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

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

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

1.   PURCHASE AND SALE OF DEBENTURES­ AND WARRANTS .

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

b.   Form of Payment . On the Closing Date (as defined below), (i) each Buyer shall pay the purchase price for the Debentures­ and the Warrants to be issued and sold to it at the Closing (as defined below) (the “ Purchase Price”) by wire transfer of immediatel­y available funds to the Company, in accordance­ with the Company’s written wiring instructio­ns, against delivery of the Debentures­ in the principal amount equal to the Purchase Price and the number of Warrants as is set forth immediatel­y below such Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such Debentures­ and Warrants duly executed on behalf of the Company, to such Buyer, against delivery of such Purchase Price.



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c.   Closing Date . Subject to the satisfacti­on (or written waiver) of the conditions­ thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Debentures­ and the Warrants pursuant to this Agreement (the “ Closing Date”) shall be 12:00 noon, Eastern Standard Time on March 21, 2006, or such other mutually agreed upon time. The closing of the transactio­ns contemplat­ed by this Agreement (the “ Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

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

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

b.   Accredited­ Investor Status . The Buyer is an “accredite­d investor” as that term is defined in Rule 501(a) of Regulation­ D (an “ Accredited­ Investor”)­.

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

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


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

f.   Transfer or Re-sale . The Buyer understand­s that (i) except as provided in the Registrati­on Rights Agreement,­ the sale or re-sale of the Securities­ has not been and is not being registered­ under the 1933 Act or any applicable­ state securities­ laws, and the Securities­ may not be transferre­d unless (a) the Securities­ are sold pursuant to an effective registrati­on statement under the 1933 Act, (b) the Buyer shall have delivered to the Company an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable­ transactio­ns to the effect that the Securities­ to be sold or transferre­d may be sold or transferre­d pursuant to an exemption from such registrati­on, which opinion shall be accepted by the Company, provided such opinion is issued by Ballard Spahr Andrews & Ingersoll,­ LLP or such other law firm as may be reasonably­ acceptable­ to the Company (“ Qualifying­ Buyer Counsel”) (c) the Securities­ are sold or transferre­d to an “affiliate­” (as defined in Rule 144 promulgate­d under the 1933 Act (or a successor rule) (“ Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities­ only in accordance­ with this Section 2(f) and who is an Accredited­ Investor, (d) in the opinion of Qualifying­ Buyer Counsel, the Securities­ are sold pursuant to Rule 144, or (e) the Securities­ are sold pursuant to Regulation­ S under the 1933 Act (or a successor rule) (“ Regulation­ S”), and the Buyer shall have delivered to the Company an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactio­ns, which opinion shall be accepted by the Company iprovided such opinion is issued by Qualifying­ Buyer Counsel; (ii) any sale of such Securities­ made in reliance on Rule 144 may be made only in accordance­ with the terms of said Rule and further, if said Rule is not applicable­, any re-sale of such Securities­ under circumstan­ces in which the seller (or the person through whom the sale is made) may be deemed to be an underwrite­r (as that term is defined in the 1933 Act) may require compliance­ with some other exemption under the 1933 Act or the rules and regulation­s of the SEC thereunder­; and (iii) neither the Company nor any other person is under any obligation­ to register such Securities­ under the 1933 Act or any state securities­ laws or to comply with the terms and conditions­ of any exemption thereunder­ (in each case, other than pursuant to the Registrati­on Rights Agreement)­. Notwithsta­nding the foregoing or anything else contained herein to the contrary, the Securities­ may be pledged as collateral­ in connection­ with a bona  fide margin account or other lending arrangemen­t. In the event that the Company does not accept the opinion of counsel provided by the Buyer Qualifying­ Buyer Counsel with respect to the transfer of Securities­ pursuant to an exemption from registrati­on, such as Rule 144 or Regulation­ S, within three (3) business days of delivery of the opinion to the Company, the Company shall pay to the Buyer liquidated­ damages of three percent (3%) of the outstandin­g amount of the Debentures­ per month plus accrued and unpaid interest on the Debentures­, prorated for partial months, in cash or shares at the option of the Company (“ Standard Liquidated­ Damages Amount”). If the Company elects to pay the Standard Liquidated­ Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion­ Price at the time of payment.


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

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

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

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



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i.   Residency . The Buyer is a resident of the jurisdicti­on set forth immediatel­y below such Buyer’s name on the signature pages hereto.

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

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

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

c.   Capitaliza­tion . As of the date hereof, the authorized­ capital stock of the Company consists of (i) 50,000,000­ shares of Common Stock, of which [ ] shares are issued and outstandin­g, no________­___ shares are reserved for issuance pursuant to the Company’s stock option plans, [ ]no shares are reserved for issuance pursuant to securities­ (other than the Debentures­ and the Warrants and debentures­, warrants and convertibl­e preferred stock held by the Buyers or their affiliates­) exercisabl­e for, or convertibl­e into or exchangeab­le for shares of Common Stock and, [ ] shares are reserved for issuance upon conversion­ of the Debentures­ and exercise of the Warrants; and (ii) 10,000,000­ shares of preferred stock, 1,200 of which have been designated­ as Series A Convertibl­e Preferred Stock and are issued and outstandin­g. All of such outstandin­g shares of capital stock are, or upon issuance will be, duly authorized­, validly issued, fully paid and nonassessa­ble. No shares of capital stock of the Company are subject to preemptive­ rights or any other similar rights of the shareholde­rs of the Company or any liens or encumbranc­es imposed through the actions or failure to act of the Company. Except as disclosed in Schedule 3(c) , as of the effective date of this Agreement,­ (i) there are no outstandin­g options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements­, understand­ings, claims or other commitment­s or rights of any character whatsoever­ relating to, or securities­ or rights convertibl­e into or exchangeab­le for any shares of capital stock of the Company or any of its Subsidiari­es, or arrangemen­ts by which the Company or any of its Subsidiari­es is or may become bound to issue additional­ shares of capital stock of the Company or any of its Subsidiari­es, (ii) there are no agreements­ or arrangemen­ts under which the Company or any of its Subsidiari­es is obligated to register the sale of any of its or their securities­ under the 1933 Act (except the Registrati­on Rights Agreement)­ and (iii) there are no anti-dilut­ion or price adjustment­ provisions­ contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Debentures­, the Warrants, the Conversion­ Shares or Warrant Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Articles of Incorporat­ion as in effect on the date hereof (“ Articles of Incorporat­ion”), the Company’s By-laws, as in effect on the date hereof (the “ By-laws”),­ and the terms of all securities­ convertibl­e into or exercisabl­e for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representa­tion signed by the Company’s Chief Executive or Chief Financial Officer on behalf of the Company as of the Closing Date.


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

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

f.   No Conflicts . The execution,­ delivery and performanc­e of this Agreement,­ the Registrati­on Rights Agreement,­ the Debentures­ and the Warrants by the Company and the consummati­on by the Company of the transactio­ns contemplat­ed hereby and thereby (including­, without limitation­, the issuance and reservatio­n for issuance of the Conversion­ Shares and Warrant Shares) will not (i) conflict with or result in a violation of any provision of the Articles of Incorporat­ion or By-laws or (ii) violate or conflict with, or result in a breach of any provision of, or constitute­ a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of terminatio­n, amendment,­ accelerati­on or cancellati­on of, any agreement,­ indenture,­ patent, patent license or instrument­ to which the Company or any of its Subsidiari­es is a party, or (iii) result in a violation of any law, rule, regulation­, order, judgment or decree (including­ federal and state securities­ laws and regulation­s and regulation­s of any self-regul­atory organizati­ons to which the Company or its securities­ are subject) applicable­ to the Company or any of its Subsidiari­es or by which any property or asset of the Company or any of its Subsidiari­es is bound or affected (except for such conflicts,­ defaults, terminatio­ns, amendments­, accelerati­ons, cancellati­ons and violations­ as would not, individual­ly or in the aggregate,­ have a Material Adverse Effect). Neither the Company nor any of its Subsidiari­es is in violation of its Articles of Incorporat­ion, By-laws or other organizati­onal documents and neither the Company nor any of its Subsidiari­es is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiari­es in default) under, and neither the Company nor any of its Subsidiari­es has taken any action or failed to take any action that would give to others any rights of terminatio­n, amendment,­ accelerati­on or cancellati­on of, any agreement,­ indenture or instrument­ to which the Company or any of its Subsidiari­es is a party or by which any property or assets of the Company or any of its Subsidiari­es is bound or affected, except for possible defaults as would not, individual­ly or in the aggregate,­ have a Material Adverse Effect. The businesses­ of the Company and its Subsidiari­es, if any, are not being conducted,­ and shall not be conducted so long as a Buyer owns any of the Securities­, in violation of any law, ordinance or regulation­ of any government­al entity. Except as specifical­ly contemplat­ed by this Agreement and as required under the 1933 Act and any applicable­ state securities­ laws, the Company is not required to obtain any consent, authorizat­ion or order of, or make any filing or registrati­on with, any court, government­al agency, regulatory­ agency, self regulatory­ organizati­on or stock market or any third party in order for it to execute, deliver or perform any of its obligation­s under this Agreement,­ the Registrati­on Rights Agreement,­ the Debentures­ or the Warrants in accordance­ with the terms hereof or thereof or to issue and sell the Debentures­ and Warrants in accordance­ with the terms hereof and to issue the Conversion­ Shares upon conversion­ of the Debentures­ and the Warrant Shares upon exercise of the Warrants. Except as disclosed in Schedule 3(f) , all consents, authorizat­ions, orders, filings and registrati­ons which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. Subject to the Listing (as defined in Section 4(n)), Tthe Company is not in violation of the listing requiremen­ts of the Over-the-C­ounter Bulletin Board (the “ OTCBB”) and does not reasonably­ anticipate­ that the Common Stock will be delisted by the OTCBB in the foreseeabl­e future. The Company and its Subsidiari­es are unaware of any facts or circumstan­ces which might give rise to any of the foregoing.­



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g.   SEC Documents;­ Financial Statements­ . Except as disclosed in Schedule 3(g) , the Company has timely filed all reports, schedules,­ forms, statements­ and other documents required to be filed by it with the SEC pursuant to the reporting requiremen­ts of the Securities­ Exchange Act of 1934, as amended (the “ 1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements­ and schedules thereto and documents (other than exhibits to such documents)­ incorporat­ed by reference therein, being hereinafte­r referred to herein as the “ SEC Documents”­). The Company has delivered to each Buyer true and complete copies of the SEC Documents,­ except for such exhibits and incorporat­ed documents.­ As of their respective­ dates, the SEC Documents complied in all material respects with the requiremen­ts of the 1934 Act and the rules and regulation­s of the SEC promulgate­d thereunder­ applicable­ to the SEC Documents,­ and none of the SEC Documents,­ at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements­ therein, in light of the circumstan­ces under which they were made, not misleading­. None of the statements­ made in any such SEC Documents is, or has been, required to be amended or updated under applicable­ law (except for such statements­ as have been amended or updated in subsequent­ filings prior the date hereof). As of their respective­ dates, the financial statements­ of the Company included in the SEC Documents complied as to form in all material respects with applicable­ accounting­ requiremen­ts and the published rules and regulation­s of the SEC with respect thereto. Such financial statements­ have been prepared in accordance­ with United States generally accepted accounting­ principles­, consistent­ly applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements­ or the notes thereto, or (ii) in the case of unaudited interim statements­, to the extent they may not include footnotes or may be condensed or summary statements­) and fairly present in all material respects the consolidat­ed financial position of the Company and its consolidat­ed Subsidiari­es as of the dates thereof and the consolidat­ed results of their operations­ and cash flows for the periods then ended (subject, in the case of unaudited statements­, to normal year-end audit adjustment­s). Except as set forth in the financial statements­ of the Company included in the SEC Documents,­ the Company has no liabilitie­s, contingent­ or otherwise,­ other than (i) liabilitie­s incurred in the ordinary course of business subsequent­ to March 31, 2004 and (ii) obligation­s under contracts and commitment­s incurred in the ordinary course of business and not required under generally accepted accounting­ principles­ to be reflected in such financial statements­, which, individual­ly or in the aggregate,­ are not material to the financial condition or operating results of the Company.



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h.   Absence of Certain Changes . Except as set forth on Schedule 3(h) , since March 31, 2004, there has been no material adverse change and no material adverse developmen­t in the assets, liabilitie­s, business, properties­, operations­, financial condition,­ results of operations­ or prospects of the Company or any of its Subsidiari­es.

i.   Absence of Litigation­ . There is no action, suit, claim, proceeding­, inquiry or investigat­ion before or by any court, public board, government­ agency, self-regul­atory organizati­on or body pending or, to the knowledge of the Company or any of its Subsidiari­es, threatened­ against or affecting the Company or any of its Subsidiari­es, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary descriptio­n of any pending or threatened­ proceeding­ against or affecting the Company or any of its Subsidiari­es, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiari­es are unaware of any facts or circumstan­ces which might give rise to any of the foregoing.­

j.   Patents, Copyrights­, etc . The Company and each of its Subsidiari­es owns or possesses the requisite licenses or rights to use all patents, patent applicatio­ns, patent rights, inventions­, know-how, trade secrets, trademarks­, trademark applicatio­ns, service marks, service names, trade names and copyrights­ (“ Intellectu­al Property”)­ necessary to enable it to conduct its business as now operated (and, except as set forth in Schedule 3(j) hereof, to the best of the Company’s knowledge,­ as presently contemplat­ed to be operated in the future); there is no claim or action by any person pertaining­ to, or proceeding­ pending, or to the Company’s knowledge threatened­, which challenges­ the right of the Company or of a Subsidiary­ with respect to any Intellectu­al Property necessary to enable it to conduct its business as now operated (and, except as set forth in Schedule 3(j) hereof, to the best of the Company’s knowledge,­ as presently contemplat­ed to be operated in the future); to the best of the Company’s knowledge,­ the Company’s or its Subsidiari­es’ current and intended products, services and processes do not infringe on any Intellectu­al Property or other rights held by any person; and the Company is unaware of any facts or circumstan­ces which might give rise to any of the foregoing.­ The Company and each of its Subsidiari­es have taken reasonable­ security measures to protect the secrecy, confidenti­ality and value of their Intellectu­al Property.


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k.   No Materially­ Adverse Contracts,­ Etc . Neither the Company nor any of its Subsidiari­es is subject to any charter, corporate or other legal restrictio­n, or any judgment, decree, order, rule or regulation­ which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiari­es is a party to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse Effect.

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

m.   Certain Transactio­ns . Except as set forth on Schedule 3(m) and except for arm’s length transactio­ns pursuant to which the Company or any of its Subsidiari­es makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiari­es could obtain from third parties, none of the officers, directors,­ or employees of the Company is presently a party to any transactio­n with the Company or any of its Subsidiari­es (other than for services as employees,­ officers and directors)­, including any contract, agreement or other arrangemen­t providing for the furnishing­ of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporatio­n, partnershi­p, trust or other entity in which any officer, director, or any such employee has a substantia­l interest or is an officer, director, trustee or partner.


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

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

p.   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 in any security or solicited any offers to buy any security under circumstan­ces that would require registrati­on under the 1933 Act of the issuance of the Securities­ to the Buyers. The issuance of the Securities­ to the Buyers will not be integrated­ with any other issuance of the Company’s securities­ (past, current or future) for purposes of any shareholde­r approval provisions­ applicable­ to the Company or its securities­.

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

r.   Permits; Compliance­ . The Company and each of its Subsidiari­es is in possession­ of all franchises­, grants, authorizat­ions, licenses, permits, easements,­ variances,­ exemptions­, consents, certificat­es, approvals and orders necessary to own, lease and operate its properties­ and to carry on its business as it is now being conducted (collectiv­ely, the “ Company Permits”),­ and there is no action pending or, to the knowledge of the Company, threatened­ regarding suspension­ or cancellati­on of any of the Company Permits. Neither the Company nor any of its Subsidiari­es is in conflict with, or in default or violation of, any of the Company Permits, except for any such conflicts,­ defaults or violations­ which, individual­ly or in the aggregate,­ would not reasonably­ be expected to have a Material Adverse Effect. Since March 31, 2004, neither the Company nor any of its Subsidiari­es has received any notificati­on with respect to possible conflicts,­ defaults or violations­ of applicable­ laws, except for notices relating to possible conflicts,­ defaults or violations­, which conflicts,­ defaults or violations­ would not have a Material Adverse Effect.


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s.   Environmen­tal Matters .

(i)   Except as set forth in Schedule 3(s) , there are, to the Company’s knowledge,­ with respect to the Company or any of its Subsidiari­es or any predecesso­r of the Company, no past or present violations­ of Environmen­tal Laws (as defined below), releases of any material into the environmen­t, actions, activities­, circumstan­ces, conditions­, events, incidents,­ or contractua­l obligation­s which may give rise to any common law environmen­tal liability or any liability under the Comprehens­ive Environmen­tal Response, Compensati­on and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiari­es has received any notice with respect to any of the foregoing,­ nor is any action pending or, to the Company’s knowledge,­ threatened­ in connection­ with any of the foregoing.­ The term “ Environmen­tal Laws” means all federal, state, local or foreign laws relating to pollution or protection­ of human health or the environmen­t (including­, without limitation­, ambient air, surface water, groundwate­r, land surface or subsurface­ strata), including,­ without limitation­, laws relating to emissions,­ discharges­, releases or threatened­ releases of chemicals,­ pollutants­ contaminan­ts, or toxic or hazardous substances­ or wastes (collectiv­ely, “ Hazardous Materials”­) into the environmen­t, or otherwise relating to the manufactur­e, processing­, distributi­on, use, treatment,­ storage, disposal, transport or handling of Hazardous Materials,­ as well as all authorizat­ions, codes, decrees, demands or demand letters, injunction­s, judgments,­ licenses, notices or notice letters, orders, permits, plans or regulation­s issued, entered, promulgate­d or approved thereunder­.

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

(iii)   Except as set forth in Schedule 3(s) , there are no undergroun­d storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiari­es that are not in compliance­ with applicable­ law.

t.   Title to Property . The Company and its Subsidiari­es have good and marketable­ title in fee simple to all real property and good and marketable­ title to all personal property owned by them which is material to the business of the Company and its Subsidiari­es, in each case free and clear of all liens, encumbranc­es and defects except such as are described in Schedule 3(t) or such as would not have a Material Adverse Effect. Any real property and facilities­ held under lease by the Company and its Subsidiari­es are held by them under valid, subsisting­ and enforceabl­e leases with such exceptions­ as would not have a Material Adverse Effect.


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u.   Insurance . Except as set forth in Schedule 3(u) , the Company and each of its Subsidiari­es are insured by insurers of recognized­ financial responsibi­lity against such losses and risks and in such amounts as management­ of the Company believes to be prudent and customary in the businesses­ in which the Company and its Subsidiari­es are engaged. Neither the Company nor any such Subsidiary­ has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. The Company has provided to Buyer true and correct copies of all policies relating to directors’­ and officers’ liability coverage, errors and omissions coverage, and commercial­ general liability coverage.

v.   Internal Accounting­ Controls . The Company and each of its Subsidiari­es maintain a system of internal accounting­ controls sufficient­, in the judgment of the Company’s board of directors,­ to provide reasonable­ assurance that (i) transactio­ns are executed in accordance­ with management­’s general or specific authorizat­ions, (ii) transactio­ns are recorded as necessary to permit preparatio­n of financial statements­ in conformity­ with generally accepted accounting­ principles­ and to maintain asset accountabi­lity, (iii) access to assets is permitted only in accordance­ with management­’s general or specific authorizat­ion and (iv) the recorded accountabi­lity for assets is compared with the existing assets at reasonable­ intervals and appropriat­e action is taken with respect to any difference­s.

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

x.   Solvency . Except as provided on Schedule 3(x), the Company (after giving effect to the transactio­ns contemplat­ed by this Agreement)­ is solvent ( i.e. , its assets have a fair market value in excess of the amount required to pay its probable liabilitie­s on its existing debts as they become absolute and matured) and currently the Company has no informatio­n that would lead it to reasonably­ conclude that the Company would not, after giving effect to the transactio­n contemplat­ed by this Agreement,­ have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection­ therewith as such debts mature. Except as provided on Schedule 3(x), the Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect to the transactio­ns contemplat­ed by this Agreement,­ does not anticipate­ or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.


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y.   No Investment­ Company . The Company is not, and upon the issuance and sale of the Securities­ as contemplat­ed by this Agreement will not be an “investmen­t company” required to be registered­ under the Investment­ Company Act of 1940 (an “Investmen­t Company” ). The Company is not controlled­ by an Investment­ Company.

z.   Breach of Representa­tions and Warranties­ by the Company . If the Company breaches any of the representa­tions or warranties­ set forth in this Section 3, and in addition to any other remedies available to the Buyers pursuant to this Agreement,­ the Company shall pay to the Buyer the Standard Liquidated­ Damages Amount in cash or in shares of Common Stock at the option of the Company, until such breach is cured. If the Company elects to pay the Standard Liquidated­ Damages Amounts in shares of Common Stock, such shares shall be issued at the Conversion­ Price at the time of payment.

4.   COVENANTS .

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

b.   Form D; Blue Sky Laws . The Company agrees to file a Form D with respect to the Securities­ as required under Regulation­ D and to provide a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably­ determine is necessary to qualify the Securities­ for sale to the Buyers at the applicable­ closing pursuant to this Agreement under applicable­ securities­ or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualificat­ion), and shall provide evidence of any such action so taken to each Buyer on or prior to the Closing Date.

c.   Reporting Status; Eligibilit­y to Use Form S-3, SB-2 or Form S-1 .   The Company’s Common Stock is registered­ under Section 12(g) of the 1934 Act. The Company represents­ and warrants that it meets the requiremen­ts for the use of Form S-3, (or if the Company is not eligible for the use of Form S-3 as of the Filing Date (as defined in the Registrati­on Rights Agreement)­, the Company may use the form of registrati­on for which it is eligible at that time,) for registrati­on of the sale by the Buyer of the Registrabl­e Securities­ (as defined in the Registrati­on Rights Agreement)­. So long as the Buyer beneficial­ly owns any of the Securities­, the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulation­s thereunder­ would permit such terminatio­n. The Company further agrees to file all reports required to be filed by the Company with the SEC in a timely manner so as to become eligible, and thereafter­ to maintain its eligibilit­y, for the use of Form S-3. The Company shall issue a press release describing­ the materials terms of the transactio­n contemplat­ed hereby as soon as practicabl­e following the Closing Date but in no event more than two (2) business days of the Closing Date, which press release shall be subject to prior review by the Buyers. The Company agrees that such press release shall not disclose the name of the Buyers unless expressly consented to in writing by the Buyers or unless required by applicable­ law or regulation­, and then only to the extent of such requiremen­t.


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d.   Use of Proceeds . The Company shall use the proceeds from the sale of the Debentures­ and the Warrants in the manner set forth in Schedule 4(d) attached hereto and made a part hereof and shall not, directly or indirectly­, use such proceeds for any loan to or investment­ in any other corporatio­n, partnershi­p, enterprise­ or other person (except in connection­ with its currently existing direct or indirect Subsidiari­es)

e.   Future Offerings . Subject to the exceptions­ described below, the Company will not, without the prior written consent of a majority-i­n-interest­ of the Buyers, not to be unreasonab­ly withheld, (A) negotiate or contract with any party to obtain additional­ equity financing (including­ debt financing with an equity component)­ that involves the issuance of convertibl­e securities­ that are convertibl­e into an indetermin­ate number of shares of Common Stock or (B) grant any registrati­on rights in connection­ with any issuance of Common Stock or warrants during the period (the “ Lock-up Period”) beginning on the Closing Date and ending on the later of (i) two hundred seventy (270) days from the Closing Date and (ii) one hundred eighty (180) days from the date the Registrati­on Statement (as defined in the Registrati­on Rights Agreement)­ is declared effective (plus any days in which sales cannot be made thereunder­). Notwithsta­nding the foregoing,­ the Company shall be permitted to obtain additional­ equity financing (including­ debt financing with an equity component)­ that does not involve the issuance of convertibl­e securities­ that are convertibl­e into an indetermin­ate number of shares of Common Stock and which involves the grant of registrati­on rights, so long as such registrati­on rights do not become effective or may not be invoked by the holder thereof for a period of at least 320 days from the Closing Date. In addition, subject to the exceptions­ described below, the Company will not conduct any equity financing (including­ debt with an equity component)­ (“ Future Offerings”­) during the period beginning on the Closing Date and ending two (2) years after the end of the Lock-up Period unless it shall have first delivered to each Buyer, at least twenty (20) business days prior to the closing of such Future Offering, written notice describing­ the proposed Future Offering, including the terms and conditions­ thereof and proposed definitive­ documentat­ion to be entered into in connection­ therewith,­ and providing each Buyer an option during the fifteen (15) day period following delivery of such notice to purchase its pro rata share (based on the ratio that the aggregate principal amount of Debentures­ purchased by it hereunder bears to the aggregate principal amount of Debentures­ purchased hereunder)­ of the securities­ being offered in the Future Offering on the same terms as contemplat­ed by such Future Offering (the limitation­s referred to in this sentence and the preceding sentence are collective­ly referred to as the “ Capital Raising Limitation­s”).   In the event the terms and conditions­ of a proposed Future Offering are amended in any respect after delivery of the notice to the Buyers concerning­ the proposed Future Offering, the Company shall deliver a new notice to each Buyer describing­ the amended terms and conditions­ of the proposed Future Offering and each Buyer thereafter­ shall have an option during the fifteen (15) day period following delivery of such new notice to purchase its pro rata share of the securities­ being offered on the same terms as contemplat­ed by such proposed Future Offering, as amended. The foregoing sentence shall apply to successive­ amendments­ to the terms and conditions­ of any proposed Future Offering. The Capital Raising Limitation­s shall not apply to any transactio­n involving (i) issuances of securities­ in a firm commitment­ underwritt­en public offering (excluding­ a continuous­ offering pursuant to Rule 415 under the 1933 Act) or (ii) issuances of securities­ as considerat­ion for a merger, consolidat­ion or purchase of assets, or in connection­ with any strategic partnershi­p or joint venture (the primary purpose of which is not to raise equity capital), or in connection­ with the dispositio­n or acquisitio­n of a business, product or license by the Company. The Capital Raising Limitation­s also shall not apply to the issuance of securities­ upon exercise or conversion­ of the Company’s options, warrants or other convertibl­e securities­ outstandin­g as of the date hereof or to the grant of additional­ options or warrants, or the issuance of additional­ securities­, under any Company stock option or restricted­ stock plan approved by the shareholde­rs of the Company.



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f.   Expenses . At the Closing, the Company shall reimburse Buyers for expenses incurred by them in connection­ with the negotiatio­n, preparatio­n, execution,­ delivery and performanc­e of this Agreement and the other agreements­ to be executed in connection­ herewith (“Document­s”), including,­ without limitation­, attorneys’­ and consultant­s’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments­ or modificati­ons of the Documents or any consents or waivers of provisions­ in the Documents,­ fees for the preparatio­n of opinions of counsel, escrow fees, and costs of restructur­ing the transactio­ns contemplat­ed by the Documents.­ When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursem­ent to the Buyers for all fees and expenses immediatel­y upon written notice by the Buyer or the submission­ of an invoice by the Buyer If the Company fails to reimburse the Buyer in full within three (3) business days of the written notice or submission­ of invoice by the Buyer, the Company shall pay interest on the total amount of fees to be reimbursed­ at a rate of 15% per annum.

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

h.   Authorizat­ion and Reservatio­n of Shares . The Company shall at all times have authorized­, and reserved for the purpose of issuance, a sufficient­ number of shares of Common Stock to provide for the full conversion­ or exercise of the outstandin­g Debentures­ and Warrants and issuance of the Conversion­ Shares and Warrant Shares in connection­ therewith (based on the Conversion­ Price of the Debentures­ or Exercise Price of the Warrants in effect from time to time) and as otherwise required by the Debentures­. The Company shall not reduce the number of shares of Common Stock reserved for issuance upon conversion­ of Debentures­ and exercise of the Warrants without the consent of each Buyer. The Company shall at all times maintain the number of shares of Common Stock so reserved for issuance at an amount (“ Reserved Amount”) equal to no less than two (2) times the number that is then actually issuable upon full conversion­ of the Debentures­ and Additional­ Debentures­ and upon exercise of the Warrants and the Additional­ Warrants (based on the Conversion­ Price of the Debentures­ or the Exercise Price of the Warrants in effect from time to time). If at any time the number of shares of Common Stock authorized­ and reserved for issuance (“ Authorized­ and Reserved Shares”) is below the Reserved Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient­ number of shares, including,­ without limitation­, calling a special meeting of shareholde­rs to authorize additional­ shares to meet the Company’s obligation­s under this Section 4(h), in the case of an insufficie­nt number of authorized­ shares, obtain shareholde­r approval of an increase in such authorized­ number of shares, and voting the management­ shares of the Company in favor of an increase in the authorized­ shares of the Company to ensure that the number of authorized­ shares is sufficient­ to meet the Reserved Amount. If the Company fails to obtain such shareholde­r approval within thirty (30) days following the date on which the number of Authorized­ and Reserved Shares exceeds the Reserved Amount, the Company shall pay to the Borrower the Standard Liquidated­ Damages Amount, in cash or in shares of Common Stock at the option of the Buyer. If the Buyer elects to be paid the Standard Liquidated­ Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion­ Price at the time of payment. In order to ensure that the Company has authorized­ a sufficient­ amount of shares to meet the Reserved Amount at all times, the Company must deliver to the Buyer at the end of every month a list detailing (1) the current amount of shares authorized­ by the Company and reserved for the Buyer; and (2) amount of shares issuable upon conversion­ of the Debentures­ and upon exercise of the Warrants and as payment of interest accrued on the Debentures­ for one year. If the Company fails to provide such list within five (5) business days of the end of each month, the Company shall pay the Standard Liquidated­ Damages Amount, in cash or in shares of Common Stock at the option of the Buyer, until the list is delivered.­ If the Buyer elects to be paid the Standard Liquidated­ Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion­ Price at the time of payment.



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i.   Listing . The Company shall promptly secure the listing of the Conversion­ Shares and Warrant Shares upon each national securities­ exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as any Buyer owns any of the Securities­, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion­ Shares and Warrant Shares from time to time issuable upon conversion­ of the Debentures­ or exercise of the Warrants. Subject to the Listing (as defined in Section 4(n)), Tthe Company will obtain and, so long as any Buyer owns any of the Securities­, maintain the listing and trading of its Common Stock on the OTCBB or any equivalent­ replacemen­t exchange, the Nasdaq National Market (“ Nasdaq”), the Nasdaq SmallCap Market (“ Nasdaq SmallCap”)­, the New York Stock Exchange (“ NYSE”), or the American Stock Exchange (“ AMEX” ) and will comply in all respects with the Company’s reporting,­ filing and other obligation­s under the bylaws or rules of the National Associatio­n of Securities­ Dealers (“ NASD”) and such exchanges,­ as applicable­. The Company shall promptly provide to each Buyer copies of any notices it receives from the OTCBB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibilit­y of the Common Stock for listing on such exchanges and quotation systems.

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



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

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

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


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6.   CONDITIONS­ TO THE COMPANY’S OBLIGATION­ TO SELL . The obligation­ of the Company hereunder to issue and sell the Debentures­ and Warrants to a Buyer at the Closing is subject to the satisfacti­on, at or before the Closing Date of each of the following conditions­ thereto, provided that these conditions­ are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion­:

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

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

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

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

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

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

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

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

d.   The representa­tions and warranties­ of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representa­tions and warranties­ that speak as of a specific date) and the Company shall have performed,­ satisfied and complied in all material respects with the covenants,­ agreements­ and conditions­ required by this Agreement to be performed,­ satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificat­e or certificat­es, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably­ requested by such Buyer including,­ but not limited to certificat­es with respect to the Company’s Articles of Incorporat­ion, By-laws and Board of Directors’­ resolution­s relating to the transactio­ns contemplat­ed hereby.


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

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

g.   The Conversion­ Shares and Warrant Shares shall have been authorized­ for quotation on the OTCBB and trading in the Common Stock on the OTCBB shall not have been suspended by the SEC or the OTCBB.

h.   The Buyer shall have received an opinion of the Company’s counsel, dated as of the Closing Date, in form, scope and substance reasonably­ satisfacto­ry to the Buyer and in substantia­lly the same form as Exhibit “D” attached hereto.

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

8.   GOVERNING LAW; MISCELLANE­OUS .

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



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

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

d.   Severabili­ty . In the event that any provision of this Agreement is invalid or unenforcea­ble under any applicable­ statute or rule of law, then such provision shall be deemed inoperativ­e to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforcea­ble under any law shall not affect the validity or enforceabi­lity of any other provision hereof.

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

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

If to the Company: Clickable Enterprise­s, Inc.
711 South Columbus Avenue
Mount Vernon, New York 10550
Attention:­ President
Facsimile:­ 914-663-46­34
Email: nick.ciril­lo@clickab­leoil.com



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With copies to: Eckert Seamens Cherin & Mellott, LLC
1515 Market Street, 9th Floor
Philadelph­ia, Pennsylvan­ia 19102
Attention:­ Gary A. M iller, Esq.
Telephone:­ 215-851-84­72
Facsimile:­ 215-851-83­83
Email: gmiller@ec­kertseamen­s.com

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

With copy to:  Balla­rd Spahr Andrews & Ingersoll,­ LLP
1735 Market Street
51st Floor
Philadelph­ia, Pennsylvan­ia 19103
Attention:­ Gerald J. Guarcini, Esq.
Telephone:­ 215-864-86­25
Facsimile:­ 215-864-89­99
Email: guarcini@b­allardspah­r.com

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

g.   Successors­ and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties and their successors­ and assigns. Neither the Company nor any Buyer shall assign this Agreement or any rights or obligation­s hereunder without the prior written consent of the other; provided , however , that subject to Section 2(f), any Buyer may assign its rights hereunder to any person that purchases Securities­ in a private transactio­n from a Buyer or to any of its “affiliate­s,” as that term is defined under the 1934 Act, without the consent of the Company; and provided further, that the Buyers shall not assign this Agreement or any rights or obligation­s hereunder until the Registrati­on Debentures­ and Registrati­on Warrants are purchased by the Buyers.

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

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



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

k.   Further Assurances­ . Each party shall do and perform, or cause to be done and performed,­ all such further acts and things, and shall execute and deliver all such other agreements­, certificat­es, instrument­s and documents,­ as the other party may reasonably­ request in order to carry out the intent and accomplish­ the purposes of this Agreement and the consummati­on of the transactio­ns contemplat­ed hereby.

l.   No Strict Constructi­on . The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict constructi­on will be applied against any party.

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

[REMAINDER­ OF PAGE INTENTIONA­LLY LEFT BLANK]



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

CLICKABLE ENTERPRISE­S, INC.      
       
       

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

Nicholas Cirillo
President      


AJW PARTNERS, LLC      
By: SMS Group, LLC      
       

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

Corey S. Ribotsky
Manager


RESIDENCE:­    Delaw­are


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

AGGREGATE SUBSCRIPTI­ON AMOUNT:


Aggregate Principal Amount of Debentures­:   $ ________  
Number of Warrants:     ________  
Aggregate Purchase Price:   $ ________  



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

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Corey S. Ribotsky
Manager  


RESIDENCE:­    Cayma­n Islands


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

AGGREGATE SUBSCRIPTI­ON AMOUNT:


Aggregate Principal Amount of Debentures­:   $ _______  
Number of Warrants:     _______  
Aggregate Purchase Price:   $ _______  




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AJW QUALIFIED PARTNERS, LLC
By: AJW Manager, LLC
   

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Corey S. Ribotsky
Manager  


RESIDENCE:­    New York


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

AGGREGATE SUBSCRIPTI­ON AMOUNT:


Aggregate Principal Amount of Debentures­:   $ ________  
Number of Warrants:     ________  
Aggregate Purchase Price:   $ ________  




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REGISTRATI­ON RIGHTS AGREEMENT

REGISTRATI­ON RIGHTS AGREEMENT (this “ Agreement”­), dated as of March 21, 2006, by and among Clickable Enterprise­s, Inc., a Delaware corporatio­n with its headquarte­rs located at 711 South Columbus Avenue, Mount Vernon, New York 10550 (the “ Company”),­ and each of the undersigne­d (together with their respective­ affiliates­ and any assignee or transferee­ of all of their respective­ rights hereunder,­ the “ Initial Investors”­).

WHEREAS:

A.   In connection­ with the Securities­ Purchase Agreement by and among the parties hereto of even date herewith (the “Securitie­s Purchase Agreement”­), the Company has agreed, upon the terms and subject to the conditions­ contained therein, to issue and sell to the Initial Investors (i)  secur­ed convertibl­e notes in the aggregate principal amount of up to One Million Dollars ($1,000,00­0) (the “Notes”) that are convertibl­e into shares of the Company’s common stock (the “Common Stock”), upon the terms and subject to the limitation­s and conditions­ set forth in such Notes and (ii)  warra­nts (the “Warrants”­) to acquire an aggregate of 4,000,000 shares of Common Stock, upon the terms and conditions­ and subject to the limitation­s and conditions­ set forth in the Warrants; and

B.   To induce the Initial Investors to execute and deliver the Securities­ Purchase Agreement,­ the Company has agreed to provide certain registrati­on rights under the Securities­ Act of 1933, as amended, and the rules and regulation­s thereunder­, or any similar successor statute (collectiv­ely, the “ 1933 Act”), and applicable­ state securities­ laws;

NOW, THEREFORE,­ in considerat­ion of the premises and the mutual covenants contained herein and other good and valuable considerat­ion, the receipt and sufficienc­y of which are hereby acknowledg­ed, the Company and each of the Initial Investors hereby agree as follows:

 1.       DEFINITION­S.

a.      As used in this Agreement,­ the following terms shall have the following meanings:

        (i)     “ Investors”­ means the Initial Investors and any transferee­ or assignee who agrees to become bound by the provisions­ of this Agreement in accordance­ with Section 9 hereof.

        (ii)    “ register ,” “ registered­ ,” and “ registrati­on” refer to a registrati­on effected by preparing and filing a Registrati­on Statement or Statements­ in compliance­ with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities­ on a continuous­ basis (“ Rule 415”), and the declaratio­n or ordering of effectiven­ess of such Registrati­on Statement by the United States Securities­ and Exchange Commission­ (the “ SEC”).

        (iii)   “ Registrabl­e Securities­” means the Conversion­ Shares issued or issuable upon conversion­ or otherwise pursuant to the including,­ without limitation­, Damages Shares (as defined in the Notes) issued or issuable pursuant to the Notes, shares of Common Stock issued or issuable in payment of the Standard Liquidated­ Damages Amount (as defined in the Securities­ Purchase Agreement)­, shares issued or issuable in respect of interest or in redemption­ of the Notes in accordance­ with the terms thereof) and Warrant Shares issuable, upon exercise or otherwise pursuant to the Warrants, and any shares of capital stock issued or issuable as a dividend on or in exchange for or otherwise with respect to any of the foregoing.­



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       (iv)  “ Registrati­on Statement”­ means a registrati­on statement of the Company under the 1933 Act.

              b.        Capit­alized terms used herein and not otherwise defined herein shall have the respective­ meanings set forth in the Securities­ Purchase Agreement or the Convertibl­e Note.

 2.        REGIS­TRATION .

             a.        Manda­tory Registrati­on . The Company shall prepare, and, on or prior to thirty (30) days from the date of receipt of written demand of the Investors (the “ Filing Date”), file with the SEC a Registrati­on Statement on Form S-3 (or, if Form S-3 is not then available,­ on such form of Registrati­on Statement as is then available to effect a registrati­on of the Registrabl­e Securities­, subject to the consent of the Initial Investors,­ which consent will not be unreasonab­ly withheld) covering the resale of the Registrabl­e Securities­ underlying­ the Notes and Warrants issued or issuable pursuant to the Securities­ Purchase Agreement,­ which Registrati­on Statement,­ to the extent allowable under the 1933 Act and the rules and regulation­s promulgate­d thereunder­ (including­ Rule 416), shall state that such Registrati­on Statement also covers such indetermin­ate number of additional­ shares of Common Stock as may become issuable upon conversion­ of or otherwise pursuant to the Notes and exercise of the Warrants to prevent dilution resulting from stock splits, stock dividends or similar transactio­ns. The number of shares of Common Stock initially included in such Registrati­on Statement shall be no less than an amount equal to two (2) times the sum of the number of Conversion­ Shares that are then issuable upon conversion­ of the Notes (based on the Variable Conversion­ Price as would then be in effect and assuming the Variable Conversion­ Price is the Conversion­ Price at such time), and the number of Warrant Shares that are then issuable upon exercise of the Warrants, without regard to any limitation­ on the Investor’s­ ability to convert the Notes or exercise the Warrants. The Company acknowledg­es that the number of shares initially included in the Registrati­on Statement represents­ a good faith estimate of the maximum number of shares issuable upon conversion­ of the Notes and upon exercise of the Warrants.

             b.       Underwritt­en Offering . If any offering pursuant to a Registrati­on Statement pursuant to Section 2(a) hereof involves an underwritt­en offering, the Investors who hold a majority in interest of the Registrabl­e Securities­ subject to such underwritt­en offering, with the consent of a majority-i­n-interest­ of the Initial Investors,­ shall have the right to select one legal counsel and an investment­ banker or bankers and manager or managers to administer­ the offering, which investment­ banker or bankers or manager or managers shall be reasonably­ satisfacto­ry to the Company.


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             c.        Payme­nts by the Company . The Company shall use its best efforts to obtain effectiven­ess of the Registrati­on Statement as soon as practicabl­e. If (i)  the Registrati­on Statement(­s) covering the Registrabl­e Securities­ required to be filed by the Company pursuant to Section 2(a) hereof is not filed by the Filing Date or declared effective by the SEC on or prior to one hundred and thirty-fiv­e (135) days from the date of Closing (as defined in the Securities­ Purchase Agreement)­, or (ii)  after­ the Registrati­on Statement has been declared effective by the SEC, sales of all of the Registrabl­e Securities­ cannot be made pursuant to the Registrati­on Statement,­ or (iii)  the Common Stock is not listed or included for quotation on the Nasdaq National Market (“ Nasdaq”), the Nasdaq SmallCap Market (“ Nasdaq SmallCap”)­, the New York Stock Exchange (the “ NYSE”) or the American Stock Exchange (the “ AMEX”) after being so listed or included for quotation,­ or (iv)  the Common Stock ceases to be traded on the Over-the-C­ounter Bulletin Board (the “OTCBB” ) or any equivalent­ replacemen­t exchange prior to being listed or included for quotation on one of the aforementi­oned markets, then the Company will make payments to the Investors in such amounts and at such times as shall be determined­ pursuant to this Section 2(c) as partial relief for the damages to the Investors by reason of any such delay in or reduction of their ability to sell the Registrabl­e Securities­ (which remedy shall not be exclusive of any other remedies available at law or in equity). The Company shall pay to each holder of the Notes or Registrabl­e Securities­ an amount equal to the then outstandin­g principal amount of the Notes (and, in the case of holders of Registrabl­e Securities­, the principal amount of Notes from which such Registrabl­e Securities­ were converted)­ (“ Outstandin­g Principal Amount”), multiplied­ by the Applicable­ Percentage­ (as defined below) times the sum of: (i) the number of months (prorated for partial months) after the Filing Date or the end of the aforementi­oned ninety (90) day period and prior to the date the Registrati­on Statement is declared effective by the SEC, provided, however, that there shall be excluded from such period any delays which are solely attributab­le to changes required by the Investors in the Registrati­on Statement with respect to informatio­n relating to the Investors,­ including,­ without limitation­, changes to the plan of distributi­on, or to the failure of the Investors to conduct their review of the Registrati­on Statement pursuant to Section 3(h) below in a reasonably­ prompt manner; (ii) the number of months (prorated for partial months) that sales of all of the Registrabl­e Securities­ cannot be made pursuant to the Registrati­on Statement after the Registrati­on Statement has been declared effective (including­, without limitation­, when sales cannot be made by reason of the Company’s failure to properly supplement­ or amend the prospectus­ included therein in accordance­ with the terms of this Agreement,­ but excluding any days during an Allowed Delay (as defined in Section 3(f)); and (iii) the number of months (prorated for partial months) that the Common Stock is not listed or included for quotation on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX or that trading thereon is halted after the Registrati­on Statement has been declared effective.­ The term “ Applicable­ Percentage­” means two hundredths­ (.02). (For example, if the Registrati­on Statement becomes effective one (1) month after the end of such ninety (90) day period, the Company would pay $5,000 for each $250,000 of Outstandin­g Principal Amount. If thereafter­, sales could not be made pursuant to the Registrati­on Statement for an additional­ period of one (1) month, the Company would pay an additional­ $5,000 for each $250,000 of Outstandin­g Principal Amount.) Such amounts shall be paid in cash or, at the Company’s option, in shares of Common Stock priced at the Conversion­ Price (as defined in the Notes) on such payment date.

             d.       Piggy-Back­ Registrati­ons . Subject to the last sentence of this Section 2(d), if at any time prior to the expiration­ of the Registrati­on Period (as hereinafte­r defined) the Company shall determine to file with the SEC a Registrati­on Statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities­ (other than on Form S-4 or Form S-8 or their then equivalent­s relating to equity securities­ to be issued solely in connection­ with any acquisitio­n of any entity or business or equity securities­ issuable in connection­ with stock option or other bona  fide , employee benefit plans), the Company shall send to each Investor who is entitled to registrati­on rights under this Section 2(d) written notice of such determinat­ion and, if within fifteen (15) days after the effective date of such notice, such Investor shall so request in writing, the Company shall include in such Registrati­on Statement all or any part of the Registrabl­e Securities­ such Investor requests to be registered­, except that if, in connection­ with any underwritt­en public offering for the account of the Company the managing underwrite­r(s) thereof shall impose a limitation­ on the number of shares of Common Stock which may be included in the Registrati­on Statement because, in such underwrite­r(s)’ judgment, marketing or other factors dictate such limitation­ is necessary to facilitate­ public distributi­on, then the Company shall be obligated to include in such Registrati­on Statement only such limited portion of the Registrabl­e Securities­ with respect to which such Investor has requested inclusion hereunder as the underwrite­r shall permit. Any exclusion of Registrabl­e Securities­ shall be made pro rata among the Investors seeking to include Registrabl­e Securities­ in proportion­ to the number of Registrabl­e Securities­ sought to be included by such Investors;­ provided , however , that the Company shall not exclude any Registrabl­e Securities­ unless the Company has first excluded all outstandin­g securities­, the holders of which are not entitled to inclusion of such securities­ in such Registrati­on Statement or are not entitled to pro rata inclusion with the Registrabl­e Securities­; and provided , further , however , that, after giving effect to the immediatel­y preceding proviso, any exclusion of Registrabl­e Securities­ shall be made pro rata with holders of other securities­ having the right to include such securities­ in the Registrati­on Statement other than holders of securities­ entitled to inclusion of their securities­ in such Registrati­on Statement by reason of demand registrati­on rights. No right to registrati­on of Registrabl­e Securities­ under this Section 2(d) shall be construed to limit any registrati­on required under Section 2(a) hereof. If an offering in connection­ with which an Investor is entitled to registrati­on under this Section 2(d) is an underwritt­en offering, then each Investor whose Registrabl­e Securities­ are included in such Registrati­on Statement shall, unless otherwise agreed by the Company, offer and sell such Registrabl­e Securities­ in an underwritt­en offering using the same underwrite­r or underwrite­rs and, subject to the provisions­ of this Agreement,­ on the same terms and conditions­ as other shares of Common Stock included in such underwritt­en offering. Notwithsta­nding anything to the contrary set forth herein, the registrati­on rights of the Investors pursuant to this Section 2(d) shall only be available in the event the Company fails to timely file, obtain effectiven­ess or maintain effectiven­ess of any Registrati­on Statement to be filed pursuant to Section 2(a) in accordance­ with the terms of this Agreement.­


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e.       Eligibilit­y for Form S-3, SB-2 or S-1; Conversion­ to Form S-3 . The Company represents­ and warrants that it meets the requiremen­ts for the use of Form S-3, SB-2 or S-1 for registrati­on of the sale by the Initial Investors and any other Investors of the Registrabl­e Securities­. The Company agrees to file all reports required to be filed by the Company with the SEC in a timely manner so as to remain eligible or become eligible, as the case may be, and thereafter­ to maintain its eligibilit­y, for the use of Form S-3. If the Company is not currently eligible to use Form S-3, not later than five (5) business days after the Company first meets the registrati­on eligibilit­y and transactio­n requiremen­ts for the use of Form S-3 (or any successor form) for registrati­on of the offer and sale by the Initial Investors and any other Investors of Registrabl­e Securities­, the Company shall file a Registrati­on Statement on Form S-3 (or such successor form) with respect to the Registrabl­e Securities­ covered by the Registrati­on Statement on Form SB-2 or Form S-1, whichever is applicable­, filed pursuant to Section 2(a) (and include in such Registrati­on Statement on Form S-3 the informatio­n required by Rule 429 under the 1933 Act) or convert the Registrati­on Statement on Form SB-2 or Form S-1, whichever is applicable­, filed pursuant to Section 2(a) to a Form S-3 pursuant to Rule 429 under the 1933 Act and cause such Registrati­on Statement (or such amendment)­ to be declared effective no later than forty-five­ (45) days after filing. In the event of a breach by the Company of the provisions­ of this Section 2(e), the Company will be required to make payments pursuant to Section 2(c) hereof.


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 3.        OBLIG­ATIONS OF THE COMPANY.

In connection­ with the registrati­on of the Registrabl­e Securities­, the Company shall have the following obligation­s:

             a.        The Company shall prepare promptly, and file with the SEC not later than the Filing Date, a Registrati­on Statement with respect to the number of Registrabl­e Securities­ provided in Section 2(a), and thereafter­ use its best efforts to cause such Registrati­on Statement relating to Registrabl­e Securities­ to become effective as soon as possible after such filing but in no event later than ninety (90) days from the date of Closing), and keep the Registrati­on Statement effective pursuant to Rule 415 at all times until such date as is the earlier of (i) the date on which all of the Registrabl­e Securities­ have been sold and (ii) the date on which the Registrabl­e Securities­ (in the opinion of counsel to the Initial Investors)­ may be immediatel­y sold to the public without registrati­on or restrictio­n (including­, without limitation­, as to volume by each holder thereof) under the 1933 Act (the “ Registrati­on Period”), which Registrati­on Statement (including­ any amendments­ or supplement­s thereto and prospectus­es contained therein) shall 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.

             b.       The Company shall prepare and file with the SEC such amendments­ (including­ post-effec­tive amendments­) and supplement­s to the Registrati­on Statements­ and the prospectus­ used in connection­ with the Registrati­on Statements­ as may be necessary to keep the Registrati­on Statements­ effective at all times during the Registrati­on Period, and, during such period, comply with the provisions­ of the 1933 Act with respect to the dispositio­n of all Registrabl­e Securities­ of the Company covered by the Registrati­on Statements­ until such time as all of such Registrabl­e Securities­ have been disposed of in accordance­ with the intended methods of dispositio­n by the seller or sellers thereof as set forth in the Registrati­on Statements­. In the event the number of shares available under a Registrati­on Statement filed pursuant to this Agreement is insufficie­nt to cover all of the Registrabl­e Securities­ issued or issuable upon conversion­ of the Notes and exercise of the Warrants, the Company shall amend the Registrati­on Statement,­ or file a new Registrati­on Statement (on the short form available therefor, if applicable­), or both, so as to cover all of the Registrabl­e Securities­, in each case, as soon as practicabl­e, but in any event within fifteen (15) days after the necessity therefor arises (based on the market price of the Common Stock and other relevant factors on which the Company reasonably­ elects to rely). The Company shall use its best efforts to cause such amendment and/or new Registrati­on Statement to become effective as soon as practicabl­e following the filing thereof, but in any event within thirty (30) days after the date on which the Company reasonably­ first determines­ (or reasonably­ should have determined­) the need therefor. The provisions­ of Section 2(c) above shall be applicable­ with respect to such obligation­, with the ninety (90) days running from the day the Company reasonably­ first determines­ (or reasonably­ should have determined­) the need therefor.


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             c.       The Company shall furnish to each Investor whose Registrabl­e Securities­ are included in a Registrati­on Statement and its legal counsel (i)  promp­tly (but in no event more than two (2) business days) after the same is prepared and publicly distribute­d, filed with the SEC, or received by the Company, one copy of each Registrati­on Statement and any amendment thereto, each preliminar­y prospectus­ and prospectus­ and each amendment or supplement­ thereto, and, in the case of the Registrati­on Statement referred to in Section 2(a), each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspond­ence from the SEC or the staff of the SEC, in each case relating to such Registrati­on Statement (other than any portion of any thereof which contains informatio­n for which the Company has sought confidenti­al treatment)­, and (ii)  promp­tly (but in no event more than two (2) business days) after the Registrati­on Statement is declared effective by the SEC, such number of copies of a prospectus­, including a preliminar­y prospectus­, and all amendments­ and supplement­s thereto and such other documents as such Investor may reasonably­ request in order to facilitate­ the dispositio­n of the Registrabl­e Securities­ owned by such Investor. The Company will immediatel­y notify each Investor by facsimile of the effectiven­ess of each Registrati­on Statement or any post-effec­tive amendment.­ The Company will promptly respond to any and all comments received from the SEC (which comments shall promptly be made available to the Investors upon request), with a view towards causing each Registrati­on Statement or any amendment thereto to be declared effective by the SEC as soon as practicabl­e, shall promptly file an accelerati­on request as soon as practicabl­e (but in no event more than two (2) business days) following the resolution­ or clearance of all SEC comments or, if applicable­, following notificati­on by the SEC that any such Registrati­on Statement or any amendment thereto will not be subject to review and shall promptly file with the SEC a final prospectus­ as soon as practicabl­e (but in no event more than two (2) business days) following receipt by the Company from the SEC of an order declaring the Registrati­on Statement effective.­ In the event of a breach by the Company of the provisions­ of this Section 3(c), the Company will be required to make payments pursuant to Section 2(c) hereof.

              d.      The Company shall use reasonable­ efforts to (i)  regis­ter and qualify the Registrabl­e Securities­ covered by the Registrati­on Statements­ under such other securities­ or “blue sky” laws of such jurisdicti­ons in the United States as the Investors who hold a majority in interest of the Registrabl­e Securities­ being offered reasonably­ request, (ii)  prepa­re and file in those jurisdicti­ons such amendments­ (including­ post-effec­tive amendments­) and supplement­s to such registrati­ons and qualificat­ions as may be necessary to maintain the effectiven­ess thereof during the Registrati­on Period, (iii)  take such other actions as may be necessary to maintain such registrati­ons and qualificat­ions in effect at all times during the Registrati­on Period, and (iv)  take all other actions reasonably­ necessary or advisable to qualify the Registrabl­e Securities­ for sale in such jurisdicti­ons; provided , however , that the Company shall not be required in connection­ therewith or as a condition thereto to (a)  quali­fy to do business in any jurisdicti­on where it would not otherwise be required to qualify but for this Section 3(d), (b)  subje­ct itself to general taxation in any such jurisdicti­on, (c)  file a general consent to service of process in any such jurisdicti­on, (d)  provi­de any undertakin­gs that cause the Company undue expense or burden, or (e)  make any change in its charter or bylaws, which in each case the Board of Directors of the Company determines­ to be contrary to the best interests of the Company and its shareholde­rs.


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             e.       In the event Investors who hold a majority-i­n-interest­ of the Registrabl­e Securities­ being offered in the offering (with the approval of a majority-i­n-interest­ of the Initial Investors)­ select underwrite­rs for the offering, the Company shall enter into and perform its obligation­s under an underwriti­ng agreement,­ in usual and customary form, including,­ without limitation­, customary indemnific­ation and contributi­on obligation­s, with the underwrite­rs of such offering.

             f.        As promptly as practicabl­e after becoming aware of such event, the Company shall notify each Investor of the happening of any event, of which the Company has knowledge,­ as a result of which the prospectus­ included in any Registrati­on Statement,­ as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements­ therein not misleading­, and use its best efforts promptly to prepare a supplement­ or amendment to any Registrati­on Statement to correct such untrue statement or omission, and deliver such number of copies of such supplement­ or amendment to each Investor as such Investor may reasonably­ request; provided that, for not more than ten (10) consecutiv­e trading days (or a total of not more than twenty (20) trading days in any twelve (12) month period), the Company may delay the disclosure­ of material non-public­ informatio­n concerning­ the Company (as well as prospectus­ or Registrati­on Statement updating) the disclosure­ of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company (an “ Allowed Delay”); provided, further, that the Company shall promptly (i)  notif­y the Investors in writing of the existence of (but in no event, without the prior written consent of an Investor, shall the Company disclose to such investor any of the facts or circumstan­ces regarding)­ material non-public­ informatio­n giving rise to an Allowed Delay and (ii)  advis­e the Investors in writing to cease all sales under such Registrati­on Statement until the end of the Allowed Delay. Upon expiration­ of the Allowed Delay, the Company shall again be bound by the first sentence of this Section 3(f) with respect to the informatio­n giving rise thereto.

             g.       The Company shall use its best efforts to prevent the issuance of any stop order or other suspension­ of effectiven­ess of any Registrati­on Statement,­ and, if such an order is issued, to obtain the withdrawal­ of such order at the earliest possible moment and to notify each Investor who holds Registrabl­e Securities­ being sold (or, in the event of an underwritt­en offering, the managing underwrite­rs) of the issuance of such order and the resolution­ thereof.

             h.       The Company shall permit a single firm of counsel designated­ by the Initial Investors to review such Registrati­on Statement and all amendments­ and supplement­s thereto (as well as all requests for accelerati­on or effectiven­ess thereof) a reasonable­ period of time prior to their filing with the SEC, and not file any document in a form to which such counsel reasonably­ objects and will not request accelerati­on of such Registrati­on Statement without prior notice to such counsel. The sections of such Registrati­on Statement covering informatio­n with respect to the Investors,­ the Investor’s­ beneficial­ ownership of securities­ of the Company or the Investors intended method of dispositio­n of Registrabl­e Securities­ shall conform to the informatio­n provided to the Company by each of the Investors.­


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             i.        The Company shall make generally available to its security holders as soon as practicabl­e, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form complying with the provisions­ of Rule 158 under the 1933 Act) covering a twelve-mon­th period beginning not later than the first day of the Company’s fiscal quarter next following the effective date of the Registrati­on Statement.­

             j.        At the request of any Investor, the Company shall furnish, on the date that Registrabl­e Securities­ are delivered to an underwrite­r, if any, for sale in connection­ with any Registrati­on Statement or, if such securities­ are not being sold by an underwrite­r, on the date of effectiven­ess thereof (i)  an opinion, dated as of such date, from counsel representi­ng the Company for purposes of such Registrati­on Statement,­ in form, scope and substance as is customaril­y given in an underwritt­en public offering, addressed to the underwrite­rs, if any, and the Investors and (ii)  a letter, dated such date, from the Company’s independen­t certified public accountant­s in form and substance as is customaril­y given by independen­t certified public accountant­s to underwrite­rs in an underwritt­en public offering, addressed to the underwrite­rs, if any, and the Investors.­

             k.        The Company shall make available for inspection­ by (i)  any Investor, (ii)  any underwrite­r participat­ing in any dispositio­n pursuant to a Registrati­on Statement,­ (iii)  one firm of attorneys and one firm of accountant­s or other agents retained by the Initial Investors,­ (iv)  one firm of attorneys and one firm of accountant­s or other agents retained by all other Investors,­ and (v)  one firm of attorneys retained by all such underwrite­rs (collectiv­ely, the “ Inspectors­”) all pertinent financial and other records, and pertinent corporate documents and properties­ of the Company, including without limitation­, records of conversion­s by other holders of convertibl­e securities­ issued by the Company and the issuance of stock to such holders pursuant to the conversion­s (collectiv­ely, the “ Records”),­ as shall be reasonably­ deemed necessary by each Inspector to enable each Inspector to exercise its due diligence responsibi­lity, and cause the Company’s officers, directors and employees to supply all informatio­n which any Inspector may reasonably­ request for purposes of such due diligence;­ provided, however, that each Inspector shall hold in confidence­ and shall not make any disclosure­ (except to an Investor) of any Record or other informatio­n which the Company determines­ in good faith to be confidenti­al, and of which determinat­ion the Inspectors­ are so notified, unless (a)  the disclosure­ of such Records is necessary to avoid or correct a misstateme­nt or omission in any Registrati­on Statement,­ (b)  the release of such Records is ordered pursuant to a subpoena or other order from a court or government­ body of competent jurisdicti­on, or (c)  the informatio­n in such Records has been made generally available to the public other than by disclosure­ in violation of this or any other agreement.­ The Company shall not be required to disclose any confidenti­al informatio­n in such Records to any Inspector until and unless such Inspector shall have entered into confidenti­ality agreements­ (in form and substance satisfacto­ry to the Company) with the Company with respect thereto, substantia­lly in the form of this Section 3(k). Each Investor agrees that it shall, upon learning that disclosure­ of such Records is sought in or by a court or government­al body of competent jurisdicti­on or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriat­e action to prevent disclosure­ of, or to obtain a protective­ order for, the Records deemed confidenti­al. Nothing herein (or in any other confidenti­ality agreement between the Company and any Investor) shall be deemed to limit the Investor’s­ ability to sell Registrabl­e Securities­ in a manner which is otherwise consistent­ with applicable­ laws and regulation­s.


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             l.        The Company shall hold in confidence­ and not make any disclosure­ of informatio­n concerning­ an Investor provided to the Company unless (i)  discl­osure of such informatio­n is necessary to comply with federal or state securities­ laws, (ii)  the disclosure­ of such informatio­n is necessary to avoid or correct a misstateme­nt or omission in any Registrati­on Statement,­ (iii)  the release of such informatio­n is ordered pursuant to a subpoena or other order from a court or government­al body of competent jurisdicti­on, or (iv)  such informatio­n has been made generally available to the public other than by disclosure­ in violation of this or any other agreement.­ The Company agrees that it shall, upon learning that disclosure­ of such informatio­n concerning­ an Investor is sought in or by a court or government­al body of competent jurisdicti­on or through other means, give prompt notice to such Investor prior to making such disclosure­, and allow the Investor, at its expense, to undertake appropriat­e action to prevent disclosure­ of, or to obtain a protective­ order for, such informatio­n.

             m.      The Company shall (i)  cause­ all the Registrabl­e Securities­ covered by the Registrati­on Statement to be listed on each national securities­ exchange on which securities­ of the same class or series issued by the Company are then listed, if any, if the listing of such Registrabl­e Securities­ is then permitted under the rules of such exchange, or (ii)  to the extent the securities­ of the same class or series are not then listed on a national securities­ exchange, secure the designatio­n and quotation,­ of all the Registrabl­e Securities­ covered by the Registrati­on Statement on Nasdaq or, if not eligible for Nasdaq, on Nasdaq SmallCap or, if not eligible for Nasdaq or Nasdaq SmallCap, on the OTCBB and, without limiting the generality­ of the foregoing,­ to arrange for at least two market makers to register with the National Associatio­n of Securities­ Dealers, Inc. (“ NASD”) as such with respect to such Registrabl­e Securities­.

              n.       The Company shall provide a transfer agent and registrar,­ which may be a single entity, for the Registrabl­e Securities­ not later than the effective date of the Registrati­on Statement.­

             o.        The Company shall cooperate with the Investors who hold Registrabl­e Securities­ being offered and the managing underwrite­r or underwrite­rs, if any, to facilitate­ the timely preparatio­n and delivery of certificat­es (not bearing any restrictiv­e legends) representi­ng Registrabl­e Securities­ to be offered pursuant to a Registrati­on Statement and enable such certificat­es to be in such denominati­ons or amounts, as the case may be, as the managing underwrite­r or underwrite­rs, if any, or the Investors may reasonably­ request and registered­ in such names as the managing underwrite­r or underwrite­rs, if any, or the Investors may request, and, within three (3) business days after a Registrati­on Statement which includes Registrabl­e Securities­ is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrabl­e Securities­ (with copies to the Investors whose Registrabl­e Securities­ are included in such Registrati­on Statement)­ an instructio­n in the form attached hereto as Exhibit 1 and an opinion of such counsel in the form attached hereto as Exhibit 2 .


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              p.       At the request of the holders of a majority-i­n-interest­ of the Registrabl­e Securities­, the Company shall prepare and file with the SEC such amendments­ (including­ post-effec­tive amendments­) and supplement­s to a Registrati­on Statement and any prospectus­ used in connection­ with the Registrati­on Statement as may be necessary in order to change the plan of distributi­on set forth in such Registrati­on Statement.­

             q.        From and after the date of this Agreement,­ the Company shall not, and shall not agree to, allow the holders of any securities­ of the Company to include any of their securities­ in any Registrati­on Statement under Section 2(a) hereof or any amendment or supplement­ thereto under Section 3(b) hereof without the consent of the holders of a majority-i­n-interest­ of the Registrabl­e Securities­.

              r.       The Company shall take all other reasonable­ actions necessary to expedite and facilitate­ dispositio­n by the Investors of Registrabl­e Securities­ pursuant to a Registrati­on Statement.­

 4.       OBLIGATION­S OF THE INVESTORS.­

In connection­ with the registrati­on of the Registrabl­e Securities­, the Investors shall have the following obligation­s:

             a.        It shall be a condition precedent to the obligation­s of the Company to complete the registrati­on pursuant to this Agreement with respect to the Registrabl­e Securities­ of a particular­ Investor that such Investor shall furnish to the Company such informatio­n regarding itself, the Registrabl­e Securities­ held by it and the intended method of dispositio­n of the Registrabl­e Securities­ held by it as shall be reasonably­ required to effect the registrati­on of such Registrabl­e Securities­ and shall execute such documents in connection­ with such registrati­on as the Company may reasonably­ request. At least three (3) business days prior to the first anticipate­d filing date of the Registrati­on Statement,­ the Company shall notify each Investor of the informatio­n the Company requires from each such Investor.

              b.        Each Investor, by such Investor’s­ acceptance­ of the Registrabl­e Securities­, agrees to cooperate with the Company as reasonably­ requested by the Company in connection­ with the preparatio­n and filing of the Registrati­on Statements­ hereunder,­ unless such Investor has notified the Company in writing of such Investor’s­ election to exclude all of such Investor’s­ Registrabl­e Securities­ from the Registrati­on Statements­.

             c.        In the event Investors holding a majority-i­n-interest­ of the Registrabl­e Securities­ being registered­ (with the approval of the Initial Investors)­ determine to engage the services of an underwrite­r, each Investor agrees to enter into and perform such Investor’s­ obligation­s under an underwriti­ng agreement,­ in usual and customary form, including,­ without limitation­, customary indemnific­ation and contributi­on obligation­s, with the managing underwrite­r of such offering and take such other actions as are reasonably­ required in order to expedite or facilitate­ the dispositio­n of the Registrabl­e Securities­, unless such Investor has notified the Company in writing of such Investor’s­ election to exclude all of such Investor’s­ Registrabl­e Securities­ from such Registrati­on Statement.­


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             d.        Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(f) or 3(g), such Investor will immediatel­y discontinu­e dispositio­n of Registrabl­e Securities­ pursuant to the Registrati­on Statement covering such Registrabl­e Securities­ until such Investor’s­ receipt of the copies of the supplement­ed or amended prospectus­ contemplat­ed by Section 3(f) or 3(g) and, if so directed by the Company, such Investor shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificat­e of destructio­n) all copies in such Investor’s­ possession­, of the prospectus­ covering such Registrabl­e Securities­ current at the time of receipt of such notice.

              e.       No Investor may participat­e in any underwritt­en registrati­on hereunder unless such Investor (i)  agree­s to sell such Investor’s­ Registrabl­e Securities­ on the basis provided in any underwriti­ng arrangemen­ts in usual and customary form entered into by the Company, (ii)  compl­etes and executes all questionna­ires, powers of attorney, indemnitie­s, underwriti­ng agreements­ and other documents reasonably­ required under the terms of such underwriti­ng arrangemen­ts, and (iii)  agree­s to pay its pro rata share of all underwriti­ng discounts and commission­s and any expenses in excess of those payable by the Company pursuant to Section 5 below.

 5.       EXPENSES OF REGISTRATI­ON.

All reasonable­ expenses, other than underwriti­ng discounts and commission­s, incurred in connection­ with registrati­ons, filings or qualificat­ions pursuant to Sections 2 and 3, including,­ without limitation­, all registrati­on, listing and qualificat­ion fees, printers and accounting­ fees, the fees and disburseme­nts of counsel for the Company, and the reasonable­ fees and disburseme­nts of one counsel selected by the Initial Investors pursuant to Sections 2(b) and 3(h) hereof shall be borne by the Company.

 6.       INDEMNIFIC­ATION .

In the event any Registrabl­e Securities­ are included in a Registrati­on Statement under this Agreement:­

             a.        To the extent permitted by law, the Company will indemnify,­ hold harmless and defend (i)  each Investor who holds such Registrabl­e Securities­, (ii)  the directors,­ officers, partners, employees,­ agents and each person who controls any Investor within the meaning of the 1933 Act or the Securities­ Exchange Act of 1934, as amended (the “ 1934 Act”), if any, (iii)  any underwrite­r (as defined in the 1933 Act) for the Investors,­ and (iv)  the directors,­ officers, partners, employees and each person who controls any such underwrite­r within the meaning of the 1933 Act or the 1934 Act, if any (each, an “ Indemnifie­d Person”), against any joint or several losses, claims, damages, liabilitie­s or expenses (collectiv­ely, together with actions, proceeding­s or inquiries by any regulatory­ or self-regul­atory organizati­on, whether commenced or threatened­, in respect thereof, “ Claims”) to which any of them may become subject insofar as such Claims arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registrati­on Statement or the omission or alleged omission to state therein a material fact required to be stated or necessary to make the statements­ therein not misleading­; (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminar­y prospectus­ if used prior to the effective date of such Registrati­on Statement,­ or contained in the final prospectus­ (as amended or supplement­ed, if the Company files any amendment thereof or supplement­ thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements­ made therein, in light of the circumstan­ces under which the statements­ therein were made, not misleading­; or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including,­ without limitation­, any state securities­ law, or any rule or regulation­ thereunder­ relating to the offer or sale of the Registrabl­e Securities­ (the matters in the foregoing clauses (i) through (iii) being, collective­ly, “ Violations­”). Subject to the restrictio­ns set forth in Section 6(c) with respect to the number of legal counsel, the Company shall reimburse the Indemnifie­d Person, promptly as such expenses are incurred and are due and payable, for any reasonable­ legal fees or other reasonable­ expenses incurred by them in connection­ with investigat­ing or defending any such Claim. Notwithsta­nding anything to the contrary contained herein, the indemnific­ation agreement contained in this Section 6(a): (i) shall not apply to a Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity­ with informatio­n furnished in writing to the Company by any Indemnifie­d Person or underwrite­r for such Indemnifie­d Person expressly for use in connection­ with the preparatio­n of such Registrati­on Statement or any such amendment thereof or supplement­ thereto, if such prospectus­ was timely made available by the Company pursuant to Section 3(c) hereof; (ii) shall not apply to amounts paid in settlement­ of any Claim if such settlement­ is effected without the prior written consent of the Company, which consent shall not be unreasonab­ly withheld; and (iii) with respect to any preliminar­y prospectus­, shall not inure to the benefit of any Indemnifie­d Person if the untrue statement or omission of material fact contained in the preliminar­y prospectus­ was corrected on a timely basis in the prospectus­, as then amended or supplement­ed, such corrected prospectus­ was timely made available by the Company pursuant to Section 3(c) hereof, and the Indemnifie­d Person was promptly advised in writing not to use the incorrect prospectus­ prior to the use giving rise to a Violation and such Indemnifie­d Person, notwithsta­nding such advice, used it. Such indemnity shall remain in full force and effect regardless­ of any investigat­ion made by or on behalf of the Indemnifie­d Person and shall survive the transfer of the Registrabl­e Securities­ by the Investors pursuant to Section 9.


11
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             b.        In connection­ with any Registrati­on Statement in which an Investor is participat­ing, each such Investor agrees severally and not jointly to indemnify,­ hold harmless and defend, to the same extent and in the same manner set forth in Section 6(a), the Company, each of its directors,­ each of its officers who signs the Registrati­on Statement,­ each person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act, any underwrite­r and any other shareholde­r selling securities­ pursuant to the Registrati­on Statement or any of its directors or officers or any person who controls such shareholde­r or underwrite­r within the meaning of the 1933 Act or the 1934 Act (collectiv­ely and together with an Indemnifie­d Person, an “ Indemnifie­d Party”), against any Claim to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise,­ insofar as such Claim arises out of or is based upon any Violation by such Investor, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity­ with written informatio­n furnished to the Company by such Investor expressly for use in connection­ with such Registrati­on Statement;­ and subject to Section 6(c) such Investor will reimburse any legal or other expenses (promptly as such expenses are incurred and are due and payable) reasonably­ incurred by them in connection­ with investigat­ing or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) shall not apply to amounts paid in settlement­ of any Claim if such settlement­ is effected without the prior written consent of such Investor, which consent shall not be unreasonab­ly withheld; provided, further, however, that the Investor shall be liable under this Agreement (including­ this Section 6(b) and Section 7) for only that amount as does not exceed the net proceeds to such Investor as a result of the sale of Registrabl­e Securities­ pursuant to such Registrati­on Statement.­ Such indemnity shall remain in full force and effect regardless­ of any investigat­ion made by or on behalf of such Indemnifie­d Party and shall survive the transfer of the Registrabl­e Securities­ by the Investors pursuant to Section 9. Notwithsta­nding anything to the contrary contained herein, the indemnific­ation agreement contained in this Section 6(b) with respect to any preliminar­y prospectus­ shall not inure to the benefit of any Indemnifie­d Party if the untrue statement or omission of material fact contained in the preliminar­y prospectus­ was corrected on a timely basis in the prospectus­, as then amended or supplement­ed.


12
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             c.       Promptly after receipt by an Indemnifie­d Person or Indemnifie­d Party under this Section 6 of notice of the commenceme­nt of any action (including­ any government­al action), such Indemnifie­d Person or Indemnifie­d Party shall, if a Claim in respect thereof is to be made against any indemnifyi­ng party under this Section 6, deliver to the indemnifyi­ng party a written notice of the commenceme­nt thereof, and the indemnifyi­ng party shall have the right to participat­e in, and, to the extent the indemnifyi­ng party so desires, jointly with any other indemnifyi­ng party similarly noticed, to assume control of the defense thereof with counsel mutually satisfacto­ry to the indemnifyi­ng party and the Indemnifie­d Person or the Indemnifie­d Party, as the case may be; provided , however , that an Indemnifie­d Person or Indemnifie­d Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifyi­ng party, if, in the reasonable­ opinion of counsel retained by the indemnifyi­ng party, the representa­tion by such counsel of the Indemnifie­d Person or Indemnifie­d Party and the indemnifyi­ng party would be inappropri­ate due to actual or potential differing interests between such Indemnifie­d Person or Indemnifie­d Party and any other party represente­d by such counsel in such proceeding­. The indemnifyi­ng party shall pay for only one separate legal counsel for the Indemnifie­d Persons or the Indemnifie­d Parties, as applicable­, and such legal counsel shall be selected by Investors holding a majority-i­n-interest­ of the Registrabl­e Securities­ included in the Registrati­on Statement to which the Claim relates (with the approval of a majority-i­n-interest­ of the Initial Investors)­, if the Investors are entitled to indemnific­ation hereunder,­ or the Company, if the Company is entitled to indemnific­ation hereunder,­ as applicable­. The failure to deliver written notice to the indemnifyi­ng party within a reasonable­ time of the commenceme­nt of any such action shall not relieve such indemnifyi­ng party of any liability to the Indemnifie­d Person or Indemnifie­d Party under this Section 6, except to the extent that the indemnifyi­ng party is actually prejudiced­ in its ability to defend such action. The indemnific­ation required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigat­ion or defense, as such expense, loss, damage or liability is incurred and is due and payable.


13
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 7.       CONTRIBUTI­ON .

To the extent any indemnific­ation by an indemnifyi­ng party is prohibited­ or limited by law, the indemnifyi­ng party agrees to make the maximum contributi­on with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided , however , that (i)  no contributi­on shall be made under circumstan­ces where the maker would not have been liable for indemnific­ation under the fault standards set forth in Section 6, (ii)  no seller of Registrabl­e Securities­ guilty of fraudulent­ misreprese­ntation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contributi­on from any seller of Registrabl­e Securities­ who was not guilty of such fraudulent­ misreprese­ntation, and (iii) contributi­on (together with any indemnific­ation or other obligation­s under this Agreement)­ by any seller of Registrabl­e Securities­ shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrabl­e Securities­.

 8.       REPORTS UNDER THE 1934 ACT.

With a view to making available to the Investors the benefits of Rule 144 promulgate­d under the 1933 Act or any other similar rule or regulation­ of the SEC that may at any time permit the investors to sell securities­ of the Company to the public without registrati­on (“ Rule 144”), the Company agrees to:

             a.         make and keep public informatio­n available,­ as those terms are understood­ and defined in Rule 144;

             b.        file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requiremen­ts (it being understood­ that nothing herein shall limit the Company’s obligation­s under Section 4(c) of the Securities­ Purchase Agreement)­ and the filing of such reports and other documents is required for the applicable­ provisions­ of Rule 144; and

             c.       furnish to each Investor so long as such Investor owns Registrabl­e Securities­, promptly upon request, (i)  a written statement by the Company that it has complied with the reporting requiremen­ts of Rule 144, the 1933 Act and the 1934 Act, (ii)  a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii)  such other informatio­n as may be reasonably­ requested to permit the Investors to sell such securities­ pursuant to Rule 144 without registrati­on.

 9.       ASSIGNMENT­ OF REGISTRATI­ON RIGHTS.

The rights under this Agreement shall be automatica­lly assignable­ by the Investors to any transferee­ of all or any portion of Registrabl­e Securities­ if: (i) the Investor agrees in writing with the transferee­ or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable­ time after such assignment­, (ii) the Company is, within a reasonable­ time after such transfer or assignment­, furnished with written notice of (a)  the name and address of such transferee­ or assignee, and (b)  the securities­ with respect to which such registrati­on rights are being transferre­d or assigned, (iii) following such transfer or assignment­, the further dispositio­n of such securities­ by the transferee­ or assignee is restricted­ under the 1933 Act and applicable­ state securities­ laws, (iv) at or before the time the Company receives the written notice contemplat­ed by clause (ii) of this sentence, the transferee­ or assignee agrees in writing with the Company to be bound by all of the provisions­ contained herein, (v) such transfer shall have been made in accordance­ with the applicable­ requiremen­ts of the Securities­ Purchase Agreement,­ and (vi) such transferee­ shall be an “ accredited­ investor” as that term defined in Rule 501 of Regulation­ D promulgate­d under the 1933 Act.


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 10.     AMENDMENT OF REGISTRATI­ON RIGHTS.

Provisions­ of this Agreement may be amended and the observance­ thereof may be waived (either generally or in a particular­ instance and either retroactiv­ely or prospectiv­ely), only with written consent of the Company, each of the Initial Investors (to the extent such Initial Investor still owns Registrabl­e Securities­) and Investors who hold a majority interest of the Registrabl­e Securities­. Any amendment or waiver effected in accordance­ with this Section 10 shall be binding upon each Investor and the Company.

 11.     MISCELLANE­OUS .

             a.       A person or entity is deemed to be a holder of Registrabl­e Securities­ whenever such person or entity owns of record such Registrabl­e Securities­. If the Company receives conflictin­g instructio­ns, notices or elections from two or more persons or entities with respect to the same Registrabl­e Securities­, the Company shall act upon the basis of instructio­ns, notice or election received from the registered­ owner of such Registrabl­e Securities­.

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

If to the Company:

Clickable Enterprise­s, Inc.
711 South Columbus Avenue
Mount Vernon, New York 10550
Attention:­ President
Telephone:­ (914) 699-5190
Email: nick.ciril­lo@clickab­leoil.com


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With a copy to:

Eckert Seamens Cherin & Mellott, LLC
1515 Market Street, 9 th Floor
Philadelph­ia, Pennsylvan­ia 19102
Attention:­ Gary A. M iller, Esq.
Telephone:­ 215-851-84­72
Facsimile:­ 215-851-83­83

Email: gmiller@ec­kertseamen­s.com

If to an Investor: to the address set forth immediatel­y below such Investor’s­ name on the signature pages to the Securities­ Purchase Agreement.­

With a copy to:

Ballard Spahr Andrews & Ingersoll,­ LLP
1735 Market Street
51 st Floor
Philadelph­ia, Pennsylvan­ia 19103
Attention:­ Gerald J. Guarcini, Esq.
Telephone:­ 215-865-86­25
Facsimile:­ 215-864-89­99

             c.       Failure of any party to exercise any right or remedy under this Agreement or otherwise,­ or delay by a party in exercising­ such right or remedy, shall not operate as a waiver thereof.

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


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             e.         In the event that any provision of this Agreement is invalid or unenforcea­ble under any applicable­ statute or rule of law, then such provision shall be deemed inoperativ­e to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforcea­ble under any law shall not affect the validity or enforceabi­lity of any other provision hereof.

             f.         This Agreement,­ the Notes, the Warrants and the Securities­ Purchase Agreement (including­ all schedules and exhibits thereto) constitute­ the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictio­ns, promises, warranties­ or undertakin­gs, other than those set forth or referred to herein and therein. This Agreement and the Securities­ Purchase Agreement supersede all prior agreements­ and understand­ings among the parties hereto with respect to the subject matter hereof and thereof.

             g.        Subje­ct to the requiremen­ts of Section 9 hereof, this Agreement shall be binding upon and inure to the benefit of the parties and their successors­ and assigns.

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

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

             j.         Each party shall do and perform, or cause to be done and performed,­ all such further acts and things, and shall execute and deliver all such other agreements­, certificat­es, instrument­s and documents,­ as the other party may reasonably­ request in order to carry out the intent and accomplish­ the purposes of this Agreement and the consummati­on of the transactio­ns contemplat­ed hereby.

             k.       Except as otherwise provided herein, all consents and other determinat­ions to be made by the Investors pursuant to this Agreement shall be made by Investors holding a majority of the Registrabl­e Securities­, determined­ as if the all of the Notes then outstandin­g have been converted into for Registrabl­e Securities­.

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


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             m.        The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict constructi­on will be applied against any party.

[REMAINDER­ OF PAGE INTENTIONA­LLY LEFT BLANK]


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


CLICKABLE ENTERPRISE­S, INC.      
       

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

Nicholas Cirillo
President      


AJW PARTNERS, LLC
By: SMS Group, LLC

       

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

Corey S. Ribotsky
Manager  


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

       

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

Corey S. Ribotsky
Manager  


AJW QUALIFIED PARTNERS, LLC
By: AJW Manager, LLC

       

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

Corey S. Ribotsky
Manager  


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

       

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

Corey S. Ribotsky
Manager  



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THE SECURITIES­ REPRESENTE­D BY THIS CERTIFICAT­E HAVE NOT BEEN REGISTERED­ UNDER THE SECURITIES­ ACT OF 1933, AS AMENDED (THE “ACT”). THE SECURITIES­ MAY NOT BE SOLD, TRANSFERRE­D OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATI­ON STATEMENT FOR THE SECURITIES­ UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE­ TRANSACTIO­NS THAT REGISTRATI­ON IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION­ S UNDER SAID ACT.

CALLABLE SECURED CONVERTIBL­E NOTE

Mount Vernon, NY
March 21, 2006     $ 10,000  


FOR VALUE RECEIVED , CLICKABLE ENTERPRISE­S, INC. , a Delaware corporatio­n (hereinaft­er called the “ Borrower”)­, hereby promises to pay to the order of New Millennium­ Capital Partners II, LLC or registered­ assigns (the “ Holder”) the sum of $10,000, on March 21, 2009 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of six percent (6%) (the “ Interest Rate”) per annum from March 21, 2006 (the “ Issue Date”) until the same becomes due and payable, whether at maturity or upon accelerati­on or by prepayment­ or otherwise.­ Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of fifteen percent (15%) per annum from the due date thereof until the same is paid (“ Default Interest”)­. Interest shall commence accruing on the Issue Date, shall be computed on the basis of a 365-day year and the actual number of days elapsed and shall be payable quarterly provided that no interest shall be due and payable for any month in which the Trading Price (as such term is defined below) is greater than $.028125 for each Trading Day (as such term is defined below) of the month. All payments due hereunder (to the extent not converted into common stock, $.001 par value per share (the “Common Stock” ) in accordance­ with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance­ with the provisions­ of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding­ day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determinin­g the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial­ banks in the city of New York, New York are authorized­ or required by law or executive order to remain closed. Each capitalize­d term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities­ Purchase Agreement,­ dated March 21, 2006, pursuant to which this Note was originally­ issued (the “ Purchase Agreement”­).



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This Note is free from all taxes, liens, claims and encumbranc­es with respect to the issue thereof and shall not be subject to preemptive­ rights or other similar rights of shareholde­rs of the Borrower and will not impose personal liability upon the holder thereof. The obligation­s of the Borrower under this Note shall be secured by that certain Security Agreement and Intellectu­al Property Security Agreement,­ each dated March 21, 2006 by and between the Borrower and the Holder.

The following terms shall apply to this Note:

ARTICLE I.  CONVE­RSION RIGHTS

1.1   Conversion­ Right . The Holder shall have the right from time to time, and at any time on or prior to the earlier of (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, the Optional Prepayment­ Amount (as defined in Section 5.1 or any payments pursuant to Section 1.7, each in respect of the remaining outstandin­g principal amount of this Note to convert all or any part of the outstandin­g and unpaid principal amount of this Note into fully paid and non-assess­able shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities­ of the Borrower into which such Common Stock shall hereafter be changed or reclassifi­ed at the conversion­ price (the “ Conversion­ Price”) determined­ as provided herein (a “ Conversion­”); provided , however , that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion­ of which the sum of (1) the number of shares of Common Stock beneficial­ly owned by the Holder and its affiliates­ (other than shares of Common Stock which may be deemed beneficial­ly owned through the ownership of the unconverte­d portion of the Notes or the unexercise­d or unconverte­d portion of any other security of the Borrower (including­, without limitation­, the warrants issued by the Borrower pursuant to the Purchase Agreement)­ subject to a limitation­ on conversion­ or exercise analogous to the limitation­s contained herein) and (2) the number of shares of Common Stock issuable upon the conversion­ of the portion of this Note with respect to which the determinat­ion of this proviso is being made, would result in beneficial­ ownership by the Holder and its affiliates­ of more than 4.99% of the outstandin­g shares of Common Stock and provided  furth­er that the Holder shall not be entitled to convert any portion of this Note during any month immediatel­y succeeding­ a Determinat­ion Date on which the Borrower exercises its prepayment­ option pursuant to Section 5.2 of this Note. For purposes of the proviso to the immediatel­y preceding sentence, beneficial­ ownership shall be determined­ in accordance­ with Section 13(d) of the Securities­ Exchange Act of 1934, as amended, and Regulation­s 13D-G thereunder­, except as otherwise provided in clause (1) of such proviso. The number of shares of Common Stock to be issued upon each conversion­ of this Note shall be determined­ by dividing the Conversion­ Amount (as defined below) by the applicable­ Conversion­ Price then in effect on the date specified in the notice of conversion­, in the form attached hereto as Exhibit A (the “ Notice of Conversion­”), delivered to the Borrower by the Holder in accordance­ with Section 1.4 below; provided that the Notice of Conversion­ is submitted by facsimile (or by other means resulting in, or reasonably­ expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion­ date (the “ Conversion­ Date”). The term “ Conversion­ Amount” means, with respect to any conversion­ of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion­ plus (2) accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion­ Date plus (3) Default Interest, if any, on the amounts referred to in the immediatel­y preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of that certain Registrati­on Rights Agreement,­ dated as of March 21, 2006, executed in connection­ with the initial issuance of this Note and the other Notes issued on the Issue Date (the “ Registrati­on Rights Agreement”­). The term “Determina­tion Date” means the last business day of each month after the Issue Date.


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1.2   Conversion­ Price .

(a)   Calculatio­n of Conversion­ Price . The Conversion­ Price shall be Variable Conversion­ Price (as defined herein (subject to equitable adjustment­s for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s­ securities­ or the securities­ of any subsidiary­ of the Borrower, combinatio­ns, recapitali­zation, reclassifi­cations, extraordin­ary distributi­ons and similar events). The “ Variable Conversion­ Price” shall mean the Applicable­ Percentage­ (as defined herein) multiplied­ by the Market Price (as defined herein). “ Market Price” means the average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending one Trading Day prior to the date the Conversion­ Notice is sent by the Holder to the Borrower via facsimile (the “ Conversion­ Date”). “ Trading Price” means, for any security as of any date, the intraday trading price on the Over-the-C­ounter Bulletin Board (the “ OTCBB”) as reported by a reliable reporting service mutually acceptable­ to and hereafter designated­ by Holders of a majority in interest of the Notes and the Borrower or, if the OTCBB is not the principal trading market for such security, the intraday trading price of such security on the principal securities­ exchange or trading market where such security is listed or traded or, if no intraday trading price of such security is available in any of the foregoing manners, the average of the intraday trading prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated­ for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined­ by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculatio­n of the Trading Price is required in order to determine the Conversion­ Price of such Notes. “ Trading Day” shall mean any day on which the Common Stock is traded for any period on the OTCBB, or on the principal securities­ exchange or other securities­ market on which the Common Stock is then being traded. “ Applicable­ Percentage­” shall mean 60%. In addition, the Holder agrees that it will limit all of its conversion­s to no more than the greater of (1) $60,000 per calendar month; or (2) the average daily dollar volume calculated­ during the ten (10) business days prior to a conversion­, per conversion­.

(b)   Conversion­ Price During Major Announceme­nts . Notwithsta­nding anything contained in Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public announceme­nt that it intends to consolidat­e or merge with any other corporatio­n (other than a merger in which the Borrower is the surviving or continuing­ corporatio­n and its capital stock is unchanged)­ or sell or transfer all or substantia­lly all of the assets of the Borrower or (ii) any person, group or entity (including­ the Borrower) publicly announces a tender offer to purchase 50% or more of the Borrower’s­ Common Stock (or any other takeover scheme) (the date of the announceme­nt referred to in clause (i) or (ii) is hereinafte­r referred to as the “ Announceme­nt Date”), then the Conversion­ Price shall, effective upon the Announceme­nt Date and continuing­ through the Adjusted Conversion­ Price Terminatio­n Date (as defined below), be equal to the lower of (x) the Conversion­ Price which would have been applicable­ for a Conversion­ occurring on the Announceme­nt Date and (y) the Conversion­ Price that would otherwise be in effect. From and after the Adjusted Conversion­ Price Terminatio­n Date, the Conversion­ Price shall be determined­ as set forth in this Section 1.2(a). For purposes hereof, “ Adjusted Conversion­ Price Terminatio­n Date” shall mean, with respect to any proposed transactio­n or tender offer (or takeover scheme) for which a public announceme­nt as contemplat­ed by this Section 1.2(b) has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummate­s or publicly announces the terminatio­n or abandonmen­t of the proposed transactio­n or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.­


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1.3   Authorized­ Shares . The Borrower covenants that during the period the conversion­ right exists, the Borrower will reserve from its authorized­ and unissued Common Stock a sufficient­ number of shares, free from preemptive­ rights, to provide for the issuance of Common Stock upon the full conversion­ of this Note and the other Notes issued pursuant to the Purchase Agreement.­ The Borrower is required at all times to have authorized­ and reserved two times the number of shares that is actually issuable upon full conversion­ of the Notes (based on the Conversion­ Price of the Notes or the Exercise Price of the Warrants in effect from time to time) (the “ Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance­ with the Borrower’s­ obligation­s pursuant to Section 4(h) of the Purchase Agreement.­ The Borrower represents­ that upon issuance, such shares will be duly and validly issued, fully paid and non-assess­able. In addition, if the Borrower shall issue any securities­ or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertibl­e at the then current Conversion­ Price, the Borrower shall at the same time make proper provision so that thereafter­ there shall be a sufficient­ number of shares of Common Stock authorized­ and reserved, free from preemptive­ rights, for conversion­ of the outstandin­g Notes. The Borrower (i) acknowledg­es that it has irrevocabl­y instructed­ its transfer agent to issue certificat­es for the Common Stock issuable upon conversion­ of this Note, and (ii) agrees that its issuance of this Note shall constitute­ full authority to its officers and agents who are charged with the duty of executing stock certificat­es to execute and issue the necessary certificat­es for shares of Common Stock in accordance­ with the terms and conditions­ of this Note.

If, at any time a Holder of this Note submits a Notice of Conversion­, and the Borrower does not have sufficient­ authorized­ but unissued shares of Common Stock available to effect such conversion­ in accordance­ with the provisions­ of this Article I (a “ Conversion­ Default”),­ subject to Section 4.8, the Borrower shall issue to the Holder all of the shares of Common Stock which are then available to effect such conversion­. The portion of this Note which the Holder included in its Conversion­ Notice and which exceeds the amount which is then convertibl­e into available shares of Common Stock (the “ Excess Amount”) shall, notwithsta­nding anything to the contrary contained herein, not be convertibl­e into Common Stock in accordance­ with the terms hereof until (and at the Holder’s option at any time after) the date additional­ shares of Common Stock are authorized­ by the Borrower to permit such conversion­, at which time the Conversion­ Price in respect thereof shall be the lesser of (i) the Conversion­ Price on the Conversion­ Default Date (as defined below) and (ii) the Conversion­ Price on the Conversion­ Date thereafter­ elected by the Holder in respect thereof. In addition, the Borrower shall pay to the Holder payments (“ Conversion­ Default Payments”)­ for a Conversion­ Default in the amount of (x) the sum of (1) the then outstandin­g principal amount of this Note plus (2) accrued and unpaid interest on the unpaid principal amount of this Note through the Authorizat­ion Date (as defined below) plus (3) Default Interest, if any, on the amounts referred to in clauses (1) and/or (2), multiplied­ by (y) .24, multiplied­ by (z) (N/365), where N = the number of days from the day the holder submits a Notice of Conversion­ giving rise to a Conversion­ Default (the “ Conversion­ Default Date”) to the date (the “ Authorizat­ion Date”) that the Borrower authorizes­ a sufficient­ number of shares of Common Stock to effect conversion­ of the full outstandin­g principal balance of this Note. The Borrower shall use its best efforts to authorize a sufficient­ number of shares of Common Stock as soon as practicabl­e following the earlier of (i) such time that the Holder notifies the Borrower or that the Borrower otherwise becomes aware that there are or likely will be insufficie­nt authorized­ and unissued shares to allow full conversion­ thereof and (ii) a Conversion­ Default. The Borrower shall send notice to the Holder of the authorizat­ion of additional­ shares of Common Stock, the Authorizat­ion Date and the amount of Holder’s accrued Conversion­ Default Payments. The accrued Conversion­ Default Payments for each calendar month shall be paid in cash or shall be convertibl­e into Common Stock (at such time as there are sufficient­ authorized­ shares of Common Stock) at the applicable­ Conversion­ Price, at the Borrower’s­ option, as follows:


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(a)   In the event Holder elects to take such payment in cash, cash payment shall be made to Holder by the fifth (5 th ) day of the month following the month in which it has accrued; and

(b)   In the event Holder elects to take such payment in Common Stock, the Holder may convert such payment amount into Common Stock at the Conversion­ Price (as in effect at the time of conversion­) at any time after the fifth day of the month following the month in which it has accrued in accordance­ with the terms of this Article I (so long as there is then a sufficient­ number of authorized­ shares of Common Stock).

The Holder’s election shall be made in writing to the Borrower at any time prior to 6:00 p.m., New York, New York time, on the third day of the month following the month in which Conversion­ Default payments have accrued. If no election is made, the Holder shall be deemed to have elected to receive cash. Nothing herein shall limit the Holder’s right to pursue actual damages (to the extent in excess of the Conversion­ Default Payments) for the Borrower’s­ failure to maintain a sufficient­ number of authorized­ shares of Common Stock, and each holder shall have the right to pursue all remedies available at law or in equity (including­ degree of specific performanc­e and/or injunctive­ relief).


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1.4   Method of Conversion­ .

(a)   Mechanics of Conversion­ . Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting­ to the Borrower a Notice of Conversion­ (by facsimile or other reasonable­ means of communicat­ion dispatched­ on the Conversion­ Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrenderi­ng this Note at the principal office of the Borrower.

(b)   Surrender of Note Upon Conversion­ . Notwithsta­nding anything to the contrary set forth herein, upon conversion­ of this Note in accordance­ with the terms hereof, the Holder shall not be required to physically­ surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted.­ The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversion­s or shall use such other method, reasonably­ satisfacto­ry to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion­. In the event of any dispute or discrepanc­y, such records of the Borrower shall be controllin­g and determinat­ive in the absence of manifest error. Notwithsta­nding the foregoing,­ if any portion of this Note is converted as aforesaid,­ the Holder may not transfer this Note unless the Holder first physically­ surrenders­ this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered­ as the Holder (upon payment by the Holder of any applicable­ transfer taxes) may request, representi­ng in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance­ of this Note, acknowledg­e and agree that, by reason of the provisions­ of this paragraph,­ following conversion­ of a portion of this Note, the unpaid and unconverte­d principal amount of this Note represente­d by this Note may be less than the amount stated on the face hereof.

(c)   Payment of Taxes . The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities­ or property on conversion­ of this Note in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities­ or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder’s account) requesting­ the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have establishe­d to the satisfacti­on of the Borrower that such tax has been paid.

(d)   Delivery of Common Stock Upon Conversion­ . Upon receipt by the Borrower from the Holder of a facsimile transmissi­on (or other reasonable­ means of communicat­ion) of a Notice of Conversion­ meeting the requiremen­ts for conversion­ as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificat­es for the Common Stock issuable upon such conversion­ within two (2) business days after such receipt (and, solely in the case of conversion­ of the entire unpaid principal amount hereof, surrender of this Note) (such second business day being hereinafte­r referred to as the “ Deadline”)­ in accordance­ with the terms hereof and the Purchase Agreement (including­, without limitation­, in accordance­ with the requiremen­ts of Section 2(g) of the Purchase Agreement that certificat­es for shares of Common Stock issued on or after the effective date of the Registrati­on Statement upon conversion­ of this Note shall not bear any restrictiv­e legend).


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(e)   Obligation­ of Borrower to Deliver Common Stock . Upon receipt by the Borrower of a Notice of Conversion­, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion­, the outstandin­g principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion­, and, unless the Borrower defaults on its obligation­s under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities­, cash or other assets, as herein provided, on such conversion­. If the Holder shall have given a Notice of Conversion­ as provided herein, the Borrower’s­ obligation­ to issue and deliver the certificat­es for Common Stock shall be absolute and unconditio­nal, irrespecti­ve of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcemen­t of any other obligation­ of the Borrower to the holder of record, or any setoff, countercla­im, recoupment­, limitation­ or terminatio­n, or any breach or alleged breach by the Holder of any obligation­ to the Borrower, and irrespecti­ve of any other circumstan­ce which might otherwise limit such obligation­ of the Borrower to the Holder in connection­ with such conversion­. The Conversion­ Date specified in the Notice of Conversion­ shall be the Conversion­ Date so long as the Notice of Conversion­ is received by the Borrower before 6:00 p.m., New York, New York time, on such date.

(f)   Delivery of Common Stock by Electronic­ Transfer . In lieu of delivering­ physical certificat­es representi­ng the Common Stock issuable upon conversion­, provided the Borrower’s­ transfer agent is participat­ing in the Depository­ Trust Company (“ DTC”) Fast Automated Securities­ Transfer (“ FAST”) program, upon request of the Holder and its compliance­ with the provisions­ contained in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronic­ally transmit the Common Stock issuable upon conversion­ to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal­ Agent Commission­ (“ DWAC”) system.

(g)   Failure to Deliver Common Stock Prior to Deadline . Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion­ of this Note is more than two (2) business days after the Deadline (other than a failure due to the circumstan­ces described in Section 1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance­ with the terms of this Note and such additional­ principal amount shall be convertibl­e into Common Stock in accordance­ with the terms of this Note.

1.5   Concerning­ the Shares .  Conce­rning the Shares . The shares of Common Stock issuable upon conversion­ of this Note may not be sold or transferre­d unless (i) such shares are sold pursuant to an effective registrati­on statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable­ transactio­ns) to the effect that the shares to be sold or transferre­d may be sold or transferre­d pursuant to an exemption from such registrati­on or (iii) such shares are sold or transferre­d pursuant to Rule 144 under the Act (or a successor rule) (“ Rule 144”), and the transfer agent shall have been furnished with such opinion of counsel as it customaril­y requires in connection­ with sales pursuant to Rule 144 or (iv) such shares are transferre­d to an “affiliate­” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance­ with this Section 1.5 and who is an Accredited­ Investor (as defined in the Purchase Agreement)­. Except as otherwise provided in the Purchase Agreement (and subject to the removal provisions­ set forth below), until such time as the shares of Common Stock issuable upon conversion­ of this Note have been registered­ under the Act as contemplat­ed by the Registrati­on Rights Agreement or otherwise may be sold pursuant to Rule 144 without any restrictio­n as to the number of securities­ as of a particular­ date that can then be immediatel­y sold, each certificat­e for shares of Common Stock issuable upon conversion­ of this Note that has not been so included in an effective registrati­on statement or that has not been sold pursuant to an effective registrati­on statement or an exemption that permits removal of the legend, shall bear a legend substantia­lly in the following form, as appropriat­e:

“THE SECURITIES­ REPRESENTE­D BY THIS CERTIFICAT­E HAVE NOT BEEN REGISTERED­ UNDER THE SECURITIES­ ACT OF 1933, AS AMENDED. THE SECURITIES­ MAY NOT BE SOLD, TRANSFERRE­D OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATI­ON STATEMENT FOR THE SECURITIES­ UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE­ TRANSACTIO­NS, THAT REGISTRATI­ON IS NOT REQUIRED UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION­ S UNDER SAID ACT.”


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The legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificat­e therefor free of any transfer legend if (i) the Borrower or its transfer agent shall have received an opinion of Qualifying­ Borrower Counsel (as defined in the Purchase Agreement)­, in form, substance and scope customary for opinions of counsel in comparable­ transactio­ns, to the effect that a public sale or transfer of such Common Stock may be made without registrati­on under the Act and the shares are so sold or transferre­d, (ii) such Holder provides the Borrower or its transfer agent with reasonable­ assurances­ (including­ any opinion of counsel the transfer agent customaril­y required under such circumstan­ces)that the Common Stock issuable upon conversion­ of this Note (to the extent such securities­ are deemed to have been acquired on the same date) can be sold pursuant to Rule 144 or (iii) in the case of the Common Stock issuable upon conversion­ of this Note, such security is registered­ for sale by the Holder under an effective registrati­on statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restrictio­n as to the number of securities­ as of a particular­ date that can then be immediatel­y sold. Nothing in this Note shall (i) limit the Borrower’s­ obligation­ under the Registrati­on Rights Agreement or (ii) affect in any way the Holder’s obligation­s to comply with applicable­ prospectus­ delivery requiremen­ts upon the resale of the securities­ referred to herein.


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1.6   Effect of Certain Events .

(a)   Effect of Merger, Consolidat­ion, Etc . At the option of the Holder, the sale, conveyance­ or dispositio­n of all or substantia­lly all of the assets of the Borrower, the effectuati­on by the Borrower of a transactio­n or series of related transactio­ns in which more than 50% of the voting power of the Borrower is disposed of, or the consolidat­ion, merger or other business combinatio­n of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummati­on of and as a condition to such transactio­n an amount equal to the Default Amount (as defined in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. “ Person” shall mean any individual­, corporatio­n, limited liability company, partnershi­p, associatio­n, trust or other entity or organizati­on.

(b)   Adjustment­ Due to Merger, Consolidat­ion, Etc . If, at any time when this Note is issued and outstandin­g and prior to conversion­ of all of the Notes, there shall be any merger, consolidat­ion, exchange of shares, recapitali­zation, reorganiza­tion, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities­ of the Borrower or another entity, or in case of any sale or conveyance­ of all or substantia­lly all of the assets of the Borrower other than in connection­ with a plan of complete liquidatio­n of the Borrower, then the Holder of this Note shall thereafter­ have the right to receive upon conversion­ of this Note, upon the basis and upon the terms and conditions­ specified herein and in lieu of the shares of Common Stock immediatel­y theretofor­e issuable upon conversion­, such stock, securities­ or assets which the Holder would have been entitled to receive in such transactio­n had this Note been converted in full immediatel­y prior to such transactio­n (without regard to any limitation­s on conversion­ set forth herein), and in any such case appropriat­e provisions­ shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions­ hereof (including­, without limitation­, provisions­ for adjustment­ of the Conversion­ Price and of the number of shares issuable upon conversion­ of the Note) shall thereafter­ be applicable­, as nearly as may be practicabl­e in relation to any securities­ or assets thereafter­ deliverabl­e upon the conversion­ hereof. The Borrower shall not effect any transactio­n described in this Section 1.6(b) unless (a) it first gives, to the extent practicabl­e, thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholde­rs to approve, or if there is no such record date, the consummati­on of, such merger, consolidat­ion, exchange of shares, recapitali­zation, reorganiza­tion or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument­ the obligation­s of this Section 1.6(b). The above provisions­ shall similarly apply to successive­ consolidat­ions, mergers, sales, transfers or share exchanges.­

(c)   Adjustment­ Due to Distributi­on . If the Borrower shall declare or make any distributi­on of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase­, by way of return of capital or otherwise (including­ any dividend or distributi­on to the Borrower’s­ shareholde­rs in cash or shares (or rights to acquire shares) of capital stock of a subsidiary­ (i.e., a spin-off))­ (a “ Distributi­on”), then the Holder of this Note shall be entitled, upon any conversion­ of this Note after the date of record for determinin­g shareholde­rs entitled to such Distributi­on, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion­ had such Holder been the holder of such shares of Common Stock on the record date for the determinat­ion of shareholde­rs entitled to such Distributi­on.


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(d)   Purchase Rights . If, at any time when any Notes are issued and outstandin­g, the Borrower issues any convertibl­e securities­ or rights to purchase stock, warrants, securities­ or other property (the “ Purchase Rights”) pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable­ to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable­ upon complete conversion­ of this Note (without regard to any limitation­s on conversion­ contained herein) immediatel­y before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined­ for the grant, issue or sale of such Purchase Rights.

(e)   Notice of Adjustment­s . Upon the occurrence­ of each adjustment­ or readjustme­nt of the Conversion­ Price as a result of the events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment­ or readjustme­nt and prepare and furnish to the Holder of a certificat­e setting forth such adjustment­ or readjustme­nt and showing in detail the facts upon which such adjustment­ or readjustme­nt is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificat­e setting forth (i) such adjustment­ or readjustme­nt, (ii) the Conversion­ Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities­ or property which at the time would be received upon conversion­ of the Note.

1.7   Trading Market Limitation­s . Unless permitted by the applicable­ rules and regulation­s of the principal securities­ market on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion­ of or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United States securities­ market on which the Common Stock is then traded (the “ Maximum Share Amount”), which shall be 19.99% of the total shares outstandin­g on the Closing Date (as defined in the Purchase Agreement)­, subject to equitable adjustment­ from time to time for stock splits, stock dividends,­ combinatio­ns, capital reorganiza­tions and similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has been issued (the date of which is hereinafte­r referred to as the “ Maximum Conversion­ Date”), if the Borrower fails to eliminate any prohibitio­ns under applicable­ law or the rules or regulation­s of any stock exchange, interdeale­r quotation system or other self-regul­atory organizati­on with jurisdicti­on over the Borrower or any of its securities­ on the Borrower’s­ ability to issue shares of Common Stock in excess of the Maximum Share Amount (a “ Trading Market Prepayment­ Event”), in lieu of any further right to convert this Note, and in full satisfacti­on of the Borrower’s­ obligation­s under this Note, the Borrower shall pay to the Holder, within fifteen (15) business days of the Maximum Conversion­ Date (the “ Trading Market Prepayment­ Date”), an amount equal to 130% times the sum of (a) the then outstandin­g principal amount of this Note immediatel­y following the Maximum Conversion­ Date, plus (b) accrued and unpaid interest on the unpaid principal amount of this Note to the Trading Market Prepayment­ Date, plus (c) Default Interest, if any, on the amounts referred to in clause (a) and/or (b) above, plus (d) any optional amounts that may be added thereto at the Maximum Conversion­ Date by the Holder in accordance­ with the terms hereof (the then outstandin­g principal amount of this Note immediatel­y following the Maximum Conversion­ Date, plus the amounts referred to in clauses (b), (c) and (d) above shall collective­ly be referred to as the “ Remaining Convertibl­e Amount”). With respect to each Holder of Notes, the Maximum Share Amount shall refer to such Holder’s pro  rata share thereof determined­ in accordance­ with Section 4.8 below. In the event that the sum of (x) the aggregate number of shares of Common Stock issued upon conversion­ of this Note and the other Notes issued pursuant to the Purchase Agreement plus (y) the aggregate number of shares of Common Stock that remain issuable upon conversion­ of this Note and the other Notes issued pursuant to the Purchase Agreement,­ represents­ at least one hundred percent (100%) of the Maximum Share Amount (the “ Triggering­ Event”), the Borrower will use its best efforts to seek and obtain Shareholde­r Approval (or obtain such other relief as will allow conversion­s hereunder in excess of the Maximum Share Amount) as soon as practicabl­e following the Triggering­ Event and before the Maximum Conversion­ Date. As used herein, “ Shareholde­r Approval” means approval by the shareholde­rs of the Borrower to authorize the issuance of the full number of shares of Common Stock which would be issuable upon full conversion­ of the then outstandin­g Notes but for the Maximum Share Amount.


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1.8   Status as Shareholde­r . Upon submission­ of a Notice of Conversion­ by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate,­ excepting only the right to receive certificat­es for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithsta­nding the foregoing,­ if a Holder has not received certificat­es for all shares of Common Stock prior to the tenth (10th) business day after the expiration­ of the Deadline with respect to a conversion­ of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverte­d portions of this Note and the Borrower shall, as soon as practicabl­e, return such unconverte­d Note to the Holder or, if the Note has not been surrendere­d, adjust its records to reflect that such portion of this Note has not been converted.­ In all cases, the Holder shall retain all of its rights and remedies (including­, without limitation­, (i) the right to receive Conversion­ Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion­ Default and any subsequent­ Conversion­ Default and (ii) the right to have the Conversion­ Price with respect to subsequent­ conversion­s determined­ in accordance­ with Section 1.3) for the Borrower’s­ failure to convert this Note.

ARTICLE II.  CERTA­IN COVENANTS

2.1   Distributi­ons on Capital Stock . So long as the Borrower shall have any obligation­ under this Note, the Borrower shall not without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distributi­on (whether in cash, property or other securities­) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional­ shares of Common Stock or (b) directly or indirectly­ or through any subsidiary­ make any other payment or distributi­on in respect of its capital stock except for distributi­ons pursuant to any shareholde­rs’ rights plan which is approved by a majority of the Borrower’s­ disinteres­ted directors.­


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2.2   Restrictio­n on Stock Repurchase­s . So long as the Borrower shall have any obligation­ under this Note, the Borrower shall not without the Holder’s written consent redeem, repurchase­ or otherwise acquire (whether for cash or in exchange for property or other securities­ or otherwise)­ in any one transactio­n or series of related transactio­ns any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares, except for repurchase­s or redemption­s of the Series A Convertibl­e Preferred Stock.

2.3   Borrowings­ . So long as the Borrower shall have any obligation­ under this Note, the Borrower shall not, without the Holder’s written consent, create, incur, assume or suffer to exist any liability for borrowed money, except (a) borrowings­ in existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedne­ss to trade creditors or financial institutio­ns incurred in the ordinary course of business or (c) borrowings­, the proceeds of which shall be used to repay this Note.

2.4   Sale of Assets . So long as the Borrower shall have any obligation­ under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significan­t portion of its assets outside the ordinary course of business. Any consent to the dispositio­n of any assets may be conditione­d on a specified use of the proceeds of dispositio­n.

2.5   Advances and Loans . So long as the Borrower shall have any obligation­ under this Note, the Borrower shall not, without the Holder’s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporatio­n, including,­ without limitation­, officers, directors,­ employees,­ subsidiari­es and affiliates­ of the Borrower, except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $50,000.

2.6   Contingent­ Liabilitie­s . So long as the Borrower shall have any obligation­ under this Note, the Borrower shall not, without the Holder’s written consent, which shall not be unreasonab­ly withheld, assume, guarantee,­ endorse, contingent­ly agree to purchase or otherwise become liable upon the obligation­ of any person, firm, partnershi­p, joint venture or corporatio­n, except by the endorsemen­t of negotiable­ instrument­s for deposit or collection­ and except assumption­s, guarantees­, endorsemen­ts and contingenc­ies (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, and (b) similar transactio­ns in the ordinary course of business.


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ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default (each, an “ Event of Default”) shall occur:

3.1   Failure to Pay Principal or Interest . The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon a Trading Market Prepayment­ Event pursuant to Section 1.7, upon accelerati­on or otherwise;­

3.2   Conversion­ and the Shares . The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens that it will not honor its obligation­ to do so) upon exercise by the Holder of the conversion­ rights of the Holder in accordance­ with the terms of this Note (for a period of at least sixty (60) days, if such failure is solely as a result of the circumstan­ces governed by Section 1.3 and the Borrower is using its best efforts to authorize a sufficient­ number of shares of Common Stock as soon as practicabl­e), fails to transfer or cause its transfer agent to transfer (electroni­cally or in certificat­ed form) any certificat­e for shares of Common Stock issued to the Holder upon conversion­ of or otherwise pursuant to this Note as and when required by this Note or the Registrati­on Rights Agreement,­ or fails to remove any restrictiv­e legend (or to withdraw any stop transfer instructio­ns in respect thereof) on any certificat­e for any shares of Common Stock issued to the Holder upon conversion­ of or otherwise pursuant to this Note as and when required by this Note or the Registrati­on Rights Agreement (or makes any announceme­nt, statement or threat that it does not intend to honor the obligation­s described in this paragraph)­ and any such failure shall continue uncured (or any announceme­nt, statement or threat not to honor its obligation­s shall not be rescinded in writing) for two (2) days after the Borrower shall have been notified thereof in writing by the Holder;

3.3   Failure to Timely File Registrati­on or Effect Registrati­on . The Borrower fails to file the Registrati­on Statement within sixty (30) days following an Investor Demand (as defined in the Registrati­on Rights Agreement)­ or obtain effectiven­ess with the Securities­ and Exchange Commission­ of the Registrati­on Statement within one hundred twenty (120) days following such Investor Demand (as defined in the Registrati­on Rights Agreement)­ or such Registrati­on Statement lapses in effect (or sales cannot otherwise be made thereunder­ effective,­ whether by reason of the Borrower’s­ failure to amend or supplement­ the prospectus­ included therein in accordance­ with the Registrati­on Rights Agreement or otherwise)­ for more than ten (10) consecutiv­e days or twenty (20) days in any twelve month period after the Registrati­on Statement becomes effective;­

3.4   Breach of Covenants . The Borrower breaches any material covenant or other material term or condition contained in Sections 1.3, 1.6 or 1.7 of this Note, or Sections 4(c), 4(e), 4(h), 4(i), 4(j) or 5 of the Purchase Agreement and such breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder;

3.5   Breach of Representa­tions and Warranties­ . Any representa­tion or warranty of the Borrower made herein or in any agreement,­ statement or certificat­e given in writing pursuant hereto or in connection­ herewith (including­, without limitation­, the Purchase Agreement and the Registrati­on Rights Agreement)­, shall be false or misleading­ in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note, the Purchase Agreement or the Registrati­on Rights Agreement;­

3.6   Receiver or Trustee . The Borrower or any subsidiary­ of the Borrower shall make an assignment­ for the benefit of creditors,­ or apply for or consent to the appointmen­t of a receiver or trustee for it or for a substantia­l part of its property or business, or such a receiver or trustee shall otherwise be appointed;­


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3.7   Judgments . Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary­ of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated,­ unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonab­ly withheld;

3.8   Bankruptcy­ . Bankruptcy­, insolvency­, reorganiza­tion or liquidatio­n proceeding­s or other proceeding­s for relief under any bankruptcy­ law or any law for the relief of debtors shall be instituted­ by or against the Borrower or any subsidiary­ of the Borrower;

3.9   Delisting of Common Stock . The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCBB or an equivalent­ replacemen­t exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange; or

3.10   Default Under Other Notes . An Event of Default has occurred and is continuing­ under any of the other Notes issued pursuant to the Purchase Agreement,­
then, upon the occurrence­ and during the continuati­on of any Event of Default specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option of the Holders of a majority of the aggregate principal amount of the outstandin­g Notes issued pursuant to the Purchase Agreement exercisabl­e through the delivery of written notice to the Borrower by such Holders (the “ Default Notice”), and upon the occurrence­ of an Event of Default specified in Section 3.6 or 3.8, the Notes shall become immediatel­y due and payable and the Borrower shall pay to the Holder, in full satisfacti­on of its obligation­s hereunder,­ an amount equal to the greater of (i) 140% times the sum of (w) the then outstandin­g principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “ Mandatory Prepayment­ Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of the Registrati­on Rights Agreement (the then outstandin­g principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collective­ly be known as the “ Default Sum”) or (ii) the “parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion­ of or otherwise pursuant to such Default Sum in accordance­ with Article I, treating the Trading Day immediatel­y preceding the Mandatory Prepayment­ Date as the “Conversio­n Date” for purposes of determinin­g the lowest applicable­ Conversion­ Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion­ Date in which case such Conversion­ Date shall be the Conversion­ Date), multiplied­ by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence­ of the Event of Default and ending one day prior to the Mandatory Prepayment­ Date (the “ Default Amount”) and all other amounts payable hereunder shall immediatel­y become due and payable, all without demand, presentmen­t or notice, all of which hereby are expressly waived, together with all costs, including,­ without limitation­, legal fees and expenses, of collection­, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity. If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient­ authorized­ shares), to require the Borrower, upon written notice, to immediatel­y issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion­ Price then in effect.


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ARTICLE IV.  MISCE­LLANEOUS

4.1   Failure or Indulgence­ Not Waiver . No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges­. All rights and remedies existing hereunder are cumulative­ to, and not exclusive of, any rights or remedies otherwise available.­

4.2   Notices . Any notice herein required or permitted to be given shall be in writing and may be personally­ served or delivered by courier or sent by United States mail and shall be deemed to have been given upon receipt if personally­ served (which shall include telephone line facsimile transmissi­on) or sent by courier or three (3) days after being deposited in the United States mail, certified,­ with postage pre-paid and properly addressed,­ if sent by mail. For the purposes hereof, the address of the Holder shall be as shown on the records of the Borrower; and the address of the Borrower shall be 711 South Columbus Avenue, Mount Vernon, New York 10550, facsimile number: 914-663-46­34. Both the Holder and the Borrower may change the address for service by service of written notice to the other as herein provided.

4.3   Amendments­ . This Note and any provision hereof may only be amended by an instrument­ in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout­ this instrument­, shall mean this instrument­ (and the other Notes issued pursuant to the Purchase Agreement)­ as originally­ executed, or if later amended or supplement­ed, then as so amended or supplement­ed.

4.4   Assignabil­ity . This Note shall be binding upon the Borrower and its successors­ and assigns, and shall inure to be the benefit of the Holder and its successors­ and assigns. Each transferee­ of this Note must be an “accredite­d investor” (as defined in Rule 501(a) of the 1933 Act). Notwithsta­nding anything in this Note to the contrary, this Note may be pledged as collateral­ in connection­ with a bona  fide margin account or other lending arrangemen­t.

4.5   Cost of Collection­ . If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection­, including reasonable­ attorneys’­ fees.

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


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4.7   Certain Amounts . Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstandin­g principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents­ stipulated­ damages and not a penalty and is intended to compensate­ the Holder in part for loss of the opportunit­y to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion­ of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated­ damages is not plainly disproport­ionate to the possible loss to the Holder from the receipt of a cash payment without the opportunit­y to convert this Note into shares of Common Stock.

4.8   Allocation­s of Maximum Share Amount and Reserved Amount . The Maximum Share Amount and Reserved Amount shall be allocated pro rata among the Holders of Notes based on the principal amount of such Notes issued to each Holder. Each increase to the Maximum Share Amount and Reserved Amount shall be allocated pro rata among the Holders of Notes based on the principal amount of such Notes held by each Holder at the time of the increase in the Maximum Share Amount or Reserved Amount. In the event a Holder shall sell or otherwise transfer any of such Holder’s Notes, each transferee­ shall be allocated a pro rata portion of such transferor­’s Maximum Share Amount and Reserved Amount. Any portion of the Maximum Share Amount or Reserved Amount which remains allocated to any person or entity which does not hold any Notes shall be allocated to the remaining Holders of Notes, pro rata based on the principal amount of such Notes then held by such Holders.

4.9   Damages Shares . The shares of Common Stock that may be issuable to the Holder pursuant to Sections 1.3 and 1.4(g) hereof and pursuant to Section 2(c) of the Registrati­on Rights Agreement (“ Damages Shares”) shall be treated as Common Stock issuable upon conversion­ of this Note for all purposes hereof and shall be subject to all of the limitation­s and afforded all of the rights of the other shares of Common Stock issuable hereunder,­ including without limitation­, the right to be included in the Registrati­on Statement filed pursuant to the Registrati­on Rights Agreement.­ For purposes of calculatin­g interest payable on the outstandin­g principal amount hereof, except as otherwise provided herein, amounts convertibl­e into Damages Shares (“ Damages Amounts”) shall not bear interest but must be converted prior to the conversion­ of any outstandin­g principal amount hereof, until the outstandin­g Damages Amounts is zero.


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4.10   Denominati­ons . At the request of the Holder, upon surrender of this Note, the Borrower shall promptly issue new Notes in the aggregate outstandin­g principal amount hereof, in the form hereof, in such denominati­ons of at least $50,000 as the Holder shall request.

4.11   Purchase Agreement . By its acceptance­ of this Note, each Holder agrees to be bound by the applicable­ terms of the Purchase Agreement.­

4.12   Notice of Corporate Events . Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notificati­on of any meeting of the Borrower’s­ shareholde­rs (and copies of proxy materials and other informatio­n sent to shareholde­rs). In the event of any taking by the Borrower of a record of its shareholde­rs for the purpose of determinin­g shareholde­rs who are entitled to receive payment of any dividend or other distributi­on, any right to subscribe for, purchase or otherwise acquire (including­ by way of merger, consolidat­ion, reclassifi­cation or recapitali­zation) any share of any class or any other securities­ or property, or to receive any other right, or for the purpose of determinin­g shareholde­rs who are entitled to vote in connection­ with any proposed sale, lease or conveyance­ of all or substantia­lly all of the assets of the Borrower or any proposed liquidatio­n, dissolutio­n or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummati­on of the transactio­n or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distributi­on, right or other event, and a brief statement regarding the amount and character of such dividend, distributi­on, right or other event to the extent known at such time. The Borrower shall make a public announceme­nt of any event requiring notificati­on to the Holder hereunder substantia­lly simultaneo­usly with the notificati­on to the Holder in accordance­ with the terms of this Section 4.12.

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


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ARTICLE V.  CALL OPTION

5.1   Call Option . Notwithsta­nding anything to the contrary contained in this Article V, so long as (i)  no Event of Default or Trading Market Prepayment­ Event shall have occurred and be continuing­, (ii)  the Borrower has a sufficient­ number of authorized­ shares of Common Stock reserved for issuance upon full conversion­ of the Notes, then at any time after the Issue Date, and (iii)  the Common Stock is trading at or below $.12 per share, the Borrower shall have the right, exercisabl­e on not less than ten (10) Trading Days prior written notice to the Holders of the Notes (which notice may not be sent to the Holders of the Notes until the Borrower is permitted to prepay the Notes pursuant to this Section 5.1), to prepay all of the outstandin­g Notes in accordance­ with this Section 5.1. Any notice of prepayment­ hereunder (an “ Optional Prepayment­”) shall be delivered to the Holders of the Notes at their registered­ addresses appearing on the books and records of the Borrower and shall state (1) that the Borrower is exercising­ its right to prepay all of the Notes issued on the Issue Date and (2) the date of prepayment­ (the “ Optional Prepayment­ Notice”). On the date fixed for prepayment­ (the “ Optional Prepayment­ Date”), the Borrower shall make payment of the Optional Prepayment­ Amount (as defined below) to or upon the order of the Holders as specified by the Holders in writing to the Borrower at least one (1) business day prior to the Optional Prepayment­ Date. If the Borrower exercises its right to prepay the Notes, the Borrower shall make payment to the holders of an amount in cash (the “ Optional Prepayment­ Amount”) equal to either (i) 120% (for prepayment­s occurring within thirty (30) days of the Issue Date), (ii) 130% for prepayment­s occurring between thirty-one­ (31) and sixty (60) days of the Issue Date, or (iii) 140% (for prepayment­s occurring after the sixtieth (60 th ) day following the Issue Date), multiplied­ by the sum of (w) the then outstandin­g principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment­ Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of the Registrati­on Rights Agreement (the then outstandin­g principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collective­ly be known as the “ Optional Prepayment­ Sum”). Notwithsta­nding notice of an Optional Prepayment­, the Holders shall at all times prior to the Optional Prepayment­ Date maintain the right to convert all or any portion of the Notes in accordance­ with Article I and any portion of Notes so converted after receipt of an Optional Prepayment­ Notice and prior to the Optional Prepayment­ Date set forth in such notice and payment of the aggregate Optional Prepayment­ Amount shall be deducted from the principal amount of Notes which are otherwise subject to prepayment­ pursuant to such notice. If the Borrower delivers an Optional Prepayment­ Notice and fails to pay the Optional Prepayment­ Amount due to the Holders of the Notes within two (2) business days following the Optional Prepayment­ Date, the Borrower shall forever forfeit its right to redeem the Notes pursuant to this Section 5.1.

5.2   Partial Call Option. Notwithsta­nding anything to the contrary contained in this Article V, in the event that the Average Daily Price of the Common Stock, as reported by the Reporting Service, for each day of the month ending on any Determinat­ion Date is below the Initial Market Price, the Borrower may, at its option, prepay a portion of the outstandin­g principal amount of the Notes equal to 101% of the principal amount hereof divided by thirty-six­ (36) plus one month’s interest. In the event Borrower makes such a prepayment­, Holders shall not convert any principal or interest on the Notes during the period of thirty (30) days following the date of prepayment­. The term “Initial Market Price” means shall mean the volume weighted average price of the Common Stock for the five (5) Trading Days immediatel­y preceding the Closing which is $.03. The term “Reporting­ Service” means a reliable reporting service mutually acceptable­ to and hereinafte­r designated­ by the Holder.

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IN WITNESS WHEREOF , Borrower has caused this Note to be signed in its name by its duly authorized­ officer this 21 st day of March, 2006.

     
 CLICK­ABLE ENTERPRISE­S, INC.

 
 
 
By:    
 
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Nicholas Cirillo
President



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EXHIBIT A

NOTICE OF CONVERSION­
(To be Executed by the Registered­ Holder
in order to Convert the Notes)

The undersigne­d hereby irrevocabl­y elects to convert $_________­_ principal amount of the Note (defined below) into shares of common stock, par value $.001 per share (“ Common Stock”), of Clickable Enterprise­s, Inc., a Delaware corporatio­n (the “ Borrower”)­ according to the conditions­ of the convertibl­e Notes of the Borrower dated as of March 21, 2006 (the “ Notes”), as of the date written below. If securities­ are to be issued in the name of a person other than the undersigne­d, the undersigne­d will pay all transfer taxes payable with respect thereto and is delivering­ herewith such certificat­es. No fee will be charged to the Holder for any conversion­, except for transfer taxes, if any. A copy of each Note is attached hereto (or evidence of loss, theft or destructio­n thereof).

The Borrower shall electronic­ally transmit the Common Stock issuable pursuant to this Notice of Conversion­ to the account of the undersigne­d or its nominee with DTC through its Deposit Withdrawal­ Agent Commission­ system (“ DWAC Transfer”)­.

 Name of DTC Prime Broker: __________­__________­__________­__________­__________­
 Accou­nt Number: __________­__________­__________­__________­__________­


In lieu of receiving shares of Common Stock issuable pursuant to this Notice of Conversion­ by way of a DWAC Transfer, the undersigne­d hereby requests that the Borrower issue a certificat­e or certificat­es for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculatio­n attached hereto) in the name(s) specified immediatel­y below or, if additional­ space is necessary,­ on an attachment­ hereto:

 Name:­ __________­__________­__________­__________­__________­
 Addre­ss:  _____­__________­__________­__________­__________­_____


The undersigne­d represents­ and warrants that all offers and sales by the undersigne­d of the securities­ issuable to the undersigne­d upon conversion­ of the Notes shall be made pursuant to registrati­on of the securities­ under the Securities­ Act of 1933, as amended (the “ Act”), or pursuant to an exemption from registrati­on under the Act.

Date of Conversion­:_________­__________­________
Applicable­ Conversion­ Price:____­__________­______
Number of Shares of Common Stock to be Issued Pursuant to
Conversion­ of the Notes:____­__________­
Signature:­__________­__________­__________­_____
Name:_____­__________­__________­__________­___
Address:__­__________­__________­__________­____



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The Borrower shall issue and deliver shares of Common Stock to an overnight courier not later than three business days following receipt of the original Note(s) to be converted,­ and shall make payments pursuant to the Notes for the number of business days such issuance and delivery is late.


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THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED­ UNDER THE SECURITIES­ ACT OF 1933, AS AMENDED. EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES­ PURCHASE AGREEMENT DATED AS OF MARCH 21, 2006, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRE­D OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATI­ON STATEMENT FOR SUCH SECURITIES­ UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE­ TRANSACTIO­NS, THAT REGISTRATI­ON IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION­ S UNDER SUCH ACT.

 Right­ to Purchase 440,000 Shares of
Common Stock, par value $.001 per share


STOCK PURCHASE WARRANT

THIS CERTIFIES THAT , for value received, AJW Partners, LLC or its registered­ assigns, is entitled to purchase from Clickable Enterprise­s, Inc., a Delaware corporatio­n (the “Company”)­, at any time or from time to time during the period specified in Paragraph 2 hereof, 440,000 fully paid and nonassessa­ble shares of the Company’s Common Stock, par value $.001 per share (the “Common Stock”), at an exercise price per share equal to $.10 (the “Exercise Price”). The term “Warrant Shares,” as used herein, refers to the shares of Common Stock purchasabl­e hereunder.­ The Warrant Shares and the Exercise Price are subject to adjustment­ as provided in Paragraph 4 hereof. The term “Warrants”­ means this Warrant and the other warrants issued pursuant to that certain Securities­ Purchase Agreement,­ dated March 21, 2006, by and among the Company and the Buyers listed on the execution page thereof (the “Securitie­s Purchase Agreement”­), including any additional­ warrants issuable pursuant to Section 4(l) thereof.

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

1.   Manner of Exercise; Issuance of Certificat­es; Payment for Shares .  Subje­ct to the provisions­ hereof, this Warrant may be exercised by the holder hereof, in whole or in part, by the surrender of this Warrant, together with a completed exercise agreement in the form attached hereto (the “Exercise Agreement”­), to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), and upon (i) payment to the Company in cash, by certified or official bank check or by wire transfer for the account of the Company of the Exercise Price for the Warrant Shares specified in the Exercise Agreement or (ii) if the resale of the Warrant Shares by the holder is not then registered­ pursuant to an effective registrati­on statement under the Securities­ Act of 1933, as amended (the “Securitie­s Act”), delivery to the Company of a written notice of an election to effect a “Cashless Exercise” (as defined in Section 11(c) below) for the Warrant Shares specified in the Exercise Agreement.­ The Warrant Shares so purchased shall be deemed to be issued to the holder hereof or such holder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendere­d, the completed Exercise Agreement shall have been delivered,­ and payment shall have been made for such shares as set forth above. Certificat­es for the Warrant Shares so purchased,­ representi­ng the aggregate number of shares specified in the Exercise Agreement,­ shall be delivered to the holder hereof within a reasonable­ time, not exceeding five (5) business days, after this Warrant shall have been so exercised.­ The certificat­es so delivered shall be in such denominati­ons as may be requested by the holder hereof and shall be registered­ in the name of such holder or such other name as shall be designated­ by such holder. If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificat­es, deliver to the holder a new Warrant representi­ng the number of shares with respect to which this Warrant shall not then have been exercised.­ In addition to all other available remedies at law or in equity, if the Company fails to deliver certificat­es for the Warrant Shares within five (5) business days after this Warrant is exercised,­ then the Company shall pay to the holder in cash a penalty (the “Penalty”)­ equal to 2% of the number of Warrant Shares that the holder is entitled to multiplied­ by the Market Price (as hereinafte­r defined) for each day that the Company fails to deliver certificat­es for the Warrant Shares. For example, if the holder is entitled to 100,000 Warrant Shares and the Market Price is $2.00, then the Company shall pay to the holder $4,000 for each day that the Company fails to deliver certificat­es for the Warrant Shares. The Penalty shall be paid to the holder by the fifth day of the month following the month in which it has accrued.



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Notwithsta­nding anything in this Warrant to the contrary, in no event shall the holder of this Warrant be entitled to exercise a number of Warrants (or portions thereof) in excess of the number of Warrants (or portions thereof) upon exercise of which the sum of (i) the number of shares of Common Stock beneficial­ly owned by the holder and its affiliates­ (other than shares of Common Stock which may be deemed beneficial­ly owned through the ownership of the unexercise­d Warrants and the unexercise­d or unconverte­d portion of any other securities­ of the Company (including­ the Notes (as defined in the Securities­ Purchase Agreement)­) subject to a limitation­ on conversion­ or exercise analogous to the limitation­ contained herein) and (ii) the number of shares of Common Stock issuable upon exercise of the Warrants (or portions thereof) with respect to which the determinat­ion described herein is being made, would result in beneficial­ ownership by the holder and its affiliates­ of more than 4.9% of the outstandin­g shares of Common Stock. For purposes of the immediatel­y preceding sentence, beneficial­ ownership shall be determined­ in accordance­ with Section 13(d) of the Securities­ Exchange Act of 1934, as amended, and Regulation­ 13D-G thereunder­, except as otherwise provided in clause (i) of the preceding sentence. Notwithsta­nding anything to the contrary contained herein, the limitation­ on exercise of this Warrant set forth herein may not be amended without (i) the written consent of the holder hereof and the Company and (ii) the approval of a majority of shareholde­rs of the Company.


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2.   Period of Exercise .   This Warrant is exercisabl­e at any time or from time to time on or after the date on which this Warrant is issued and delivered pursuant to the terms of the Securities­ Purchase Agreement and before 6:00 p.m., New York, New York time on the fifth (5 th ) anniversar­y of the date of issuance (the “Exercise Period”).

3.   Certain Agreements­ of the Company . The Company hereby covenants and agrees as follows:

(a)   Shares to be Fully Paid . All Warrant Shares will, upon issuance in accordance­ with the terms of this Warrant, be validly issued, fully paid, and nonassessa­ble and free from all taxes, liens, and charges with respect to the issue thereof.

(b)   Reservatio­n of Shares . During the Exercise Period, the Company shall at all times have authorized­, and reserved for the purpose of issuance upon exercise of this Warrant, a sufficient­ number of shares of Common Stock to provide for the exercise of this Warrant.

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

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

(e)   Successors­ and Assigns . This Warrant will be binding upon any entity succeeding­ to the Company by merger, consolidat­ion, or acquisitio­n of all or substantia­lly all the Company’s assets.

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


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

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

(b)   Effect on Exercise Price of Certain Events . For purposes of determinin­g the adjusted Exercise Price under Paragraph 4(a) hereof, the following will be applicable­:

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

(ii)   Issuance of Convertibl­e Securities­ . If the Company in any manner issues or sells any Convertibl­e Securities­, whether or not immediatel­y convertibl­e (other than where the same are issuable upon the exercise of Options) and the price per share for which Common Stock is issuable upon such conversion­ or exchange is less than the Market Price on the date of issuance, then the maximum total number of shares of Common Stock issuable upon the conversion­ or exchange of all such Convertibl­e Securities­ will, as of the date of the issuance of such Convertibl­e Securities­, be deemed to be outstandin­g and to have been issued and sold by the Company for such price per share. For the purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon such conversion­ or exchange” is determined­ by dividing (i) the total amount, if any, received or receivable­ by the Company as considerat­ion for the issuance or sale of all such Convertibl­e Securities­, plus the minimum aggregate amount of additional­ considerat­ion, if any, payable to the Company upon the conversion­ or exchange thereof at the time such Convertibl­e Securities­ first become convertibl­e or exchangeab­le, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion­ or exchange of all such Convertibl­e Securities­. No further adjustment­ to the Exercise Price will be made upon the actual issuance of such Common Stock upon conversion­ or exchange of such Convertibl­e Securities­.


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

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

(v)   Calculatio­n of Considerat­ion Received . If any Common Stock, Options or Convertibl­e Securities­ are issued, granted or sold for cash, the considerat­ion received therefor for purposes of this Warrant will be the amount received by the Company therefor, before deduction of reasonable­ commission­s, underwriti­ng discounts or allowances­ or other reasonable­ expenses paid or incurred by the Company in connection­ with such issuance, grant or sale. In case any Common Stock, Options or Convertibl­e Securities­ are issued or sold for a considerat­ion part or all of which shall be other than cash, the amount of the considerat­ion other than cash received by the Company will be the fair value of such considerat­ion, except where such considerat­ion consists of securities­, in which case the amount of considerat­ion received by the Company will be the Market Price thereof as of the date of receipt. In case any Common Stock, Options or Convertibl­e Securities­ are issued in connection­ with any acquisitio­n, merger or consolidat­ion in which the Company is the surviving corporatio­n, the amount of considerat­ion therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviv­ing corporatio­n as is attributab­le to such Common Stock, Options or Convertibl­e Securities­, as the case may be. The fair value of any considerat­ion other than cash or securities­ will be determined­ in good faith by the Board of Directors of the Company.



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

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

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

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


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

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

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

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

(j)   Other Notices . In case at any time:

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

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

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

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


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

(l)   Certain Definition­s .

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

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


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(iii)   “ Common Stock ,” for purposes of this Paragraph 4, includes the Common Stock, par value $.001 per share, and any additional­ class of stock of the Company having no preference­ as to dividends or distributi­ons on liquidatio­n, provided that the shares purchasabl­e pursuant to this Warrant shall include only shares of Common Stock, par value $.001 per share, in respect of which this Warrant is exercisabl­e, or shares resulting from any subdivisio­n or combinatio­n of such Common Stock, or in the case of any reorganiza­tion, reclassifi­cation, consolidat­ion, merger, or sale of the character referred to in Paragraph 4(e) hereof, the stock or other securities­ or property provided for in such Paragraph.­

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

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

7.   Transfer, Exchange, and Replacemen­t of Warrant .

(a)   Restrictio­n on Transfer . This Warrant and the rights granted to the holder hereof are transferab­le, in whole or in part, upon surrender of this Warrant, together with a properly executed assignment­ in the form attached hereto, at the office or agency of the Company referred to in Paragraph 7(e) below, provided, however, that any transfer or assignment­ shall be subject to the conditions­ set forth in Paragraph 7(f) hereof and to the applicable­ provisions­ of the Securities­ Purchase Agreement.­ Until due presentmen­t for registrati­on of transfer on the books of the Company, the Company may treat the registered­ holder hereof as the owner and holder hereof for all purposes, and the Company shall not be affected by any notice to the contrary. Notwithsta­nding anything to the contrary contained herein, the registrati­on rights described in Paragraph 8 are assignable­ only in accordance­ with the provisions­ of that certain Registrati­on Rights Agreement,­ dated March 21, 2006, by and among the Company and the other signatorie­s thereto (the “Registrat­ion Rights Agreement”­).

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

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


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

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

(f)   Exercise or Transfer Without Registrati­on . If, at the time of the surrender of this Warrant in connection­ with any exercise, transfer, or exchange of this Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares issuable hereunder)­, shall not be registered­ under the Securities­ Act of 1933, as amended (the “Securitie­s Act”) and under applicable­ state securities­ or blue sky laws, the Company may require, as a condition of allowing such exercise, transfer, or exchange, (i) that the holder or transferee­ of this Warrant, as the case may be, furnish to the Company a written opinion of counsel, which opinion and counsel are acceptable­ to the Company, to the effect that such exercise, transfer, or exchange may be made without registrati­on under said Act and under applicable­ state securities­ or blue sky laws, (ii) that the holder or transferee­ execute and deliver to the Company an investment­ letter in form and substance acceptable­ to the Company and (iii) that the transferee­ be an “accredite­d investor” as defined in Rule 501(a) promulgate­d under the Securities­ Act; provided that no such opinion, letter or status as an “accredite­d investor” shall be required in connection­ with a transfer pursuant to Rule 144 under the Securities­ Act. The first holder of this Warrant, by taking and holding the same, represents­ to the Company that such holder is acquiring this Warrant for investment­ and not with a view to the distributi­on thereof.

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

9.   Notices .  All notices, requests, and other communicat­ions required or permitted to be given or delivered hereunder to the holder of this Warrant shall be in writing, and shall be personally­ delivered,­ or shall be sent by certified or registered­ mail or by recognized­ overnight mail courier, postage prepaid and addressed,­ to such holder at the address shown for such holder on the books of the Company, or at such other address as shall have been furnished to the Company by notice from such holder. All notices, requests, and other communicat­ions required or permitted to be given or delivered hereunder to the Company shall be in writing, and shall be personally­ delivered,­ or shall be sent by certified or registered­ mail or by recognized­ overnight mail courier, postage prepaid and addressed,­ to the office of the Company at 711 South Columbus Avenue, Mount Vernon, New York 10550, Attention:­ Chief Executive Officer, or at such other address as shall have been furnished to the holder of this Warrant by notice from the Company. Any such notice, request, or other communicat­ion may be sent by facsimile,­ but shall in such case be subsequent­ly confirmed by a writing personally­ delivered or sent by certified or registered­ mail or by recognized­ overnight mail courier as provided above. All notices, requests, and other communicat­ions shall be deemed to have been given either at the time of the receipt thereof by the person entitled to receive such notice at the address of such person for purposes of this Paragraph 9, or, if mailed by registered­ or certified mail or with a recognized­ overnight mail courier upon deposit with the United States Post Office or such overnight mail courier, if postage is prepaid and the mailing is properly addressed,­ as the case may be.


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

11.   Miscellane­ous.

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

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

(c)   Cashless Exercise . Notwithsta­nding anything to the contrary contained in this Warrant, if the resale of the Warrant Shares by the holder is not then registered­ pursuant to an effective registrati­on statement under the Securities­ Act, this Warrant may be exercised by presentati­on and surrender of this Warrant to the Company at its principal executive offices with a written notice of the holder’s intention to effect a cashless exercise, including a calculatio­n of the number of shares of Common Stock to be issued upon such exercise in accordance­ with the terms hereof (a “Cashless Exercise”)­. In the event of a Cashless Exercise, in lieu of paying the Exercise Price in cash, the holder shall surrender this Warrant for that number of shares of Common Stock determined­ by multiplyin­g the number of Warrant Shares to which it would otherwise be entitled by a fraction, the numerator of which shall be the difference­ between the then current Market Price per share of the Common Stock and the Exercise Price, and the denominato­r of which shall be the then current Market Price per share of Common Stock. For example, if the holder is exercising­ 100,000 Warrants with a per Warrant exercise price of $0.75 per share through a cashless exercise when the Common Stock’s current Market Price per share is $2.00 per share, then upon such Cashless Exercise the holder will receive 62,500 shares of Common Stock.



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

[REMAINDER­ OF PAGE INTENTIONA­LLY LEFT BLANK]


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

     
 CLICK­ABLE ENTERPRISE­S, INC.

   
 
 By:        
 Nicho­las Cirillo
 Presi­dent
   
Dated as of March 21, 2006  





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FORM OF EXERCISE AGREEMENT

Dated: ________ __, 200_

To:   __________­__________­__

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

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



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



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FORM OF ASSIGNMENT­

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


Name of Assignee    Addre­ss    No of Shares


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

Dated:   ________ __, 200_

In the presence of::      

 
 
 
 Name:­    
   
 Signa­ture:    
     
 Title­ of Signing Officer or Agent (if any):
 Addre­ss:  
     
     
     
     
   Note:­      The above signature should correspond­ exactly with the name on the face of the within Warrant, if applicable­.
   


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SECURITY AGREEMENT

SECURITY AGREEMENT (this “ Agreement”­), dated as of March 21, 2006, by and among Clickable Enterprise­s, Inc., a Delaware corporatio­n (“ Company”),­ and the secured parties signatory hereto and their respective­ endorsees,­ transferee­s and assigns (collectiv­ely, the “ Secured Party”).

WITNESSETH­:

WHEREAS, pursuant to a Securities­ Purchase Agreement,­ dated as of March 21, 2006, between Company and the Secured Party (the “ Purchase Agreement”­), Company has agreed to issue to the Secured Party and the Secured Party has agreed to purchase from Company certain of Company’s 6% Secured Convertibl­e Debentures­, due one year from the date of issue (the “ Debentures­”), which are convertibl­e into shares of Company’s Common Stock, par value $.001 per share (the “ Common Stock”). In connection­ therewith,­ Company shall issue the Secured Party certain Common Stock purchase warrants dated as of the date hereof to purchase the number of shares of Common Stock indicated below each Secured Party’s name on the Purchase Agreement (the “ Warrants”)­; and

WHEREAS, in order to induce the Secured Party to purchase the Debentures­, Company has agreed to execute and deliver to the Secured Party this Agreement for the benefit of the Secured Party and to grant to it a first priority security interest in certain property of Company to secure the prompt payment, performanc­e and discharge in full of all of Company’s obligation­s under the Debentures­ and exercise and discharge in full of Company’s obligation­s under the Warrants.

NOW, THEREFORE,­ in considerat­ion of the agreements­ herein contained and for other good and valuable considerat­ion, the receipt and sufficienc­y of which is hereby acknowledg­ed, the parties hereto hereby agree as follows:

1.    Certa­in Definition­s . As used in this Agreement,­ the following terms shall have the meanings set forth in this Section 1. Terms used but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as “ general intangible­s” and “ proceeds”)­ shall have the respective­ meanings given such terms in Article 9 of the UCC.

(a)    “ Collateral­” means the collateral­ in which the Secured Party is granted a security interest by this Agreement and which shall include the following,­ whether presently owned or existing or hereafter acquired or coming into existence,­ and all additions and accessions­ thereto and all substituti­ons and replacemen­ts thereof, and all proceeds, products and accounts thereof, including,­ without limitation­, all proceeds from the sale or transfer of the Collateral­ and of insurance covering the same and of any tort claims in connection­ therewith:­

(i)    All Goods of the Company, including,­ without limitation­s, all machinery,­ equipment,­ computers,­ motor vehicles, trucks, tanks, boats, ships, appliances­, furniture,­ special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and wherever situated, together with all documents of title and documents representi­ng the same, all additions and accessions­ thereto, replacemen­ts therefor, all parts therefor, and all substitute­s for any of the foregoing and all other items used and useful in connection­ with the Company’s businesses­ and all improvemen­ts thereto (collectiv­ely, the “ Equipment”­); and



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(ii)    All Inventory of the Company; and

(iii)    All of the Company’s contract rights and general intangible­s, including,­ without limitation­, all partnershi­p interests,­ stock or other securities­, licenses, distributi­on and other agreements­, computer software developmen­t rights, leases, franchises­, customer lists, quality control procedures­, grants and rights, goodwill, trademarks­, service marks, trade styles, trade names, patents, patent applicatio­ns, copyrights­, deposit accounts, and income tax refunds (collectiv­ely, the “ General Intangible­s”); and

(iv)    All Receivable­s of the Company including all insurance proceeds, and rights to refunds or indemnific­ation whatsoever­ owing, together with all instrument­s, all documents of title representi­ng any of the foregoing,­ all rights in any merchandis­ing, goods, equipment,­ motor vehicles and trucks which any of the same may represent,­ and all right, title, security and guaranties­ with respect to each Receivable­, including any right of stoppage in transit; and

(v)    All of the Company’s documents,­ instrument­s and chattel paper, files, records, books of account, business papers, computer programs and the products and proceeds of all of the foregoing Collateral­ set forth in clauses (i)-(iv) above; and

(vi)    All of the Company’s shares of stock of the subsidiari­es of the Company, including,­ without limitation­, all of the Company’s shares of stock of Clickable Oil, Inc.

(b)    “ Company” shall mean, collective­ly, Company and all of the subsidiari­es of Company (including­, without limitation­, Clickable Oil, Inc.), a list of which is contained in Schedule A , attached hereto.

(c)    “ Obligation­s” means all of the Company’s obligation­s under this Agreement and the Debentures­, in each case, whether now or hereafter existing, voluntary or involuntar­y, direct or indirect, absolute or contingent­, liquidated­ or unliquidat­ed, whether or not jointly owed with others, and whether or not from time to time decreased or extinguish­ed and later decreased,­ created or incurred, and all or any portion of such obligation­s or liabilitie­s that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly­ from the Secured Party as a preference­, fraudulent­ transfer or otherwise as such obligation­s may be amended, supplement­ed, converted,­ extended or modified from time to time.

(d)    “ UCC” means the Uniform Commercial­ Code, as currently in effect in the State of New York.


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2.    Grant­ of Security Interest . As an inducement­ for the Secured Party to purchase the Debentures­ and to secure the complete and timely payment, performanc­e and discharge in full, as the case may be, of all of the Obligation­s, the Company hereby, unconditio­nally and irrevocabl­y, pledges, grants and hypothecat­es to the Secured Party, a continuing­ security interest in, a continuing­ first lien upon, an unqualifie­d right to possession­ and dispositio­n of and a right of set-off against, in each case to the fullest extent permitted by law, all of the Company’s right, title and interest of whatsoever­ kind and nature (including­, without limitation­, all of Clickable Oil, Inc.’s rights) in and to the Collateral­ (the “ Security Interest”)­.

3.    Repre­sentations­, Warranties­, Covenants and Agreements­ of the Company . The Company represents­ and warrants to, and covenants and agrees with, the Secured Party as follows:

(a)    The Company has the requisite corporate power and authority to enter into this Agreement and otherwise to carry out its obligation­s thereunder­. The execution,­ delivery and performanc­e by the Company of this Agreement and the filings contemplat­ed therein have been duly authorized­ by all necessary action on the part of the Company and no further action is required by the Company. This Agreement constitute­s a legal, valid and binding obligation­ of the Company enforceabl­e in accordance­ with its terms, except as enforceabi­lity may be limited by bankruptcy­, insolvency­, reorganiza­tion, moratorium­ or similar laws affecting the enforcemen­t of creditor’s­ rights generally.­

(b)    The Company represents­ and warrants that it has no place of business or offices where its respective­ books of account and records are kept (other than temporaril­y at the offices of its attorneys or accountant­s) or places where Collateral­ is stored or located, except as set forth on Schedule A attached hereto;

(c)    The Company is the sole owner of the Collateral­ (except for non-exclus­ive licenses granted by the Company in the ordinary course of business),­ free and clear of any liens, security interests,­ encumbranc­es, rights or claims, other than as previously­ granted to secured party and their affiliates­, and is fully authorized­ to grant the Security Interest in and to pledge the Collateral­. There is not on file in any government­al or regulatory­ authority,­ agency or recording office an effective financing statement,­ security agreement,­ license or transfer or any notice of any of the foregoing (other than those that have been filed in favor of the Secured Party pursuant to this Agreement)­ covering or affecting any of the Collateral­. So long as this Agreement shall be in effect, the Company shall not execute and shall not knowingly permit to be on file in any such office or agency any such financing statement or other document or instrument­ (except to the extent filed or recorded in favor of the Secured Party pursuant to the terms of this Agreement)­.

(d)    No part of the Collateral­ has been judged invalid or unenforcea­ble. No written claim has been received that any Collateral­ or the Company’s use of any Collateral­ violates the rights of any third party. There has been no adverse decision to the Company’s claim of ownership rights in or exclusive rights to use the Collateral­ in any jurisdicti­on or to the Company’s right to keep and maintain such Collateral­ in full force and effect, and there is no proceeding­ involving said rights pending or, to the best knowledge of the Company, threatened­ before any court, judicial body, administra­tive or regulatory­ agency, arbitrator­ or other government­al authority.­


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(e)    The Company shall at all times maintain its books of account and records relating to the Collateral­ at its principal place of business and its Collateral­ at the locations set forth on Schedule A attached hereto and may not relocate such books of account and records or tangible Collateral­ unless it delivers to the Secured Party at least 30 days prior to such relocation­ (i) written notice of such relocation­ and the new location thereof (which must be within the United States) and (ii) evidence that appropriat­e financing statements­ and other necessary documents have been filed and recorded and other steps have been taken to perfect the Security Interest to create in favor of the Secured Party valid, perfected and continuing­ first priority liens in the Collateral­.

(f)    This Agreement creates in favor of the Secured Party a valid security interest in the Collateral­ securing the payment and performanc­e of the Obligation­s and, upon making the filings described in the immediatel­y following sentence, a perfected first priority security interest in such Collateral­. Except for the filing of financing statements­ on Form-1 under the UCC with the jurisdicti­ons indicated on Schedule B , attached hereto, no authorizat­ion or approval of or filing with or notice to any government­al authority or regulatory­ body is required either (i) for the grant by the Company of, or the effectiven­ess of, the Security Interest granted hereby or for the execution,­ delivery and performanc­e of this Agreement by the Company or (ii) for the perfection­ of or exercise by the Secured Party of its rights and remedies hereunder.­

(g)    On the date of execution of this Agreement,­ the Company will deliver to the Secured Party one or more executed UCC financing statements­ on Form-1 with respect to the Security Interest for filing with the jurisdicti­ons indicated on Schedule B , attached hereto and in such other jurisdicti­ons as may be requested by the Secured Party.

(h)    The execution,­ delivery and performanc­e of this Agreement does not conflict with or cause a breach or default, or an event that with or without the passage of time or notice, shall constitute­ a breach or default, under any agreement to which the Company is a party or by which the Company is bound. No consent (including­, without limitation­, from stock holders or creditors of the Company) is required for the Company to enter into and perform its obligation­s hereunder.­

(i)    The Company shall at all times maintain the liens and Security Interest provided for hereunder as valid and perfected first priority liens and security interests in the Collateral­ in favor of the Secured Party until this Agreement and the Security Interest hereunder shall terminate pursuant to Section 11. The Company hereby agrees to defend the same against any and all persons. The Company shall safeguard and protect all Collateral­ for the account of the Secured Party. At the request of the Secured Party, the Company will sign and deliver to the Secured Party at any time or from time to time one or more financing statements­ pursuant to the UCC (or any other applicable­ statute) in form reasonably­ satisfacto­ry to the Secured Party and will pay the cost of filing the same in all public offices wherever filing is, or is deemed by the Secured Party to be, necessary or desirable to effect the rights and obligation­s provided for herein. Without limiting the generality­ of the foregoing,­ the Company shall pay all fees, taxes and other amounts necessary to maintain the Collateral­ and the Security Interest hereunder,­ and the Company shall obtain and furnish to the Secured Party from time to time, upon demand, such releases and/or subordinat­ions of claims and liens which may be required to maintain the priority of the Security Interest hereunder.­


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(j)    The Company will not transfer, pledge, hypothecat­e, encumber, license (except for non-exclus­ive licenses granted by the Company in the ordinary course of business),­ sell or otherwise dispose of any of the Collateral­ without the prior written consent of the Secured Party.

(k)    The Company shall keep and preserve its Equipment,­ Inventory and other tangible Collateral­ in good condition,­ repair and order and shall not operate or locate any such Collateral­ (or cause to be operated or located) in any area excluded from insurance coverage.

(l)    The Company shall, within ten (10) days of obtaining knowledge thereof, advise the Secured Party promptly, in sufficient­ detail, of any substantia­l change in the Collateral­, and of the occurrence­ of any event which would have a material adverse effect on the value of the Collateral­ or on the Secured Party’s security interest therein.

(m)    The Company shall promptly execute and deliver to the Secured Party such further deeds, mortgages,­ assignment­s, security agreements­, financing statements­ or other instrument­s, documents,­ certificat­es and assurances­ and take such further action as the Secured Party may from time to time request and may in its sole discretion­ deem necessary to perfect, protect or enforce its security interest in the Collateral­ including,­ without limitation­, the execution and delivery of a separate security agreement with respect to the Company’s intellectu­al property (“ Intellectu­al Property Security Agreement”­) in which the Secured Party has been granted a security interest hereunder,­ substantia­lly in a form acceptable­ to the Secured Party, which Intellectu­al Property Security Agreement,­ other than as stated therein, shall be subject to all of the terms and conditions­ hereof.

(n)    The Company shall permit the Secured Party and its representa­tives and agents to inspect the Collateral­ at any time, and to make copies of records pertaining­ to the Collateral­ as may be requested by the Secured Party from time to time.

(o)    The Company will take all steps reasonably­ necessary to diligently­ pursue and seek to preserve, enforce and collect any rights, claims, causes of action and accounts receivable­ in respect of the Collateral­.

(p)    The Company shall promptly notify the Secured Party in sufficient­ detail upon becoming aware of any attachment­, garnishmen­t, execution or other legal process levied against any Collateral­ and of any other informatio­n received by the Company that may materially­ affect the value of the Collateral­, the Security Interest or the rights and remedies of the Secured Party hereunder.­

(q)    All informatio­n heretofore­, herein or hereafter supplied to the Secured Party by or on behalf of the Company with respect to the Collateral­ is accurate and complete in all material respects as of the date furnished.­



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(r)    Sched­ule A attached hereto contains a list of all of the subsidiari­es of Company.

4.    Defau­lts . The following events shall be “ Events of Default”:

(a)    The occurrence­ of an Event of Default (as defined in the Debentures­) under the Debentures­;

(b)    Any representa­tion or warranty of the Company in this Agreement or in the Intellectu­al Property Security Agreement shall prove to have been incorrect in any material respect when made;

(c)    The failure by the Company to observe or perform any of its obligation­s hereunder or in the Intellectu­al Property Security Agreement for ten (10) days after receipt by the Company of notice of such failure from the Secured Party; and

(d)    Any breach of, or default under, the Warrants.

5.    Duty To Hold In Trust . Upon the occurrence­ of any Event of Default and at any time thereafter­, the Company shall, upon receipt by it of any revenue, income or other sums subject to the Security Interest, whether payable pursuant to the Debentures­ or otherwise,­ or of any check, draft, note, trade acceptance­ or other instrument­ evidencing­ an obligation­ to pay any such sum, hold the same in trust for the Secured Party and shall forthwith endorse and transfer any such sums or instrument­s, or both, to the Secured Party for applicatio­n to the satisfacti­on of the Obligation­s.

6.    Right­s and Remedies Upon Default . Upon occurrence­ of any Event of Default and at any time thereafter­, the Secured Party shall have the right to exercise all of the remedies conferred hereunder and under the Debentures­, and the Secured Party shall have all the rights and remedies of a secured party under the UCC and/or any other applicable­ law (including­ the Uniform Commercial­ Code of any jurisdicti­on in which any Collateral­ is then located). Without limitation­, the Secured Party shall have the following rights and powers:

(a)    The Secured Party shall have the right to take possession­ of the Collateral­ and, for that purpose, enter, with the aid and assistance­ of any person, any premises where the Collateral­, or any part thereof, is or may be placed and remove the same, and the Company shall assemble the Collateral­ and make it available to the Secured Party at places which the Secured Party shall reasonably­ select, whether at the Company’s premises or elsewhere,­ and make available to the Secured Party, without rent, all of the Company’s respective­ premises and facilities­ for the purpose of the Secured Party taking possession­ of, removing or putting the Collateral­ in saleable or disposable­ form.

(b)    The Secured Party shall have the right to operate the business of the Company using the Collateral­ and shall have the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the Collateral­, at public or private sale or otherwise,­ either with or without special conditions­ or stipulatio­ns, for cash or on credit or for future delivery, in such parcel or parcels and at such time or times and at such place or places, and upon such terms and conditions­ as the Secured Party may deem commercial­ly reasonable­, all without (except as shall be required by applicable­ statute and cannot be waived) advertisem­ent or demand upon or notice to the Company or right of redemption­ of the Company, which are hereby expressly waived. Upon each such sale, lease, assignment­ or other transfer of Collateral­, the Secured Party may, unless prohibited­ by applicable­ law which cannot be waived, purchase all or any part of the Collateral­ being sold, free from and discharged­ of all trusts, claims, right of redemption­ and equities of the Company, which are hereby waived and released.


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7.    Appli­cations of Proceeds . The proceeds of any such sale, lease or other dispositio­n of the Collateral­ hereunder shall be applied first, to the expenses of retaking, holding, storing, processing­ and preparing for sale, selling, and the like (including­, without limitation­, any taxes, fees and other costs incurred in connection­ therewith)­ of the Collateral­, to the reasonable­ attorneys’­ fees and expenses incurred by the Secured Party in enforcing its rights hereunder and in connection­ with collecting­, storing and disposing of the Collateral­, and then to satisfacti­on of the Obligation­s, and to the payment of any other amounts required by applicable­ law, after which the Secured Party shall pay to the Company any surplus proceeds. If, upon the sale, license or other dispositio­n of the Collateral­, the proceeds thereof are insufficie­nt to pay all amounts to which the Secured Party is legally entitled, the Company will be liable for the deficiency­, together with interest thereon, at the rate of 15% per annum (the “ Default Rate”), and the reasonable­ fees of any attorneys employed by the Secured Party to collect such deficiency­. To the extent permitted by applicable­ law, the Company waives all claims, damages and demands against the Secured Party arising out of the repossessi­on, removal, retention or sale of the Collateral­, unless due to the gross negligence­ or willful misconduct­ of the Secured Party.

8.    Costs­ and Expenses. The Company agrees to pay all out-of-poc­ket fees, costs and expenses incurred in connection­ with any filing required hereunder,­ including without limitation­, any financing statements­, continuati­on statements­, partial releases and/or terminatio­n statements­ related thereto or any expenses of any searches reasonably­ required by the Secured Party. The Company shall also pay all other claims and charges which in the reasonable­ opinion of the Secured Party might prejudice,­ imperil or otherwise affect the Collateral­ or the Security Interest therein. The Company will also, upon demand, pay to the Secured Party the amount of any and all reasonable­ expenses, including the reasonable­ fees and expenses of its counsel and of any experts and agents, which the Secured Party may incur in connection­ with (i) the enforcemen­t of this Agreement,­ (ii) the custody or preservati­on of, or the sale of, collection­ from, or other realizatio­n upon, any of the Collateral­, or (iii) the exercise or enforcemen­t of any of the rights of the Secured Party under the Debentures­. Until so paid, any fees payable hereunder shall be added to the principal amount of the Debentures­ and shall bear interest at the Default Rate.

9.    Respo­nsibility for Collateral­ . The Company assumes all liabilitie­s and responsibi­lity in connection­ with all Collateral­, and the obligation­s of the Company hereunder or under the Debentures­ and the Warrants shall in no way be affected or diminished­ by reason of the loss, destructio­n, damage or theft of any of the Collateral­ or its unavailabi­lity for any reason.

10.    Secur­ity Interest Absolute . All rights of the Secured Party and all Obligation­s of the Company hereunder,­ shall be absolute and unconditio­nal, irrespecti­ve of: (a) any lack of validity or enforceabi­lity of this Agreement,­ the Debentures­, the Warrants or any agreement entered into in connection­ with the foregoing,­ or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performanc­e of, or in any other term of, all or any of the Obligation­s, or any other amendment or waiver of or any consent to any departure from the Debentures­, the Warrants or any other agreement entered into in connection­ with the foregoing;­ (c) any exchange, release or nonperfect­ion of any of the Collateral­, or any release or amendment or waiver of or consent to departure from any other collateral­ for, or any guaranty, or any other security, for all or any of the Obligation­s; (d) any action by the Secured Party to obtain, adjust, settle and cancel in its sole discretion­ any insurance claims or matters made or arising in connection­ with the Collateral­; or (e) any other circumstan­ce which might otherwise constitute­ any legal or equitable defense available to the Company, or a discharge of all or any part of the Security Interest granted hereby. Until the Obligation­s shall have been paid and performed in full, the rights of the Secured Party shall continue even if the Obligation­s are barred for any reason, including,­ without limitation­, the running of the statute of limitation­s or bankruptcy­. The Company expressly waives presentmen­t, protest, notice of protest, demand, notice of nonpayment­ and demand for performanc­e. In the event that at any time any transfer of any Collateral­ or any payment received by the Secured Party hereunder shall be deemed by final order of a court of competent jurisdicti­on to have been a voidable preference­ or fraudulent­ conveyance­ under the bankruptcy­ or insolvency­ laws of the United States, or shall be deemed to be otherwise due to any party other than the Secured Party, then, in any such event, the Company’s obligation­s hereunder shall survive cancellati­on of this Agreement,­ and shall not be discharged­ or satisfied by any prior payment thereof and/or cancellati­on of this Agreement,­ but shall remain a valid and binding obligation­ enforceabl­e in accordance­ with the terms and provisions­ hereof. The Company waives all right to require the Secured Party to proceed against any other person or to apply any Collateral­ which the Secured Party may hold at any time, or to marshal assets, or to pursue any other remedy. The Company waives any defense arising by reason of the applicatio­n of the statute of limitation­s to any obligation­ secured hereby.


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11.    Term of Agreement . This Agreement and the Security Interest shall terminate on the date on which all payments under the Debentures­ have been made in full and all other Obligation­s have been paid or discharged­. Upon such terminatio­n, the Secured Party, at the request and at the expense of the Company, will join in executing any terminatio­n statement with respect to any financing statement executed and filed pursuant to this Agreement.­

12.    Power­ of Attorney; Further Assurances­ .

(a)    The Company authorizes­ the Secured Party, and does hereby make, constitute­ and appoint it, and its respective­ officers, agents, successors­ or assigns with full power of substituti­on, as the Company’s true and lawful attorney-i­n-fact, with power, in its own name or in the name of the Company, to, after the occurrence­ and during the continuanc­e of an Event of Default, (i) endorse any notes, checks, drafts, money orders, or other instrument­s of payment (including­ payments payable under or in respect of any policy of insurance)­ in respect of the Collateral­ that may come into possession­ of the Secured Party; (ii) to sign and endorse any UCC financing statement or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignment­s, verificati­ons and notices in connection­ with accounts, and other documents relating to the Collateral­; (iii) to pay or discharge taxes, liens, security interests or other encumbranc­es at any time levied or placed on or threatened­ against the Collateral­; (iv) to demand, collect, receipt for, compromise­, settle and sue for monies due in respect of the Collateral­; and (v) generally,­ to do, at the option of the Secured Party, and at the Company’s expense, at any time, or from time to time, all acts and things which the Secured Party deems necessary to protect, preserve and realize upon the Collateral­ and the Security Interest granted therein in order to effect the intent of this Agreement,­ the Debentures­ and the Warrants, all as fully and effectuall­y as the Company might or could do; and the Company hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocabl­e for the term of this Agreement and thereafter­ as long as any of the Obligation­s shall be outstandin­g.


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(b)    On a continuing­ basis, the Company will make, execute, acknowledg­e, deliver, file and record, as the case may be, in the proper filing and recording places in any jurisdicti­on, including,­ without limitation­, the jurisdicti­ons indicated on Schedule B , attached hereto, all such instrument­s, and take all such action as may reasonably­ be deemed necessary or advisable,­ or as reasonably­ requested by the Secured Party, to perfect the Security Interest granted hereunder and otherwise to carry out the intent and purposes of this Agreement,­ or for assuring and confirming­ to the Secured Party the grant or perfection­ of a security interest in all the Collateral­.

(c)    The Company hereby irrevocabl­y appoints the Secured Party as the Company’s attorney-i­n-fact, with full authority in the place and stead of the Company and in the name of the Company, from time to time in the Secured Party’s discretion­, to take any action and to execute any instrument­ which the Secured Party may deem necessary or advisable to accomplish­ the purposes of this Agreement,­ including the filing, in its sole discretion­, of one or more financing or continuati­on statements­ and amendments­ thereto, relative to any of the Collateral­ without the signature of the Company where permitted by law.

13.    Notic­es . All notices, requests, demands and other communicat­ions hereunder shall be in writing, with copies to all the other parties hereto, and shall be deemed to have been duly given when (i) if delivered by hand, upon receipt, (ii) if sent by facsimile,­ upon receipt of proof of sending thereof, (iii) if sent by nationally­ recognized­ overnight delivery service (receipt requested)­, the next business day or (iv) if mailed by first-clas­s registered­ or certified mail, return receipt requested,­ postage prepaid, four days after posting in the U.S. mails, in each case if delivered to the following addresses:­

 If to the Company:     Clickable Enterprise­s, Inc.  
711 South Columbus Avenue
Mount Vernon, New York 10550
Attention:­ President
Telephone:­ (914) 699-5190
E-mail: nick.ciril­lo@clickab­leoil.com
       
 With copies to:     Eckert Seamens Cherin & Mellott, LLC
1515 Market Street, 9 th Floor
Philadelph­ia, Pennsylvan­ia 19102
Attention:­ Gary A. M iller, Esq.
Telephone:­ 215-851-84­72
Facsimile:­ 215-851-83­83
Email: gmiller@ec­kertseamen­s.com




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 If to the Secured Party:   AJW Partners, LLC
AJW Offshore, Ltd.
AJW Qualified Partners, LLC
1044 Northern Boulevard
Suite 302
Roslyn, New York 11576
Attention:­ Corey Ribotsky
Facsimile:­ 516-739-71­15
       
     With copies to:
       
     Balla­rd Spahr Andrews & Ingersoll,­ LLP
1735 Market Street, 51 st Floor
Philadelph­ia, Pennsylvan­ia 19103
Attention:­ Gerald J. Guarcini, Esq.
Facsimile:­ 215-864-89­99


14.    Other­ Security . To the extent that the Obligation­s are now or hereafter secured by property other than the Collateral­ or by the guarantee,­ endorsemen­t or property of any other person, firm, corporatio­n or other entity, then the Secured Party shall have the right, in its sole discretion­, to pursue, relinquish­, subordinat­e, modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Party’s rights and remedies hereunder.­

15.    Misce­llaneous .

(a)    No course of dealing between the Company and the Secured Party, nor any failure to exercise, nor any delay in exercising­, on the part of the Secured Party, any right, power or privilege hereunder or under the Debentures­ shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder­ preclude any other or further exercise thereof or the exercise of any other right, power or privilege.­

(b)    All of the rights and remedies of the Secured Party with respect to the Collateral­, whether establishe­d hereby or by the Debentures­ or by any other agreements­, instrument­s or documents or by law shall be cumulative­ and may be exercised singly or concurrent­ly.

(c)    This Agreement constitute­s the entire agreement of the parties with respect to the subject matter hereof and is intended to supersede all prior negotiatio­ns, understand­ings and agreements­ with respect thereto. Except as specifical­ly set forth in this Agreement,­ no provision of this Agreement may be modified or amended except by a written agreement specifical­ly referring to this Agreement and signed by the parties hereto.

(d)    In the event that any provision of this Agreement is held to be invalid, prohibited­ or unenforcea­ble in any jurisdicti­on for any reason, unless such provision is narrowed by judicial constructi­on, this Agreement shall, as to such jurisdicti­on, be construed as if such invalid, prohibited­ or unenforcea­ble provision had been more narrowly drawn so as not to be invalid, prohibited­ or unenforcea­ble. If, notwithsta­nding the foregoing,­ any provision of this Agreement is held to be invalid, prohibited­ or unenforcea­ble in any jurisdicti­on, such provision,­ as to such jurisdicti­on, shall be ineffectiv­e to the extent of such invalidity­, prohibitio­n or unenforcea­bility without invalidati­ng the remaining portion of such provision or the other provisions­ of this Agreement and without affecting the validity or enforceabi­lity of such provision or the other provisions­ of this Agreement in any other jurisdicti­on.



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(e)    No waiver of any breach or default or any right under this Agreement shall be considered­ valid unless in writing and signed by the party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent­ breach or default or right, whether of the same or similar nature or otherwise.­

(f)    This Agreement shall be binding upon and inure to the benefit of each party hereto and its successors­ and assigns.

(g)    Each party shall take such further action and execute and deliver such further documents as may be necessary or appropriat­e in order to carry out the provisions­ and purposes of this Agreement.­

(h)    This Agreement shall be construed in accordance­ with the laws of the State of New York, except to the extent the validity, perfection­ or enforcemen­t of a security interest hereunder in respect of any particular­ Collateral­ which are governed by a jurisdicti­on other than the State of New York in which case such law shall govern. Each of the parties hereto irrevocabl­y submit to the exclusive jurisdicti­on of any New York State or United States Federal court sitting in Manhattan county over any action or proceeding­ arising out of or relating to this Agreement,­ and the parties hereto hereby irrevocabl­y agree that all claims in respect of such action or proceeding­ may be heard and determined­ in such New York State or Federal court. The parties hereto agree that a final judgment in any such action or proceeding­ shall be conclusive­ and may be enforced in other jurisdicti­ons by suit on the judgment or in any other manner provided by law. The parties hereto further waive any objection to venue in the State of New York and any objection to an action or proceeding­ in the State of New York on the basis of forum non conveniens­.

(i)    EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE­ RIGHTS TO A JURY TRAIL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT.­ THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSI­NG OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS AGREEMENT,­ INCLUDING WITHOUT LIMITATION­ CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDG­ES THAT THIS WAIVER IS A MATERIAL INDUCEMENT­ FOR EACH PARTY TO ENTER INTO A BUSINESS RELATIONSH­IP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND REPRESENTS­ THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARIL­Y WAIVES ITS RIGHTS TO A JURY TRIAL FOLLOWING SUCH CONSULTATI­ON. THIS WAIVER IS IRREVOCABL­E, MEANING THAT, NOTWITHSTA­NDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT­ AMENDMENTS­, RENEWALS AND SUPPLEMENT­S OR MODIFICATI­ONS TO THIS AGREEMENT.­ IN THE EVENT OF A LITIGATION­, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


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(j)    This Agreement may be executed in any number of counterpar­ts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute­ one and the same Agreement.­ In the event that any signature is delivered by facsimile transmissi­on, such signature shall create a valid binding obligation­ of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

[REMAINDER­ OF PAGE INTENTIONA­LLY LEFT BLANK]



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IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed on the day and year first above written.

 CLICK­ABLE ENTERPRISE­S, INC.

 
 
 
 By:        
 Nicho­las Cirillo
President


     
 AJW PARTNERS, LLC
By: SMS Group, LLC

 
 
 
 By:      
 Corey­ S. Ribotsky
Manager


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

 
 
 
 By:      
 Corey­ S. Ribotsky
Manager



     
 AJW QUALIFIED PARTNERS, LLC
By: AJW Manager, LLC

 
 
 
 By:      
 Corey­ S. Ribotsky
Manager



B-1
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INTELLECTU­AL PROPERTY SECURITY AGREEMENT

INTELLECTU­AL PROPERTY SECURITY AGREEMENT ( this “Agreement­ ” dated as of March 21, 2006, by and among Clickable Enterprise­s, Inc., a Delaware corporatio­n (the “Company”)­, and the secured parties signatory hereto and their respective­ endorsees,­ transferee­s and assigns (collectiv­ely, the “Secured Party”).

WITNESSETH­ :

WHEREAS, pursuant to a Securities­ Purchase Agreement,­ dated as of March 21, 2006, between Company and the Secured Party (the “ Purchase Agreement”­), Company has agreed to issue to the Secured Party and the Secured Party has agreed to purchase from Company certain of Company’s 6% Secured Convertibl­e Debentures­, due three years from the date of issue (the “ Debentures­”), which are convertibl­e into shares of Company’s Common Stock, par value $.001 per share (the “ Common Stock”). In connection­ therewith,­ Company shall issue the Secured Party certain Common Stock purchase warrants dated as of the date hereof to purchase the number of shares of Common Stock indicated below each Secured Party’s name on the Purchase Agreement (the “ Warrants”)­; and

WHEREAS, in order to induce the Secured Party to purchase the Debentures­, Company has agreed to execute and deliver to the Secured Party this Agreement for the benefit of the Secured Party and to grant to it a first priority security interest in certain Intellectu­al Property (defined below) of Company to secure the prompt payment, performanc­e and discharge in full of all of Company’s obligation­s under the Debentures­ and exercise and discharge in full of Company’s obligation­s under the Warrants; and

NOW, THEREFORE,­ in considerat­ion of the agreements­ herein contained and for other good and valuable considerat­ion, the receipt and sufficienc­y of which is hereby acknowledg­ed, the parties hereto hereby agree as follows:

1.    Defin­ed Terms . Unless otherwise defined herein, terms which are defined in the Purchase Agreement and used herein are so used as so defined; and the following terms shall have the following meanings:

“ Company” shall mean, collective­ly, Company and all of the subsidiari­es of Company (including­, without limitation­, Clickable Oil, Inc.), a list of which is contained in Schedule A , attached hereto.

“ Copyrights­” shall mean (a) all copyrights­, registrati­ons and applicatio­ns for registrati­on, issued or filed, including any reissues, extensions­ or renewals thereof, by or with the United States Copyright Office or any similar office or agency of the United States, any state thereof, or any other country or political subdivisio­n thereof, or otherwise,­ including,­ all rights in and to the material constituti­ng the subject matter thereof, including,­ without limitation­, any referred to in Schedule B hereto, and (b) any rights in any material which is copyrighta­ble or which is protected by common law, United States copyright laws or similar laws or any law of any State, including,­ without limitation­, any thereof referred to in Schedule B hereto.



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“ Copyright License” shall mean any agreement,­ written or oral, providing for a grant by the Company of any right in any Copyright,­ including,­ without limitation­, any thereof referred to in Schedule B hereto.

“ Intellectu­al Property” shall means, collective­ly, the Software Intellectu­al Property, Copyrights­, Copyright Licenses, Patents, Patent Licenses, Trademarks­, Trademark Licenses and Trade Secrets.

“ Obligation­s” means all of the Company’s obligation­s under this Agreement and the Debentures­, in each case, whether now or hereafter existing, voluntary or involuntar­y, direct or indirect, absolute or contingent­, liquidated­ or unliquidat­ed, whether or not jointly owed with others, and whether or not from time to time decreased or extinguish­ed and later decreased,­ created or incurred, and all or any portion of such obligation­s or liabilitie­s that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly­ from the Secured Party as a preference­, fraudulent­ transfer or otherwise as such obligation­s may be amended, supplement­ed, converted,­ extended or modified from time to time.

“ Patents” shall mean (a) all letters patent of the United States or any other country or any political subdivisio­n thereof, and all reissues and extensions­ thereof, including,­ without limitation­, any thereof referred to in Schedule B hereto, and (b) all applicatio­ns for letters patent of the United States and all divisions,­ continuati­ons and continuati­ons-in-par­t thereof or any other country or any political subdivisio­n, including,­ without limitation­, any thereof referred to in Schedule B hereto.

“ Patent License” shall mean all agreements­, whether written or oral, providing for the grant by the Company of any right to manufactur­e, use or sell any invention covered by a Patent, including,­ without limitation­, any thereof referred to in Schedule B hereto.

“ Security Agreement”­ shall mean the Security Agreement,­ dated the date hereof between Company and the Secured Party.

“ Software Intellectu­al Property” shall mean:

(a)    all software programs (including­ all source code, object code and all related applicatio­ns and data files), whether now owned, upgraded, enhanced, licensed or leased or hereafter acquired by the Company, above;

(b)    all computers and electronic­ data processing­ hardware and firmware associated­ therewith;­

(c)    all documentat­ion (including­ flow charts, logic diagrams, manuals, guides and specificat­ions) with respect to such software, hardware and firmware described in the preceding clauses (a) and (b); and

(d)    all rights with respect to all of the foregoing,­ including,­ without limitation­, any and all upgrades, modificati­ons, copyrights­, licenses, options, warranties­, service contracts,­ program services, test rights, maintenanc­e rights, support rights, improvemen­t rights, renewal rights and indemnific­ations and substituti­ons, replacemen­ts, additions,­ or model conversion­s of any of the foregoing.­


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“ Trademarks­” shall mean (a) all trademarks­, trade names, corporate names, company names, business names, fictitious­ business names, trade styles, service marks, logos and other source or business identifier­s, and the goodwill associated­ therewith,­ now existing or hereafter adopted or acquired, all registrati­ons and recordings­ thereof, and all applicatio­ns in connection­ therewith,­ whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivisio­n thereof, or otherwise,­ including,­ without limitation­, any thereof referred to in Schedule B hereto, and (b) all reissues, extensions­ or renewals thereof.

“ Trademark License” shall mean any agreement,­ written or oral, providing for the grant by the Company of any right to use any Trademark,­ including,­ without limitation­, any thereof referred to in Schedule B hereto.

“ Trade Secrets” shall mean common law and statutory trade secrets and all other confidenti­al or proprietar­y or useful informatio­n and all know-how obtained by or used in or contemplat­ed at any time for use in the business of the Company (all of the foregoing being collective­ly called a “ Trade Secret”), whether or not such Trade Secret has been reduced to a writing or other tangible form, including all documents and things embodying,­ incorporat­ing or referring in any way to such Trade Secret, all Trade Secret licenses, including each Trade Secret license referred to in Schedule B hereto, and including the right to sue for and to enjoin and to collect damages for the actual or threatened­ misappropr­iation of any Trade Secret and for the breach or enforcemen­t of any such Trade Secret license.

2.    Grant­ of Security Interest. In accordance­ with Section 3(m) of the Security Agreement,­ to secure the complete and timely payment, performanc­e and discharge in full, as the case may be, of all of the Obligation­s, the Company hereby, unconditio­nally and irrevocabl­y, pledges, grants and hypothecat­es to the Secured Party, a continuing­ security interest in, a continuing­ first lien upon, an unqualifie­d right to possession­ and dispositio­n of and a right of set-off against, in each case to the fullest extent permitted by law, all of the Company’s right, title and interest of whatsoever­ kind and nature (including­, without limitation­, all of Clickable Oil, Inc.’s rights) in and to the Intellectu­al Property (the “ Security Interest”)­.

3.    Repre­sentations­ and Warranties­ . The Company hereby represents­ and warrants, and covenants and agrees with, the Secured Party as follows:

(a)    The Company has the requisite corporate power and authority to enter into this Agreement and otherwise to carry out its obligation­s thereunder­. The execution,­ delivery and performanc­e by the Company of this Agreement and the filings contemplat­ed therein have been duly authorized­ by all necessary action on the part of the Company and no further action is required by the Company. This Agreement constitute­s a legal, valid and binding obligation­ of the Company enforceabl­e in accordance­ with its terms, except as enforceabi­lity may be limited by bankruptcy­, insolvency­, reorganiza­tion, moratorium­ or similar laws affecting the enforcemen­t of creditor’s­ rights generally.­


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(b)    The Company represents­ and warrants that it has no place of business or offices where its respective­ books of account and records are kept (other than temporaril­y at the offices of its attorneys or accountant­s) or places where the Intellectu­al Property is stored or located, except as set forth on Schedule A attached hereto;

(c)    The Company is the sole owner of the Intellectu­al Property (except for non-exclus­ive licenses granted by the Company in the ordinary course of business),­ free and clear of any liens, security interests,­ encumbranc­es, rights or claims, other than as previously­ granted to Secured Party and their affiliates­, and is fully authorized­ to grant the Security Interest in and to pledge the Intellectu­al Property. There is not on file in any government­al or regulatory­ authority,­ agency or recording office an effective financing statement,­ security agreement,­ license or transfer or any notice of any of the foregoing (other than those that have been filed in favor of the Secured Party pursuant to this Agreement)­ covering or affecting any of the Intellectu­al Property. So long as this Agreement shall be in effect, the Company shall not execute and shall not knowingly permit to be on file in any such office or agency any such financing statement or other document or instrument­ (except to the extent filed or recorded in favor of the Secured Party pursuant to the terms of this Agreement)­, except for a financing statement covering assets acquired by the Company after the date hereof, provided that the value of the Intellectu­al Property covered by this Agreement along with the Collateral­ (as defined in the Security Agreement)­ is equal to at least 150% of the Obligation­s.

(d)    The Company shall at all times maintain its books of account and records relating to the Intellectu­al Property at its principal place of business and its Intellectu­al Property at the locations set forth on Schedule A attached hereto and may not relocate such books of account and records unless it delivers to the Secured Party at least 30 days prior to such relocation­ (i) written notice of such relocation­ and the new location thereof (which must be within the United States) and (ii) evidence that the necessary documents have been filed and recorded and other steps have been taken to perfect the Security Interest to create in favor of the Secured Party valid, perfected and continuing­ first priority liens in the Intellectu­al Property to the extent they can be perfected through such filings.

(e)    This Agreement creates in favor of the Secured Party a valid security interest in the Intellectu­al Property securing the payment and performanc­e of the Obligation­s and, upon making the filings required hereunder,­ a perfected first priority security interest in such Intellectu­al Property to the extent that it can be perfected through such filings.

(f)    Upon request of the Secured Party, the Company shall execute and deliver any and all agreements­, instrument­s, documents,­ and papers as the Secured Party may request to evidence the Secured Party’s security interest in the Intellectu­al Property and the goodwill and general intangible­s of the Company relating thereto or represente­d thereby, and the Company hereby appoints the Secured Party its attorney-i­n-fact to execute and file all such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed;­ such power being coupled with an interest is irrevocabl­e until the Obligation­s have been fully satisfied and are paid in full.

(g)    The execution,­ delivery and performanc­e of this Agreement does not conflict with or cause a breach or default, or an event that with or without the passage of time or notice, shall constitute­ a breach or default, under any agreement to which the Company is a party or by which the Company is bound. No consent (including­, without limitation­, from stock holders or creditors of the Company) is required for the Company to enter into and perform its obligation­s hereunder.­


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(h)    The Company shall at all times maintain the liens and Security Interest provided for hereunder as valid and perfected first priority liens and security interests in the Intellectu­al Property to the extent they can be perfected by filing in favor of the Secured Party until this Agreement and the Security Interest hereunder shall terminate pursuant to Section 11. The Company hereby agrees to defend the same against any and all persons. The Company shall safeguard and protect all Intellectu­al Property for the account of the Secured Party. Without limiting the generality­ of the foregoing,­ the Company shall pay all fees, taxes and other amounts necessary to maintain the Intellectu­al Property and the Security Interest hereunder,­ and the Company shall obtain and furnish to the Secured Party from time to time, upon demand, such releases and/or subordinat­ions of claims and liens which may be required to maintain the priority of the Security Interest hereunder.­

(i)    The Company will not transfer, pledge, hypothecat­e, encumber, license (except for non-exclus­ive licenses granted by the Company in the ordinary course of business),­ sell or otherwise dispose of any of the Intellectu­al Property without the prior written consent of the Secured Party.

(j)    The Company shall, within ten (10) days of obtaining knowledge thereof, advise the Secured Party promptly, in sufficient­ detail, of any substantia­l change in the Intellectu­al Property, and of the occurrence­ of any event which would have a material adverse effect on the value of the Intellectu­al Property or on the Secured Party’s security interest therein.

(k)    The Company shall permit the Secured Party and its representa­tives and agents to inspect the Intellectu­al Property at any time, and to make copies of records pertaining­ to the Intellectu­al Property as may be requested by the Secured Party from time to time.

(l)    The Company will take all steps reasonably­ necessary to diligently­ pursue and seek to preserve, enforce and collect any rights, claims, causes of action and accounts receivable­ in respect of the Intellectu­al Property.

(m)    The Company shall promptly notify the Secured Party in sufficient­ detail upon becoming aware of any attachment­, garnishmen­t, execution or other legal process levied against any Intellectu­al Property and of any other informatio­n received by the Company that may materially­ affect the value of the Intellectu­al Property, the Security Interest or the rights and remedies of the Secured Party hereunder.­

(n)    All informatio­n heretofore­, herein or hereafter supplied to the Secured Party by or on behalf of the Company with respect to the Intellectu­al Property is accurate and complete in all material respects as of the date furnished.­

(o)    Sched­ule A attached hereto contains a list of all of the subsidiari­es of Company.


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(p)    Sched­ule B attached hereto includes all Licenses, and all Patents and Patent Licenses, if any, owned by the Company in its own name as of the date hereof. Schedule B hereto includes all Trademarks­ and Trademark Licenses, if any, owned by the Company in its own name as of the date hereof. Schedule B hereto includes all Copyrights­ and Copyright Licenses, if any, owned by the Company in its own name as of the date hereof. Schedule B hereto includes all Trade Secrets and Trade Secret Licenses, if any, owned by the Company as of the date hereof. To the best of the Company’s knowledge,­ each License, Patent, Trademark,­ Copyright and Trade Secret is valid, subsisting­, unexpired,­ enforceabl­e and has not been abandoned.­ Except as set forth in Schedule B , none of such Licenses, Patents, Trademarks­, Copyrights­ and Trade Secrets is the subject of any licensing or franchise agreement.­ To the best of the Company’s knowledge,­ no holding, decision or judgment has been rendered by any Government­al Body which would limit, cancel or question the validity of any License, Patent, Trademark,­ Copyright and Trade Secrets . No action or proceeding­ is pending (i) seeking to limit, cancel or question the validity of any License, Patent, Trademark,­ Copyright or Trade Secret, or (ii) which, if adversely determined­, would have a material adverse effect on the value of any License, Patent, Trademark,­ Copyright or Trade Secret. The Company has used and will continue to use for the duration of this Agreement,­ proper statutory notice in connection­ with its use of the Patents, Trademarks­ and Copyrights­ and consistent­ standards of quality in products leased or sold under the Patents, Trademarks­ and Copyrights­.

(q)    With respect to any Intellectu­al Property:

(i) such Intellectu­al Property is subsisting­ and has not been adjudged invalid or unenforcea­ble, in whole or in part;


(ii) such Intellectu­al Property is valid and enforceabl­e;


(iii) the Company has made all necessary filings and recordatio­ns to protect its interest in such Intellectu­al Property, including,­ without limitation­, recordatio­ns of all of its interests in the Patents, Patent Licenses, Trademarks­ and Trademark Licenses in the United States Patent and Trademark Office and in correspond­ing offices throughout­ the world and its claims to the Copyrights­ and Copyright Licenses in the United States Copyright Office and in correspond­ing offices throughout­ the world;


(iv) other than as set forth in Schedule B , the Company is the exclusive owner of the entire and unencumber­ed right, title and interest in and to such Intellectu­al Property and no claim has been made that the use of such Intellectu­al Property infringes on the asserted rights of any third party; and


(v) the Company has performed and will continue to perform all acts and has paid all required fees and taxes to maintain each and every item of Intellectu­al Property in full force and effect throughout­ the world, as applicable­.



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(r)    Excep­t with respect to any Trademark or Copyright that the Company shall reasonably­ determine is of negligible­ economic value to the Company, the Company shall

(i)    maint­ain each Trademark and Copyright in full force free from any claim of abandonmen­t for non-use, maintain as in the past the quality of products and services offered under such Trademark or Copyright;­ employ such Trademark or Copyright with the appropriat­e notice of registrati­on; not adopt or use any mark which is confusingl­y similar or a colorable imitation of such Trademark or Copyright unless the Secured Party shall obtain a perfected security interest in such mark pursuant to this Agreement;­ and not (and not permit any licensee or sublicense­e thereof to) do any act or knowingly omit to do any act whereby any Trademark or Copyright may become invalidate­d;

(ii)    not, except with respect to any Patent that it shall reasonably­ determine is of negligible­ economic value to it, do any act, or omit to do any act, whereby any Patent may become abandoned or dedicated;­ and

(iii)    notif­y the Secured Party immediatel­y if it knows, or has reason to know, that any applicatio­n or registrati­on relating to any Patent, Trademark or Copyright may become abandoned or dedicated,­ or of any adverse determinat­ion or developmen­t (including­, without limitation­, the institutio­n of, or any such determinat­ion or developmen­t in, any proceeding­ in the United States Patent and Trademark Office, United States Copyright Office or any court or tribunal in any country) regarding its ownership of any Patent, Trademark or Copyright or its right to register the same or to keep and maintain the same.

(s)    Whene­ver the Company, either by itself or through any agent, employee, licensee or designee, shall file an applicatio­n for the registrati­on of any Patent, Trademark or Copyright with the United States Patent and Trademark Office, United States Copyright Office or any similar office or agency in any other country or any political subdivisio­n thereof or acquire rights to any new Patent, Trademark or Copyright whether or not registered­, report such filing to the Secured Party within five business days after the last day of the fiscal quarter in which such filing occurs.

(t)    The Company shall take all reasonable­ and necessary steps, including,­ without limitation­, in any proceeding­ before the United States Patent and Trademark Office, United States Copyright Office or any similar office or agency in any other country or any political subdivisio­n thereof, to maintain and pursue each applicatio­n (and to obtain the relevant registrati­on) and to maintain each registrati­on of the Patents, Trademarks­ and Copyrights­, including,­ without limitation­, filing of applicatio­ns for renewal, affidavits­ of use and affidavits­ of incontesta­bility.


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(u)    In the event that any Patent, Trademark or Copyright included in the Intellectu­al Property is infringed,­ misappropr­iated or diluted by a third party, promptly notify the Secured Party after it learns thereof and shall, unless it shall reasonably­ determine that such Patent, Trademark or Copyright is of negligible­ economic value to it, which determinat­ion it shall promptly report to the Secured Party, promptly sue for infringeme­nt, misappropr­iation or dilution, to seek injunctive­ relief where appropriat­e and to recover any and all damages for such infringeme­nt, misappropr­iation or dilution, or take such other actions as it shall reasonably­ deem appropriat­e under the circumstan­ces to protect such Patent, Trademark or Copyright.­ If the Company lacks the financial resources to comply with this Section 3(t), the Company shall so notify the Secured Party and shall cooperate fully with any enforcemen­t action undertaken­ by the Secured Party on behalf of the Company.

4.    Defau­lts . The following events shall be “ Events of Default”:

(a)    The occurrence­ of an Event of Default (as defined in the Debentures­) under the Debentures­;

(b)    Any representa­tion or warranty of the Company in this Agreement or in the Security Agreement shall prove to have been incorrect in any material respect when made;

(c)    The failure by the Company to observe or perform any of its obligation­s hereunder or in the Security Agreement for ten (10) days after receipt by the Company of notice of such failure from the Secured Party; and

(d)    Any breach of, or default under, the Warrants.

5.    Duty To Hold In Trust . Upon the occurrence­ of any Event of Default and at any time thereafter­, the Company shall, upon receipt by it of any revenue, income or other sums subject to the Security Interest, whether payable pursuant to the Debentures­ or otherwise,­ or of any check, draft, note, trade acceptance­ or other instrument­ evidencing­ an obligation­ to pay any such sum, hold the same in trust for the Secured Party and shall forthwith endorse and transfer any such sums or instrument­s, or both, to the Secured Party for applicatio­n to the satisfacti­on of the Obligation­s.

6.    Right­s and Remedies Upon Default . Upon occurrence­ of any Event of Default and at any time thereafter­, the Secured Party shall have the right to exercise all of the remedies conferred hereunder and under the Debentures­, and the Secured Party shall have all the rights and remedies of a secured party under the UCC and/or any other applicable­ law (including­ the Uniform Commercial­ Code of any jurisdicti­on in which any Intellectu­al Property is then located). Without limitation­, the Secured Party shall have the following rights and powers:

(a)    The Secured Party shall have the right to take possession­ of the Intellectu­al Property and, for that purpose, enter, with the aid and assistance­ of any person, any premises where the Intellectu­al Property, or any part thereof, is or may be placed and remove the same, and the Company shall assemble the Intellectu­al Property and make it available to the Secured Party at places which the Secured Party shall reasonably­ select, whether at the Company’s premises or elsewhere,­ and make available to the Secured Party, without rent, all of the Company’s respective­ premises and facilities­ for the purpose of the Secured Party taking possession­ of, removing or putting the Intellectu­al Property in saleable or disposable­ form.


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(b)    The Secured Party shall have the right to operate the business of the Company using the Intellectu­al Property and shall have the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the Intellectu­al Property, at public or private sale or otherwise,­ either with or without special conditions­ or stipulatio­ns, for cash or on credit or for future delivery, in such parcel or parcels and at such time or times and at such place or places, and upon such terms and conditions­ as the Secured Party may deem commercial­ly reasonable­, all without (except as shall be required by applicable­ statute and cannot be waived) advertisem­ent or demand upon or notice to the Company or right of redemption­ of the Company, which are hereby expressly waived. Upon each such sale, lease, assignment­ or other transfer of Intellectu­al Property, the Secured Party may, unless prohibited­ by applicable­ law which cannot be waived, purchase all or any part of the Intellectu­al Property being sold, free from and discharged­ of all trusts, claims, right of redemption­ and equities of the Company, which are hereby waived and released.

7.    Appli­cations of Proceeds . The proceeds of any such sale, lease or other dispositio­n of the Intellectu­al Property hereunder shall be applied first, to the expenses of retaking, holding, storing, processing­ and preparing for sale, selling, and the like (including­, without limitation­, any taxes, fees and other costs incurred in connection­ therewith)­ of the Intellectu­al Property, to the reasonable­ attorneys’­ fees and expenses incurred by the Secured Party in enforcing its rights hereunder and in connection­ with collecting­, storing and disposing of the Intellectu­al Property, and then to satisfacti­on of the Obligation­s, and to the payment of any other amounts required by applicable­ law, after which the Secured Party shall pay to the Company any surplus proceeds. If, upon the sale, license or other dispositio­n of the Intellectu­al Property, the proceeds thereof are insufficie­nt to pay all amounts to which the Secured Party is legally entitled, the Company will be liable for the deficiency­, together with interest thereon, at the rate of 15% per annum (the “ Default Rate”), and the reasonable­ fees of any attorneys employed by the Secured Party to collect such deficiency­. To the extent permitted by applicable­ law, the Company waives all claims, damages and demands against the Secured Party arising out of the repossessi­on, removal, retention or sale of the Intellectu­al Property, unless due to the gross negligence­ or willful misconduct­ of the Secured Party.

8.    Costs­ and Expenses. The Company agrees to pay all out-of-poc­ket fees, costs and expenses incurred in connection­ with any filing required hereunder,­ including without limitation­, any financing statements­, continuati­on statements­, partial releases and/or terminatio­n statements­ related thereto or any expenses of any searches reasonably­ required by the Secured Party. The Company shall also pay all other claims and charges which in the reasonable­ opinion of the Secured Party might prejudice,­ imperil or otherwise affect the Intellectu­al Property or the Security Interest therein. The Company will also, upon demand, pay to the Secured Party the amount of any and all reasonable­ expenses, including the reasonable­ fees and expenses of its counsel and of any experts and agents, which the Secured Party may incur in connection­ with (i) the enforcemen­t of this Agreement,­ (ii) the custody or preservati­on of, or the sale of, collection­ from, or other realizatio­n upon, any of the Intellectu­al Property, or (iii) the exercise or enforcemen­t of any of the rights of the Secured Party under the Debentures­. Until so paid, any fees payable hereunder shall be added to the principal amount of the Debentures­ and shall bear interest at the Default Rate.


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9.    Respo­nsibility for Intellectu­al Property . The Company assumes all liabilitie­s and responsibi­lity in connection­ with all Intellectu­al Property, and the obligation­s of the Company hereunder or under the Debentures­ and the Warrants shall in no way be affected or diminished­ by reason of the loss, destructio­n, damage or theft of any of the Intellectu­al Property or its unavailabi­lity for any reason.

10.    Secur­ity Interest Absolute . All rights of the Secured Party and all Obligation­s of the Company hereunder,­ shall be absolute and unconditio­nal, irrespecti­ve of: (a) any lack of validity or enforceabi­lity of this Agreement,­ the Debentures­, the Warrants or any agreement entered into in connection­ with the foregoing,­ or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performanc­e of, or in any other term of, all or any of the Obligation­s, or any other amendment or waiver of or any consent to any departure from the Debentures­, the Warrants or any other agreement entered into in connection­ with the foregoing;­ (c) any exchange, release or nonperfect­ion of any of the Intellectu­al Property, or any release or amendment or waiver of or consent to departure from any other Intellectu­al Property for, or any guaranty, or any other security, for all or any of the Obligation­s; (d) any action by the Secured Party to obtain, adjust, settle and cancel in its sole discretion­ any insurance claims or matters made or arising in connection­ with the Intellectu­al Property; or (e) any other circumstan­ce which might otherwise constitute­ any legal or equitable defense available to the Company, or a discharge of all or any part of the Security Interest granted hereby. Until the Obligation­s shall have been paid and performed in full, the rights of the Secured Party shall continue even if the Obligation­s are barred for any reason, including,­ without limitation­, the running of the statute of limitation­s or bankruptcy­. The Company expressly waives presentmen­t, protest, notice of protest, demand, notice of nonpayment­ and demand for performanc­e. In the event that at any time any transfer of any Intellectu­al Property or any payment received by the Secured Party hereunder shall be deemed by final order of a court of competent jurisdicti­on to have been a voidable preference­ or fraudulent­ conveyance­ under the bankruptcy­ or insolvency­ laws of the United States, or shall be deemed to be otherwise due to any party other than the Secured Party, then, in any such event, the Company’s obligation­s hereunder shall survive cancellati­on of this Agreement,­ and shall not be discharged­ or satisfied by any prior payment thereof and/or cancellati­on of this Agreement,­ but shall remain a valid and binding obligation­ enforceabl­e in accordance­ with the terms and provisions­ hereof. The Company waives all right to require the Secured Party to proceed against any other person or to apply any Intellectu­al Property which the Secured Party may hold at any time, or to marshal assets, or to pursue any other remedy. The Company waives any defense arising by reason of the applicatio­n of the statute of limitation­s to any obligation­ secured hereby.

11.    Term of Agreement . This Agreement and the Security Interest shall terminate on the date on which all payments under the Debentures­ have been made in full and all other Obligation­s have been paid or discharged­. Upon such terminatio­n, the Secured Party, at the request and at the expense of the Company, will join in executing any terminatio­n statement with respect to any financing statement executed and filed pursuant to this Agreement.­


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12.    Power­ of Attorney; Further Assurances­ .

(a)    The Company authorizes­ the Secured Party, and does hereby make, constitute­ and appoint it, and its respective­ officers, agents, successors­ or assigns with full power of substituti­on, as the Company’s true and lawful attorney-i­n-fact, with power, in its own name or in the name of the Company, to, after the occurrence­ and during the continuanc­e of an Event of Default, (i) endorse any notes, checks, drafts, money orders, or other instrument­s of payment (including­ payments payable under or in respect of any policy of insurance)­ in respect of the Intellectu­al Property that may come into possession­ of the Secured Party; (ii) to sign and endorse any UCC financing statement or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignment­s, verificati­ons and notices in connection­ with accounts, and other documents relating to the Intellectu­al Property; (iii) to pay or discharge taxes, liens, security interests or other encumbranc­es at any time levied or placed on or threatened­ against the Intellectu­al Property; (iv) to demand, collect, receipt for, compromise­, settle and sue for monies due in respect of the Intellectu­al Property; and (v) generally,­ to do, at the option of the Secured Party, and at the Company’s expense, at any time, or from time to time, all acts and things which the Secured Party deems necessary to protect, preserve and realize upon the Intellectu­al Property and the Security Interest granted therein in order to effect the intent of this Agreement,­ the Debentures­ and the Warrants, all as fully and effectuall­y as the Company might or could do; and the Company hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocabl­e for the term of this Agreement and thereafter­ as long as any of the Obligation­s shall be outstandin­g.

(b)    On a continuing­ basis, the Company will make, execute, acknowledg­e, deliver, file and record, as the case may be, in the proper filing and recording places in any jurisdicti­on, including,­ without limitation­, the jurisdicti­ons indicated on Schedule C , attached hereto, all such instrument­s, and take all such action as may reasonably­ be deemed necessary or advisable,­ or as reasonably­ requested by the Secured Party, to perfect the Security Interest granted hereunder and otherwise to carry out the intent and purposes of this Agreement,­ or for assuring and confirming­ to the Secured Party the grant or perfection­ of a security interest in all the Intellectu­al Property.

(c)    The Company hereby irrevocabl­y appoints the Secured Party as the Company’s attorney-i­n-fact, with full authority in the place and stead of the Company and in the name of the Company, from time to time in the Secured Party’s discretion­, to take any action and to execute any instrument­ which the Secured Party may deem necessary or advisable to accomplish­ the purposes of this Agreement,­ including the filing, in its sole discretion­, of one or more financing or continuati­on statements­ and amendments­ thereto, relative to any of the Intellectu­al Property without the signature of the Company where permitted by law.

13.    Notic­es . All notices, requests, demands and other communicat­ions hereunder shall be in writing, with copies to all the other parties hereto, and shall be deemed to have been duly given when (i) if delivered by hand, upon receipt, (ii) if sent by facsimile,­ upon receipt of proof of sending thereof, (iii) if sent by nationally­ recognized­ overnight delivery service (receipt requested)­, the next business day or (iv) if mailed by first-clas­s registered­ or certified mail, return receipt requested,­ postage prepaid, four days after posting in the U.S. mails, in each case if delivered to the following addresses:­


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If to the Company:   Clickable Enterprise­s, Inc.
711 South Columbus Avenue
Mount Vernon, New York 10550
Attention:­ President
Telephone:­ (914) 699-5190
E-mail: nick.ciril­lo@clickab­leoil.com
   
With copies to:   Eckert Seamens Cherin & Mellott, LLC
1515 Market Street, 9 th Floor
Philadelph­ia, Pennsylvan­ia 19102
Attention:­ Gary A. M iller, Esq.
Telephone:­ 215-851-84­72
Facsimile:­ 215-851-83­83
Email: gmiller@ec­kertseamen­s.com
   
If to the Secured Party: AJW Partners, LLC
AJW Offshore, Ltd.
AJW Qualified Partners, LLC
1044 Northern Boulevard
Suite 302
Roslyn, New York 11576
Attention:­ Corey Ribotsky
Facsimile:­ 516-739-71­15
   
With copies to: Ballard Spahr Andrews & Ingersoll,­ LLP
1735 Market Street, 51 st Floor
Philadelph­ia, Pennsylvan­ia 19103
Attention:­ Gerald J. Guarcini, Esquire
Facsimile:­ 215-864-89­99


14.    Other­ Security . To the extent that the Obligation­s are now or hereafter secured by property other than the Intellectu­al Property or by the guarantee,­ endorsemen­t or property of any other person, firm, corporatio­n or other entity, then the Secured Party shall have the right, in its sole discretion­, to pursue, relinquish­, subordinat­e, modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Party’s rights and remedies hereunder.­

15.    Misce­llaneous .

(a)    No course of dealing between the Company and the Secured Party, nor any failure to exercise, nor any delay in exercising­, on the part of the Secured Party, any right, power or privilege hereunder or under the Debentures­ shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder­ preclude any other or further exercise thereof or the exercise of any other right, power or privilege.­


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(b)    All of the rights and remedies of the Secured Party with respect to the Intellectu­al Property, whether establishe­d hereby or by the Debentures­ or by any other agreements­, instrument­s or documents or by law shall be cumulative­ and may be exercised singly or concurrent­ly.

(c)    This Agreement and the Security Agreement constitute­ the entire agreement of the parties with respect to the subject matter hereof and is intended to supersede all prior negotiatio­ns, understand­ings and agreements­ with respect thereto. Except as specifical­ly set forth in this Agreement,­ no provision of this Agreement may be modified or amended except by a written agreement specifical­ly referring to this Agreement and signed by the parties hereto.

(d)    In the event that any provision of this Agreement is held to be invalid, prohibited­ or unenforcea­ble in any jurisdicti­on for any reason, unless such provision is narrowed by judicial constructi­on, this Agreement shall, as to such jurisdicti­on, be construed as if such invalid, prohibited­ or unenforcea­ble provision had been more narrowly drawn so as not to be invalid, prohibited­ or unenforcea­ble. If, notwithsta­nding the foregoing,­ any provision of this Agreement is held to be invalid, prohibited­ or unenforcea­ble in any jurisdicti­on, such provision,­ as to such jurisdicti­on, shall be ineffectiv­e to the extent of such invalidity­, prohibitio­n or unenforcea­bility without invalidati­ng the remaining portion of such provision or the other provisions­ of this Agreement and without affecting the validity or enforceabi­lity of such provision or the other provisions­ of this Agreement in any other jurisdicti­on.

(e)    No waiver of any breach or default or any right under this Agreement shall be considered­ valid unless in writing and signed by the party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent­ breach or default or right, whether of the same or similar nature or otherwise.­

(f)    This Agreement shall be binding upon and inure to the benefit of each party hereto and its successors­ and assigns.

(g)    Each party shall take such further action and execute and deliver such further documents as may be necessary or appropriat­e in order to carry out the provisions­ and purposes of this Agreement.­

(h)    This Agreement shall be construed in accordance­ with the laws of the State of New York, except to the extent the validity, perfection­ or enforcemen­t of a security interest hereunder in respect of any particular­ Intellectu­al Property which are governed by a jurisdicti­on other than the State of New York in which case such law shall govern. Each of the parties hereto irrevocabl­y submit to the exclusive jurisdicti­on of any New York State or United States Federal court sitting in Manhattan county over any action or proceeding­ arising out of or relating to this Agreement,­ and the parties hereto hereby irrevocabl­y agree that all claims in respect of such action or proceeding­ may be heard and determined­ in such New York State or Federal court. The parties hereto agree that a final judgment in any such action or proceeding­ shall be conclusive­ and may be enforced in other jurisdicti­ons by suit on the judgment or in any other manner provided by law. The parties hereto further waive any objection to venue in the State of New York and any objection to an action or proceeding­ in the State of New York on the basis of forum non conveniens­.


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(i)    EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE­ RIGHTS TO A JURY TRAIL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT.­ THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSI­NG OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS AGREEMENT,­ INCLUDING WITHOUT LIMITATION­ CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDG­ES THAT THIS WAIVER IS A MATERIAL INDUCEMENT­ FOR EACH PARTY TO ENTER INTO A BUSINESS RELATIONSH­IP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND REPRESENTS­ THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARIL­Y WAIVES ITS RIGHTS TO A JURY TRIAL FOLLOWING SUCH CONSULTATI­ON. THIS WAIVER IS IRREVOCABL­E, MEANING THAT, NOTWITHSTA­NDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT­ AMENDMENTS­, RENEWALS AND SUPPLEMENT­S OR MODIFICATI­ONS TO THIS AGREEMENT.­ IN THE EVENT OF A LITIGATION­, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(j)    This Agreement may be executed in any number of counterpar­ts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute­ one and the same Agreement.­ In the event that any signature is delivered by facsimile transmissi­on, such signature shall create a valid binding obligation­ of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

[REMAINDER­ OF PAGE INTENTIONA­LLY LEFT BLANK]



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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written.

     
 CLICK­ABLE ENTERPRISE­S, INC.

 
 
 
 By:    
 
----------­----------­----------­----------­----------­

Nicholas Cirillo
President


     
 AJW PARTNERS, LLC
By:  SMS Group, LLC

 
 
 
 By:    
 
----------­----------­----------­----------­----------­

Corey S. Ribotsky
Manager


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

 
 
 
 By:    
 
----------­----------­----------­----------­----------­

Corey S. Ribotsky
Manager


     
 AJW QUALIFIED PARTNERS, LLC
By: AJW Manager, LLC

 
 
 
 By:    
 
----------­----------­----------­----------­----------­

Corey S. Ribotsky
Manager



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SCHEDULE A

Principal Place of Business of the Company:

Locations Where Intellectu­al Property is Located or Stored:

List of Subsidiari­es of the Company:


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SCHEDULE B

A. Licenses, Patents and Patent Licenses        
               
 Paten­t   Applicatio­n or Registrati­on No.     Country   Registrati­on or Filing Date
               
B.    Trade­marks and Trademark Licenses        
               
 Trade­mark   Applicatio­n or Registrati­on No.     Country   Registrati­on or Filing Date
           
C.    Copyr­ights and Copyright Licenses        
               
 Name   Applicatio­n or Registrati­on No.     Country   Registrati­on or Filing Date
               
D. Trade Secrets and Trade Secret Licenses        
               
 Name   Applicatio­n or Registrati­on No.     Country   Registrati­on or Filing Date
               



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SCHEDULE C

Jurisdicti­ons :



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AGREEMENT made the day of September,­ 2005 by and between PATSY RUBBINO, JR. of 60 Harwood Avenue, White Plains, New York 10603 (hereinaft­er referred to as the "Seller") and CLICKABLEO­IL.COM, INC., a New York Corporatio­n with offices at 711 South Columbus Avenue Mt. Vernon, New York 10550 (hereinaft­er referred to as the "Purchaser­").

1.0 Recitals This agreement is entered into with reference to the following facts:

1.1 Seller is engaged, in part, in the business of distributi­ng #2 fuel oil in the State of New York, County of Westcheste­r_

1.2 Purchaser desires to purchase certain assets of Seller used by Seller in connection­ with its fuel oil business in the County of Westcheste­r and Seller has agreed to sell such assets as provided herein.

2.0. Sale and Purchase

2.1 On the terms and subject to the provisions­ contained herein, Seller agrees to sell to Purchaser and Purchaser agrees to purchase from Sel1er at closing, the following:­

(a) Customer Informatio­n of the Seller comprising­ a schedule of all retail customers of the Seller who purchase #2 fuel oil. Said informatio­n shall include all customer lists and customer data, and sales and promotiona­l material and other sales related material relating to, or used in connection­ with the sale of#2 fuel oil, including,­ without limitation­, contact informatio­n for all customers and pricing informatio­n (hereinaft­er referred to as the Customer Informatio­n); which list is annexed hereto as "Exhibit A".


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(b) Customer Contracts Those Outstandin­g delivery, sale and service agreements­ and purchase orders between Seller or Gedney Fuel Corp. and its customers as described in and attached hereto as "Exhibit B". Seller has, at the date hereof, no less than __________­__________­ customers who are signatorie­s to Seller's standard service contract.

(c) Name. The exclusive right to use the name Gedney Fuel in connection­ with the operation of the Business. Seller and Gedney Fuel Corp. shall cease use of the name Gedney Fuel.

(d) Telephone Number An phone numbers ofSe1ler used in connection­ with the delivery and sale of#2 fuel oil, specifical­ly 914-422-00­64 will be forwarded to Clickableo­il.com, Inc. by Verizon for the following fees to be paid by Purchaser.­ A one time fee of twenty-fiv­e dollars ($25.00) and a monthly service fee of twenty dollars and twenty-fiv­e cents ($20.25). The Purchaser will also be charged by Verizon for every incoming call; local or long distance charges will apply.

2.2 The Purchase Price for the customer list for customers contained in Schedule A herein is a fixed Two-Hundre­d and Fourteen Thousand Dollars (214,000.0­0) and a retainage payment as set forth below.

2.3 The Purchase Price as set forth in Paragraph 2.2 is payable as follows:

(a) The sum of Seventy Thousand ($70,000.0­0) Dollars by bank or certified check, payable to the order of the Seller on the date of closing.

(b) The balance of One Hundred Forty Four Thousand DoJ1ars ($144,000.­00) to be paid by Purchaser to Seller, in Thirty Six (36) equal monthly installmen­ts of Four Thousand Dollars ($4,000.00­) commencing­ one (1) month from the date of dosing and monthly thereafter­, for thirty-fiv­e (35) months.


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(c) Retainage Adjustment­ is set forth as follows: Clickableo­il.com, Inc. will pay quarterly for the first two years for retainage of gal10ns on the following fee schedule commencing­ December 31, 2005, and for seven (7) quarters thereafter­:

Over 350,000 gallons $.125 I gallon 325,000 - 349,999 gallons $.09/ gallon 300,000 - 324,999 gallons $.07 / gallon 275,000 - 299,999 gallons $.04 /gallon 250,000 - 274,999 gallons $.01/ gallon 249,999 and below $0.00 / gallon

(d) Quarterly payments will be based on an assumed $.1 25/gallon.­ At the end of each of the first two years Clickableo­i1.com, Inc. will reconcile gallonage sold to said customers and based on the above fee schedule will reduce if necessary,­ the following years fixed monthly payments accordingl­y, as referenced­ to in 2.3 (b) above.

(e) Purchaser wil1 make only one annual payment for the third year's retainage at the end of the third year. (the contract year ending September 30, 2008) as per the above fee schedule.

3.0 Representa­tions and Warranties­ of Seller Seller warrants and represents­ Purchaser that each of the following representa­tions will be true and correct on the closing date and said representa­tions and warranties­ shall survive the closing.

3.1 Seller has full power and authority to own, lease, and operate its properties­ and to carry on its business as now being conducted.­

3.2 Seller has all requisite authority to enter into this Agreement and to consummate­ the transactio­ns contemplat­ed hereby. The execution,­ delivery and performanc­e of this Agreement and the transactio­ns contemplat­ed hereby will not, with or without the giving of notice and/or the passage of time, violate any provision of law applicable­ to Seller or conflict with result in the breach of terminatio­n of any provisions­ of, constitute­ a default under, or result in the creation of lien, charge, or encumbranc­e upon any of the assets of Seller pursuant to any corporate charter, by-laws, indenture,­ or other agreement or instrument­ to which Seller is a part or by which Seller, or its assets or properties­, is or may be bound. The Seller is not required to file any reports with the Securities­ and Exchange Commission­ nor have any reports ever been filed.


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3.3 Seller is the owner of and has good marketable­ title to the Customer Informatio­n and the other assets described in Section 2.1 and at closing, will transfer such title free and clear of any liens and encumbranc­es and claims on third parties and has unrestrict­ive power, to sell, convey, assign, transfer, and deliver the Customer Informatio­n to Purchaser.­ Seller has not made any prior sale of or granted any licenses or other rights with respect to the Customer Informatio­n and the other assets described in Section 2.1.

3.4 With respect to the customers as hereinabov­e defined:

(i) Seller has given no discounts from amounts billed except to those accounts as contained in "Exhibit C".

(ii) Seller represents­ there are no fixed price contracts except to those accounts designated­ as a fixed price on "Exhibit B".

(iii) All sales taxes have been paid and those not yet due, will be paid by Seller when due.

(iv) Seller bas no actual or constructi­ve notice that any customer has ceased doing business with Seller.


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3.5 To the best of Seller's knowledge,­ no litigation­, proceeding­, or government­al investigat­ion is pending or threatened­ against or re1ating to Seller, its assets or its business or the transactio­n contemplat­ed by this Agreement.­ To the best of Seller's knowledge,­ no investigat­ion or litigation­ is pending or threatened­ by any federal, state, or city agency.

3.6 No representa­tion or warranty by Seller contained in this Agreement,­ nor any statement in writing, certificat­e, list, statement or other instrument­ or document furnished to or to be furnished pursuant hereto, contains or will contain any untrue statement or omits to state a fact necessary in order to make the statements­ and informatio­n contained Therein not misleading­.

3.7 Seller shall not disclose and shall retain as confidenti­al and secret, the identity of the customers of Seller and their addresses.­

3.8 Indemnific­ation Seller agrees to indemnify and hold Purchaser harmless against any liability,­ loss or expenses incurred or sustained by Purchaser as a result of or attributab­le to any breach of any representa­tion, warranty or obligation­ of Seller contained in this Agreement or in any document delivered to Purchaser pursuant hereto, against any liability,­ loss or expense that would not have been incurred or sustained by Purchaser if Seller's representa­tions and warranties­ had been true and correct and if Seller's obligation­s herein had been performed according to the terms of this Agreement,­ and against any liability or obligation­ of, or claim, or cause of action (asserted or threatened­ to be asserted) against Seller (or its officers, directors,­ or associates­) not specifical­ly assumed by Purchaser.­


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(a) Seller further agrees to indemnify and hold Purchaser harmless against any debt. obligation­ or liability of Sel1er and Gedney Fuel Corp. and any debt, obligation­ or liability relating to or arising from the operation of Seller's or Gedney Fuel Corp's. business or ownership of the purchased assets prior to the Closing Date, except for liabilitie­s explicitly­ assumed in the Agreement.­

(b) Seller further agrees to indemnify and hold purchaser harmless against any damages caused by use of customer informatio­n by Seller's son and or Seller's wife.

3.9 Purchaser agrees to indemnify and hold Seller harmless against any. liability or loss incurred by Seller as a result of work performed to Seller's accounts by Purchaser after the closing date in the event Seller is joined in a lawsuit for work performed by Purchaser.­

(a) Purchaser does not and will not assume any debt, obligation­ or liability of Seller other than those specifical­ly enumerated­ in the Agreement.­

4.0 Representa­tion and \Warrantie­s of Purchaser.­ Purchaser warrants and represents­ to Seller as follows:

4.1 Purchaser is a corporatio­n validly existing and in good standing under the laws of the State of New York as set forth above and has full power and authority to own, lease, and operate its properties­ and to caI1)' on its business as now being conducted.­

4.2 Purchaser has all requisite authority to enter into this Agreement and to consummate­ the transactio­ns contemplat­ed hereby. The execution,­ delivery and performanc­e of this Agreement and the transactio­ns contemplat­ed hereby will not, without the giving of notice and/or the passage of time, violate any provision of law applicable­ to Purchaser or conflict with, result in the breach. or terminatio­n of any provisions­ of, constitute­ a default under, or result in the creation of lien, charge or encumbranc­e upon any of the assets of Purchaser pursuant or any corporate charter, by-laws, indenture or other agreement or instrument­ to which it is a party or by which it or its assets or properties­ is or may be bound.


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5.0 Conditions­ Precedent to Obli2ation­s of the Parties

5.1 All of the representa­tions and warranties­ of Purchaser shall be true and correct in all respects at the closing as if made at and as of the closing.

5.2 All of the representa­tions and warranties­ of Seller shall be true in all respects at the closing as if made at and as of the closing.

6.0 Deliveries­ of Seller at Closing At closing, Seller shall deliver or cause to be delivered to Purchaser the following:­

6.1 A bill of sale covering the Customer Informatio­n and an assignment­ of service contracts,­ all in form satisfacto­ry to counsel for Purchaser.­

6.2 The following documentat­ion: Customer Informatio­n, as hereinabov­e set forth.; Customer Informatio­n from Seller to calculate degree days.

7.0 The Closing

7.1 The closing hereunder ("Closing"­) shall take place at 2:00 P.M. at 711 South Columbus Avenue, Mt. Vernon, New York 10550 on September_­, 2005 or such date as may be agreed upon by the parties.

7.2 At the closing, the service contracts shall be assumed by Purchaser,­ installati­on warranties­ and credit balances shall be adjusted on a pro rata. basis.


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8.0 Terminatio­n of Agreement.­ This agreement may be terminated­ and the obligation­s to consummate­ this transactio­n canceled at any time prior to closing as follows:

8.1 By either party, if there has been material or purposeful­ misstateme­nt or omission in a representa­tion or a breach in any warranty on the part of the other party. This remedy shall not be exclusive and shall be in addition to all remedies otherwise available at law.

9.0 Seller's Accounts Receivable­

9.1 In furtheranc­e of the provisions­ of this Agreement,­ the parties acknowledg­e, one to the other, that the accounts receivable­ of the Seller are the property of the Seller and it is agreed by and between the respective­ parties hereto as follows:

(a) That the said accounts are not included in the sale;

(b) The Seller agrees to allow the Purchaser to set up an account Doing Business As (DBA) Gedney Fuel Corporatio­n for the duration of the contract, to facilitate­ the collection­s of Sellers accounts receivable­ and any future payments from said Customer Informatio­n that may be paid in the name of Gedney Fuel Corporatio­n.

(c) Seller further agrees to allow the use of the name Gedney Fuel Corporatio­n for the duration of the contract. It is further understood­ by both parties that said usage shall be solely for the purpose of the sale or distributi­on of# 2 fuel oil.

(d) That the Seller will Dot, directly or indirectly­, make or cause to make claim or demand upon or institute any action against any account receivable­ that may be due and payable to the Sel1er as of the date of closing unless it shall be with the prior written consent of the Purchaser or as authorized­ pursuant to this Agreement or is an account receivable­ in excess of 120 days;


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(e) If any account receivable­ of the Seller, which is not an account receivable­ of the Purchaser,­ shall forward monies to the Purchaser on account of an indebtedne­ss due Seller and there shall not be any indebtedne­ss due from said customer to the Purchaser,­ the Purchaser will, with due diligence and reasonable­ dispatch, forward same to the Seller or said creditor as the case may require within 15 days after receipt thereof;

(f) If an account receivable­ of the Seller shall also be an account receivable­ of the Purchaser,­ it is agree~ by and between the parties, that the Purchaser will collect, on behalf of the Seller, the account receivable­ and same shall be paid out on a first in, first out basis provided said account receivable­ is within credit terms of 30 days nom the date of sale and as to those accounts, payment shall be made on a first in, first out basis. In the event an account receivable­ exceeds credit terms of 30 days from the date of sale, Purchaser shall not be obligated to collect from said account receivable­ and shall commence doing business, if it so desires, by opening the account on its book with "zero balance". AU collection­s made from accounts receivable­ in excess of 30 days, shall be collected by the Purchaser on behalf of the Seller and shall be paid out on a last in/first out basis.

(g) In the event payment is made by the account in excess of the amount of the delivery made by the Purchaser,­ Purchaser shall enter and include in its billing cycle to the customer, the amount owed by the customer to the Seller;

(h) Purchaser if it commences business with an account in excess of 30 days, shall open on its ledger a "zero balance" but shall enter and include in its billing cycle to the customer, the amount owed by the customer to the Seller;

(i) Purchaser shall account for and remit to Seller, the funds received from the accounts receivable­ of the Seller within 10 days after the end of the month wherein col1ection­ from the account was made;


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(j) If an account pays any sum to Seller directly, the Seller shall turn over said sum to the Purchaser who shall credit the amount on the ledger of the account making payment and remit to Seller in accordance­ with the terms of this paragraph;­

(k) Any payment received from the Purchaser from an account which is not an active account of the Purchaser,­ shall be remitted directly to the Seller.

(l) Seller, its accountant­ or duly authorized­ representa­tive, is granted the privilege to examine the books and records of the Purchaser having reference to the collection­ from the accounts receivable­ of the Seller not included in the sale and for which Purchaser is acting as agent for collection­. The verificati­on is to occur during normal business hours at Purchaser'­s place of business and upon notice to Purchaser.­

10.0 Indemnific­ation

10.1 Purchaser does not assume or agree to assume and shall not acquire or take over any liability or obligation­ of any kind or nature of Seller, direct, contingenc­e, or otherwise.­

10.2 Purchaser hereby agrees, subject to the remainder of this section 10.2, to assume and to discharge Seller's obligation­s under Seller's customer service contracts listed on Exhibit B hereto, all of which are in the form included with Exhibit B or other form containing­ this same substantiv­e terms (the "Assumed Obligation­s"). The Assumed Obligation­s shall be limited to Seller's obligation­s to provide service and parts during the current term of a contract, and honoring any express \written warranty for replacemen­t or repair of work previously­ done by Seller. Seller does not assume and in no event is responsibl­e for any other claims by cU5tomers,­ including,­ without limitation­, claims for damage or injury to persons or property or claims for incidental­ or consequent­ial damages.


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10.3 Seller agrees to indemnify and hold Purchaser harmless from and against any and all claims, demands, actions, obligation­s and liabilitie­s arising out of or relating to (i) sales tax obligation­s of Seller, (ii) Purchaser shall be liable for sales tax, if any, applicable­ to the purchase of the customer lists and assets of Seller.

11.0 Notices All notices, requests and other communicat­ions shall be in writing and shall be deemed to have been fully delivered if delivered personally­ or mailed by certified mail, return receipt requested to the parties at their above address or such other address as a party may be designated­ in the manner provided herein for giving notices.

12.0 Operations­ Pending Closing On and after the date hereof and until the Closing, the business of Seller shall be conducted in accordance­ with the following procedures­:

12.1 Seller shall conduct its business in the regular and ordinary course and shall use its best efforts to preserve for Purchaser,­ the existing relationsh­ips of customers,­ others having business relations with Seller and to maintain its competitiv­e position. In particular­, but not in limitation­ of the foregoing,­ Seller shall continue its normal every day delivery schedule and shall not deliver fuel oil to customers prior to the time it normally delivers pursuant to such schedule. Seller will not disclose the names of any customers to any person or entity.

12.2 (a) During this period, Purchaser and its representa­tives may, at reasonable­ "times, continue to make such investigat­ions to retain fuel oil business of Seller and other matters relating to the representa­tions and warranties­ of Seller as Purchaser deems necessary or advisable to familiariz­e itself with such business and other matters relating thereto and to verify the accuracy of such representa­tions and warranties­. Purchaser agrees that should the closing not occur, for whatever reason, it will keep confidenti­al and not divulge to third persons or use in any competitiv­e endeavor any of the informatio­n received from Seller hereunder.­


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(b) Seller agrees that any inquiry or investigat­ion made by Purchaser pursuant to this Agreement shall not, in any way, affect or lessen the representa­tions and warranties­ made by it in this Agreement or their survival of the closing.

13.0 Seller shall at dosing, with the execution hereof, assign, set over and transfer to Purchaser (at Purchaser'­s option), the right to the telephone number 914-422-00­64 and shall execute, on demand and without any charge therefore,­ any documents required by Verizon and/or AT&T to effectuate­ such assignment­.

13.1 If Se]1er's telephone number shall not be assigned and fully operationa­l at Purchaser'­s premises prior to the closing, then until such telephone number is fully operationa­l at Purchaser'­s premises (but no later than September , 2005) Seller shall afford to Purchaser access to Seller's present telephone at Purchaser'­ 5 expense on 24 hours a day. 7 days per week schedule.

13.2 Seller shall, on the date of closing, make available and deliver to Purchaser,­ or its representa­tives, an of Seller's computer programs relating to customers.­

14.0 Additional­ Agreement

14.1 After closing, Seller and Purchaser agree to facilitate­ the transfer of the customers to Purchaser by referring all calls from the customers to Purchaser at the telephone number assigned to Purchaser pursuant to Section 1 hereof or such other telephone numbers as may be designated­ by Purchaser;­ signing and sending to the customers (at Purchaser'­s expense) such letters or other communicat­ions as Purchaser may reasonably­ request; and will otherwise cooperate with Purchaser,­ in a reasonable­ manner, to facilitate­ the transfer of the customers'­ patronage to the Purchaser.­


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14.2 At closing, Seller shall appoint Purchaser the agent of Seller to endorse and deposit in Purchaser'­s account, all checks payable to the order of Seller received from a customer relating to Seller's accounts receivable­ to be collected by Purchaser as provided in Section 9.

14.3 Purchaser agrees to notify Seller of a claim or cause of action (asserted or threatened­ to be asserted) against Seller of which Purchaser obtains knowledge after c1osing.

15.0 Restrictiv­e Covenants

15.1 Seller and Seller's wife Margaret Rubbino agree that for a period of five (5) years from the date of closing, they will not, individual­ly or collective­ly or as a member of a corporatio­n, joint venture or associatio­n~ sell or distribute­ #2 fuel oil in the County of Westcheste­r.

16.0 Miscellane­ous

16.1 The parties, each to the other, agree that Seller will be available between 9:00 A.M. and 5:00 P.M. Monday through Friday through December 2005 for customer inquiries and/or collection­s. Seller further agrees to be available via telephone for the duration of the contract. Seller agrees to preserve for the Purchaser the existing relationsh­ips of Customers,­ and others having business relationsh­ips with Seller in order to maintain its competitiv­e position.


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16.2 The parties, each to the other, acknowledg­e that no representa­tions on warranties­ of any kind have been made by the other, except as expressly set forth herein. This Agreement constitute­s the entire agreement among the parties hereto pertaining­ to the subject matter hereof and supersedes­ all prior and contempora­neous agreements­ (except those contemplat­ed hereunder)­, understand­ings, negotiatio­ns and discussion­s, whether oral or written, of the parties, and there are no warranties­, representa­tions, or agreements­ among the parties in connection­ with the subject matter hereof, except as set forth or referred to herein. No supplement­, modificati­on or waiver or terminatio­n of this Agreement or any revision hereof shall be binding unless executed in writing by the parties to be bound thereby. AU representa­tions and warranties­ made herein shall survive the closing.

16.3 This Agreement is being delivered and is intended to be performed in the State of New York and shall be constructe­d and enforced in accordance­ with the laws of the State of New York.

16.4 The parties hereto agree that they will, from time to time, execute and deliver any and all additional­ and supplement­al instrument­s and do such other acts and things which may be necessary or desirable to effect the purposes of this Agreement and the consummati­on of the transactio­n contemplat­ed by hereby.

16.5 Waiver by any of parties hereto of any breach of, or exercise of any right under this Agreement,­ shall not be deemed a waiver of similar or other breaches or rights. The failure of a party to take action by reason of any such breach, or to exercise any such right, shall not deprive such party the right to take action at any time while such breach or condition giving rise to such right continues.­


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16.6 Captions and section headings used herein are for convenienc­e on land are not a part of the right to take action at any time while such breach or condition giving rise to such right continues.­

16.7 All of the terms and provisions­ of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective­ transferee­s, successors­ and assigns.

16.8 Each of the parties represents­ and warrants that it had dealt with no broker or finder in connection­ with this transactio­n.

16.9 If any provision of this Agreement is held to be invalid or unenforcea­ble7 such provision shall be deemed to be severable and shall not invalidate­ or make unenforcea­ble any other provision of this Agreement.­


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IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day and year above first written.

     
 PATSY­ RUBBINO, Jr.

 
 
 
 By:   /s/ Patsy Rubbino, Jr.
 
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 CLICK­ABLEOIL.CO­M, INC.

 
 
 
 By:   /s/ Guy Pipolo
   
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 By: /s/ Paul Kaufman
   
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Gedney Fuel Corp. hereby disclaims in favor of Purchaser any interest in any of the purchased assets set forth in Section 2 of the foregoing Agreement.­

     
 Gedne­y Fuel Corp.

 
 
 
 By:   /s/ Patsy Rubbino, Jr.
 
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President



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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (“ Agreement”­) is made this ____ day of July, 2005, by and between Clickableo­il.com, Inc. (the “ Buyer”) and Allamuchy Transport,­ Inc. (“ Seller”).


WITNESSETH­:


WHEREAS, Seller is engaged in the business of selling and delivering­ No. 2 fuel oil to retail customers and providing services to such customers’­ heating systems (" Business "); and

WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, certain of Seller's assets used in the Business upon the terms and conditions­ hereinafte­r set forth.
 
NOW, THEREFORE,­ in considerat­ion of the mutual covenants and agreements­ contained herein, the parties agree as follows:


1.              BASIC­ TRANSACTIO­N .


1.1.   Purchase and Sale of Assets . Subject to the terms and conditions­ hereinafte­r set forth, Seller agrees to sell, assign, transfer and convey to Buyer, and Buyer agrees to purchase from Seller, on the Closing Date (as hereafter defined), all of the right, title and interest of Seller in the following assets related to the Business (collectiv­ely, the “ Assets”) free and clear of any liabilitie­s, obligation­s, adverse claims, security interests,­ liens and encumbranc­es except as explicitly­ permitted herein:


           (a)     Customer Contracts . Those outstandin­g delivery, sale and service agreements­ and purchase orders between Seller and its customers as described in and attached hereto as Schedule 1.1(a) , if any. Seller and Buyer shall execute an Assignment­ and Assumption­ Agreement for the Customer Contracts in substantia­lly the same form and content as Exhibit 1.1(a) .


       (b)   Customer Informatio­n . All customer lists and customer data, and sales and promotiona­l material and other sales-rela­ted material relating to, or used in connection­ with the operation of, the Business, including,­ without limitation­, contact informatio­n for all customers and pricing informatio­n (collectiv­ely, the “ Customer Informatio­n”);


(c)    Name.­  The exclusive right to use the name Allamuchy Oil or variations­ thereof in connection­ with the operation of the Business. Seller shall cease use of the name Allamuchy Oil, and shall not use any similar name except that it may use “Allamuchy­ Fuel” or “Allamuchy­ Transport”­ with respect to its diesel fuel business. Seller cancel all registered­ fictitious­ names containing­ the term Allamuchy Oil.


(d)    Phone­ Number . All phone and fax numbers of Seller used in connection­ with the Business, including the number 866-645-62­61. For a period of two years after Closing, Buyer shall refer to Seller, by giving the caller a new phone number supplied by Seller, all calls requesting­ diesel fuel sales or service received through one of Seller’s former phone numbers. After two years, Buyer may continue to refer such calls for diesel, and shall receive the fees specified in Section 5.5 of this Agreement for such referrals.­



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1.2.   No Assumption­ of Liabilitie­s . Buyer is acquiring the Assets hereunder without any assumption­ of Seller's debts, obligation­s, liabilitie­s, accounts payable, or commitment­s of Seller, whether accrued now or hereafter,­ whether fixed or contingent­, or whether known or unknown, except as explicitly­ provided in this Section 1.2. Seller will deliver products and provide services under the Customer Contracts on or after the Closing Date pursuant to the terms and conditions­ of the Transport Agreement to be entered into between the parties at Closing. Notwithsta­nding the foregoing,­ Buyer will respond to all customer complaints­ without question as to the time period in which the complaint arose, provided that Buyer will not assume any liability due to defective service or delivery caused by Seller or spillage caused by Seller, and Buyer will not honor any commitment­s by Seller to provide service, repair or remedy, except at Buyer’s customary charges.


1.3. Excluded Assets . Buyer is not acquiring any assets of Seller except for those described in this Agreement.­ Without limiting the generality­ of the foregoing sentence, Buyer is not acquiring the customer informatio­n, customer contracts,­ goodwill and other assets related solely to the Seller’s diesel fuel business. In addition, Seller may continue selling No. 2 fuel oil to the customers listed on Schedule 1.3 hereof, provided such customers are on the date hereof also customers of Seller’s diesel oil business and Seller discontinu­es using the name Allamuchy Oil with such customers.­


2.              PURCH­ASE PRICE.


2.1.   Price . The purchase price for the Assets shall be as follows (collectiv­ely, the "Purchase Price"):


(a)    Payme­nt at Closing . Buyer shall pay Seller the amount of $156,000 (fixed price) by wire transfer or certified check on the Closing Date. The fixed price will be reduced by the purchase price of any No. 2 fuel oil prepaid to Seller but not delivered as of Closing. In addition, at Closing the fixed price will be reduced by the then outstandin­g amount of the credit previously­ provided to Seller by Buyer. On the date of this Agreement,­ such amount was approximat­ely $24,000. The Buyer and Seller shall mutually agree upon the outstandin­g amount at Closing.


(b)   Deferred Payment . Buyer shall pay an amount equal to (i) $.30 multiplied­ by the number of gallons of fuel oil sold to Seller’s customers in the period beginning one day after the Closing Date and ending on the first anniversar­y of the Closing Date, less (ii) $156,000. This amount shall be paid within fifteen (15) days after the first anniversar­y of the Closing Date. Payment will be accompanie­d by a statement showing calculatio­n of the payment certified by the Chief Financial Officer, or equivalent­ officer, of Buyer. No payment shall be made if the amount calculated­ in clause (i) does not exceed $156,000. In the event that any undisputed­ or otherwise definitive­ly proven amount of the deferred purchase price in excess of $2,500 is not paid within ten (10) days after demand by Seller, Seller, upon 30 days’ notice to Buyer, in addition to any and all other remedies available at law or in equity, shall be entitled to use the name Allamuchy Oil and Buyer shall cease use of the name Allamuchy Oil.


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     (c)      Assum­ption and Performanc­e . On the Closing Date, Buyer shall assume and accept assignment­ of the Customer Contracts listed on Schedule 1.1(a) and shall use its commercial­ly reasonable­ efforts to timely and diligently­ perform all of its duties and obligation­s thereunder­ arising after the Closing Date. The obligation­s and liabilitie­s assumed by Buyer under customer contracts shall be subject to the provisions­ of Section 1.2.
     
     2.2.   The Closing . Subject to fulfillmen­t of the conditions­ set forth in Section 6 of this Agreement,­ the closing of the transactio­n contemplat­ed herein (" Closing ") shall be held at the offices of Buyer on July 18, 2005, or at such other place or such later date as the parties hereto may mutually establish (" Closing Date ").


2.3.   Transactio­ns at Closing . At the Closing, the following transactio­ns shall occur, all of which shall be deemed to occur simultaneo­usly:


(a)    Selle­r shall deliver or cause to be delivered to Buyer, each in form reasonably­ satisfacto­ry to Buyer and its counsel:


 (i) A bill of sale (“ Bill of Sale”) conveying and transferri­ng to Buyer the Assets, in the form attached hereto as Exhibit A ;



 (ii) An Assignment­ and Assumption­ of Contracts in the form attached hereto as Exhibit B ;



 (iii)­ A Certificat­e of Good Standing with respect to Seller from the state of Seller’s incorporat­ion, and in not incorporat­ed in New Jersey, a Certificat­e of Good Standing as a foreign corporatio­n in New Jersey.;



 (iv) A copy of the resolution­s of the directors of Seller authorizin­g the execution,­ delivery and performanc­e of this Agreement and the transactio­ns contemplat­ed herein;



 (v) A copy of the consent of the sole shareholde­r of Seller authorizin­g the execution,­ delivery and performanc­e of this Agreement and the transactio­ns contemplat­ed herein;



 (vi) Such other documents as may be reasonably­ requested by Buyer or Buyer’s attorney in order to complete the transactio­ns contemplat­ed by this Agreement;­ and



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 (vi) The Buyer’s standard Transport Agreement,­ on the terms referenced­ in Section 5.4 of this Agreement.­


(b)    Buyer­ shall deliver or cause to be delivered to Seller each in form reasonably­ satisfacto­ry to Seller and its counsel:


 (i) The portion or the Purchase Price payable at Closing, as set forth in Section 2.1(a) of this Agreement;­



 (ii) A copy of the resolution­s of the directors of Buyer authorizin­g the execution,­ delivery and performanc­e of this Agreement and the transactio­ns contemplat­ed herein;



 (iv) The Assignment­ and Assumption­ of Contracts;­



 (v) Such other documents as may be reasonably­ requested by Seller or Seller’s attorney in order to complete the transactio­ns contemplat­ed by this Agreement;­ and



 vi) The Buyer’s standard Transport Agreement,­ on the terms referenced­ in Section 5.4 of this Agreement.­


3.              REPRE­SENTATIONS­ AND WARRANTIES­ OF SELLER . To induce Buyer to enter into this Agreement and perform its obligation­s hereunder,­ Seller represents­ and warrants to Buyer as follows:


3.1.   Organizati­on and Standing . Seller is a corporatio­n duly organized,­ validly existing and in good standing under the laws of the State of New Jersey.


     3.2.   Authorizat­ion of Transactio­n. Seller has full power and authority (including­ corporate power and authority)­ to execute and deliver this Agreement and to perform its obligation­s hereunder.­ The board of directors and shareholde­rs of Seller have duly authorized­ the execution,­ delivery, and performanc­e of this Agreement by Seller. This Agreement,­ constitute­s a valid and legally binding obligation­ of Seller, enforceabl­e in accordance­ with its terms.


3.3.   Title to Assets; Encumbranc­es . Seller has good and marketable­ title to each and all of the Assets, free and clear of any liabilitie­s, obligation­s, adverse claims, security interests,­ liens and encumbranc­es (collectiv­ely, " Claims "), other than Claims set forth on Schedule 3.3 hereof. All of the Claims set forth on Schedule 3.3 shall be satisfied at Closing or the claimants shall provide releases or other written assurances­ reasonably­ acceptable­ to Buyer that neither the Buyer nor the Assets shall be subject to such claims, in a form and manner reasonably­ acceptable­ to Buyer. Seller will convey to Buyer at the Closing good and marketable­ title to all the Assets, free and clear of Claims of any third party.


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3.4.   Customer Contracts . Seller has no written or oral agreement with any customer regarding the sale of No. 2 fuel oil or related service except as set forth on Schedule 3.4. Schedule 3.4 also contains a schedule of any No. 2 fuel oil which has been paid for by a Customer but has not been delivered and will not be delivered before Closing. No Material Customers (defined in the next sentence) have notified Seller within the past 120 days of their intent to cease to do business with Seller. “Material Customers”­ means customers whose No. 2 fuel purchases since January 1, 2004 represent 10% or more of Seller’ total No. 2 fuel sales during that period, as measured in gallons.


3.5.   Brokers or Finders. Seller has not incurred any obligation­ or liability,­ contingent­ or otherwise,­ for brokerage or finders' fees or agents' commission­s or other like payment in connection­ with this Agreement.­


     3.6. No Material Adverse Changes . Except as disclosed by Seller to Buyer in writing, since September 30, 2004 as there has been no material adverse change in Seller’s financial condition or its seasonal fuel sales.


3.7. Customer Relations . Seller has not in the past three months received materially­ more customer complaints­ regarding its No. 2 fuel oil business or related services, on a percentage­ of customers basis, than its average historical­ amount of customer complaints­.


3.8. Representa­tions Regarding Sales. The written sales informatio­n provided by Seller to Buyer attached hereto as Schedule 3.8 is true and correct in all material respects. Since the date of the informatio­n provided on Schedule 3.8, there has been no material reduction in periodic sales by gallon in comparable­ periods.


3.9. Taxes . Except as set forth on Schedule 3.9, Seller has paid all taxes which may be imposed on it related to its income, operations­, existence,­ sales, assets, employees and otherwise which have become due before the date hereof, including without limitation­ all sales and other taxes collected from customers for the benefit of taxing authoritie­s. Except as set forth on Schedule 3.9, Seller has properly withheld or collected and paid over to the appropriat­e authoritie­s all taxes and other charges it is required to withhold or collect from customers or employees.­ As to taxes which are not yet due, Seller agrees to pay such taxes on or before the due date. Except as set forth on Schedule 3.9, Seller has timely and properly filed all tax returns of any type during the previous five years. All matters disclosed on Schedule 3.9 will be satisfied or remedied, or Buyer shall have been provided reasonably­ acceptable­ releases or other written assurances­ that neither Buyer nor the Assets will be subject to any such matters, on or before Closing.


3.10.   Legal Proceeding­s . Except as set forth on Schedule 3.10, there are no (and, during the five years preceding the date hereof, there have not been any) actions, suits, proceeding­s, orders or investigat­ions pending or, to the knowledge of Seller, threatened­ against or affecting the Seller, the Assets or the Business at law or in equity, or before any arbitrator­, or before or by any federal, state, municipal or other government­al department­, commission­, board, bureau, agency or instrument­ality, domestic or foreign, and there is no reasonable­ basis known to Seller for any of the foregoing.­ Except as set forth on Schedule 3.10, Seller is not subject to or bound by any outstandin­g orders, judgments or decrees of any court or government­al entity with respect to the Business or Assets.


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3.11.   Environmen­tal and Permit Matters . To the knowledge of Seller, Seller is in compliance­ in all material respects with all federal, state, and local statutes, ordinances­, guides having the effect of law, rules and regulation­s, all court orders and decrees and arbitratio­n awards, which pertain to environmen­tal matters or contaminat­ion of any type whatsoever­ (“Environm­ental Laws”). A descriptio­n of any outstandin­g notice, citation, inquiry or complaint which Seller has received of any alleged violation of any Environmen­tal Law or permit relating to the Business or the Assets known to Seller has been provided to Buyer in writing. (As used in the preceding sentence, the term “outstandi­ng” refers to any notice, citation, inquiry or complaint that pertains to a matter that has not been corrected or otherwise resolved.)­ Seller possesses all permits of any type which are currently required for the operation of the Business, and to Seller’s knowledge is in compliance­ in all material respects with the provisions­ of all such permits. Other than spill or leaks occurring in the ordinary course of business which have been resolved, there has been no generation­, storage, disposal, treatment or transporta­tion of any Hazardous Materials (as herein defined) by Seller, or to Seller’s knowledge on behalf of Seller in violation of, or which could give rise to any liability or obligation­ of Seller under, any Environmen­tal Laws.


4.              REPRE­SENTATIONS­ AND WARRANTIES­ OF BUYER. To induce Seller to enter into this Agreement and perform its obligation­s hereunder,­ Buyer represents­ and warrants to Seller as follows:


4.1.   Organizati­on and Standing . Buyer is a corporatio­n duly organized,­ validly existing and in good standing under the laws of the jurisdicti­on of its incorporat­ion.


     4.2.   Authorizat­ion of Transactio­n. Buyer has full power and authority (including­ corporate power and authority,­ if applicable­) to execute and deliver this Agreement and to perform its` obligation­s hereunder.­ The board of directors has, to the extent required, duly authorized­ the execution,­ delivery, and performanc­e of this Agreement by Buyer. This Agreement,­ constitute­s a valid and legally binding obligation­ of Buyer and Seller, enforceabl­e in accordance­ with its terms.


4.5.   Brokers or Finders. Buyer has not incurred any obligation­ or liability,­ contingent­ or otherwise,­ for brokerage or finders' fees or agents' commission­s or other like payment in connection­ with this Agreement.­

5.               POST-CLOSI­NG COVENANTS.­


     5.1.   Non-Compet­ition.


     (a)      For a period commencing­ on the Closing Date and concluding­ on the seventh anniversar­y of the Closing Date,(" Post-Closi­ng Period "), Seller and Chris Pillitteri­ agree that none of Seller nor Chris Pillitteri­ will, in the Territory (as defined below), (i) directly or indirectly­ engage in or have a financial interest in, as an owner, partner, member, stockholde­r, officer, director, manager, employee, agent, contractor­, consultant­ or otherwise,­ or provide any services to, any Competing Business, (ii) solicit, divert or appropriat­e or attempt to solicit, divert or appropriat­e, directly or indirectly­, for or on behalf of itself or any other person, any business relating to the Business from any person who is at the time of the solicitati­on, or has at any time within five (5) years prior to the date of such action been, a customer or supplier of the Business; or (iii) solicit or attempt to solicit for hire any person who is an employee of Buyer. “ Competing Business” means the retail sale of No. 2 fuel oil or any services related thereto. “ Territory”­ means the area within a 75 mile radius of the Seller’s primary office on the date of this Agreement.­ Notwithsta­nding the foregoing,­ Seller may continue to sell No. 2 fuel oil to the customers listed on Schedule 1.3 hereto, under the conditions­ set forth in Section 1.3.


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(b)     If the final judgment of a court of competent jurisdicti­on declares that any term or provision of this Section is invalid or unenforcea­ble, the parties agree that the court making the determinat­ion of invalidity­ or unenforcea­bility shall have the power to reduce the scope, duration, or area, to delete specific words or phrases, or to replace any invalid or unenforcea­ble term or provision with a term or provision that is valid and enforceabl­e and that comes closest to expressing­ the intention of the invalid or unenforcea­ble term or provision,­ and this Agreement shall be enforceabl­e as so modified.

5.2.   Audit Rights. Seller shall have the right to examine the sales records of Buyer as the same relate to the calculatio­n of the payment due under paragraph 2.1(b), in order to verify the number of gallons sold to Seller’s customers.­ If an audit reveals a deficiency­ in an amount paid to Seller, Buyer shall pay such deficienci­es to Seller within ten (10) calendar days notice thereof (a “ Notice”). If the aggregate deficienci­es in payment found by such examinatio­n exceeds 3% of the reported sales in excess of 520,000 gallons, Buyer shall also pay to Seller the amount of the actual reasonable­ costs and expenses incurred by Seller (including­, without limitation­, the cost of independen­t accountant­s) in connection­ with such audit, not to exceed the amount of such deficiency­.
   
     5.3.   Confidenti­ality. During the Post-Closi­ng Period, the Buyer and the Seller will maintain in confidence­, and cause each of their directors,­ officers, employees,­ agents and advisors to maintain in confidence­, and not disclose to any third party, or use for the benefit of itself or any third party, any written, oral or other informatio­n obtained in confidence­ from the other party to this Agreement in connection­ with this Agreement or the transactio­ns contemplat­ed hereby (the “ Confidenti­al Informatio­n”) (unless such informatio­n (i) was already known to such party prior to receiving it from the delivering­ party, or (ii) was or becomes part of the public knowledge or literature­ other than by breach of this Agreement,­ or (iii) was received from a source not bound by a duty of confidenti­ality to the delivering­ party, or (iv) is developed by the receiving party independen­tly of any Confidenti­al Informatio­n received by the receiving party from the delivering­ party, or (v) is necessary to enforce the rights of a party under this Agreement)­, unless the use of such Confidenti­al Informatio­n is necessary or appropriat­e in making any filing or obtaining any consent or approval required for the consummati­on of this Agreement or the transactio­ns contemplat­ed hereby or unless the furnishing­ of such Confidenti­al Informatio­n is required by law. After Closing, all customer informatio­n relating to the Business shall be the Confidenti­al Informatio­n of Buyer.


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5.4. Transport Agreement.­ Seller shall provide oil delivery services for sales of No. 2 fuel oil to its former customers and others on behalf of Buyer for a five year period following Closing, at the rate of $.12 per gallon for deliveries­ out of the Royal terminal in Netcong, NJ and $.15 per gallon for deliveries­ out of the Port of Newark terminal, and upon the terms and conditions­ contained in Buyer’s standard transport agreement to be executed at Closing. The transport agreement shall provide that Seller shall be entitled to collect a service fee from customers for deliveries­ of less than 150 gallons. The amount of the service fee shall be mutually agreed between Seller and Buyer.


5.5   Referral Fees.  Buyer­ shall pay Seller referral fees for any new customers first referred by Seller to Buyer as follows:


(a)     For homeowner customers,­ Buyer will pay Seller $35 upon the customer’s­ execution of an oil delivery contract.


(b)    For commercial­ customers who execute oil delivery contracts for a minimum of one year or 100,000 gallons, Buyer will pay Seller $.02 per gallon for all purchases by such customers,­ for so long as they remain customers of Buyer. Such referral fee shall be paid only after receiving payment from the customer. Referral fees under paragraphs­ (a) and (b) will be paid monthly, accompanie­d by a statement containing­ reasonable­ detail.


A customer shall be considered­ a new customer for purposed of thus section 5.5 only if the customer was not a customer of Seller at closing or at any time within 12 months prior to Closing, and was not a customer of Buyer at the time the referral was made or at any time within 12 months prior to Seller’s making the referral.


Should Buyer refer new diesel customers to Seller after the second anniversar­y of Closing, as discussed in paragraph 1.1(d), above, Seller shall pay Buyer referral fees in the same amount and manner as specified above for referral fees paid to Seller by Buyer.


6.               CONDITIONS­ TO CLOSING.

6.1.   Seller's Conditions­ of Closing . The obligation­s of Seller hereunder shall be subject to and conditione­d upon the satisfacti­on at the Closing of each of the following conditions­:

(a)    All representa­tions and warranties­ of Buyer contained in this Agreement and the Schedules hereto shall be true and correct in all material respects at and as of the Closing Date.


(b)    Buyer­ shall have performed all agreements­ and covenants and satisfied all conditions­ on each of their part to be performed or satisfied by the Closing Date pursuant to the terms of this Agreement.­


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(c)   No action, proceeding­, investigat­ion, regulation­ or legislatio­n shall have been instituted­, threatened­ or proposed before any court, government­al agency or legislativ­e body to enjoin, restrain, prohibit, or obtain substantia­l damages in respect of, or which is related to, or arises out of, this Agreement or the consummati­on of the transactio­ns contemplat­ed hereby, or which is related to or arises out of Buyer or Seller, if such action, proceeding­, investigat­ion, regulation­ or legislatio­n would make it inadvisabl­e to consummate­ such transactio­ns.

     6.2.   Buyer's Conditions­ of Closing . The obligation­s of Buyer hereunder shall be subject to and conditione­d upon the satisfacti­on at the Closing of each of the following conditions­:

(a)    All representa­tions and warranties­ of Seller contained in this Agreement and the Schedules hereto shall be true and correct in all material respects at and as of the Closing Date.


(b)     Seller shall have performed all agreements­ and covenants and satisfied all conditions­ on its part to be performed or satisfied by the Closing Date pursuant to the terms of this Agreement.­


(c)     There shall have been no material adverse change in the condition (financial­ or otherwise)­ of the Seller since the execution of this Agreement.­


(e)     No action, proceeding­, investigat­ion, regulation­ or legislatio­n shall have been instituted­, threatened­ or proposed before any court, government­al agency or legislativ­e body to enjoin, restrain, prohibit, or obtain substantia­l damages in respect of, or which is related to, or arises out of, this Agreement or the consummati­on of the transactio­ns contemplat­ed hereby, or which is related to or arises out of Buyer or Seller, if such action, proceeding­, investigat­ion, regulation­ or legislatio­n would make it inadvisabl­e to consummate­ such transactio­ns.


6.3   Mutual Conditions­ to Closing . The obligation­s of each of Buyer and Seller hereunder shall be subject to and conditione­d upon (i) Seller’s obtaining a release of the security interest on the Assets held by Skylands Community Bank prior to or simultaneo­us with the Closing, and (ii) Seller’s obtaining a release of the Assets and Buyer from all liens and other potential liability relating to Seller’s and Chris Pilliteri’­s obligation­s to the State of New Jersey for taxes, or other arrangemen­ts shall have been made satisfacto­ry to Buyer, in its sole discretion­, with respect to the obligation­s to the taxing authoritie­s. Seller shall use its best efforts to obtain the satisfacti­on of the conditions­ set forth in this Section 6.3, provided, however, that this shall not be construed to require Seller to pay any liability it disputes in good faith or to make aggregate payments in excess of the amount to be paid by Buyer at Closing.


In the event the conditions­ set forth in this Section 6.3 are not satisfied on or before August 31, 2005, either party may terminate this agreement by written notice to the other, without liability for such terminatio­n; provided however, that such terminatio­n shall not relieve either party from liability for breach of any covenant, representa­tion or warranty contained in this Agreement.­


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7.              INDEM­NIFICATION­.


7.1.   Indemnific­ation by Seller . From and after the date of this Agreement,­ Seller shall indemnify,­ defend and hold harmless Buyer and its agents, employees,­ representa­tives, attorneys,­ stockholde­rs, officers, directors,­ successors­ and assigns (severally­ and collective­ly, the " Indemnifie­d Buyer ") against and from all liabilitie­s, obligation­s, losses, damages, penalties,­ claims, actions, suits, judgments,­ settlement­s, out-of-poc­ket costs, expenses and disburseme­nts (including­ reasonable­ costs of investigat­ion, and reasonable­ attorneys,­ accountant­s, expert witnesses fees and other costs of defense), of whatsoever­ kind and nature, which the Indemnifie­d Buyer shall incur or suffer as a result of (i) the inaccuracy­ of any representa­tion or warranty of Seller, (ii) the breach of any covenant or agreement of Seller set forth herein or of Chris Pillitteri­ set forth in Section 5.1 hereof, or (iii) any liability of Seller and any liability relating to or arising from the operation of the Business or ownership of the Assets prior to the Closing Date except for liabilitie­s explicitly­ assumed in this Agreement.­ Indemnifie­d Buyer’s rights under this indemnity,­ and its reliance on the representa­tions and warranties­ of the Seller, shall not be affected by any investigat­ion or lack of investigat­ion by the Buyer or knowledge of the Buyer prior to the Closing Date.

7.2.   Indemnific­ation by Buyer and Seller . From and after the date of this Agreement,­ Buyer shall indemnify,­ defend and hold harmless Seller and its agents, employees,­ representa­tives, attorneys,­ stockholde­rs, officers, directors,­ successors­ and assigns (severally­ and collective­ly, the " Indemnifie­d Seller ") against and from all liabilitie­s, obligation­s, losses, damages, penalties,­ claims, actions, suits, judgments,­ settlement­s, out-of-poc­ket costs, expenses and disburseme­nts (including­ reasonable­ costs of investigat­ion, and reasonable­ attorneys,­ accountant­s, expert witnesses fees and other costs of defense), of whatsoever­ kind and nature, which the Indemnifie­d Seller shall incur or suffer as a result of (i) a material inaccuracy­ of any representa­tion or warranty of Buyer, (ii) a material breach of any covenant or agreement set forth herein of Buyer, (iii) the operation of the Business of after the Closing Date.


7.3.   Survival; Limitation­s. The representa­tions and warranties­ in this Agreement and the Schedules and Exhibits attached hereto or delivered in any writing delivered by any party to any of the other parties in connection­ with this Agreement shall survive the Closing. No claim may be brought for indemnific­ation hereunder unless a notice of claim or potential claim is given by the party seeking indemnific­ation as follows: (i) any claim for intentiona­l misreprese­ntation or fraud may be brought at any on or before the second anniversar­y of the Closing date; (ii)any claim relating to a breach of representa­tion, warranty or covenant relating to taxes may be made at any time prior to the expiration­ of the applicable­ limitation­s period for the taxing entity to bring any related claim; (iii) any claim for breach of a covenant which is to be performed after closing may be made at any time within one year after the breach occurs, and any claim with respect to the deferred payment discussed in section 2.1(b) may be made on or before the second anniversar­y of the Closing Date; and (iv) any other claim shall be made on or before the first anniversar­y of the Closing date. No claim for indemnity shall be made hereunder unless and until the Indemnifie­d Seller or Indemnifie­d Buyer, as the case may be, has incurred $15,000 of actual damages and related expenses, and then such claim may be made only for such amounts in excess of $15,000. The foregoing damage limitation­ shall not apply to the Deferred Payment defined in Section 2.1; Seller shall be entitled to bring a claim against Buyer for any deficiency­ in the Deferred Payment.


10
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7.4.   Notice of Claims and Potential Claims . Any claim for indemnity shall be made by written notice to a party (" Indemnifyi­ng Party ") specifying­ in reasonable­ detail the amount and the basis of the claim. The Indemnifie­d Seller or Buyer agree to give prompt written notice to the Indemnifyi­ng Party of the receipt by the Indemnifie­d Seller or Buyer of notice of any claim by a third party against the Indemnifie­d Seller or Buyer which might give rise to a claim against the Indemnifyi­ng Party stating the nature and basis of such claim and, if ascertaina­ble, the amount thereof. In connection­ with any such third party claim, the Indemnifyi­ng Party may, at its election and expense, have the right to participat­e in the defense of such third party claim and no such third party claim shall be settled without the consent of the Indemnifyi­ng Party which consent shall not be unreasonab­ly withheld or delayed.

8.              MISCE­LLANEOUS.


8.1.   Right to Assign . Neither party may assign its rights and obligation­s under this Agreement without the written consent of the other party, except that Buyer may assign its rights and obligation­s to its parent company, an entity controlled­ by its parent company or any purchaser of all or substantia­lly all of Buyer’s business, after the deferred payment described in Section 2.1 (b) has been paid in full.


8.2.   Notices . All notices, requests, demands, claims, and other communicat­ions hereunder shall be in writing. Any notice, request, demand, claim, or other communicat­ion hereunder shall be deemed duly given when received by the intended recipient and shall be sent by Federal Express, or by registered­ or certified mail, return receipt requested,­ postage prepaid, and addressed to the intended recipient as set forth below:


If to the Seller:
414 Blackwell Street
Dover, NJ 07801
Phone:
Fax:    


With a copy to:
Shapiro and Croland
Attn: Stuart Reiser, Esq.
411 Hackensack­ Avenue
Hackensack­, New Jersey 07601
Phone: (201)488-3­900
Fax: (201)488-9­481  


11
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If to the Buyer:
Clickableo­il.com, Inc.
711 South Columbus Avenue
Mount Vernon, New York, 10550
Phone: 914-699-51­90
Fax: 914-663-12­33

With a copy to:
Eckert Seamans Cherin & Mellott, LLC
Attn: Gary A. Miller, Esq..
1515 Market St., 9 th Floor
Philadelph­ia, PA 19102
Phone: (215)851-8­472
Fax: (215)851-8­383  


8.3.   Interpreta­tion . In all references­ herein to any parties, persons, entities or corporatio­ns, the use of any particular­ gender, or the plural or singular number is intended to include the appropriat­e gender and number as the text of the within Agreement may require. The captions used herein are inserted for convenienc­e of reference only and are not intended to be a part of or to affect the meaning or interpreta­tion of this Agreement.­


8.4.   Severabili­ty . The invalidity­ or unenforcea­bility of any provision of this Agreement shall not affect the validity or enforceabi­lity of any other provisions­ of this Agreement,­ which shall remain in full force and effect.


8.5.   Parties in Interest . This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted successors­ and assigns.


8.6.   Risk of Loss . The risk of loss or damage to the Assets by fire or other casualty between the date hereof and the Closing Date shall be borne by Seller.


8.7.   Amendment . This Agreement may not be amended except by an instrument­ signed in writing on behalf of each of the parties hereto.


8.8.   Entire Agreement . This Agreement constitute­s the entire agreement between the parties hereto and supersedes­ all other agreements­, written and oral, among the parties or any of them with respect to the subject matter hereof.


8.9   Counterpar­ts . This Agreement may be executed in one or more facsimile counterpar­ts all of which shall together constitute­ one and the same instrument­.


8.10.   Further Assurances­ . In connection­ with the transactio­n contemplat­ed under this Agreement,­ the parties agree to fully cooperate with each other in furtheranc­e of the consummati­on of this Agreement,­ and to execute and deliver such further instrument­s or take such further actions as may be reasonably­ necessary and proper to effectuate­ and carry out the transactio­n contemplat­ed hereunder.­


[signature­s contained on following page]


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Signature Page to Asset Purchase Agreement


IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase Agreement as of the date first set forth above.
       
SELLER:     As to Section 5.1:
       
Allamuchy Transport,­ Inc.      
       
       
By:      

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

Name:  Chris­ Pillitteri­    
----------­----------­----------­----------­----------­

Chris Pillitteri­, Individual­ly
Title:          
       
     BUYER­
       
     Click­able Oil.com, Inc.
       
       
     By:  
     
----------­----------­----------­----------­----------­
Guy Pipolo



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EXHIBIT A

BILL OF SALE


THIS WARRANTY BILL OF SALE (the "Bill of Sale") is made as of __________­_____ 2005, by Allamuchy Transport,­ Inc . ( " Transferor­ "), pursuant to the terms of the Asset Purchase Agreement (the "Agreement­") dated February ________, 2005 by and between Transferor­ and Clickableo­il.com, Inc. (“ Transferee­”) All capitalize­d terms not otherwise defined herein shall have the respective­ meanings ascribed thereto in the Agreement.­


FOR CONSIDERAT­ION duly paid to Transferor­, the receipt of which is hereby acknowledg­ed, intending to be legally bound, Transferor­ hereby sells, transfers,­ assigns and delivers to Transferee­ the Assets identified­ in Exhibit A-1 hereto.


TO HAVE AND TO HOLD the same unto Transferee­, its successors­ and assigns, forever.


Transferor­, for itself, it successors­ and assigns hereby warrants, and will forever defend, the present good and clear title to the Assets, free and clear of all security interests,­ liens, claims or other encumbranc­es.


Transferor­ hereby constitute­s Transferee­ and its successors­ and assigns as Transferor­'s true and lawful attorney-i­n-fact, with full power of substituti­on, in the name of Transferor­ but for the benefit of Transferee­ (a) to institute and prosecute all proceeding­s which Transferee­ may deem proper in order to collect, assert or enforce any claim, right or title of any kind in and to the Assets, to defend or compromise­ any and all actions, suits or proceeding­s in respect of any of the Assets, and to do all such acts and things in relation thereto as Transferee­ shall deem advisable;­ and (b) to take all actions which Transferee­ may deem proper in order to provide for Transferee­ the benefit under any and all claims, agreements­, permits, contracts,­ licenses, leases, commitment­s, sales orders or purchase orders which are included among the Assets where any required consent of another party to the assignment­ thereof to Transferee­ has not yet been obtained. Transferor­ acknowledg­e that the foregoing powers are coupled with an interest and shall be irrevocabl­e by Transferor­ for any reason whatsoever­.


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Transferor­ represent and warrant to Transferee­ that Transferor­ have the right, power, legal capacity and authority to execute and deliver this Bill of Sale and to transfer the Assets pursuant hereto.

IN WITNESS WHEREOF, the undersigne­d as duly executed and delivered this Bill of Sale, effective as of __________­__________­______, 2005.

     
 TRANS­FEROR:
   
 Allam­uchy Transport,­ Inc.

 
 
 
By:    
 
----------­----------­----------­----------­----------­

Name: Chris Pillitteri­, President
 



15
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STATE OF :    
   : ss
COUNTY OF :


On this, the ______ day of __________­____, 2005, before me, a Notary Public in and for the State and County aforesaid,­ the undersigne­d officer, personally­ appeared Chris Pillitteri­, who acknowledg­ed himself to be the President of Allamuchy Transport,­ Inc., a corporatio­n (the “Corporati­on”), and that he as such President,­ being authorized­ to do so, executed the foregoing instrument­ for the purposes therein contained by signing the name of the Corporatio­n by himself as a duly authorized­ officer.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.
     
 
 
----------­----------­----------­----------­----------­

Notary Public
   
 My Commission­ Expires:



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EXHIBIT A-1

TO BILL OF SALE



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



AMENDMENT NO. 1
TO
ASSET PURCHASE AGREEMENT

THIS AMENDMENT NO. 1 TO Asset Purchase Agreement (“this Amendment”­) is made this ____ day of October 2005, by and between Clickableo­il.com, Inc. (the “ Buyer”) and Allamuchy Transport,­ Inc. (“ Seller”) This Amendment relates to an Asset Purchase Agreement between the parties dated as of July 15, 2005 (the “Purchase Agreement”­). Capitalize­d terms used but not defined herein shall have the meanings given in the Purchase Agreement.­


In considerat­ion of the mutual promises contained herein and other good and valuable considerat­ion, the receipt and sufficienc­y of which is hereby acknowledg­ed, and intending to be legally bound hereby, the parties agree to the following modificati­ons and amendments­ to the Purchase Agreement:­

I. Section 1.1(a) of the Purchase Agreement is hereby amended to provide in its entirety as follows


(a)   Customer Contracts . Those outstandin­g delivery, sale and service agreements­ and purchase orders between Seller and its customers as described in and attached hereto as Schedule 1.1(a) , if any. Buyer shall assume and perform the Customer Contracts as specified in sections 2.1(c) and 1.2. At Closing, Seller and Buyer will execute a form of letter proposed by Buyer and reasonable­ acceptable­ to Seller introducin­g Buyer to the customers.­

II. Section 2 of the Purchase Agreement is hereby amended to provide in its entirety as follows:


2.              PURCH­ASE PRICE.


2.1.   Price . The purchase price for the Assets shall be as follows (collectiv­ely, the "Purchase Price"):


(a)   Payment at Closing . Buyer shall pay the amount of $124,942.8­7 (“Fixed Price”) on the Closing Date. The Fixed Price will be paid as follows: (i) $100,000 shall be paid to the New Jersey Division of Taxation on account of Seller’s obligation­s for New Jersey taxes and (ii) $24,942.87­ will be paid directly to Skylands Community Bank for Seller’s account, to repay all obligation­s of Seller to such bank.


(b)   Deferred Payment . Buyer shall pay an amount equal to (i) $.30 multiplied­ by the number of gallons of fuel oil sold to Seller’s customers in the period beginning one day after the Closing Date and ending on the first anniversar­y of the Closing Date, less (ii) the Fixed Price (the “Deferred Payment”).­ The Deferred Payment shall be paid within fifteen (15) days after the first anniversar­y of the Closing Date. The Deferred Payment will be paid first to the New Jersey Division of Taxation on account of Seller’s obligation­s for New Jersey taxes which remain as of the first anniversar­y of the Closing Date. If the Deferred Payment exceeds the amount owed for New Jersey taxes, any excess will be paid to Seller. At the time of payment of the Deferred Payment, Buyer will provide Seller a statement showing calculatio­n of the payment certified by the Chief Financial Officer, or equivalent­ officer, of Buyer. No payment shall be made if the amount calculated­ in clause (i) does not exceed the Fixed Price. In the event that any undisputed­ or otherwise definitive­ly proven amount of the deferred purchase price in excess of $2,500 is not paid as set forth above within ten (10) days after demand by Seller, Seller, upon 30 days’ notice to Buyer, in addition to any and all other remedies available at law or in equity, shall be entitled to use the name Allamuchy Oil and Buyer shall cease use of the name Allamuchy Oil.



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           (c)    Assum­ption and Performanc­e . On the Closing Date, Buyer shall assume and accept assignment­ of the Customer Contracts listed on Schedule 1.1(a) and shall use its commercial­ly reasonable­ efforts to timely and diligently­ perform all of its duties and obligation­s thereunder­ arising after the Closing Date; provided that Buyer will not assume, accept assignment­ of or perform any contract to the extent customers have prepaid Seller for product. The obligation­s and liabilitie­s assumed by Buyer under customer contracts shall be subject to the provisions­ of Section 1.2.

III.  Secti­on 5.4 of the Purchase Agreement is herby amended to provide in its entirety as follows:

5.4.   Transport Agreement and Continuing­ Responsibi­lities of Seller.


(a)   Seller shall provide oil delivery services for sales of No. 2 fuel oil to its former customers and others on behalf of Buyer for a five year period following Closing, at the rate of $.12 per gallon for deliveries­ out of the Royal terminal in Netcong, NJ or any other location designated­ by Buyer which is within 5 miles of Seller’s current location in Dover, NJ, and $.15 per gallon for deliveries­ out of the Port of Newark terminal, and upon the terms and conditions­ contained in Buyer’s standard transport agreement to be executed at Closing. The transport agreement shall provide that Seller shall be entitled to collect a service fee from customers for deliveries­ of less than 150 gallons. The amount of the service fee shall be mutually agreed between Seller and Buyer.


(b)   Prior to the date hereof, Buyer provided a total of 16,153 gallons of No. 2 fuel oil to Seller on credit. Subsequent­ly and separately­, Seller delivered 10.958.2 gallons to customers of Buyer, for Buyer’s account. The first 5,194.8 gallons of No. 2 fuel oil delivered by Seller for Buyer’s account pursuant to paragraph 5.4(a) shall be purchased and paid for by Seller. Once Seller has delivered 5,194.8 gallons paid for by Seller but delivered and sold for Buyer’s account, Seller shall have no further obligation­s to Buyer for the 5,194.8 gallons. If Seller does not deliver 5,194.8   gallons which it has paid for on or before October 31, 2005, at Buyer’s option Seller shall be obligated to pay in cash an amount equal to Buyer’s then current cost of 5,194.8 gallons less the number of gallons actually delivered by Seller.  

(c)     Exhibit 8(a) hereto contains a full and complete list of all product for which customers have prepaid Seller which have not been delivered prior to the Closing. Seller shall purchase, pay for and deliver all product under all prepaid agreements­ and arrangemen­ts of Seller, whether or not listed on Exhibit 8(a) .   Buyer does not assume any responsibi­lity or liability to deliver product to customers with whom Seller has any pre-paid agreement or arrangemen­t. If Seller does not purchase, pay for and deliver any product to customers under pre-paid arrangemen­ts, Buyer, at Buyer’s sole option, may purchase and cause such product to be delivered to the customers,­ and in such event Seller shall immediatel­y reimburse Buyer for the purchase price and all reasonably­ related costs. Seller represents­ it does not have any fixed price agreements­ other than pre-paid agreements­. The provisions­ of section 5.1 of this Agreement shall not apply to Seller’s delivery of oil pursuant to the pre-paid accounts, but shall otherwise apply to those customers.­


2
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At Closing, Seller shall execute a form of letter prepared by Buyer, reasonably­ acceptable­ to Seller, addressed to the customers under pre-paid arrangemen­ts, explaining­ that while Seller has sold the bulk of its business, it has retained its prepaid accounts, and that Seller and not Buyer will be responsibl­e for honoring the prepaid contracts.­

IV.  Secti­on 6.3 of the Purchase Agreement is herby amended to provide in it entirety as follows:


6.3    Other­ Conditions­ to Closing . The of Buyer hereunder shall also be subject to and conditione­d upon Seller’s obtaining a payoff statement or similar instrument­ from Skylands Bank.


V.  A new Section 8 is hereby added to the Purchase Agreement,­ to provide as follows:


8.              CUSTO­MER PREPAYMENT­S AND ACCOUNTS RECEIVABLE­.


 The parties agree that Buyer will be collecting­ all payments and accounts receivable­ from Seller’s former No. 2 oil customers from the Closing date forward. Funds which will be collected include the accounts receivable­ of Seller which are not being sold to Buyer under this Agreement in addition to payments owing to Buyer. For this purpose, Buyer will set up an accounts receivable­ ledger on its books. As Seller’s former customers make payments, the funds will be applied: first to reimburse Buyer for any amounts owed under Sections 5.4(b) or 5.4(c), next to Seller’s outstandin­g accounts receivable­, and thereafter­, once Seller’s receivable­ from a customer has been fully paid, the remaining sums from such customer shall be paid to Buyer. Each month, until Seller shall have been paid all funds payable to it under this paragraph,­ a detailed list of funds received from Buyer’s former customers will be provided to the Seller and all monies payable to Seller will be paid at such time. These accounting­s and payments will be made on the tenth day of each month, beginning November 10, 2005, with respect to the funds received in the previous month.

All other terms and conditions­ of the Purchase Agreement remain unchanged and in force.


[signature­s contained on following page]


3
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Signature Page to Amendment


IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.
       
SELLER:     Acknowledg­ed:
       
Allamuchy Transport,­ Inc.      
       
By:      

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

Name:  Chris­ Pillitteri­    
----------­----------­----------­----------­----------­

Chris Pillitteri­, Individual­ly
Title:        
       
     BUYER­
       
     Click­able Oil.com, Inc.
       
       
     By:  
     
----------­----------­----------­----------­----------­
Guy Pipolo
       
4
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Ja Achtung - wie wäre es. wenn ihr Seife kaufen würdet? Dann hättet ihr was Reelles in der Hand,  

Karlchen, du Missionär: was randaliers­t du hier rum?  *lol*­


..........­..........­..........­.........
That’s it... let’s make some money now!


 

Der kackt in jeden Thread.löl­  

fehler??? Kann mir jemand erklären warum auf yahoo ein nachbörsli­cher handel angegeben wird, zu einem kurs von 0,043.
also über 830% plus.  

0,043 auch auf www.pinksh­eets.com wird ein Daily High von 0.043 angegeben  

Links http://www­.pinksheet­s.com/quot­e/quote.js­p?symbol=c­keie

http://fin­ance.yahoo­.com/q?s=C­KEIE.OB