f10qsb0307ex4c.htm


    
      


      
        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
          NOVEMBER 6, 2007, 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 976,000
        Shares of  Common
        Stock, par
        value
        $.00005 per
        share

       

      STOCK
        PURCHASE
        WARRANT

       

      THIS
        CERTIFIES THAT, for value
        received, AJW Offshore, Ltd. or its registered assigns, is entitled to purchase
        from Midnight Holdings Group,
        Inc., a Delaware corporation (the “Company”), at any time or from time to
        time during the period specified in Paragraph 2 hereof, 976,000
        fully paid and nonassessable shares of the Company’s Common Stock, par value
        $.00005 per share (the “Common Stock”), at an exercise price per share equal to
        $.08 (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 November 6, 2007, by and among the Company
        and the Buyers listed on the execution page thereof (the “Securities Purchase
        Agreement”).

       

      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.

       

      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.

       

      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 (5th)
        anniversary of
        the date of issuance (the “Exercise Period”).

       

       

      
        
          
          

        

        
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      3.  Certain
        Agreements of the
        Company.

       

        The
        Company hereby covenants and agrees as follows:

       

      (a)  Shares
        to be Fully
        Paid.  Subject
        to the
        completion of the Charter Amendment Actions (as such term is defined in the
        Securities Purchase Agreement), 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.  Subject
        to the
        completion of the Charter Amendment Actions, 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
        use it best efforts to 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.

       

       

      
        
          
          

        

        
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      (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.

       

      (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 approved by a majority of the independent members of 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.

       

      (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

       

       

      
        
          
          

        

        
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      (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.

       

      (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.

       

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

      (iii)  “Common
        Stock,”
        for purposes of this Paragraph 4, includes the Common Stock, par value $.00005
        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 $.00005 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 November 6, 2007, 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.

       

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

       

      (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 22600 Hall Road, Suite 205, Clinton Township,
        MI
        48036, 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.  

       

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

       

      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.

       

      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.  

       

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

         

         

        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.

      

       

      (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]

       

      


       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

      


       

      IN
        WITNESS WHEREOF, the
        Company has caused this Warrant to be signed by its duly authorized officer
        as
        of the date first above written.

       

      MIDNIGHT
        HOLDINGS GROUP,
        INC.

      


      


      


      By:
/s/
        Nicholas Cocco            

       Nicholas
        Cocco

       Chief
        Executive Officer

      


       

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      


       

      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.

       

      


       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

      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.

              


      

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        

        

      

       

      
         

        
          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
            NOVEMBER 6, 2007, 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 176,000
          Shares of  Common
          Stock, par
          value
          $.00005 per
          share

         

        STOCK
          PURCHASE
          WARRANT

         

        THIS
          CERTIFIES THAT, for value
          received, AJW
          Partners, LLC or its registered assigns, is entitled to purchase from Midnight Holdings Group,
          Inc.,
          a Delaware corporation (the “Company”), at any time or from time to time during
          the period specified in Paragraph 2 hereof, 176,000
          fully paid and nonassessable shares of the Company’s Common Stock, par value
          $.00005 per share (the “Common Stock”), at an exercise price per share equal to
          $.08 (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 November 6, 2007, by and among the
          Company
          and the Buyers listed on the execution page thereof (the “Securities Purchase
          Agreement”).

         

        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.

         

        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.

         

        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 (5th)
          anniversary of
          the date of issuance (the “Exercise Period”).

         

         

        
          
            
            

          

          
            -2-

            
              

            

          

          
            
            

          

        

         

        3.  Certain
          Agreements of the
          Company.

         

          The
          Company hereby covenants and agrees as follows:

         

        (a)  Shares
          to be Fully
          Paid.  Subject
          to the
          completion of the Charter Amendment Actions (as such term is defined in
          the
          Securities Purchase Agreement), 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.  Subject
          to the
          completion of the Charter Amendment Actions, 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
          use it best efforts to 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.

         

         

        
          
            
            

          

          
            -3-

            
              

            

          

          
            
            

          

        

         

        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.

         

         

        
          
            
            

          

          
            -4-

            
              

            

          

          
            
            

          

        

         

        (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.

         

        (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.

         

         

        
          
            
            

          

          
            -5-

            
              

            

          

          
            
            

          

        

         

        (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 approved by a majority of the independent members of 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.

         

        (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.

         

         

        
          
            
            

          

          
            -6-

            
              

            

          

          
            
            

          

        

         

        (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

         

         

        
          
            
            

          

          
            -7-

            
              

            

          

          
            
            

          

        

         

        (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.

         

        (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.

         

         

        
          
            
            

          

          
            -8-

            
              

            

          

          
            
            

          

        

         

        (iii)  “Common
          Stock,”
          for purposes of this Paragraph 4, includes the Common Stock, par value
          $.00005
          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 $.00005 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 November 6, 2007, 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.

         

         

        
          
            
            

          

          
            -9-

            
              

            

          

          
            
            

          

        

         

        (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 22600 Hall Road, Suite 205, Clinton Township,
          MI
          48036, 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.  

         

         

        
          
            
            

          

          
            -10-

            
              

            

          

          
            
            

          

        

         

         

        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.

         

        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.  

         

         

        
          
            
            

          

          
            -11-

            
              

            

          

          
            
            

          

           

           

          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.

        

         

        (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]

         

        


         

        
          
            
            

          

          
            -12-

            
              

            

          

          
            
            

          

        

        


         

        IN
          WITNESS WHEREOF, the
          Company has caused this Warrant to be signed by it's duly authorized officer
          as
          of the date first above written.

         

        MIDNIGHT
          HOLDINGS GROUP,
          INC.

        


        


        


        By:
/s/
          Nicholas Cocco            

         Nicholas
          Cocco

         Chief
          Executive Officer

        


         

        


        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        


         

        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.

         

        


         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

         

        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.

                


        

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      
        
          

          

        

         

        
          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
            NOVEMBER 6, 2007, 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 432,000
          Shares of Common
          Stock, par
          value
          $.00005 per
          share

         

        STOCK
          PURCHASE
          WARRANT

         

        THIS
          CERTIFIES THAT, for value
          received,  AJW
          Qualified Partners, LLC or its registered assigns, is entitled to purchase
          from
Midnight Holdings Group,
          Inc., a Delaware corporation (the “Company”), at any time or from time to
          time during the period specified in Paragraph 2 hereof, 432,000
          fully paid and nonassessable shares of the Company’s Common Stock, par
          value $.00005 per share (the “Common Stock”), at an exercise price per share
          equal to $.08 (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 November 6, 2007, by and among the
          Company
          and the Buyers listed on the execution page thereof (the “Securities Purchase
          Agreement”).

         

        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.

         

        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.

         

        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 (5th)
          anniversary of
          the date of issuance (the “Exercise Period”).

         

         

        
          
            
            

          

          
            -2-

            
              

            

          

          
            
            

          

        

         

        3.  Certain
          Agreements of the
          Company.

         

          The
          Company hereby covenants and agrees as follows:

         

        (a)  Shares
          to be Fully
          Paid.  Subject
          to the
          completion of the Charter Amendment Actions (as such term is defined in
          the
          Securities Purchase Agreement), 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.  Subject
          to the
          completion of the Charter Amendment Actions, 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
          use it best efforts to 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.

         

         

        
          
            
            

          

          
            -3-

            
              

            

          

          
            
            

          

        

         

        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.

         

         

        
          
            
            

          

          
            -4-

            
              

            

          

          
            
            

          

        

         

        (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.

         

        (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.

         

         

        
          
            
            

          

          
            -5-

            
              

            

          

          
            
            

          

        

         

        (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 approved by a majority of the independent members of 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.

         

        (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.

         

         

        
          
            
            

          

          
            -6-

            
              

            

          

          
            
            

          

        

         

        (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

         

         

        
          
            
            

          

          
            -7-

            
              

            

          

          
            
            

          

        

         

        (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.

         

        (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.

         

         

        
          
            
            

          

          
            -8-

            
              

            

          

          
            
            

          

        

         

        (iii)  “Common
          Stock,”
          for purposes of this Paragraph 4, includes the Common Stock, par value
          $.00005
          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 $.00005 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 November 6, 2007, 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.

         

         

        
          
            
            

          

          
            -9-

            
              

            

          

          
            
            

          

        

         

        (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 22600 Hall Road, Suite 205, Clinton Township,
          MI
          48036, 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.  

         

         

        
          
            
            

          

          
            -10-

            
              

            

          

          
            
            

          

        

         

         

        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.

         

        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.  

         

         

        
          
            
            

          

          
            -11-

            
              

            

          

          
            
            

          

           

           

          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.

        

         

        (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]

         

        


         

        
          
            
            

          

          
            -12-

            
              

            

          

          
            
            

          

        

        


         

        IN
          WITNESS WHEREOF, the
          Company has caused this Warrant to be signed by it's duly authorized officer
          as
          of the date first above written.

         

        MIDNIGHT
          HOLDINGS GROUP,
          INC.

        


        


        


        By:
/s/
          Nicholas Cocco            

         Nicholas
          Cocco

         Chief
          Executive Officer

        


         

        


        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        


         

        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.

         

        


         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

         

        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.

                


        

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      
        
           

          
            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
              NOVEMBER 6, 2007, 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 16,000
            Shares of  Common
            Stock,  par
            value
            $.00005 per
            share

           

          STOCK
            PURCHASE
            WARRANT

           

          THIS
            CERTIFIES THAT, for value
            received,  New
            Millennium Capital Partners II, LLC or its registered assigns, is entitled
            to
            purchase from Midnight Holdings
            Group, Inc., a Delaware corporation (the “Company”), at any time or from
            time to time during the period specified in Paragraph 2 hereof, 16,000
            fully paid and nonassessable shares of the Company’s Common Stock, par
            value $.00005 per share (the “Common Stock”), at an exercise price per share
            equal to $.08 (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 November 6, 2007, by and among the
            Company
            and the Buyers listed on the execution page thereof (the “Securities Purchase
            Agreement”).

           

          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.

           

          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.

           

          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
            (5th)
            anniversary of
            the date of issuance (the “Exercise Period”).

           

           

          
            
              
              

            

            
              -2-

              
                

              

            

            
              
              

            

          

           

          3.  Certain
            Agreements of the
            Company.

           

            The
            Company hereby covenants and agrees as follows:

           

          (a)  Shares
            to be Fully
            Paid.  Subject
            to the
            completion of the Charter Amendment Actions (as such term is defined
            in the
            Securities Purchase Agreement), 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.  Subject
            to the
            completion of the Charter Amendment Actions, 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
            use it best efforts to 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.

           

           

          
            
              
              

            

            
              -3-

              
                

              

            

            
              
              

            

          

           

          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.

           

           

          
            
              
              

            

            
              -4-

              
                

              

            

            
              
              

            

          

           

          (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.

           

          (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.

           

           

          
            
              
              

            

            
              -5-

              
                

              

            

            
              
              

            

          

           

          (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 approved by a majority of the independent members of 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.

           

          (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.

           

           

          
            
              
              

            

            
              -6-

              
                

              

            

            
              
              

            

          

           

          (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

           

           

          
            
              
              

            

            
              -7-

              
                

              

            

            
              
              

            

          

           

          (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.

           

          (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.

           

           

          
            
              
              

            

            
              -8-

              
                

              

            

            
              
              

            

          

           

          (iii)  “Common
            Stock,”
            for purposes of this Paragraph 4, includes the Common Stock, par value
            $.00005
            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 $.00005 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 November 6, 2007, 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.

           

           

          
            
              
              

            

            
              -9-

              
                

              

            

            
              
              

            

          

           

          (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 22600 Hall Road, Suite 205, Clinton Township,
            MI
            48036, 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.  

           

           

          
            
              
              

            

            
              -10-

              
                

              

            

            
              
              

            

          

           

           

          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.

           

          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.  

           

           

          
            
              
              

            

            
              -11-

              
                

              

            

            
              
              

            

             

             

            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.

          

           

          (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]

           

          


           

          
            
              
              

            

            
              -12-

              
                

              

            

            
              
              

            

          

          


           

          IN
            WITNESS WHEREOF, the
            Company has caused this Warrant to be signed by it's duly authorized
            officer as
            of the date first above written.

           

          MIDNIGHT
            HOLDINGS GROUP,
            INC.

          


          


          


          By:
/s/
            Nicholas Cocco            

           Nicholas
            Cocco

           Chief
            Executive Officer

          


           

          


          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          


           

          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.

           

          


           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

           

           

          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.