AMENDMENT NO. 1
 
Execution Copy
 
EXHIBIT 10.1
 
AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT
 
Amendment No. 1 to Securities Purchase Agreement by and among Carsunlimited.com,
a Nevada corporation (the “Company”), Mellon HBV Master U.S. Event Driven Fund
LP and Mellon HBV Master Global Event Driven Fund LP (collectively,
“Investors”), who are signatories to the Securities Purchase Agreement dated as
of August 9, 2006 (the “Agreement”) between the Company and the Investors.
Capitalized terms used but not otherwise defined in this Amendment have the
meanings assigned to them in the Agreement. This Amendment also amends the
Registration Rights Agreement among the parties, as set forth below.
 
RECITALS
 
A.  WHEREAS, pursuant to the Agreement, the Investors purchased Notes and
Warrants of the Company;
 
B.  WHEREAS, the Agreement provided for the issuance of additional stock
purchase warrants to the Investors if certain EBITDA tests were not met (“EBITDA
Shortfall Warrants”);
 
C.  WHEREAS, the Company has obtained $700,000 in advance funding from a
prospective customer (the “Prospective Customer”) for the purchase of molds and
tooling so that it may produce pre-production samples of a specially designed
dual chamber dispensing pump (“New Product”) for the customer’s testing and
acceptance, and has provided to the Investors evidence of its receipt of such
funding; and
 
D.  WHEREAS, the Company and the Investors wish to amend the Agreement and the
Registration Rights Agreement in the manner set forth in this Amendment.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the foregoing and the promises and covenants
contained herein and in the Agreement, and for other good and valuable
consideration the receipt of which is acknowledged, the parties agree as
follows:
 
1. Initial Additional Warrants. In consideration of the deletion of Section 7.2
and Schedule A from the Agreement, the Company shall issue to the Investors,
within two business days of the Investors delivery of this Agreement to the
Company, additional warrants, in the form of Exhibits A and B hereto,
respectively, covering an aggregate of 14,340,183.45 shares of common stock of
the Company at an initial exercise price of $.02615 per share, with an
expiration date of August 9, 2011 (the “Additional Warrants”; which defined term
shall also include any Further Additional Warrants, if issued as contemplated by
Section 2 below).
 
2. Potential Further Additional Warrants. In the event that the New Product does
not pass the testing requirements for the New Product that may be specified by
the Prospective Customer by March 31, 2007, the Company shall issue to the
Investors further additional warrants in substantially the form of Exhibits A
and B hereto respectively, covering an aggregate of 14,340,183.45 shares of
common stock of the Company at an initial exercise price of $.02615 per share,
with an expiration date of August 9, 2011 (the “Further Additional Warrants”).
Such Further Additional Warrants shall be issued by the Company on the earlier
of (i) March 31, 2007 or (ii) five business days after the Company has received
irrevocable written notice from the Prospective Customer that the New Product
has not met the testing requirements specified by such prospective customer, and
either (x) instructing the Company to cease efforts at attempting to meet the
testing requirements set forth by the Prospective Customer or (y) informing the
Company that the Prospective Customer will not enter into a supply agreement
with the Company for the New Product. The Company covenants that it will
promptly notify the Investors if it receives from the Prospective Customer the
notice referred to in the preceding sentence, or if the New Product meets the
testing requirements specified, and is accepted, by the Prospective Customer. No
Further Additional Warrants will be issued if, no later than March 31, 2007, the
Prospective Customer advises the Company in writing that the New Product meets
the testing requirements specified, and is accepted, by the Prospective
Customer.
 

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AMENDMENT NO. 1
 
3. Amendment to Registration Rights Agreement. The terms “Registrable
Securities” and the “Warrants”, as used in the Registration Rights Agreement,
are each hereby amended to delete the phrase “EBITDA Shortfall Warrants” and
insert, in lieu thereof, the phrase “Additional Warrants”.
 
4.  Effect of Amendment. Except as expressly modified by this Amendment, the
Agreement and the Registration Rights Agreement shall remain unmodified and in
full force and effect.
 
5. Entire Agreement. This Amendment together with the Agreement and the
Registration Rights Agreement constitute the full and entire understanding and
agreement among the Company and the Investors with regard to the EBITDA
Shortfall Warrants and the Additional Warrants.
 
6. Headings. The headings contained in this Amendment are for convenience of
reference only and are not to be given any legal effect and shall not affect the
meaning or interpretation of this Amendment.

 

 
SIGNATURE PAGES FOLLOW
 
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AMENDMENT NO. 1
 
IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the
date that the last party signs this Amendment. 
 

COMPANY:

CARSUNLIMITED.COM, INC.

By: ____________________________

Name: ___________________________

Title: ___________________________

Address: _________________________
_________________________

Facsimile Number: ________________
Date of Signature: ________________

 

Company Signature Page to Amendment to Securities Purchase Agreement
 
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AMENDMENT NO. 1
 
IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the
date that the last party signs this Amendment.

INVESTORS:

MELLON HBV MASTER U.S. EVENT
DRIVEN FUND LP

By: ____________________________

Name: ___________________________

Title: ___________________________

Address: _________________________
_________________________

Facsimile Number: ________________
Date of Signature: ________________

 
MELLON HBV MASTER GLOBAL
 
EVENT DRIVEN FUND LP
 

By: ____________________________

Name: ___________________________

Title: ___________________________

Address: _________________________
_________________________

Facsimile Number: ________________
Date of Signature: ________________

 
Investors Signature Page to Amendment to Securities Purchase Agreement
 
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AMENDMENT NO. 1
 
 
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”). THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT
OR UNDER STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO THE EXPRESS PROVISIONS
OF THIS WARRANT, AND NO SALE, ASSIGNMENT, TRANSFER, OR OTHER DISPOSITION OF THIS
WARRANT SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH PROVISIONS SHALL HAVE
BEEN COMPLIED WITH.

Date of Issuance: , 2006
CARSUNLIMITED.COM, INC.
Stock Purchase Warrant
(Void after August 9, 2011)

CARSUNLIMITED.COM, INC., a Nevada corporation (the “Company”), for value
received, hereby certifies and agrees that MELLON HBV MASTER U.S. EVENT DRIVEN
FUND, L.P. or its registered assigns (the “Registered Holder”), is entitled,
subject to the terms set forth below, to purchase from the Company, at any time
or from time to time on or after the date hereof (the “Date of Issuance”) and on
or before 5:00 p.m. New York time on August 9, 2011 (such date and time, the
“Expiration Time”), two million eight hundred sixty eight thousand and thirty
seven plus forty five/hundredths (2,868,037.45) duly authorized, validly issued,
fully paid and non-assessable shares of the Company’s common stock, $0.001 par
value per share (the “Common Stock”) at an initial exercise price equal to
$.02615 per share, subject to adjustment in certain cases as described herein.
The shares issuable upon exercise of this Warrant, and the purchase price per
share, are hereinafter referred to as the “Warrant Shares” and the “Exercise
Price,” respectively. The term “Warrant” as used herein shall include this
Warrant and any other warrants delivered in substitution or exchange therefor,
as provided herein. The Warrant shall terminate at the Expiration Time.

This Warrant is issued pursuant to Amendment No. 1 effective as of October 17,
2006 to that certain Securities Purchase Agreement dated as of August 9, 2006 by
and among the Company and certain investors set forth therein (as so amended,
the “Securities Purchase Agreement”).
 
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AMENDMENT NO. 1
 

I.  
Exercise.

 

Method of Exercise
 
1.  This Warrant may be exercised by the Registered Holder at any time from time
to time, in whole or in part, prior to the Expiration Time by surrendering this
Warrant, with a Notice of Exercise in the form of Annex A hereto (the “Notice of
Exercise”) duly executed by such Registered Holder or by such Registered
Holder’s duly authorized attorney, at the principal office of the Company set
forth on the signature page hereto, or at such other office or agency as the
Company may designate in writing (the “Company’s Office”), accompanied by
payment in full, in lawful money of the United States (by wire transfer of
immediately available funds or by bank cashier’s or certified check), of the
Exercise Price payable in respect of the number of shares of Warrant Shares
purchased upon such exercise. In lieu of cash payment, the Warrant may be
exercised through a cashless exercise in the manner set forth in Section 1.2
below.
 
 
2.  Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which the appropriate
Annex form shall be dated and directed to the Company (as evidenced by the
applicable postmark or other evidence of transmittal) as provided in Section
1(a) hereof. At such time, the person or persons in whose name or names any
certificates for Warrant Shares shall be issuable upon such exercise as provided
in Section 1(c) hereof shall be deemed to have become the holder or holders of
record of the Warrant Shares represented by such certificates.
 
 
3.  As soon as practicable after the exercise of this Warrant, in full or in
part, and in any event within ten (10) days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder, or as such Registered Holder (upon payment by such Registered
Holder of any applicable transfer taxes) may direct:
 
 

a.  
a certificate or certificates for the number of full Warrant Shares to which
such Registered Holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which such Registered Holder would otherwise be entitled,
cash in an amount determined pursuant to Section 4 hereof; and

 
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AMENDMENT NO. 1
 

b.  
in case such exercise is in part only, a new warrant or warrants (dated the date
hereof) of like tenor, representing in the aggregate on the face or faces
thereof the number of Warrant Shares equal (without giving effect to any
adjustment therein) to the number of such shares called for on the face of this
Warrant minus the number of such shares purchased by the Registered Holder upon
such exercise as provided in Section 3 hereof or received pursuant to Section
1.2 hereof.

 
 
Exercise by Surrender of Warrant. In addition to the method of payment set forth
in Section 1.1 and in lieu of any cash payment required thereunder, the Warrant
may be exercised by surrendering the Warrant in the manner specified in this
Section 1.2, together with irrevocable instructions to the Company to issue in
exchange for the Warrant the number of shares of Common Stock equal to the
product of (x) the number of shares of Common Stock underlying the Warrants
multiplied by (y) a fraction, the numerator of which is the Market Value (as
defined below) of the Common Stock less the Exercise Price and the denominator
of which is such Market Value. As used herein, the phrase “Market Value” at any
date shall be deemed to be the last reported sale price, or, in case no such
reported sale takes place on such day, the average of the last reported sale
prices for the last three (3) trading days, in either case as officially
reported by the principal securities exchange or “over the counter” (including
on the pink sheets or bulletin board) exchange on which the Common Stock is
listed or admitted to trading, or, if the Common Stock is not listed or admitted
to trading on any national securities exchange or sold “over the counter”, the
average closing bid price as furnished by the NASD through NASDAQ or similar
organization if NASDAQ is no longer reporting such information, or if the Common
Stock is not quoted on NASDAQ, as determined in good faith by resolution of the
Board of Directors of the Company, based on the best information available to
it.
 
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AMENDMENT NO. 1
 

II.  
Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees
that all shares of Common Stock which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance by the Company, be
validly issued, fully paid and nonassessable, and free from preemptive rights
and free from all taxes, liens and charges with respect thereto. The Company
further covenants and agrees that, from and after the Date of Issuance and
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized, and reserve, free from
preemptive rights, out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the exercise of this Warrant, a sufficient
number of shares of Common Stock to provide for the exercise of the rights
represented by this Warrant.

 
 

III.  
Fractional Shares. The Company shall not be required upon the exercise of this
Warrant to issue any fractional shares, but shall make an adjustment therefor in
cash on the basis of the Market Value for each fractional share of the Company’s
Common Stock which would be issuable upon exercise of this Warrant.

 
 

IV.  
Requirements for Transfer.

 
1.  Warrant Register. The Company will maintain a register (the “Warrant
Register”) containing the names and addresses of the Registered Holder or
Registered Holders. Any Registered Holder of this Warrant or any portion thereof
may change its address as shown on the Warrant Register by written notice to the
Company requesting such change, and the Company shall promptly make such change.
Until this Warrant is transferred on the Warrant Register of the Company, the
Company may treat the Registered Holder as shown on the Warrant Register as the
absolute owner of this Warrant for all purposes, notwithstanding any notice to
the contrary, provided, however, that if and when this Warrant is properly
assigned in blank, the Company may, but shall not be obligated to, treat the
bearer hereof as the absolute owner hereof for all purposes, notwithstanding any
notice to the contrary.
 
2.  Warrant Agent. The Company may, by written notice to the Registered Holder,
appoint an agent for the purpose of maintaining the Warrant Register referred to
in Section 4(a) hereof, issuing the Common Stock issuable upon the exercise of
this Warrant, exchanging this Warrant, replacing this Warrant or any or all of
the foregoing. Thereafter, any such registration, issuance, exchange, or
replacement, as the case may be, may be made at the office of such agent.
 
3.  Transfer. Subject to the provisions of this Section 4, this Warrant and all
rights hereunder are transferable, in whole or in part, upon the surrender of
this Warrant with a properly executed Assignment Form in substantially the form
attached hereto as Annex B (the “Assignment”) at the principal office of the
Company.
 
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AMENDMENT NO. 1
 

Exchange of Warrant Upon a Transfer. On surrender of this Warrant for exchange,
properly endorsed on the Assignment and subject to the provisions of this
Warrant and with the limitations on assignments and transfers as contained in
this Section 4, the Company at its expense shall issue to or on the order of the
Registered Holder a new warrant or warrants of like tenor, in the name of the
Registered Holder or as the Registered Holder (on payment by the Registered
Holder of any applicable transfer taxes) may direct, for the number of shares
issuable upon exercise hereof.
 

V.  
Adjustment. 

 
1. Computation of Adjusted Exercise Price. Except as hereinafter provided, in
case the Company shall at any time after the date hereof issue or sell any
shares of its Stock (as defined in Section 5(g)), other than the issuances or
sales referred to in Section 5(h) hereof, for a consideration per share less
than the Exercise Price in effect immediately prior to the issuance or sale of
such shares, or without consideration, then forthwith upon such issuance or
sale, the Exercise Price shall (until another such issuance or sale) be reduced
to the price (calculated to the nearest full cent) equal to the quotient derived
by dividing (A) an amount equal to the sum of (X) the product of (a) the
Exercise Price in effect immediately prior to such issuance or sale, multiplied
by (b) the total number of shares of Stock outstanding immediately prior to such
issuance or sale, plus (Y) the aggregate of the amount of all consideration, if
any, received by the Company upon such issuance or sale, by (B) the total number
of shares of Stock outstanding immediately after such issuance or sale;
provided, however, that in no event shall the Exercise Price be adjusted
pursuant to this computation to an amount in excess of the Exercise Price in
effect immediately prior to such computation, except in the case of a
combination of outstanding shares of Stock, as provided by Section 5(c) hereof.
For the purposes of this Section 5 the term Exercise Price shall mean the
Exercise Price per share set forth on the first page of this Warrant, as
adjusted from time to time pursuant to the provisions of this Section 5.
 

a.  
For purposes of any computation to be made in accordance with this Section 5(a),
the following provisions shall be applicable:

 
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AMENDMENT NO. 1
 

b.  
In case of the issuance or sale of shares of Stock for a consideration part or
all of which shall be cash, the amount of the cash consideration, shall be
deemed to be the amount of cash received by the Company for such shares (or, if
shares of Stock are offered by the Company for subscription, the subscription
price, or, if either of such securities shall be sold to underwriters or dealers
for public offering without a subscription price, the public offering price,
before deducting therefrom any compensation paid or discount allowed in the
sale, underwriting or purchase thereof by underwriters or dealers or other
persons or entities performing similar services), or any expenses incurred in
connection therewith and less any amounts payable to security holders or any
affiliate thereof, including, without limitation, any employment agreement,
royalty, consulting agreement, covenant not to compete, earnout or contingent
payment right or similar arrangement, agreement or understanding, whether oral
or written; all such amounts shall be valued at the aggregate amount payable
thereunder whether such payments are absolute or contingent and irrespective of
the period or uncertainty of payment, the rate of interest, if any, or the
contingent nature thereof.

 

c.  
In case of the issuance or sale (otherwise than as a dividend or other
distribution on any stock of the Company) of shares of Stock for a consideration
part or all of which shall be other than cash, the amount of the consideration
therefor other than cash shall be deemed to be the value of such consideration
as determined in good faith by the Board of Directors of the Company.

 

d.  
Shares of Stock issuable by way of dividend or other distribution on any capital
stock of the Company shall be deemed to have been issued immediately after the
opening of business on the day following the record date for the determination
of stockholders entitled to receive such dividend or other distribution and
shall be deemed to have been issued without consideration.

 
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AMENDMENT NO. 1
 

e.  
The reclassification of securities of the Company other than shares of Stock
into securities including shares of Stock shall be deemed to involve the
issuance of such shares of Stock for consideration other than cash immediately
prior to the close of business on the date fixed for the determination of
security holders entitled to receive such shares, and the value of the
consideration allocable to such shares of Stock shall be determined as provided
in Section 5(v).

 

f.  
The number of shares of Stock at any one time outstanding shall include the
aggregate number of shares issued or issuable (subject to readjustment upon the
actual issuance thereof) upon the exercise of then outstanding options, rights,
warrants, and convertible and exchangeable securities.

 
2. Options, Rights, Warrants and Convertible and Exchangeable Securities.
 

a.  
In case the Company shall at any time after the date hereof issue options,
rights or warrants to subscribe for shares of Stock, or issue any securities
convertible into or exchangeable for shares of Stock, for a consideration per
share less than the Exercise Price in effect immediately prior to the issuance
of such options, rights, warrants or such convertible or exchangeable
securities, or without consideration, the Exercise Price in effect immediately
prior to the issuance of such options, rights, warrants or such convertible or
exchangeable securities, as the case may be, shall be reduced to a price
determined by making a computation in accordance with the provisions of Section
5(a) hereof, provided that:

 
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AMENDMENT NO. 1
 

b.  
The aggregate maximum number of shares of Stock, as the case may be, issuable
under such options, rights or warrants shall be deemed to be issued and
outstanding at the time such options, rights or warrants were issued, for a
consideration equal to the minimum purchase price per share provided for in such
options, rights or warrants at the time of issuance, plus the consideration
(determined in the same manner as consideration received on the issue or sale of
shares in accordance with the terms of the Warrant), if any, received by the
Company for such options, rights or warrants. The aggregate maximum number of
shares of Stock issuable upon conversion or exchange of any convertible or
exchangeable securities shall be deemed to be issued and outstanding at the time
of issuance of such securities, and for a consideration equal to the
consideration (determined in the same manner as consideration received on the
issue or sale of shares of Stock in accordance with the terms of the Warrant)
received by the Company for such securities, plus the minimum consideration, if
any, receivable by the Company upon the conversion or exchange thereof. If any
change shall occur in the price per share provided for in any of the options,
rights or warrants referred to in subsection, or in the price per share at which
the securities referred to in this subsection are exchangeable, such options,
rights or warrants or exchange rights, as the case may be, shall be deemed to
have expired or terminated on the date when such price change became effective
in respect to shares not theretofore issued pursuant to the exercise or exchange
thereof, and the Company shall be deemed to have issued upon such date new
options, rights or warrants or exchangeable securities at the new price in
respect of the number of shares issuable upon the exercise of such options,
rights or warrants or the conversion or exchange of such exchangeable
securities.

 
Subdivision and Combination. If the Company at any time subdivides (by any stock
split, stock dividend, recapitalization, reorganization, reclassification or
otherwise) the shares of Stock subject to acquisition 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 and the number of shares of Common Stock subject to
acquisition upon exercise of this Warrant will be proportionately increased. If
the Company at any time combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) the shares of Stock subject to
acquisition 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 and the number of
shares of Common Stock subject to acquisition upon exercise of this Warrant will
be proportionately decreased.
 
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AMENDMENT NO. 1
 
3.  Merger or Consolidation. 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 Registered Holder will have the right to
acquire and receive upon exercise of this Warrant in lieu of the shares of
Common Stock immediately theretofore subject to acquisition 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 subject to acquisition 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 Section 5 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.
 
4.  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 Registered Holder, which notice shall state the
Exercise Price resulting from such adjustment and the increase or decrease, if
any, 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.
 
5.  Adjustment in Number of Securities. Upon each adjustment of the Exercise
Price pursuant to the provisions of this Section 5, the number of securities
issuable upon the exercise of each Warrant shall be adjusted to the nearest full
amount by multiplying a number equal to the Exercise Price in effect immediately
prior to such adjustment by the number of Warrant Shares issuable upon exercise
of the Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.

Definition of Stock. For the purpose of this Agreement, the term "Stock" shall
mean (i) the class of stock designated as Common Stock in the Articles of
Incorporation of the Company as may be amended as of the date hereof, or (ii)
any other class of stock resulting from successive changes or reclassifications
of such Stock consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value.
 
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AMENDMENT NO. 1

No Adjustment of Exercise Price in Certain Cases. No adjustment of the Exercise
Price shall be made:

a.  
Upon issuance or sale of this Warrant or Warrant Shares, or the other Warrants
issued pursuant to the Purchase Agreement and Warrant Shares issued upon
exercise thereof, or other options, warrants and convertible securities
outstanding as of the date hereof into or for shares of Common Stock.

 

b.  
Upon the issuance or sale of any shares of capital stock, or the grant of
options exercisable therefor, issued or issuable after the date of this Warrant,
to directors, officers, employees, advisers and consultants of the Company or
any subsidiary pursuant to any incentive or non-qualified stock option plan or
agreement, stock purchase plan or agreement, stock restriction agreement or
restricted stock plan, employee stock ownership plan (ESOP), consulting
agreement, stock appreciation right (SAR), stock depreciation right (SDR), bonus
stock arrangement, or such other similar compensatory options, issuances,
arrangements, agreements or plans approved by the Board of Directors.

 

c.  
If the amount of said adjustment shall be less than one cent ($0.01) per
security issuable upon exercise of this Warrant, provided, however, that in such
case any adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment so carried forward,
shall amount to at least two cents ($0.02) per security issuable upon exercise
of this Warrant.

 
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AMENDMENT NO. 1
 

VI.  
No Impairment. The Company will not, by amendment of its charter or through
reorganization, consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant but will at all times carry out all such terms and
take all such action as may be reasonably necessary or appropriate in order to
protect the rights of the holder of this Warrant against impairment.

 

VII.  
Liquidating Dividends and Other Distributions. The Company agrees and covenants
that, while any amount of the Notes is outstanding, it will not directly or
indirectly declare or pay any dividend or make any distributions. After the
payment in full of the Notes, if the Company pays a dividend or makes a
distribution on the Common Stock payable otherwise than in cash out of earnings
or earned surplus (determined in accordance with generally accepted accounting
principles) except for a stock dividend payable in shares of Common Stock (a
“Liquidating Dividend”) or otherwise distributes to its stockholders any assets,
properties, rights, evidence of indebtedness, securities whether issued by the
Company or by another, or any other thing of value, then the Company will pay or
distribute to the Registered Holder of this Warrant, upon the exercise hereof,
in addition to the Warrant Shares purchased upon such exercise, either (i) the
Liquidating Dividend that would have been paid to such Registered Holder if he
had been the owner of record of such Warrant Shares immediately prior to the
date on which a record is taken for such Liquidating Dividend or, if no record
is taken, the date as of which the record holders of Common Stock entitled to
such dividends or distribution are to be determined or (ii) the same property,
assets, rights, evidences of indebtedness, securities or any other thing of
value that the Registered Holder would have been entitled to receive at the time
of such distribution as if the Warrant had been exercised immediately prior to
such distribution.

 

VIII.  
Notices of Record Date, Etc. In case:

 
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AMENDMENT NO. 1
 
1.  the Company shall take a record of the holders of its Common Stock (or other
stock or securities at the time deliverable upon the exercise of this Warrant)
for the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any other right; or of
any capital reorganization of the Company, any reclassification of the capital
stock of the Company, any consoli-dation or merger of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the surviving entity), or any transfer of all or substantially all of the
assets of the Company; or of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company, then, and in each such case, the
Company will mail or cause to be mailed to the Registered Holder of this Warrant
a notice specifying, as the case may be, (i) the date on which a record is to be
taken for the purpose of such dividend, distribution or right, and stating the
amount and character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up is to take place, and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such other stock or securities at the time deliverable upon the
exercise of this Warrant) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up. Such notice shall be mailed at
least ten (10) days prior to the record date or effective date for the event
specified in such notice unless such prior notice is waived by the Registered
Holder.
 

IX.  
No Rights of Stockholders. Subject to other Sections of this Warrant, the
Registered Holder shall not be entitled to vote, to receive dividends or
subscription rights, nor shall anything contained herein be construed to confer
upon the Registered Holder, as such, any of the rights of a stockholder of the
Company, including without limitation any right to vote for the election of
directors or upon any matter submitted to stockholders, to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value or change of stock to no
par value, consolidation, merger, conveyance, or otherwise), to receive notices,
or otherwise, until the Warrant shall have been exercised as provided herein.

 

X.  
Registration Rights. The Registered Holder shall be entitled to the registration
rights set forth in the Registration Rights Agreement dated as of August 9, 2006
executed in connection with the Securities Purchase Agreement.

 
16

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AMENDMENT NO. 1
 

XI.  
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 loss, theft or destruction) upon delivery of an indemnity agreement
reasonably satisfactory to the Company, or (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will issue, in lieu
thereof, a new Warrant of like tenor.

 

XII.  
Mailing of Notices, Etc. All notices and other communi-cations from the Company
to the Registered Holder of this Warrant shall be mailed by first-class
certified or registered mail, postage prepaid, to the address furnished to the
Company in writing by the last Registered Holder of this Warrant who shall have
furnished an address to the Company in writing. All notices and other
communications from the Registered Holder of this Warrant or in connection
herewith to the Company shall be mailed by first-class certified or registered
mail, postage prepaid, to the Company at its principal office set forth below.
If the Company should at any time change the location of its principal office to
a place other than as set forth below, then it shall give prompt written notice
to the Registered Holder of this Warrant and thereafter all references in this
Warrant to the location of its principal office at the particular time shall be
as so specified in such notice.

 
17

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AMENDMENT NO. 1
 

XIII.  
Change or Waiver. Any term of this Warrant may be changed or waived only by an
instrument in writing signed by the party against which enforcement of the
change or waiver is sought.

 

XIV.  
Headings. The headings in this Warrant are for purposes of reference only and
shall not limit or otherwise affect the meaning of any provision of this
Warrant.

 

XV.  
 Severability. If any provision of this Warrant shall be held to be invalid and
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Warrant.

 

XVI.  
Governing Law and Submission to Jurisdiction. This Warrant will be governed by
and construed in accordance with the laws of the State of New York without
regard to principles of conflict or choice of laws of any jurisdiction. The
parties hereby agree that any action, proceeding or claim against it arising out
of, or relating in any way to this Warrant shall be brought and enforced in the
courts of the State of New York, and irrevocably submit to such jurisdiction,
which jurisdiction shall be exclusive.

 

XVII.  
Certificate. Upon request by the Registered Holder of this Warrant, the Company
shall promptly deliver to such holder a certificate executed by its President or
Chief Financial Officer setting forth the total number of outstanding shares of
capital stock, convertible debt instruments and options, rights, warrants or
other agreements relating to the purchase of such capital stock or convertible
debt instruments, together with its calculation of the number of shares
remaining available for issuance upon exercise of this Warrant, and a
certificate of the accuracy of the statements set forth therein.

 
18

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AMENDMENT NO. 1
 

XVIII.  
Supplements and Amendments. The Company and the Registered Holder may from time
to time supplement or amend this Warrant in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Holder may deem necessary or desirable.

 

XIX.  
Successors. This Warrant shall be binding upon and shall inure to the benefit of
the respective successors and assigns of the parties, except that the Company
shall not have the right to assign or otherwise transfer all or any part of its
rights or obligations hereunder or any interest herein without the prior written
consent of the Registered Holder.

 

XX.  
Benefits of this Warrant. Nothing in this Warrant shall be construed to give to
any person, entity or corporation other than the Company and the Registered
Holder of the Warrant Certificate any legal or equitable right, remedy or claim
under this Warrant; and this Warrant shall be for the sole and exclusive benefit
of the Company and the Registered Holder of the Warrant Certificate.

 

Balance of Page Intentionally left Blank
Signature Page Follows
 
19

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AMENDMENT NO. 1

IN WITNESS WHEREOF, CARSUNLIMITED.COM, INC. has caused this Warrant to be signed
by its duly authorized officers under its corporate seal and to be dated on the
day and year first written above.

CARSUNLIMITED.COM, INC.

By:_________________________________
Name: Paul Block
Title: President

Principal Office: 305 Madison Avenue,
 Suite 4510
 New York, NY 10165

20

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AMENDMENT NO. 1

i.  
ANNEX A

 

NOTICE OF EXERCISE FORM

To:
Dated: 

The undersigned, pursuant to the provisions in the attached Warrant, hereby
irrevocably elects to: [check the appropriate box]

__ (i) purchase _____ shares of Common Stock covered by such Warrant and hereby
makes payment of $_______, representing the full purchase price for shares at
the exercise price per share provided for in such Warrant. Enclosed herewith is
payment of the exercise price of such shares in full; or

__ (ii) exercise the Warrant on a “cashless” basis in the manner set forth in
Section 1.2 of the Warrant. Such calculation results in the net issuance of
_______ shares of Common Stock of the Company to the undersigned.

Please have the shares of Common Stock of the Company issuable pursuant to this
exercise delivered to ________________.

Signature:
Dated: 
Address:

 
 
21

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AMENDMENT NO. 1
 
ANNEX B

ASSIGNMENT FORM

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

 

Name of Assignee
Address
No. of Shares

Dated:

Signature:
Dated:

Witness:

22

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AMENDMENT NO. 1

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”). THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT
OR UNDER STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO THE EXPRESS PROVISIONS
OF THIS WARRANT, AND NO SALE, ASSIGNMENT, TRANSFER, OR OTHER DISPOSITION OF THIS
WARRANT SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH PROVISIONS SHALL HAVE
BEEN COMPLIED WITH.

Date of Issuance: , 200
CARSUNLIMITED.COM, INC.
Stock Purchase Warrant
(Void after August 9, 2011)

CARSUNLIMITED.COM, INC., a Nevada corporation (the “Company”), for value
received, hereby certifies and agrees that MELLON HBV MASTER GLOBAL EVENT DRIVEN
FUND, L.P. or its registered assigns (the “Registered Holder”), is entitled,
subject to the terms set forth below, to purchase from the Company, at any time
or from time to time on or after the date hereof (the “Date of Issuance”) and on
or before 5:00 p.m. New York time on August 9, 2011 (such date and time, the
“Expiration Time”), eleven million four hundred seventy seven thousand one
hundred and forty six (11,472,146) duly authorized, validly issued, fully paid
and non-assessable shares of the Company’s common stock, $0.001 par value per
share (the “Common Stock”) at an initial exercise price equal to $.02615 per
share, subject to adjustment in certain cases as described herein. The shares
issuable upon exercise of this Warrant, and the purchase price per share, are
hereinafter referred to as the “Warrant Shares” and the “Exercise Price,”
respectively. The term “Warrant” as used herein shall include this Warrant and
any other warrants delivered in substitution or exchange therefor, as provided
herein. The Warrant shall terminate at the Expiration Time.

This Warrant is issued pursuant to Amendment No. 1 effective as of October 17,
2006 to that certain Securities Purchase Agreement dated as of August 9, 2006 by
and among the Company and certain investors set forth therein (as so amended,
the “Securities Purchase Agreement”).
 
23

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AMENDMENT NO. 1
 

XXI.  
Exercise.

 

1.1.  Method of Exercise
 
1.  This Warrant may be exercised by the Registered Holder at any time from time
to time, in whole or in part, prior to the Expiration Time by surrendering this
Warrant, with a Notice of Exercise in the form of Annex A hereto (the “Notice of
Exercise”) duly executed by such Registered Holder or by such Registered
Holder’s duly authorized attorney, at the principal office of the Company set
forth on the signature page hereto, or at such other office or agency as the
Company may designate in writing (the “Company’s Office”), accompanied by
payment in full, in lawful money of the United States (by wire transfer of
immediately available funds or by bank cashier’s or certified check), of the
Exercise Price payable in respect of the number of shares of Warrant Shares
purchased upon such exercise. In lieu of cash payment, the Warrant may be
exercised through a cashless exercise in the manner set forth in Section 1.2
below.
 
2.  Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which the appropriate
Annex form shall be dated and directed to the Company (as evidenced by the
applicable postmark or other evidence of transmittal) as provided in Section
1(a) hereof. At such time, the person or persons in whose name or names any
certificates for Warrant Shares shall be issuable upon such exercise as provided
in Section 1(c) hereof shall be deemed to have become the holder or holders of
record of the Warrant Shares represented by such certificates.
 
3.  As soon as practicable after the exercise of this Warrant, in full or in
part, and in any event within ten (10) days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder, or as such Registered Holder (upon payment by such Registered
Holder of any applicable transfer taxes) may direct:
 

a.  
a certificate or certificates for the number of full Warrant Shares to which
such Registered Holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which such Registered Holder would otherwise be entitled,
cash in an amount determined pursuant to Section 4 hereof; and

 
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AMENDMENT NO. 1
 

b.  
in case such exercise is in part only, a new warrant or warrants (dated the date
hereof) of like tenor, representing in the aggregate on the face or faces
thereof the number of Warrant Shares equal (without giving effect to any
adjustment therein) to the number of such shares called for on the face of this
Warrant minus the number of such shares purchased by the Registered Holder upon
such exercise as provided in Section 3 hereof or received pursuant to Section
1.2 hereof.

 
1.2.  Exercise by Surrender of Warrant. In addition to the method of payment set
forth in Section 1.1 and in lieu of any cash payment required thereunder, the
Warrant may be exercised by surrendering the Warrant in the manner specified in
this Section 1.2, together with irrevocable instructions to the Company to issue
in exchange for the Warrant the number of shares of Common Stock equal to the
product of (x) the number of shares of Common Stock underlying the Warrants
multiplied by (y) a fraction, the numerator of which is the Market Value (as
defined below) of the Common Stock less the Exercise Price and the denominator
of which is such Market Value. As used herein, the phrase “Market Value” at any
date shall be deemed to be the last reported sale price, or, in case no such
reported sale takes place on such day, the average of the last reported sale
prices for the last three (3) trading days, in either case as officially
reported by the principal securities exchange or “over the counter” (including
on the pink sheets or bulletin board) exchange on which the Common Stock is
listed or admitted to trading, or, if the Common Stock is not listed or admitted
to trading on any national securities exchange or sold “over the counter”, the
average closing bid price as furnished by the NASD through NASDAQ or similar
organization if NASDAQ is no longer reporting such information, or if the Common
Stock is not quoted on NASDAQ, as determined in good faith by resolution of the
Board of Directors of the Company, based on the best information available to
it.
 
25

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AMENDMENT NO. 1
 

XXII.  
Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees
that all shares of Common Stock which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance by the Company, be
validly issued, fully paid and nonassessable, and free from preemptive rights
and free from all taxes, liens and charges with respect thereto. The Company
further covenants and agrees that, from and after the Date of Issuance and
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized, and reserve, free from
preemptive rights, out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the exercise of this Warrant, a sufficient
number of shares of Common Stock to provide for the exercise of the rights
represented by this Warrant.

 

XXIII.  
Fractional Shares. The Company shall not be required upon the exercise of this
Warrant to issue any fractional shares, but shall make an adjustment therefor in
cash on the basis of the Market Value for each fractional share of the Company’s
Common Stock which would be issuable upon exercise of this Warrant.

 

XXIV.  
Requirements for Transfer.

 
1.  Warrant Register. The Company will maintain a register (the “Warrant
Register”) containing the names and addresses of the Registered Holder or
Registered Holders. Any Registered Holder of this Warrant or any portion thereof
may change its address as shown on the Warrant Register by written notice to the
Company requesting such change, and the Company shall promptly make such change.
Until this Warrant is transferred on the Warrant Register of the Company, the
Company may treat the Registered Holder as shown on the Warrant Register as the
absolute owner of this Warrant for all purposes, notwithstanding any notice to
the contrary, provided, however, that if and when this Warrant is properly
assigned in blank, the Company may, but shall not be obligated to, treat the
bearer hereof as the absolute owner hereof for all purposes, notwithstanding any
notice to the contrary.
 
2.  Warrant Agent. The Company may, by written notice to the Registered Holder,
appoint an agent for the purpose of maintaining the Warrant Register referred to
in Section 4(a) hereof, issuing the Common Stock issuable upon the exercise of
this Warrant, exchanging this Warrant, replacing this Warrant or any or all of
the foregoing. Thereafter, any such registration, issuance, exchange, or
replacement, as the case may be, may be made at the office of such agent.
 
3.  Transfer. Subject to the provisions of this Section 4, this Warrant and all
rights hereunder are transferable, in whole or in part, upon the surrender of
this Warrant with a properly executed Assignment Form in substantially the form
attached hereto as Annex B (the “Assignment”) at the principal office of the
Company.
 
26

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AMENDMENT NO. 1
 

(a)  Exchange of Warrant Upon a Transfer. On surrender of this Warrant for
exchange, properly endorsed on the Assignment and subject to the provisions of
this Warrant and with the limitations on assignments and transfers as contained
in this Section 4, the Company at its expense shall issue to or on the order of
the Registered Holder a new warrant or warrants of like tenor, in the name of
the Registered Holder or as the Registered Holder (on payment by the Registered
Holder of any applicable transfer taxes) may direct, for the number of shares
issuable upon exercise hereof.
 

XXV.  
Adjustment. 

 

1. Computation of Adjusted Exercise Price. Except as hereinafter provided, in
case the Company shall at any time after the date hereof issue or sell any
shares of its Stock (as defined in Section 5(g)), other than the issuances or
sales referred to in Section 5(h) hereof, for a consideration per share less
than the Exercise Price in effect immediately prior to the issuance or sale of
such shares, or without consideration, then forthwith upon such issuance or
sale, the Exercise Price shall (until another such issuance or sale) be reduced
to the price (calculated to the nearest full cent) equal to the quotient derived
by dividing (A) an amount equal to the sum of (X) the product of (a) the
Exercise Price in effect immediately prior to such issuance or sale, multiplied
by (b) the total number of shares of Stock outstanding immediately prior to such
issuance or sale, plus (Y) the aggregate of the amount of all consideration, if
any, received by the Company upon such issuance or sale, by (B) the total number
of shares of Stock outstanding immediately after such issuance or sale;
provided, however, that in no event shall the Exercise Price be adjusted
pursuant to this computation to an amount in excess of the Exercise Price in
effect immediately prior to such computation, except in the case of a
combination of outstanding shares of Stock, as provided by Section 5(c) hereof.
For the purposes of this Section 5 the term Exercise Price shall mean the
Exercise Price per share set forth on the first page of this Warrant, as
adjusted from time to time pursuant to the provisions of this Section 5.
 

a.  
For purposes of any computation to be made in accordance with this Section 5(a),
the following provisions shall be applicable:

 
27

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AMENDMENT NO. 1
 

b.  
In case of the issuance or sale of shares of Stock for a consideration part or
all of which shall be cash, the amount of the cash consideration, shall be
deemed to be the amount of cash received by the Company for such shares (or, if
shares of Stock are offered by the Company for subscription, the subscription
price, or, if either of such securities shall be sold to underwriters or dealers
for public offering without a subscription price, the public offering price,
before deducting therefrom any compensation paid or discount allowed in the
sale, underwriting or purchase thereof by underwriters or dealers or other
persons or entities performing similar services), or any expenses incurred in
connection therewith and less any amounts payable to security holders or any
affiliate thereof, including, without limitation, any employment agreement,
royalty, consulting agreement, covenant not to compete, earnout or contingent
payment right or similar arrangement, agreement or understanding, whether oral
or written; all such amounts shall be valued at the aggregate amount payable
thereunder whether such payments are absolute or contingent and irrespective of
the period or uncertainty of payment, the rate of interest, if any, or the
contingent nature thereof.

 

c.  
In case of the issuance or sale (otherwise than as a dividend or other
distribution on any stock of the Company) of shares of Stock for a consideration
part or all of which shall be other than cash, the amount of the consideration
therefor other than cash shall be deemed to be the value of such consideration
as determined in good faith by the Board of Directors of the Company.

 

d.  
Shares of Stock issuable by way of dividend or other distribution on any capital
stock of the Company shall be deemed to have been issued immediately after the
opening of business on the day following the record date for the determination
of stockholders entitled to receive such dividend or other distribution and
shall be deemed to have been issued without consideration.

 
28

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AMENDMENT NO. 1
 

e.  
The reclassification of securities of the Company other than shares of Stock
into securities including shares of Stock shall be deemed to involve the
issuance of such shares of Stock for consideration other than cash immediately
prior to the close of business on the date fixed for the determination of
security holders entitled to receive such shares, and the value of the
consideration allocable to such shares of Stock shall be determined as provided
in Section 5(v).

 

f.  
The number of shares of Stock at any one time outstanding shall include the
aggregate number of shares issued or issuable (subject to readjustment upon the
actual issuance thereof) upon the exercise of then outstanding options, rights,
warrants, and convertible and exchangeable securities.

 
2. Options, Rights, Warrants and Convertible and Exchangeable Securities.
 

a.  
In case the Company shall at any time after the date hereof issue options,
rights or warrants to subscribe for shares of Stock, or issue any securities
convertible into or exchangeable for shares of Stock, for a consideration per
share less than the Exercise Price in effect immediately prior to the issuance
of such options, rights, warrants or such convertible or exchangeable
securities, or without consideration, the Exercise Price in effect immediately
prior to the issuance of such options, rights, warrants or such convertible or
exchangeable securities, as the case may be, shall be reduced to a price
determined by making a computation in accordance with the provisions of Section
5(a) hereof, provided that:

 
29

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AMENDMENT NO. 1
 

b.  
The aggregate maximum number of shares of Stock, as the case may be, issuable
under such options, rights or warrants shall be deemed to be issued and
outstanding at the time such options, rights or warrants were issued, for a
consideration equal to the minimum purchase price per share provided for in such
options, rights or warrants at the time of issuance, plus the consideration
(determined in the same manner as consideration received on the issue or sale of
shares in accordance with the terms of the Warrant), if any, received by the
Company for such options, rights or warrants. The aggregate maximum number of
shares of Stock issuable upon conversion or exchange of any convertible or
exchangeable securities shall be deemed to be issued and outstanding at the time
of issuance of such securities, and for a consideration equal to the
consideration (determined in the same manner as consideration received on the
issue or sale of shares of Stock in accordance with the terms of the Warrant)
received by the Company for such securities, plus the minimum consideration, if
any, receivable by the Company upon the conversion or exchange thereof. If any
change shall occur in the price per share provided for in any of the options,
rights or warrants referred to in subsection, or in the price per share at which
the securities referred to in this subsection are exchangeable, such options,
rights or warrants or exchange rights, as the case may be, shall be deemed to
have expired or terminated on the date when such price change became effective
in respect to shares not theretofore issued pursuant to the exercise or exchange
thereof, and the Company shall be deemed to have issued upon such date new
options, rights or warrants or exchangeable securities at the new price in
respect of the number of shares issuable upon the exercise of such options,
rights or warrants or the conversion or exchange of such exchangeable
securities.

 
(b)  Subdivision and Combination. If the Company at any time subdivides (by any
stock split, stock dividend, recapitalization, reorganization, reclassification
or otherwise) the shares of Stock subject to acquisition 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 and the number of shares of Common Stock subject
to acquisition upon exercise of this Warrant will be proportionately increased.
If the Company at any time combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) the shares of Stock subject to
acquisition 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 and the number of
shares of Common Stock subject to acquisition upon exercise of this Warrant will
be proportionately decreased.
 
30

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AMENDMENT NO. 1
 
3.  Merger or Consolidation. 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 Registered Holder will have the right to
acquire and receive upon exercise of this Warrant in lieu of the shares of
Common Stock immediately theretofore subject to acquisition 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 subject to acquisition 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 Section 5 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.
 
4.  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 Registered Holder, which notice shall state the
Exercise Price resulting from such adjustment and the increase or decrease, if
any, 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.
 
5.  Adjustment in Number of Securities. Upon each adjustment of the Exercise
Price pursuant to the provisions of this Section 5, the number of securities
issuable upon the exercise of each Warrant shall be adjusted to the nearest full
amount by multiplying a number equal to the Exercise Price in effect immediately
prior to such adjustment by the number of Warrant Shares issuable upon exercise
of the Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.

(c)  Definition of Stock. For the purpose of this Agreement, the term "Stock"
shall mean (i) the class of stock designated as Common Stock in the Articles of
Incorporation of the Company as may be amended as of the date hereof, or (ii)
any other class of stock resulting from successive changes or reclassifications
of such Stock consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value.
 
31

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AMENDMENT NO. 1

(d)  No Adjustment of Exercise Price in Certain Cases. No adjustment of the
Exercise Price shall be made:

a.  
Upon issuance or sale of this Warrant or Warrant Shares, or the other Warrants
issued pursuant to the Purchase Agreement and Warrant Shares issued upon
exercise thereof, or other options, warrants and convertible securities
outstanding as of the date hereof into or for shares of Common Stock.

 

b.  
Upon the issuance or sale of any shares of capital stock, or the grant of
options exercisable therefor, issued or issuable after the date of this Warrant,
to directors, officers, employees, advisers and consultants of the Company or
any subsidiary pursuant to any incentive or non-qualified stock option plan or
agreement, stock purchase plan or agreement, stock restriction agreement or
restricted stock plan, employee stock ownership plan (ESOP), consulting
agreement, stock appreciation right (SAR), stock depreciation right (SDR), bonus
stock arrangement, or such other similar compensatory options, issuances,
arrangements, agreements or plans approved by the Board of Directors.

 

c.  
If the amount of said adjustment shall be less than one cent ($0.01) per
security issuable upon exercise of this Warrant, provided, however, that in such
case any adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment so carried forward,
shall amount to at least two cents ($0.02) per security issuable upon exercise
of this Warrant.

 
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AMENDMENT NO. 1
 

XXVI.  
No Impairment. The Company will not, by amendment of its charter or through
reorganization, consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant but will at all times carry out all such terms and
take all such action as may be reasonably necessary or appropriate in order to
protect the rights of the holder of this Warrant against impairment.

 

XXVII.  
Liquidating Dividends and Other Distributions. The Company agrees and covenants
that, while any amount of the Notes is outstanding, it will not directly or
indirectly declare or pay any dividend or make any distributions. After the
payment in full of the Notes, if the Company pays a dividend or makes a
distribution on the Common Stock payable otherwise than in cash out of earnings
or earned surplus (determined in accordance with generally accepted accounting
principles) except for a stock dividend payable in shares of Common Stock (a
“Liquidating Dividend”) or otherwise distributes to its stockholders any assets,
properties, rights, evidence of indebtedness, securities whether issued by the
Company or by another, or any other thing of value, then the Company will pay or
distribute to the Registered Holder of this Warrant, upon the exercise hereof,
in addition to the Warrant Shares purchased upon such exercise, either (i) the
Liquidating Dividend that would have been paid to such Registered Holder if he
had been the owner of record of such Warrant Shares immediately prior to the
date on which a record is taken for such Liquidating Dividend or, if no record
is taken, the date as of which the record holders of Common Stock entitled to
such dividends or distribution are to be determined or (ii) the same property,
assets, rights, evidences of indebtedness, securities or any other thing of
value that the Registered Holder would have been entitled to receive at the time
of such distribution as if the Warrant had been exercised immediately prior to
such distribution.

 

XXVIII.  
Notices of Record Date, Etc. In case:

 
33

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AMENDMENT NO. 1
 
1.  the Company shall take a record of the holders of its Common Stock (or other
stock or securities at the time deliverable upon the exercise of this Warrant)
for the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any other right; or of
any capital reorganization of the Company, any reclassification of the capital
stock of the Company, any consoli-dation or merger of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the surviving entity), or any transfer of all or substantially all of the
assets of the Company; or of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company, then, and in each such case, the
Company will mail or cause to be mailed to the Registered Holder of this Warrant
a notice specifying, as the case may be, (i) the date on which a record is to be
taken for the purpose of such dividend, distribution or right, and stating the
amount and character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up is to take place, and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such other stock or securities at the time deliverable upon the
exercise of this Warrant) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up. Such notice shall be mailed at
least ten (10) days prior to the record date or effective date for the event
specified in such notice unless such prior notice is waived by the Registered
Holder.
 

XXIX.  
No Rights of Stockholders. Subject to other Sections of this Warrant, the
Registered Holder shall not be entitled to vote, to receive dividends or
subscription rights, nor shall anything contained herein be construed to confer
upon the Registered Holder, as such, any of the rights of a stockholder of the
Company, including without limitation any right to vote for the election of
directors or upon any matter submitted to stockholders, to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value or change of stock to no
par value, consolidation, merger, conveyance, or otherwise), to receive notices,
or otherwise, until the Warrant shall have been exercised as provided herein.

 

XXX.  
Registration Rights. The Registered Holder shall be entitled to the registration
rights set forth in the Registration Rights Agreement dated as of August 9, 2006
executed in connection with the Securities Purchase Agreement.

 
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AMENDMENT NO. 1
 

XXXI.  
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 loss, theft or destruction) upon delivery of an indemnity agreement
reasonably satisfactory to the Company, or (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will issue, in lieu
thereof, a new Warrant of like tenor.

 

XXXII.  
Mailing of Notices, Etc. All notices and other communi-cations from the Company
to the Registered Holder of this Warrant shall be mailed by first-class
certified or registered mail, postage prepaid, to the address furnished to the
Company in writing by the last Registered Holder of this Warrant who shall have
furnished an address to the Company in writing. All notices and other
communications from the Registered Holder of this Warrant or in connection
herewith to the Company shall be mailed by first-class certified or registered
mail, postage prepaid, to the Company at its principal office set forth below.
If the Company should at any time change the location of its principal office to
a place other than as set forth below, then it shall give prompt written notice
to the Registered Holder of this Warrant and thereafter all references in this
Warrant to the location of its principal office at the particular time shall be
as so specified in such notice.

 
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AMENDMENT NO. 1
 

XXXIII.  
Change or Waiver. Any term of this Warrant may be changed or waived only by an
instrument in writing signed by the party against which enforcement of the
change or waiver is sought.

 

XXXIV.  
Headings. The headings in this Warrant are for purposes of reference only and
shall not limit or otherwise affect the meaning of any provision of this
Warrant.

 

XXXV.  
 Severability. If any provision of this Warrant shall be held to be invalid and
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Warrant.

 

XXXVI.  
Governing Law and Submission to Jurisdiction. This Warrant will be governed by
and construed in accordance with the laws of the State of New York without
regard to principles of conflict or choice of laws of any jurisdiction. The
parties hereby agree that any action, proceeding or claim against it arising out
of, or relating in any way to this Warrant shall be brought and enforced in the
courts of the State of New York, and irrevocably submit to such jurisdiction,
which jurisdiction shall be exclusive.

 

XXXVII.  
Certificate. Upon request by the Registered Holder of this Warrant, the Company
shall promptly deliver to such holder a certificate executed by its President or
Chief Financial Officer setting forth the total number of outstanding shares of
capital stock, convertible debt instruments and options, rights, warrants or
other agreements relating to the purchase of such capital stock or convertible
debt instruments, together with its calculation of the number of shares
remaining available for issuance upon exercise of this Warrant, and a
certificate of the accuracy of the statements set forth therein.

 
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AMENDMENT NO. 1
 

XXXVIII.  
Supplements and Amendments. The Company and the Registered Holder may from time
to time supplement or amend this Warrant in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Holder may deem necessary or desirable.

 

XXXIX.  
Successors. This Warrant shall be binding upon and shall inure to the benefit of
the respective successors and assigns of the parties, except that the Company
shall not have the right to assign or otherwise transfer all or any part of its
rights or obligations hereunder or any interest herein without the prior written
consent of the Registered Holder.

 

XL.  
Benefits of this Warrant. Nothing in this Warrant shall be construed to give to
any person, entity or corporation other than the Company and the Registered
Holder of the Warrant Certificate any legal or equitable right, remedy or claim
under this Warrant; and this Warrant shall be for the sole and exclusive benefit
of the Company and the Registered Holder of the Warrant Certificate.

 

Balance of Page Intentionally left Blank
Signature Page Follows
 
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AMENDMENT NO. 1

IN WITNESS WHEREOF, CARSUNLIMITED.COM, INC. has caused this Warrant to be signed
by its duly authorized officers under its corporate seal and to be dated on the
day and year first written above.
 

CARSUNLIMITED.COM, INC.

By:_________________________________
Name: Paul Block
Title: President

Principal Office: 305 Madison Avenue,
 Suite 4510
 New York, NY 10165

 
 
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AMENDMENT NO. 1

 

i.  
ANNEX A

 

NOTICE OF EXERCISE FORM

To:
Dated: 

The undersigned, pursuant to the provisions in the attached Warrant, hereby
irrevocably elects to: [check the appropriate box]

__ (i) purchase _____ shares of Common Stock covered by such Warrant and hereby
makes payment of $_______, representing the full purchase price for shares at
the exercise price per share provided for in such Warrant. Enclosed herewith is
payment of the exercise price of such shares in full; or

__ (ii) exercise the Warrant on a “cashless” basis in the manner set forth in
Section 1.2 of the Warrant. Such calculation results in the net issuance of
_______ shares of Common Stock of the Company to the undersigned.

Please have the shares of Common Stock of the Company issuable pursuant to this
exercise delivered to ________________.

Signature:
Dated: 
Address:

 
 
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AMENDMENT NO. 1

ANNEX B

ASSIGNMENT FORM

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

 

Name of Assignee
Address
No. of Shares

Dated:

Signature:
Dated:

Witness:

 
 
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