Document:

ex10-1.htm

THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).

NONE OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE “SUBSCRIPTION AGREEMENT”) RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.

 

GOLDEN CENTURY RESOURCES LIMITED

 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT FOR SHARES

 

-- TO BE USED BY NON-U.S. RESIDENTS ONLY --

 

	
To:

	
Golden  Century Resources Limited (the “Company”)

 

	
Re:

	
Purchase and Sale of Shares of the Company

 

Dated For Reference:   February 18, 2010

 

Subject to the terms and conditions of this Subscription Agreement, the undersigned (the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase from the Company, that number of Shares of the common stock of the Company set out on page 2 hereof at a price of $1.00 per share.  The Subscriber’s purchase of the Shares (as defined below) is subject to the terms and conditions set forth in the sections entitled “Terms” and “General Provisions” hereto.  The Terms and the General Provisions, together with all schedules attached hereto, shall be deemed to form a part of this subscription agreement (the “Subscription Agreement.”)

 

The Subscriber and the Company hereby agree that the purchase of the Shares and the Offering have been conducted on the terms and conditions specified in the Terms and the General Provisions below.  The Subscriber hereby makes, on its own behalf and, if applicable, on behalf of others for whom it is contracting hereunder, the acknowledgments, representations and warranties set out in the Terms, the General Provisions and the Schedules hereto and agrees that the Company can rely on such acknowledgments, representations and warranties should this Subscription Agreement be accepted.

 

INSTRUCTIONS FOR COMPLETING THIS SUBSCRIPTION

 

 PRIOR TO DELIVERY TO THE COMPANY

 

	
1.

	
The Subscriber must complete the information required on pages 1 to 3 hereto.

 

	
2.

	
If the Subscriber is investing less than CDN$150,000, he must complete Schedule “A” – “Accredited Investor Questionnaire”;

 

	
3.

	
Each Subscriber must return this completed subscription and Schedule “A” in pdf format to Golden    Century Resources Limited to info@golden-century.com or fax to (302) 295-4801 along with proof of payment of the Subscription Funds for the Shares by wire, pursuant to the wire instructions in the Terms, check, certified check or money order.  Checks, certified checks or money orders should be made payable to “Golden Century Resources Limited. 

SUBSCRIPTION AMOUNTS

	
No. of Shares to be purchased at $1.00 each

	
200,000 shares

 

	
Total Subscription Funds for the Shares

	
$200,000 (“Subscription Funds”)

 

Dated this 18th day of February, 2010.

  

 

  

 

REGISTRATION AND DELIVERY

	
Qi, Wei

(Name of Subscriber – please print)

By:                                                                

(Official Capacity or Title – please print)

 

/s/ Qi, Wei

Authorized Signature

 

Please print name of individual whose signature appears above if different than the name of the Subscriber printed above

	
 2-1201, Guodu gongyu, Fengqi  Road

Hangzhou, Zhejiang, P.R. China 310006

Subscriber's Address

 

Subscriber's E-mail Address

 

Subscriber’s Permanent Resident Card Number

 

(Telephone Number)

 

(Facsimile Number)

 

Details of Beneficial Subscriber (If Not Same as Subscriber)

	
 

(Name – please print)

 

 

(if space is inadequate, please attach a schedule containing the necessary information.

	
 

Beneficial Subscriber's Address

 

 

 

	
Registration Instructions

 

Name

 

Account Reference, if applicable

 

Address

 

	
Delivery Instructions

 

Name

 

Account Reference, if applicable

 

Contact Name

 

Address

 

(Telephone Number)

 

(Facsimile Number)

  

2

  

INFORMATION REGARDING THE SUBSCRIBER

 

Please check the appropriate box (and complete the required information, if applicable) in each section:

 

	
1.

	
Security Holdings.  The Subscriber and all persons acting jointly and in concert with the Subscriber own, directly or indirectly, or exercises control or direction over (provide additional detail as applicable):

	
  

	 o	
_________________ common shares of the Company and/or the following other kinds of shares and convertible securities (including but not limited to convertible debt, warrants and options) entitling the Subscriber to acquire additional common shares or other kinds of shares of the Company:

                                                                                                                           

	
  

	  o	
No shares of the Company or securities convertible into shares of the Company.

 

	
2.

	
Insider Status.  The Subscriber either:

	
              o

	
Is an “Insider” of the Company as by virtue of being:

	
  

	
(a)

	
a director or senior officer of the Company;

	
  

	
(b)

	
a director or senior officer of a company that is an Insider or subsidiary of the Company; or,

	
  

	
(c)

	
a person that beneficially owns or controls, directly or indirectly, voting shares of the Company carrying more than 10% of the voting rights attached to all the Company's outstanding voting shares;

              o Is not an Insider of the Company.

 

Execution by the Subscriber above shall constitute an irrevocable offer and agreement by the Subscriber to subscribe for the securities described herein on the terms and conditions herein set out.  The Company shall be entitled to rely on the delivery of an electronic or facsimile copy of this subscription, and acceptance by the Company of such facsimile subscription shall be legally effective to create a valid and binding agreement between the Subscriber and the Company in accordance with the terms and conditions hereof.

 

The Shares will be subject to a hold period under Applicable Legislation and the certificates evidencing the Shares will bear a legend to that effect, as applicable. Consequently, the Shares may only be resold during such period in accordance with appropriate statutory exemptions from the prospectus and registration requirements of Applicable Legislation or if appropriate consents or discretionary orders have been obtained.  The Subscriber is advised to consult its own legal advisors in this regard.

 

ACCEPTANCE

	
This subscription is accepted and agreed to by the Company as of the 18th day of February, 2010

	
)

)

)

)

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GOLDEN CENTURY RESOURCES LIMITED

 

Per:  /s/ David Lee

Authorized Signatory

By signing the Acceptance, the Company agrees to be bound by the Terms on pages 14 to 17, the General Provisions on pages 3 to 13 and the other Schedules.

GENERAL PROVISIONS

 

 

1.           DEFINITIONS

 

1.1           In this Subscription Agreement (including the first (cover) page, the Terms on pages 14 to 17, the General Provisions on pages 3 to 13 hereto and the Schedules), the following words have the following meanings unless otherwise indicated:

 

	
  

	
(a)

	
“1933 Act” means the United States Securities Act of 1933, as amended;

 

	
  

	
(b)

	
“Applicable Legislation” means the securities legislation applicable to the Company and the sale or resale of its securities and all legislation incorporated in the definition of this term in other parts of the Subscription Agreement, together with the regulations and rules made and promulgated under that legislation and all administrative policy statements, blanket orders and rulings, notices and other administrative directions issued by the Commissions;

  

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(c)

	
“B.C. Act” means the Securities Act of British Columbia, Canada.

 

	
  

	
(d)

	
“Closing” means the completion of the sale and purchase of the Shares and payment for the Shares in accordance with the terms and conditions of this Subscription Agreement;

 

	
  

	
(e)

	
“Commissions” means the securities commissions with Jurisdiction over the Company and the securities commissions incorporated in the definition of this term in other parts of the Subscription Agreement;

 

	
                (f)

	
 
“COMPANY” MEANS GOLDEN CENTURY RESOURCES LIMITED

 

	
  

	
(g)

	
“General Provisions” means this section to the Subscription Agreement, entitled “General Provisions”

 

	
  

	
(h)

	
“NI 45-106” means National Instrument 45-106 of the Canadian Securities Administrators, Prospectus and Registration Exemptions;

 

	
  

	
(i)

	
“Offering” means the offering, consisting of no minimum but a maximum of up to 625,000 common shares (“Shares”) of the Issuer at a price of $1.00 per Share. The Issuer may increase the maximum offering to 750,000 in its discretion;

 

	
  

	
(j)

	
“Private Placement” means the total subscription proceeds from the Offering of the Shares on the terms and conditions of this Subscription Agreement;

 

	
  

	
(k)

	
“Proceeds” means the subscription proceeds of to be received by the Company in consideration for the issuance of the Shares pursuant to this Offering;

 

	
  

	
(l)

	
“Regulation S” means Regulation S promulgated under the 1933 Act;

 

	
  

	
(m)

	
“Regulatory Authorities” means the Commissions;

 

	
  

	
(n)

	
“Selling Jurisdictions” means any jurisdiction in which the Shares may be lawfully sold;

 

	
  

	
(o)

	
“Shares” means the Shares of common stock without par value of the Company being sold at a price of $1.00 per share in the Offering;

 

	
  

	
(p)

	
“Subscriber” means the subscriber of Shares pursuant to this Subscription Agreement;

 

	
  

	
(q)

	
“Subscription Agreement” means the first (cover) page, the Terms on pages 14 to17 , the General Provisions on pages 3 to 13 hereto and the Schedules; and,

 

	
  

	
(r)

	
“Terms” the section entitled “Terms” hereto.

 

1.2           In the Subscription Agreement, the following terms have the meanings defined in Regulation S under the 1933 Act: “Directed Selling Efforts”, “U.S. Person” and “United States”.

 

1.3           In the Subscription Agreement, unless otherwise specified, currencies are indicated in American dollars.

 

1.4           In the Subscription Agreement, other words and phrases that are capitalized have the meanings assigned to them in the body hereof.

 

2.           DELIVERY AND PAYMENT

 

2.1           The Subscriber must complete, sign and return to the Company, through its attorneys, the following documents:

 

	
  

	
(a)

	
a completed and duly executed copy of this Subscription Agreement;

 

	
  

	
(b)

	
a completed and duly executed copy of Schedule “A”; and,

 

	
  

	
(c)

	
payment in the aggregate amount of the Subscription Funds for the Shares, via certified check, money order or bank draft made payable to Golden Century Resources Limited in American dollars, a wire pursuant to the wire instructions in the Terms or in such other manner as may be provided for by the Company.

 

2.2          The Subscription Funds or proof of wire transfer of the Subscription Funds must accompany this Subscription Agreement.

2.3          Where the Subscription Funds are paid to the Company, the Company is entitled to treat such Subscription Funds as an interest free loan to the Company until such time as the Subscription Agreement is accepted and the certificates representing the Shares have been issued to the Subscriber.

  

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2.4          The Subscriber shall complete, sign and return to the Company as soon as possible, on request by the Company, any additional documents, questionnaires, notices and undertakings as may be required by any regulatory authorities and applicable law.

 

2.5          The Subscriber acknowledges and agrees that this Subscription Agreement, the Subscription Funds and any other documents delivered in connection herewith will be held on behalf of the Company.  In the event that this Subscription Agreement is not accepted by the Company for whatever reason, which the Company expressly reserves the right to do, at any time on or before the day after the Acquisition Closing Date, this Subscription Agreement, the Subscription Funds (without interest thereon) and any other documents delivered in connection herewith will be returned to the Subscriber at the address of the Subscriber as set forth in this Subscription Agreement.

 

3.          Conditions and Closing

 

3.1          The Closing of the Offering shall occur on the date determined by the Company (the “Closing Date”).

 

3.2          The Subscriber acknowledges that the certificates representing the Shares will be delivered following the Closing, provided that the Subscriber has satisfied the requirements of Section 2 hereof and the Company has accepted this Subscription Agreement.

 

	
4.

	
ACKNOWLEDGEMENTS, REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER

 

4.1           The Subscriber acknowledges and agrees that:

 

	
  

	
(a)

	
no agency, governmental authority, regulatory body, stock exchange or other entity has made any finding or determination as to the merit for investment of, nor have any such agencies or governmental authorities, regulatory bodies, stock exchanges or other entities made any recommendation or endorsement with respect to the Shares;

 

	
  

	
(b)

	
the sale and delivery of the Shares is and will be conditional upon such sale being exempt from the prospectus and registration requirements under the Applicable Legislation;

 

	
  

	
(c)

	
the Shares are subject to resale restrictions under the Applicable Legislation and are otherwise subject to all of the terms, conditions and provisions of this Subscription Agreement and the Subscriber (and, if applicable, others for whom it is contracting hereunder) will comply with all Applicable Legislation concerning any resale of the Shares and consult with its legal advisors with respect to complying with all restrictions applying to such resale;

 

	
  

	
(d)

	
if the Company becomes listed on an Exchange, the Shares may be required to be pooled or escrowed, either pursuant to applicable securities legislation as amended from time to time and regulations and rules prescribed thereto or pursuant to the policies of the Exchange, or any other securities regulatory body having jurisdiction.  The Subscriber agrees to sign any such pooling or escrow agreement and abide by any such restrictions as may be so imposed.  In furtherance of this covenant, the Subscriber irrevocably appoints the President of the Company as his attorney-in-fact and authorizes him as his attorney-in-fact to approve and sign a pooling or escrow or escrow agreement on behalf of the Subscriber to provide for pooling or escrow of the Shares.

 

	
  

	
(e)

	
none of the Shares have been or will be registered under the 1933 Act or the Applicable Legislation of any state and the Shares may not be offered or sold, directly or indirectly, in the United States to, or for the account or benefit of, a U.S. Person or a person in the United States unless they are registered under the 1933 Act and the Applicable Legislation of all relevant states or unless an exemption from such registration requirements is available, and the Company has no obligation or present intention of filing a registration statement under the 1933 Act in respect of any of the Shares;

 

	
  

	
(f)

	
the Subscriber is aware that Rule 144 under the 1933 Act will not be available to facilitate resale of the Shares unless certain conditions have been satisfied;

 

	
  

	
(g)

	
the decision to execute this Subscription Agreement and acquire the Shares hereunder has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the

  

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Company, and such decision is based entirely upon a review of information (the receipt of which is hereby acknowledged) which has been filed by the Company under the Applicable Legislation;

 

	
  

	
(h)

	
none of the Commissions, the Exchange or any other securities commission or similar regulatory authority have reviewed or passed on the merits of the Shares;

 

	
  

	
(i)

	
there is no government or other insurance covering any of the Shares;

 

	
  

	
(j)

	
there are risks associated with an investment in the Shares;

 

	
  

	
(k)

	
the Company has advised the Subscriber that the Company is relying on an exemption from the requirements to provide the Subscriber with a prospectus and to sell Shares through a person registered to sell securities under the Securities Act (British Columbia) and, as a consequence of acquiring the Shares pursuant to an exemption, certain protections, rights and remedies provided by the Securities Act (British Columbia), including statutory rights of rescission and damages, will not be available to the Subscriber;

 

	
  

	
(l)

	
by executing and delivering this Agreement, the Subscriber will have directed the Company not to include a Canadian Legend on any certificates representing the Shares to be issued to the Subscriber. As a consequence, the Subscriber will not be able to rely on the resale provisions of National Instrument 45-102, and any subsequent trade in any of the Shares during or after the Canadian Hold Period will be a distribution subject to the prospectus and registration requirements of Canadian securities legislation, to the extent that the trade is at that time subject to any such Canadian securities legislation;

 

	
  

	
(m)

	
all costs and expenses incurred by the Subscriber (including any fees and disbursements of any special counsel retained by the Subscriber) relating to the purchase of the Shares shall be borne by the Subscriber;

 

	
  

	
(n)

	
the Subscriber has not acquired the Shares as a result of, and will not itself engage in, any Directed Selling Efforts in the United States in respect of the Securities which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Securities; provided, however, that the Subscriber may sell or otherwise dispose of the Securities pursuant to registration thereof under the 1933 Act and any applicable state and provincial securities laws or under an exemption from such registration requirements;

 

	
  

	
(o)

	
the Subscriber and the Subscriber's advisor(s) have had a reasonable opportunity to ask questions of and receive answers from the Company in connection with the distribution of the Shares hereunder, and to obtain additional information, to the extent possessed or obtainable without unreasonable effort or expense, necessary to verify the accuracy of the information about the Company;

 

	
  

	
(p)

	
the books and records of the Company were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Subscriber during reasonable business hours at its principal place of business, and all documents, records and books in connection with the distribution of the Shares hereunder have been made available for inspection by the Subscriber, the Subscriber's lawyer and/or advisor(s);

 

	
  

	
(q)

	
the Subscriber will indemnify and hold harmless the Company and, where applicable, its directors, officers, employees, agents, advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any representation or warranty of the Subscriber contained herein or in any document furnished by the Subscriber to the Company in connection herewith being untrue in any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber to the Company in connection therewith;

 

  

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(r)

	
other than on the Over the Counter Bulletin Board, the Company’s shares are not listed or quoted on any stock exchange or automated dealer quotation system and no representation has been made to the Subscriber that any of the Shares will become listed on any other stock exchange or automated dealer quotation system or that the Company’s shares will remain listed on the Over the Counter Bulletin Board or any other stock exchange or automated dealer quotation system;

 

	
  

	
(s)

	
the statutory and regulatory basis for the exemption claimed for the offer of the Securities, although in technical compliance with the Applicable Legislation, will not be available if the offering is part of a plan or scheme to evade the registration provisions of the 1933 Act or any applicable state and provincial securities laws;

 

	
  

	
(t)

	
the Subscriber has been advised to consult the Subscriber's own legal, tax and other advisors with respect to the merits and risks of an investment in the Shares and with respect to applicable resale restrictions, and it is solely responsible (and the Company is not in any way responsible) for compliance with:

 

	
  

	
(i)

	
any applicable laws of the jurisdiction in which the Subscriber is resident in connection with the distribution of the Shares hereunder, and,

 

	
  

	
(ii)

	
applicable resale restrictions;

 

	
  

	
(u)

	
the Company will refuse to register any transfer of the Securities not made in accordance with the provisions of Regulation S, Regulation D, pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act and in accordance with any other Applicable Legislation;

 

	
  

	
(v)

	
in addition to resale restrictions imposed under U.S. securities laws, there are additional restrictions on the Subscriber’s ability to resell in Canada any of the Securities under the B.C. Act.

 

	
  

	
(w)

	
the Company has no obligation to take action so as to permit resale in the United States of the Shares pursuant to the 1933 Act (including Rule 144 there under), and, as a consequence, the Subscriber must bear the economic risks of the investment in the Shares and for an indefinite period of time; and,

 

	
  

	
(x)

	
there may be material tax consequences to the Subscriber of an acquisition or disposition of the Shares, and the Company gives no opinion and makes no representation with respect to the tax consequences to the Subscriber under United States, state, local or foreign tax law of the Subscriber’s acquisition or disposition of such Shares.

 

4.2           Collection of Personal Information.  The Subscriber acknowledges and consents to the fact that the Company is collecting the Subscriber’s personal information for the purpose of fulfilling this Subscription Agreement and completing the Offering.  The Subscriber’s personal information (and, if applicable, the personal information of those on whose behalf the Subscriber is contracting hereunder) may be disclosed by the Company to:

 

	
  

	
(a)

	
stock exchanges or Securities Regulators;

 

	
  

	
(b)

	
the Company’s registrar and transfer agent;

 

	
  

	
(c)

	
tax authorities;

 

	
  

	
(d)

	
authorities pursuant to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada); and,

 

	
  

	
(e)

	
any of the other parties involved in the Offering, including legal counsel, and may be included in record books in connection with the Offering.

 

By executing this Subscription Agreement, the Subscriber (and, if applicable, others for whom it is contracting hereunder) is deemed to be consenting to the foregoing collection, use and disclosure of the Subscriber’s personal information (and, if applicable, the personal information of those on whose behalf the Subscriber is contracting hereunder) and to the retention of such personal information for as long as permitted or required by law or business practice.  Notwithstanding that the Subscriber may be purchasing Shares as agent on behalf of an undisclosed principal, the Subscriber agrees to provide, on request, particulars as to the identity of such undisclosed principal as may be required by the Company in order to comply with the foregoing.

  

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4.3           Furthermore, the Subscriber is hereby notified that:

 

	
  

	
(a)

	
the Company may deliver to certain Securities Regulators certain personal information pertaining to the Subscriber, including such Subscriber’s full name, residential address and telephone number, the number of Shares purchased by the Subscriber and the Subscription Funds paid for such Shares, the prospectus exemption relied on by the Company and the date of distribution of the Shares;

 

	
  

	
(b)

	
such information may be collected by the Ontario Securities Commission under the authority granted to it in securities legislation for the purposes of the administration and enforcement of the securities legislation of Ontario; and,

 

	
  

	
(c)

	
the Subscriber may contact the following public official in Ontario with respect to questions about the Ontario Securities Commission’s collection of such information at the following address and telephone number:

 

Administrative Assistant to the Director of Corporate Finance

Ontario Securities Commission

Suite 1903, Box 55, 20 Queen Street West

Toronto, Ontario, M5H 3S8

Telephone:  416-593-8086

 

4.4           This Subscription Agreement is not enforceable by the Subscriber unless it has been accepted by the Company, and the Subscriber acknowledges and agrees that the Company reserves the right to reject any subscription for any reason.

 

4.5           Representations by the Subscriber

 

The Subscriber represents and warrants to the Company that, as at the Agreement Date and at the Closing:

 

	
  

	
(a)

	
the Subscriber has the legal capacity and competence to enter into and execute this Subscription Agreement and to take all actions required pursuant hereto and, if the Subscriber is a corporation, it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation and all necessary approvals by its directors, shareholders and others have been obtained to authorize execution and performance of this Subscription Agreement on behalf of the Subscriber;

 

	
  

	
(b)

	
the entering into of this Subscription Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber is or may be bound;

 

	
  

	
(c)

	
the Subscriber has duly executed and delivered this Subscription Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber in accordance with its terms;

 

	
  

	
(d)

	
the Subscriber is resident in the jurisdiction set out under the heading “Name and Address of Subscriber” on the signature page of this Subscription Agreement;

 

	
  

	
(e)

	
the Subscriber is not acquiring the Shares for the account or benefit of, directly or indirectly, any U.S. Person;

 

	
  

	
(f)

	
the Subscriber is not a U.S. Person, as that term is defined in Regulation S;

 

	
  

	
(g)

	
the Subscriber is resident in the jurisdiction set out under the heading “Name and Address of Subscriber” on the signature page of this Subscription Agreement;

 

	
  

	
(h)

	
the Subscriber has inquired into the applicable securities legislation of its jurisdiction of residence and the Subscriber either complies with or is exempt from the applicable securities legislation of the Subscriber's jurisdiction of residence;

  

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(i)

	
the Subscriber is outside the United States when receiving and executing this Agreement and is acquiring the Securities as principal for the Subscriber's own account, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalisation thereof, in whole or in part, and no other person has a direct or indirect beneficial interest in any of the Securities;

 

	
  

	
(j)

	
the Subscriber is purchasing the Shares pursuant to an exemption from the registration and the prospectus requirements of applicable securities legislation on the basis that the Subscriber is an “accredited investor” as defined in Section 1.1 of NI 45-106 (hereinafter, an “Accredited Investor”) and, as a consequence:

 

	
  

	
(i)

	
is restricted from using most of the civil remedies available under securities legislation,

 

	
  

	
(ii)

	
may not receive information that would otherwise be required to be provided under securities legislation, and

 

	
  

	
(iii)

	
the Company is relieved from certain obligations that would otherwise apply under securities legislation;

 

	
  

	
(k)

	
the Subscriber is an Accredited Investor and agrees that the Company shall not consider the Subscriber's Subscription for acceptance unless the undersigned provides to the Company, along with an executed copy of this Agreement:

 

	
  

	
(i)

	
a fully completed and executed Accredited Investor Questionnaire in the form attached as Exhibit A hereto; and

 

	
  

	
(ii)

	
such other supporting documentation that the Company or its legal counsel may request to establish the Subscriber's qualification as an Accredited Investor;

 

	
  

	
(l)

	
the Subscriber is not an underwriter of, or dealer in, shares of the Common Stock, nor is the Subscriber an affiliate of any underwriter of or dealer in the Securities, nor is it participating, pursuant to a contract or otherwise, in any distribution of the Securities;

 

	
  

	
(m)

	
the Subscriber agrees that, unless and until the Securities have been registered under the 1933 Act, or under any state securities or "blue sky" laws of any state of the United States, it will not offer or sell its Securities in the United States, directly or indirectly, to U.S. Persons except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act;

 

	
  

	
(n)

	
the Subscriber (i) has such knowledge and experience in business matters as to be capable of evaluating the merits and risks of its prospective investment in the Securities; and (ii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment;

 

	
  

	
(o)

	
if the Subscriber is acquiring the Securities as a fiduciary or agent for one or more investor accounts:

 

	
  

	
(i)

	
the Subscriber has sole investment discretion with respect to each such account and it has full power to make the foregoing acknowledgements, representations and agreements on behalf of such account, and

 

	
  

	
(ii)

	
if the Subscriber or the beneficial owner of the investor account(s) is a Canadian resident, the beneficial owners of the investor accounts for which the Subscriber acts as a fiduciary or agent satisfy the definition of an “Accredited Investor”, as the term is defined in the Canadian National Instrument NI 45-106;

 

	
  

	
(p)

	
the Subscriber has not acquired the Shares as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S) in the United States in respect of any of the Securities which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Securities;

 

	
  

	
(q)

	
any offer or and sale of any of the Securities prior to the expiration of a period of six months after the date of original issuance of that respective Security (the six-month period hereinafter referred to as the "Distribution Compliance Period") shall only be made in compliance with the safe

  

9

  

 

	
  

	
harbor provisions set forth in Regulation S, pursuant to the registration provisions of the 1933 Act or an exemption there from, and that all offers and sales after the Distribution Compliance Period shall be made only in compliance with the registration provisions of the 1933 Act or an exemption there from and in each case only in accordance with applicable state and provincial securities laws;

 

	
  

	
(r)

	
it will not engage in any hedging transactions involving any of the Securities unless such transactions are in compliance with the provisions of the 1933 Act and in each case only in accordance with applicable state and provincial securities laws and the Subscriber is not aware of any advertisement of, or any general solicitation in respect of, any of the Securities; and

 

	
  

	
(s)

	
no person has made to the Subscriber any written or oral representations:

 

	
  

	
(i)

	
that any person will resell or repurchase any of the Securities;

 

	
  

	
(ii)

	
that any person will refund the purchase price of any of the Securities;

 

	
  

	
(iii)

	
as to the future price or value of any of the Securities; or

 

	
  

	
(iv)

	
that any of the Securities will be listed and posted for trading on any stock exchange or automated dealer quotation system or that application has been made to list and post any of the Securities on any stock exchange or automated dealer quotation system; except that the Company’s Common Stock is currently approved for trading on the U.S. Over the Counter Bulletin Board and the Canadian TSX Venture stock exchange.

 

4.6           In this Subscription Agreement, the term “U.S. Person” shall have the meaning ascribed thereto in Regulation S.

 

4.7           The Subscriber has acknowledged that the decision to purchase the Shares was solely made on the basis of available information provided to the Subscriber.  The Subscriber hereby waives, to the fullest extent permitted by law, any rights of withdrawal, rescission or compensation for damages to which the Subscriber might be entitled in connection with the distribution of the Securities.

 

	
  

	
(t)

	
the sale of the Shares to the Subscriber as contemplated in this Subscription Agreement complies with or is exempt from the Applicable Legislation of the jurisdiction of residence of the Subscriber;

 

	
  

	
(u)

	
the Subscriber is acquiring the Shares for investment only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the Securities in the United States or to U.S. Persons;

 

	
  

	
(v)

	
the Subscriber is not an underwriter of, or dealer in, the common shares of the Company, nor is the Subscriber participating, pursuant to a contractual agreement or otherwise, in the distribution of the Shares;

 

	
  

	
(w)

	
the Subscriber (i) is able to fend for him/her/itself in the Subscription; (ii) has such knowledge and experience in business matters as to be capable of evaluating the merits and risks of its prospective investment in the Securities; and (iii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment;

 

	
  

	
(x)

	
the Subscriber acknowledges that the Subscriber has not acquired the Shares as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S under the 1933 Act) in the United States in respect of the Securities which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of the Securities; provided, however, that the Subscriber may sell or otherwise dispose of the Securities pursuant to registration of the Securities pursuant to the 1933 Act and any applicable state and provincial securities laws or under an exemption from such registration requirements and as otherwise provided herein;

 

	
  

	
(y)

	
the Subscriber understands and agrees that none of the Shares have been or will be registered under the 1933 Act, or under any state securities or “blue sky” laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to U.S. Persons, as that term is defined in Regulation S, except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act, or

  

10

  

 

	
  

	
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act and in each case only in accordance with applicable state and provincial securities laws;

 

	
  

	
(z)

	
the Subscriber is not aware of any advertisement of any of the Shares and is not acquiring the Shares as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;

 

	
  

	
(aa)

	
no person has made to the Subscriber any written or oral representations:

 

	
  

	
(i)

	
that any person will resell or repurchase any of the Shares;

 

	
  

	
(ii)

	
that any person will refund the purchase price of any of the Shares;

 

	
  

	
(iii)

	
as to the future price or value of any of the Shares; or

 

	
  

	
(iv)

	
that any of the Shares will be listed and posted for trading on any stock exchange or automated dealer quotation system other than the Over the Counter Bulletin Board or that application has been made to list and post any of the Securities of the Company on any Exchange or automated dealer quotation system.

 

	
  

	
(bb)

	
the Subscriber is:

 

	
  

	
(i)

	
knowledgeable of, or has been independently advised as to, the Applicable Legislation of the Securities Regulators having application in the jurisdiction in which the Subscriber is resident which would apply to the acquisition of the Shares; and,

 

	
  

	
(ii)

	
purchasing the Shares pursuant to exemptions from prospectus or equivalent requirements under Applicable Legislation; and,

 

	
  

	
(cc)

	
the Company is entitled to rely on the representations and warranties of the Subscriber contained in this Subscription Agreement and the Accredited Investor Questionnaire and the Subscriber will hold harmless the Company from any loss or damage it or they may suffer as a result of the Subscriber’s failure to correctly complete this Subscription Agreement or the Accredited Investor Questionnaire;

 

4.8           The Subscriber represents and warrants that the funds representing the Subscription Funds for the Shares will not represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) Act (Canada) (the “PCMLA”) and the Subscriber acknowledges that the Company may in the future be required by law to disclose the Subscriber’s name and other information relating to this Subscription Agreement and the Subscriber’s subscription hereunder, on a confidential basis, pursuant to the PCMLA.  To the best of the Subscriber’s knowledge:

 

	
  

	
(i)

	
none of the Subscription Funds to be provided by the Subscriber:

 

	
  

	
(A)

	
has been or will be derived from or related to any activity that is deemed criminal under the law of Canada, the United States of America, or any other jurisdiction; or

 

	
  

	
(B)

	
is being tendered on behalf of a person or entity who has not been identified to the Subscriber; and

 

	
  

	
(ii)

	
the Subscriber shall promptly notify the Company if the Subscriber discovers that any of such representations ceases to be true, and to provide the Company with appropriate information in connection therewith.

 

4.9           Reliance, indemnity and notification of changes

 

The representations and warranties in the Subscription Agreement (including the first (cover) page, the Terms on pages 14 to17, the General Provisions on pages 3 to [INSERT PAGE NUMBER] and the Schedules) are made by the Subscriber with the intent that they be relied upon by the Company in determining its suitability as a purchaser of Shares, and the

  

11

  

 

Subscriber hereby agrees to indemnify the Company against all losses, claims, costs, expenses and damages or liabilities which any of them may suffer or incur as a result of reliance thereon. The Subscriber undertakes to notify the Company immediately of any change in any representation, warranty or other information relating to the Subscriber set forth in the Subscription Agreement (including the first (cover) page, the Terms on pages 14 to17, the General Provisions on pages 3 to 13 and the Schedules) which takes place prior to the Closing.

 

4.10           Survival of representations and warranties

 

The representations and warranties contained in this Section 3 will survive the Closing.

 

5.           COMPANY’S ACCEPTANCE

 

5.1           The Subscription Agreement, when executed by the Subscriber, and delivered to the Company, will constitute a subscription for Securities which will not be binding on the Company until accepted by the Company by executing the Subscription Agreement in the space provided on the face page(s) of the Subscription Agreement and, notwithstanding the Agreement Date, if the Company accepts the subscription by the Subscriber, the Subscription Agreement will be entered into on the date of such execution by the Company.

 

6.           MISCELLANEOUS

 

6.1           The Subscriber agrees to sell, assign or transfer the Shares only in accordance with the requirements of Applicable Legislation and any legends placed on the certificates representing the Shares as contemplated by the Subscription Agreement.

 

6.2           The Subscriber hereby authorizes the Company to correct any minor errors in, or complete any minor information missing from any part of the Subscription Agreement and any other schedules, forms, certificates or documents executed by the Subscriber and delivered to the Company in connection with the Offering.

 

6.3           The Company may rely on delivery by fax machine of an executed copy of this subscription, and acceptance by the Company of such faxed copy will be equally effective to create a valid and binding agreement between the Subscriber and the Company in accordance with the terms of the Subscription Agreement.

 

6.5           Without limitation, this subscription and the transactions contemplated by this Subscription Agreement are conditional upon and subject to the Company’s having obtained such regulatory approval of this subscription and the transactions contemplated by this Subscription Agreement as the Company considers necessary.

 

6.6           This Subscription Agreement is not assignable or transferable by the parties hereto without the express written consent of the other party to this Subscription Agreement.

 

6.7           Time is of the essence of this Subscription Agreement and will be calculated in accordance with the provisions of the Interpretation Act (British Columbia).

 

6.8           The Subscriber and the Company agree that they each will execute or cause to be executed and delivered all such further and other documents and assurances, and do and cause to be done all such further acts and things as may be necessary or desirable to carry out this Subscription Agreement according to its true intent, and to secure any required approvals of the Regulatory Authorities.  Notwithstanding section 5.9 below, any further or other documents or assurances delivered by the Subscriber to the Company in connection with this Agreement are deemed to form a part of this Agreement.

 

6.9           Except as expressly provided in this Subscription Agreement and in the agreements, instruments and other documents contemplated or provided for in this Subscription Agreement, this Subscription Agreement contains the entire agreement between the parties with respect to the Securities and there are no other terms, conditions, representations or warranties whether expressed, implied, oral or written, by statute, by common law, by the Company, or by anyone else.

 

6.10           The parties may amend this Subscription Agreement by agreement.

  

12

  

 

6.11           This Subscription Agreement ensures to the benefit of and is binding upon the parties to this Subscription Agreement and their successors and permitted assigns.

 

6.12           A party to this Subscription Agreement will give all notices to or other written communications with the other party to this Subscription Agreement concerning this Subscription Agreement by hand or by facsimile or email to the addresses as may be provided by the party to whom the notice is addressed.

 

6.13           This Subscription Agreement is to be read with all changes in gender or number as required by the context.

 

6.14           This Subscription Agreement will be governed by and construed in accordance with the internal laws of British Columbia (without reference to its rules governing the choice or conflict of laws), and the parties hereto irrevocably attorn and submit to the exclusive jurisdiction of the courts of British Columbia with respect to any dispute related to this Subscription Agreement.

 

End of General Provisions

  

13acar8k20100325ex4i.htm

    Exhibit 4(i)

      

      

    

    
THIS AMENDED AND RESTATED CLASS A
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
IS NOT REQUIRED.

     

    AMENDED
AND RESTATED CLASS A WARRANT TO PURCHASE

     

    SHARES OF
COMMON STOCK

     

    OF

     

    ACTIVECARE,
INC.

     

    
      	
              No.:
      W-09-004

            	
              Number
      of shares: 285,714

            
	
              Date
      of Issuance: September 10, 2009

               

            	 
      

    

    

    FOR VALUE
RECEIVED, the undersigned, ActiveCare, Inc., a Delaware corporation (together
with its successors and assigns, the “Issuer”), hereby
certifies that GEMINI MASTER FUND, LTD. or its registered assigns is entitled to
subscribe for and purchase, during the Term (as hereinafter defined), up to TWO
HUNDRED EIGHTY FIVE THOUSAND SEVEN HUNDRED FOURTEEN (285,714) shares (subject to
adjustment as hereinafter provided) of the duly authorized, validly issued,
fully paid and non-assessable Common Stock of the Issuer, at an exercise price
per share equal to the Warrant Price then in effect, subject, however, to the
provisions and upon the terms and conditions hereinafter set forth. Capitalized
terms used in this Amended and Restated Class A Warrant (the “Warrant”) and not
otherwise defined herein shall have the respective meanings specified in Section
8 hereof.

     

    1.           Term. The term of
this Warrant shall commence on September 10, 2009 and shall expire at 6:00 p.m.,
Eastern Time, on March 24, 2015 (such period being the “Term”).

     

    2.           Method of Exercise; Payment;
Issuance of New Warrant; Transfer and Exchange.

     

    (a)           Time of Exercise. The
purchase rights represented by this Warrant may be exercised, from time to time,
in whole or in part during the Term.

     

    (b)           Method of Exercise.
The Holder hereof may exercise this Warrant, in whole or in part, by the
surrender of this Warrant (with the exercise form attached hereto duly executed)
at the principal office of the Issuer, and by the payment to the Issuer of an
amount of consideration therefor equal to the Warrant Price in effect on the
date of such exercise multiplied by the number of shares of Warrant Stock with
respect to which this Warrant is then being exercised, payable at such Holder’s
election (i) by certified or official bank check or by wire transfer
to an account designated by the Issuer, (ii) by “cashless exercise” in
accordance with the provisions of subsection (c) of this Section 2, or (iii) by
a combination of the foregoing methods of payment selected by the Holder of this
Warrant.

    
      
         

      

      
         

        
          

        

      

      
         

        
          EXECUTION
COPY

        

      

    

     

    (c)           Cashless Exercise.
Notwithstanding any provisions herein to the contrary and commencing upon the
earlier of six (6) months following the Original Issue Date and the date the
Warrant Stock becomes eligible for resale pursuant to Rule 144 under the
Securities Act, if (i) the Per Share Market Value of one share of Common Stock
is greater than the Warrant Price (at the date of calculation as set forth
below) and (ii) the Holder at the time of exercise is not able to sell the
Warrant Stock pursuant to an effective registration statement filed under the
Securities Act providing for the resale of the Warrant Stock, in lieu of
exercising this Warrant by payment of cash, the Holder may exercise this Warrant
by a cashless exercise and shall receive the number of shares of Common Stock
equal to an amount (as determined below) by surrender of this Warrant at the
principal office of the Issuer together with the properly endorsed Notice of
Exercise in which event the Issuer shall issue to the Holder a number of shares
of Common Stock computed using the following formula:

     

    
      	 
      	
              X=

            	
                

            
	 
      	 
      	 
      
	
              Where

            	
              X=

            	
              the
      number of shares of Common Stock to be issued to the
    Holder.

            
	 
      	 
      	 
      
	 
      	
              Y=

            	
              the
      number of shares of Common Stock purchasable upon exercise of all of the
      Warrant or, if only a portion of the Warrant is being exercised, the
      portion of the Warrant being exercised.

            
	 
      	 
      	 
      
	 
      	
              A=

            	
              the
      Warrant Price on the Trading Day immediately preceding the date of such
      election.

            
	 
      	 
      	 
      
	 
      	
              B=

            	
              the
      Per Share Market Value of one share of Common
  Stock.

            

    

    

    (d)           Issuance of Stock
Certificates. In the event of any exercise of this Warrant in accordance
with and subject to the terms and conditions hereof, certificates for the shares
of Warrant Stock so purchased shall be dated the date of such exercise and
delivered to the Holder hereof within a reasonable time, not exceeding three (3)
Trading Days after such exercise (the “Delivery Date”) or,
at the request of the Holder (provided that a registration statement under the
Securities Act providing for the resale of the Warrant Stock is then in effect
or the shares of Warrant Stock may be sold pursuant to Rule 144 of the
Securities Act without restriction), issued and delivered to the Depository
Trust Company (“DTC”) account on the
Holder’s behalf via the Deposit Withdrawal Agent Commission System (“DWAC”) within a
reasonable time, not exceeding three (3) Trading Days after such exercise, and
the Holder hereof shall be deemed for all purposes to be the holder of the
shares of Warrant Stock so purchased as of the date of such exercise.
Notwithstanding the foregoing to the contrary, the Issuer or its transfer agent
shall only be obligated to issue and deliver the shares to the DTC on a holder’s
behalf via DWAC if (i) such exercise is in connection with a sale, (ii) such
shares may be issued without restrictive legends and (iii) the Issuer and the
transfer agent are participating in DTC through the DWAC system.
If all of the conditions set forth in clauses (i), (ii) and (iii) above are not
satisfied, the transfer agent shall deliver physical certificates representing
the shares of Warrant Stock to such Holder. The Holder shall deliver this
original Warrant, or an indemnification undertaking with respect to such Warrant
in the case of its loss, theft or destruction, at such time that this Warrant is
fully exercised. With respect to partial exercises of this Warrant, the Issuer
shall keep written records for the Holder of the number of shares of Warrant
Stock exercised as of each date of exercise.

    
      
         

      

      
        -2-

        
          

        

      

      
         

        
          EXECUTION
COPY

        

      

    

     

    (e)           Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise. In addition to any
other rights available to the Holder, if the Issuer fails to cause its transfer
agent to transmit to the Holder a certificate or certificates representing the
Warrant Stock pursuant to an exercise on or before the Delivery Date, and if
after such date the Holder is required by its broker to purchase (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Stock which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the
Issuer shall (1) pay in cash to the Holder the amount by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of shares of Warrant Stock that the Issuer was required to deliver to the
Holder in connection with the exercise at issue times (B) the price at which the
sell order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of shares of Warrant Stock for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that would have been
issued had the Issuer timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the immediately
preceding sentence the Issuer shall be required to pay the Holder $1,000. The
Holder shall provide the Issuer written notice indicating the amounts payable to
the Holder in respect of the Buy-In, together with applicable confirmations and
other evidence reasonably requested by the Issuer. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Issuer’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of this Warrant
as required pursuant to the terms hereof.

     

    (f)           Transferability of
Warrant. Subject to Section 2(h) hereof, this Warrant may be transferred
by a Holder, in whole or in part, without the consent of the Issuer. If
transferred pursuant to this paragraph, this Warrant may be transferred on the
books of the Issuer by the Holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant at the principal office of the Issuer,
properly endorsed (by the Holder executing an assignment in the form attached
hereto) and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. This Warrant is exchangeable at the principal
office of the Issuer for Warrants to purchase the same aggregate number of
shares of Warrant Stock, each new Warrant to represent the right to purchase
such number of shares of Warrant Stock as the Holder hereof shall designate at
the time of such exchange. All Warrants issued on transfers or exchanges shall
be dated the Original Issue Date and shall be identical with this Warrant except
as to the number of shares of Warrant Stock issuable pursuant
thereto.

    
      
         

      

      
        -3-

        
          

        

      

      
         

        
          EXECUTION
COPY

        

      

    

    (g)           Continuing Rights of
Holder. The Issuer will, at the time of or at any time after each
exercise of this Warrant, upon the request of the Holder hereof, acknowledge in
writing the extent, if any, of its continuing obligation to afford to such
Holder all rights to which such Holder shall continue to be entitled after such
exercise in accordance with the terms of this Warrant, provided that if any such
Holder shall fail to make any such request, the failure shall not affect the
continuing obligation of the Issuer to afford such rights to such
Holder.

     

    (h)           Compliance with Securities
Laws.

     

    (i)           The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and
the shares of Warrant Stock to be issued upon exercise hereof are being acquired
solely for the Holder’s own account and not as a nominee for any other party,
and for investment, and that the Holder will not offer, sell or otherwise
dispose of this Warrant or any shares of Warrant Stock to be issued upon
exercise hereof except pursuant to an effective registration statement, or an
exemption from registration, under the Securities Act and any applicable state
securities laws.

     

    (ii)           Except
as provided in paragraph (iii) below, this Warrant and all certificates
representing shares of Warrant Stock issued upon exercise hereof shall be
stamped or imprinted with a legend in substantially the following
form:

     

    THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
IS NOT REQUIRED.

     

    (iii)           The
Issuer agrees to reissue this Warrant or certificates representing any of the
Warrant Stock, without the legend set forth above if at such time, prior to
making any transfer of any such securities, the Holder shall give written notice
to the Issuer describing the manner and terms of such transfer. Such proposed
transfer will not be effected until (i) the Issuer has received an opinion of
counsel reasonably satisfactory to the Issuer, to the effect that the
registration of such securities under the Securities Act is not required in
connection with such proposed transfer, (ii) a registration statement under the
Securities Act covering such proposed disposition has been filed by the Issuer
with the Securities and Exchange Commission and has become effective under the
Securities Act, (iii) the Issuer has received other evidence reasonably
satisfactory to the Issuer that such registration and qualification under the
Securities Act and state securities laws are not required or (iv) the Holder
provides the Issuer with
reasonable assurances that such security can be sold pursuant to Rule 144 under
the Securities Act.  The Issuer will respond to any such notice from a
holder within three (3) Trading Days. In the case of any proposed transfer under
this Section 2(h), the Issuer will use reasonable efforts to comply with any
such applicable state securities or “blue sky” laws, but shall in no event be
required, (x) to qualify to do business in any state where it is not then
qualified, (y) to take any action that would subject it to tax or to the general
service of process in any state where it is not then subject, or (z) to comply
with state securities or “blue sky” laws of any state for which registration by
coordination is unavailable to the Issuer. The restrictions on transfer
contained in this Section 2(h) shall be in addition to, and not by way of
limitation of, any other restrictions on transfer contained in any other section
of this Warrant. Whenever a certificate representing the Warrant Stock is
required to be issued to the Holder without a legend, in lieu of delivering
physical certificates representing the Warrant Stock, the Issuer shall cause its
transfer agent to electronically transmit the Warrant Stock to the Holder by
crediting the account of the Holder’s Prime Broker with DTC through its DWAC
system (provided that the Issuer and the Issuer’s transfer agent are
participating in DTC through the DWAC system).

    
      
         

      

      
        -4-

        
          

        

      

      
         

        
          EXECUTION
COPY

        

      

    

     

    (i)           Accredited Investor
Status. In no event may the Holder exercise this Warrant in whole or in
part unless the Holder is an “accredited investor” as defined in Regulation D
under the Securities Act.

     

    3.           Stock Fully Paid;
Reservation and Listing of Shares; Covenants.

     

    (a)           Stock Fully Paid. The
Issuer represents, warrants, covenants and agrees that all shares of Warrant
Stock which may be issued upon the exercise of this Warrant or otherwise
hereunder will, when issued in accordance with the terms of this Warrant, be
duly authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by or through the Issuer. The Issuer further
covenants and agrees that during the period within which this Warrant may be
exercised, the Issuer will at all times have authorized and reserved for the
purpose of issuance upon exercise of this Warrant a number of shares of Common
Stock equal to at least one hundred twenty percent (120%) of the aggregate
number of shares of Common Stock to provide for the exercise of this
Warrant.

     

    (b)           Reservation. If any
shares of Common Stock required to be reserved for issuance upon exercise of
this Warrant or as otherwise provided hereunder require registration or
qualification with any Governmental Authority under any federal or state law
before such shares may be so issued, the Issuer will in good faith use its best
efforts as expeditiously as possible at its expense to cause such shares to be
duly registered or qualified. If the Issuer shall list any shares of Common
Stock on any securities exchange or market it will, at its expense, list
thereon, maintain and increase when necessary such listing, of, all shares of
Warrant Stock from time to time issued upon exercise of this Warrant or as
otherwise provided hereunder, and, to the extent permissible under the
applicable securities exchange rules, all unissued shares of Warrant Stock which
are at any time issuable hereunder, so long as any shares of Common Stock shall
be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.

    
      
         

      

      
        -5-

        
          

        

      

      
         

        
          EXECUTION
COPY

        

      

    

    (c)           Covenants. The Issuer
shall not by any action, including, without limitation, amending the Certificate
of Incorporation or the Bylaws of the Issuer, or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of the Holder
hereof against dilution (to the extent specifically provided herein) or
impairment. Without limiting the generality of the foregoing, the Issuer will
(i) not permit the par value, if any, of its Common Stock to exceed the then
effective Warrant Price, (ii) not amend or modify any provision of the
Certificate of Incorporation or Bylaws of the Issuer in any manner that would
adversely affect the rights of the Holders of the Warrants, (iii) take all such
action as may be reasonably necessary in order that the Issuer may validly and
legally issue fully paid and nonassessable shares of Common Stock, free and
clear of any liens, claims, encumbrances and restrictions (other than as
provided herein) upon the exercise of this Warrant, and (iv) use its best
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be reasonably
necessary to enable the Issuer to perform its obligations under this
Warrant.

     

    (d)           Loss, Theft, Destruction of
Warrants. Upon receipt of evidence satisfactory to the Issuer of the
ownership of and the loss, theft, destruction or mutilation of any Warrant and,
in the case of any such loss, theft or destruction, upon receipt of indemnity or
security satisfactory to the Issuer or, in the case of any such mutilation, upon
surrender and cancellation of such Warrant, the Issuer will make and deliver, in
lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like
tenor and representing the right to purchase the same number of shares of Common
Stock.

     

    4.           Adjustment of Warrant Price
and Number of Shares Issuable Upon Exercise. The Warrant Price and the
Warrant Share Number shall be subject to adjustment from time to time as set
forth in this Section 4. The Issuer shall give the Holder notice of any event
described below which requires an adjustment pursuant to this Section 4 in
accordance with the notice provisions set forth in Section 5.

     

    (a)           Recapitalization,
Reorganization, Reclassification, Consolidation, Merger or
Sale.

     

    (i)           In
case the Issuer after the Original Issue Date shall do any of the following
(each, a “Triggering
Event”): (A) consolidate or merge with or into any other Person and the
Issuer shall not be the continuing or surviving corporation of such
consolidation or merger, or (B) permit any other Person to consolidate with or
merge into the Issuer and the Issuer shall be the continuing or surviving Person
but, in connection with such consolidation or merger, any Capital Stock of the
Issuer shall be changed into or exchanged for Securities of any other Person or
cash or any other property, or (C) transfer all or substantially all of its
properties or assets to any other Person, or (D) effect a capital reorganization
or reclassification of its Capital Stock, then, and in the case of each such
Triggering Event, proper provision shall be made to the Warrant Price and the
number of shares of Warrant Stock that may be purchased upon exercise of this
Warrant so that, upon the basis and the terms and in the manner provided in this
Warrant, the Holder of this Warrant shall be entitled upon the exercise hereof
at any time after the consummation
of such Triggering Event, to the extent this Warrant is not exercised prior to
such Triggering Event, to receive at the Warrant Price as adjusted to take into
account the consummation of such Triggering Event, in lieu of the Common Stock
issuable upon such exercise of this Warrant prior to such Triggering Event, the
Securities, cash and property to which such Holder would have been entitled upon
the consummation of such Triggering Event if such Holder had exercised the
rights represented by this Warrant immediately prior thereto (including the
right of a stockholder to elect the type of consideration it will receive upon a
Triggering Event), subject to adjustments (subsequent to such corporate action)
as nearly equivalent as possible to the adjustments provided for elsewhere in
this Section 4; provided, however, that the
Holder at its option may in lieu of such adjusted warrant elect to receive an
amount of cash from the Issuer equal to the value of this Warrant as determined
in accordance with the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg L.P. using (1) a price per share of Common Stock equal to
the VWAP of the Common Stock for the Trading Day immediately preceding the date
of consummation of the applicable Triggering Event, (2) a risk-free interest
rate corresponding to the U.S. Treasury rate for a period equal to the remaining
term of this Warrant as of the date of consummation of the applicable Triggering
Event and (3) an expected volatility equal to the 100 day volatility obtained
from the “HVT” function on Bloomberg L.P. determined as of the Trading Day
immediately following the public announcement of the applicable Triggering
Event. Immediately upon the occurrence of a Triggering Event, the Issuer shall
notify the Holder in writing of such Triggering Event and provide the
calculations in determining the amount of issuable Securities, cash or property
issuable upon exercise of the new warrant and the adjusted Warrant Price. Upon
the Holder’s request, the continuing or surviving corporation as a result of
such Triggering Event shall issue to the Holder a new warrant of like tenor
evidencing the right to purchase the adjusted amount of Securities, cash or
property and the adjusted Warrant Price pursuant to the terms and provisions of
this Section 4(a)(i).

    
      
         

      

      
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    (ii)           In
the event that the Holder has elected not to exercise this Warrant prior to the
consummation of a Triggering Event and has also elected not to receive an amount
in cash equal to the value of this Warrant calculated in accordance with the
Black-Scholes formula pursuant to the provisions of Section 4(a)(i) above, the
surviving entity and/or each Person (other than the Issuer) which may be
required to deliver any Securities, cash or property upon the exercise of this
Warrant as provided herein shall assume, by written instrument delivered to, and
reasonably satisfactory to, the Holder of this Warrant, (A) the obligations of
the Issuer under this Warrant (and if the Issuer shall survive the consummation
of such Triggering Event, such assumption shall be in addition to, and shall not
release the Issuer from, any continuing obligations of the Issuer under this
Warrant) and (B) the obligation to deliver to such Holder such Securities, cash
or property as, in accordance with the foregoing provisions of this subsection
(a). Following a Triggering Event, such Holder shall be entitled to receive, and
the surviving entity and/or each such Person shall have similarly delivered to
such Holder an opinion of counsel for the surviving entity and/or each such
Person, which counsel shall be reasonably satisfactory to such Holder, or in the
alternative, a written acknowledgement executed by the President or Chief
Financial Officer of the Issuer, stating that this Warrant shall thereafter
continue in full force and effect and the terms hereof (including, without
limitation, all of the provisions of this subsection (a)) shall be applicable to
the Securities, cash or property which the surviving entity and/or each such
Person may be required to deliver upon any exercise of this Warrant or the
exercise of any rights pursuant hereto.

    
      
         

      

      
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    (b)           Stock
Dividends, Subdivisions and Combinations. If at any time the Issuer
shall:

     

    (i)           make
or issue or set a record date for the holders of the Common Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, shares of Common Stock,

     

    (ii)           subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock, or

     

    (iii)           combine
its outstanding shares of Common Stock into a smaller number of shares of Common
Stock,

     

    then (1)
the number of shares of Common Stock for which this Warrant is exercisable
immediately after the occurrence of any such event shall be adjusted to equal
the number of shares of Common Stock which a record holder of the same number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to the occurrence of such event would own or be entitled to receive after the
happening of such event, and (2) the Warrant Price then in effect shall be
adjusted to equal (A) the Warrant Price then in effect multiplied by the number
of shares of Common Stock for which this Warrant is exercisable immediately
prior to the adjustment divided by (B) the number of shares of Common Stock for
which this Warrant is exercisable immediately after such
adjustment.

     

    (c)           Certain Other
Distributions. If at any time the Issuer shall make or issue or set a
record date for the holders of the Common Stock for the purpose of entitling
them to receive any dividend or other distribution of cash, property, evidences
of indebtedness or securities of any nature whatsoever (other than Common
Stock), then (1) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
adjustment multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Per Share Market Value minus the amount
allocable to one share of Common Stock of any such cash so distributable and of
the fair value (as determined in good faith by the Board and supported by an
opinion from an investment banking firm mutually agreed upon by the Issuer and
the Holder) of any and all such evidences of indebtedness, securities or
property so distributable, and (2) the Warrant Price then in effect shall be
adjusted to equal the Warrant Price then in effect multiplied by a fraction (A)
the numerator of which shall be the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to the adjustment and (B) the
denominator of which shall be the number of shares of Common Stock for which
this Warrant is exercisable immediately after such adjustment. A
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value or from no par value to par value) into shares of
Common Stock and shares of any other class of stock shall be deemed a
distribution by the Issuer to the holders of its Common Stock of such shares of
such other class of stock within the meaning of this Section 4(c) and, if the
outstanding shares of Common Stock shall be changed into a larger or smaller
number of shares of Common Stock as a part of such reclassification, such change
shall be deemed a
subdivision or combination, as the case may be, of the outstanding shares of
Common Stock within the meaning of Section 4(b).

    
      
         

      

      
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    (d)           Issuance of Additional
Shares of Common Stock.

     

    (i)           In
the event the Issuer shall at any time following the Original Issue Date issue
or sell any share of Common Stock (otherwise than as provided in Sections 4(a)
and 4(b) hereof or pursuant to Common Stock Equivalents granted or issued prior
to the Original Issue Date) (an “Additional Share of Common
Stock”) at a price per share less than the Warrant Price then in effect,
or without consideration (in which case such Additional Shares of Common Stock
shall be deemed to have been issued at a price per share of $.00001), the
Warrant Price then in effect upon each such issuance shall be decreased to the
price equal to the consideration per share paid for such Additional Share of
Common Stock, and the number of shares of Common Stock for which this Warrant is
exercisable shall be increased such that the aggregate Warrant Price payable
hereunder, after taking into account the decrease in the Warrant Price, shall be
equal to the aggregate Warrant Price prior to such adjustment; provided, however, that the
Warrant Price shall not be adjusted under this Section 4(d) to an amount less
than $0.25 per share (subject to appropriate adjustments for any stock dividend,
stock split, stock combination, reclassification or similar transaction after
the Original Issue Date).

     

    (e)           Issuance or Modification of
Common Stock Equivalents. In the event the Issuer shall, at any time
following the Original Issue Date: (i) issue or sell any Common Stock Equivalent
with an exercise or conversion price less than the Warrant Price then in effect,
or (ii) modify the conversion or exercise price of any Common Stock Equivalent
issued prior to, on or after the Original Issue Date, to an exercise or
conversion price less than the Warrant Price then in effect, the Warrant Price
then in effect shall be decreased to the exercise or conversion price of such
Common Stock Equivalent, and the number of shares of Common Stock for which this
Warrant is exercisable shall be increased such that the aggregate Warrant Price
payable hereunder, after taking into account the decrease in the Warrant Price,
shall be equal to the aggregate Warrant Price prior to such adjustment; provided, however, that the
Warrant Price shall not be adjusted under this Section 4(e) to an amount less
than $0.25 per share (subject to appropriate adjustments for any stock dividend,
stock split, stock combination, reclassification or similar transaction after
the Original Issue Date).

     

    (f)           Certain Issues
Excepted. Anything herein to the contrary notwithstanding, the Issuer
shall not be required to make any adjustment to the Warrant Price pursuant to
Sections 4(d) or 4(e) hereof upon (i) securities issued (other than for cash) in
connection with a merger, acquisition, or consolidation, (ii) securities issued
pursuant to the conversion or exercise of convertible or exercisable securities
issued or outstanding on or prior to the Original Issue Date (so long as the
conversion or exercise price in such securities are not amended to lower such
price and/or adversely affect the Holders), (iii) securities issued in
connection with bona fide strategic license agreements or other partnering
arrangements so long as such issuances are not for the purpose of raising
capital, (iv) shares of Common Stock or options issued to employees, officers,
consultants or directors of the Company pursuant to any stock or option plan
duly adopted for such purpose by (A) a majority of the non-employee members of
the Board of Directors or a majority of the members of a committee of
non-employee directors established for such purpose and (B) a majority of the
Company’s stockholders (provided that any such issuances
to employees, officers, consultants or directors shall be restricted with no
registration rights, and shall not exceed 750,000 shares and/or options, in the
aggregate (as adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction)) and (vi) securities issued as payment
of dividends on the Series B Convertible Preferred Stock issued pursuant to the
Purchase Agreement.

    
      
         

      

      
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    (g)           Other Provisions applicable
to Adjustments under this Section. The following provisions shall be
applicable to the making of adjustments of the number of shares of Common Stock
for which this Warrant is exercisable and the Warrant Price then in effect
provided for in this Section 4:

     

    (i)           When Adjustments to Be
Made. The adjustments required by this Section 4 shall be made whenever
and as often as any specified event requiring an adjustment shall occur, except
that any adjustment of the number of shares of Common Stock for which this
Warrant is exercisable that would otherwise be required may be postponed (except
in the case of a subdivision or combination of shares of the Common Stock, as
provided for in Section 4(b)) up to, but not beyond the date of exercise if such
adjustment either by itself or with other adjustments not previously made adds
or subtracts less than one percent (1%) of the shares of Common Stock for which
this Warrant is exercisable immediately prior to the making of such adjustment.
Any adjustment representing a change of less than such minimum amount (except as
aforesaid) which is postponed shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Section 4 and not
previously made, would result in a minimum adjustment or on the date of
exercise. For the purpose of any adjustment, any specified event shall be deemed
to have occurred at the close of business on the date of its
occurrence.

     

    (ii)           Fractional Interests.
In computing adjustments under this Section 4, fractional interests in Common
Stock shall be taken into account to the nearest one one-hundredth (1/100th) of
a share.

     

    (iii)           When Adjustment Not
Required. If the Issuer shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or distribution or
subscription or purchase rights and shall, thereafter and before the
distribution to stockholders thereof, legally abandon its plan to pay or deliver
such dividend, distribution, subscription or purchase rights, then thereafter no
adjustment shall be required by reason of the taking of such record and any such
adjustment previously made in respect thereof shall be rescinded and
annulled.

     

    (h)           Form of Warrant after
Adjustments. The form of this Warrant need not be changed because of any
adjustments in the Warrant Price or the number and kind of Securities
purchasable upon the exercise of this Warrant.

     

    (i)           Escrow of Warrant
Stock. If after any property becomes distributable pursuant to this
Section 4 by reason of the taking of any record of the holders of Common Stock,
but prior to the occurrence of the event for which such record is taken, and the
Holder exercises this Warrant, any shares of Common Stock issuable upon exercise
by reason of such adjustment shall be deemed the last shares of Common Stock for
which this Warrant is exercised (notwithstanding
any other provision to the contrary herein) and such shares or other property
shall be held in escrow for the Holder by the Issuer to be issued to the Holder
upon and to the extent that the event actually takes place, upon payment of the
current Warrant Price. Notwithstanding any other provision to the contrary
herein, if the event for which such record was taken fails to occur or is
rescinded, then such escrowed shares shall be cancelled by the Issuer and
escrowed property returned.

    
      
         

      

      
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    5.           Notice of Adjustments;
Dispute Resolution. Whenever the Warrant Price or Warrant Share Number
shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5,
each an “adjustment”), the Issuer shall cause its Chief Financial Officer to
prepare and execute a certificate setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Board made any determination hereunder), and the Warrant Price and Warrant Share
Number after giving effect to such adjustment, and shall cause copies of such
certificate to be delivered to the Holder of this Warrant promptly after each
adjustment. Any dispute between the Issuer and the Holder of this Warrant with
respect to the matters set forth in such certificate may at the option of the
Holder of this Warrant be submitted to a national or regional accounting firm
reasonably acceptable to the Issuer and the Holder, provided that the Issuer
shall have three (3) business days after receipt of notice from such Holder of
its selection of such firm to object thereto, in which case such Holder shall
select another such firm and the Issuer shall have no such right of objection.
The firm selected by the Holder of this Warrant as provided in the preceding
sentence shall be instructed to deliver a written opinion as to such matters to
the Issuer and such Holder within ten (10) days after submission to it of such
dispute. Such opinion shall be final and binding on the parties hereto. The
costs and expenses of the initial accounting firm shall be paid equally by the
Issuer and the Holder and, in the case of an objection by the Issuer, the costs
and expenses of the subsequent accounting firm shall be paid in full by the
Issuer. Notwithstanding the foregoing to the contrary, the Issuer shall cause
its transfer agent to promptly issue to the Holder the number of shares of
Warrant Stock that is not disputed in accordance with the terms of this Section
5.

     

    6.           Fractional Shares. No
fractional shares of Warrant Stock will be issued in connection with any
exercise hereof, but in lieu of such fractional shares, the Issuer shall round
the number of shares to be issued upon exercise up to the nearest whole number
of shares.

     

    7.           Ownership Cap and Exercise
Restriction. Notwithstanding anything to the contrary set forth in this
Warrant, at no time may the Holder exercise this Warrant if the number of shares
of Common Stock to be issued pursuant to such exercise would cause the Holder to
be directly or indirectly the beneficial owner (as determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules
thereunder) of more than 4.99% of the Common Stock; provided, however, that upon
the Holder providing the Issuer with sixty-one (61) days notice (pursuant to
Section 12 hereof) (the “Waiver Notice”) that
the Holder would like to waive this Section 7 with regard to any or all shares
of Common Stock issuable upon exercise of this Warrant, this Section 7 will be
of no force or effect with regard to all or a portion of the Warrant referenced
in the Waiver Notice. For purposes of this section, the number of shares of
Common Stock owned by the Holder shall include the number of shares of Common
Stock issuable upon exercise of this Warrant but shall exclude the number of
shares of Common Stock which are issuable upon the exercise or conversion of the
unexercised or unconverted portion
of any other securities of the Issuer subject to a limitation on exercise or
conversion analogous to the limitation contained herein owned by the
Holder.

    
      
         

      

      
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    8.           Definitions. For the
purposes of this Warrant, the following terms have the following
meanings:

     

    “Board” shall mean the
Board of Directors of the Issuer.

     

    “Capital Stock” means
and includes (i) any and all shares, interests, participations or other
equivalents of or interests in (however designated) corporate stock, including,
without limitation, shares of preferred or preference stock, (ii) all
partnership interests (whether general or limited) in any Person which is a
partnership, (iii) all membership interests or limited liability company
interests in any limited liability company, and (iv) all equity or ownership
interests in any Person of any other type.

     

    “Certificate of
Incorporation” means the Certificate of Incorporation of the Issuer as in
effect on the Original Issue Date, and as hereafter from time to time amended,
modified, supplemented or restated in accordance with the terms hereof and
thereof and pursuant to applicable law.

     

    “Common Stock” means
the common stock, $0.00001 par value per share, of the Issuer and any other
Capital Stock into which such stock may hereafter be changed.

     

    “Common Stock
Equivalent” means any Convertible Security or warrant, option or other
right to subscribe for or purchase any Additional Shares of Common Stock or any
Convertible Security.

     

    “Convertible
Securities” means evidences of indebtedness, shares of Capital Stock or
other Securities which are or may be at any time convertible into or
exchangeable for Additional Shares of Common Stock. The term “Convertible Security”
means one of the Convertible Securities.

     

    “Governmental
Authority” means any governmental, regulatory or self-regulatory entity,
department, body, official, authority, commission, board, agency or
instrumentality, whether federal, state or local, and whether domestic or
foreign.

     

    “Holders” mean the
Persons who shall from time to time own any Warrant. The term “Holder” means one of
the Holders.

     

    “Independent
Appraiser” means a nationally recognized or major regional investment
banking firm or firm of independent certified public accountants of recognized
standing (which may be the firm that regularly examines the financial statements
of the Issuer) that is regularly engaged in the business of appraising the
Capital Stock or assets of corporations or other entities as going concerns, and
which is not affiliated with either the Issuer or the Holder of any
Warrant.

     

    “Issuer” means
ActiveCare, Inc., a Delaware corporation, and its successors.

    
      
         

      

      
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    “Majority Holders”
means at any time the Holders of Warrants exercisable for a majority of the
shares of Warrant Stock issuable under the Warrants at the time
outstanding.

     

    “Original Issue Date”
means  September 10, 2009.

     

    “OTC Bulletin Board”
means the over-the-counter electronic bulletin board.

     

    “Other Common” means
any other Capital Stock of the Issuer of any class which shall be authorized at
any time after the Original Issue Date (other than Common Stock) and which shall
have the right to participate in the distribution of earnings and assets of the
Issuer without limitation as to amount.

     

    “Outstanding Common
Stock” means, at any given time, the aggregate amount of outstanding
shares of Common Stock, assuming full exercise, conversion or exchange (as
applicable) of all options, warrants and other Securities which are convertible
into or exercisable or exchangeable for, and any right to subscribe for, shares
of Common Stock that are outstanding at such time.

     

    “Person” means an
individual, corporation, limited liability company, partnership, joint stock
company, trust, unincorporated organization, joint venture, Governmental
Authority or other entity of whatever nature.

     

    “Per Share Market
Value” means on any particular date (a) the closing bid price per share
of the Common Stock on such date on any registered national stock exchange on
which the Common Stock is then listed, or if there is no such price on such
date, then the closing bid price on such exchange or quotation system on the
date nearest preceding such date, or (b) if the Common Stock is not listed then
a registered national stock exchange, the closing bid price for a share of
Common Stock in the over-the-counter market, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated (or similar organization
or agency succeeding to its functions of reporting prices) at the close of
business on such date, or (c) if the Common Stock is not then reported by the
OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of reporting prices), then
the average of the “Pink Sheet” quotes for the five days preceding such date of
determination, or (d) if the Common Stock is not then publicly traded the fair
market value of a share of Common Stock as determined by an Independent
Appraiser selected in good faith by the Majority Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser, shall
have the right to select an additional Independent Appraiser, in which case, the
fair market value shall be equal to the average of the determinations by each
such Independent Appraiser; and provided, further, that all
determinations of the Per Share Market Value shall be appropriately adjusted for
any stock dividends, stock splits or other similar transactions during such
period. The determination of fair market value by an Independent Appraiser shall
be based upon the fair market value of the Issuer determined on a going concern
basis as between a willing buyer and a willing seller and taking into account
all relevant factors determinative of value, and shall be final and binding on
all parties. In determining the fair market value of any shares of Common Stock,
no consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to the
existence or absence of, or any limitations on, voting rights.

    
      
         

      

      
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    “Purchase Agreement”
means the Series A Convertible Preferred Stock Purchase Agreement dated as of
September 10, 2009, among the Issuer and the Purchasers.

     

    “Purchasers” means the
purchasers of the Series A Convertible Preferred Stock and the Warrants issued
by the Issuer pursuant to the Purchase Agreement.

     

    “Securities” means any
debt or equity securities of the Issuer, whether now or hereafter authorized,
any instrument convertible into or exchangeable for Securities or a Security,
and any option, warrant or other right to purchase or acquire any Security.
“Security”
means one of the Securities.

     

    “Securities Act” means
the Securities Act of 1933, as amended, or any similar federal statute then in
effect.

     

    “Subsidiary” means any
corporation at least 50% of whose outstanding Voting Stock shall at the time be
owned directly or indirectly by the Issuer or by one or more of its
Subsidiaries, or by the Issuer and one or more of its Subsidiaries.

     

    “Term” has the meaning
specified in Section 1 hereof.

     

    “Trading Day” means
(a) a day on which the Common Stock is eligible to be traded on a registered
national stock exchange, or (b) if the Common Stock is not eligible to be traded
on any registered national stock exchange, a day on which the Common Stock is
authorized for quotation on the OTC Bulletin Board, or (c) if the Common Stock
is not eligible to be traded on a registered national stock exchange or
authorized for quotation on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, however, that in the
event that the Common Stock is not listed or quoted as set forth in (a), (b) or
(c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.

     

    “Trading Market” means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the NYSE Amex Equities, the Nasdaq Capital
Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange or the OTC Bulletin Board.

     

    “Voting Stock” means,
as applied to the Capital Stock of any corporation, Capital Stock of any class
or classes (however designated) having ordinary voting power for the election of
a majority of the members of the Board (or other governing body) of such
corporation, other than Capital Stock having such power only by reason of the
happening of a contingency.

     

    “VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York
City time); (b) if the OTC Bulletin Board is not a Trading Market, the volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then
quoted for trading on the OTC Bulletin Board and if prices for the Common Stock
are then reported in the “Pink Sheets” published by Pink OTC Markets Inc. (or a
similar organization or agency succeeding to its functions of reporting prices),
the most recent bid price per share of the Common Stock so reported; or (d) in
all other cases, the fair market value of a share of Common Stock as determined
by an Independent Appraiser selected in good faith by the Majority Holders and
reasonably acceptable to the Company.

    
      
         

      

      
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    “Warrants” means the
Warrants issued and sold pursuant to the Purchase Agreement, including, without
limitation, this Warrant, and any other warrants of like tenor issued in
substitution or exchange for any thereof pursuant to the provisions of Section
2(c), 2(d) or 2(e) hereof or of any of such other Warrants.

     

    “Warrant Price”
initially means $1.75 as such price may be adjusted from time to time as shall
result from the adjustments specified in this Warrant, including Section 4
hereto.

     

    “Warrant Share Number”
means at any time the aggregate number of shares of Warrant Stock which may at
such time be purchased upon exercise of this Warrant, after giving effect to all
prior adjustments and increases to such number made or required to be made under
the terms hereof.

     

    “Warrant Stock” means
Common Stock issued or issuable upon exercise of any Warrant or Warrants or
otherwise issuable pursuant to any Warrant or Warrants.

     

    9.           Other Notices. In
case at any time:

     

    (a)           the
Issuer shall make any distributions to the holders of Common Stock;
or

     

    (b)           the
Issuer shall authorize the granting to all holders of its Common Stock of rights
to subscribe for or purchase any Securities of the Issuer; or

     

    (c)           there
shall be any reclassification of the Capital Stock of the Issuer;
or

     

    (d)           there
shall be any capital reorganization by the Issuer; or

     

    (e)           there
shall be any (i) consolidation or merger involving the Issuer or (ii) sale,
transfer or other disposition of all or substantially all of the Issuer’s
property, assets or business (except a merger or other reorganization in which
the Issuer shall be the surviving corporation and its shares of Capital Stock
shall continue to be outstanding and unchanged and except a consolidation,
merger, sale, transfer or other disposition involving a wholly-owned
Subsidiary); or

     

    (f)           there
shall be a voluntary or involuntary dissolution, liquidation or winding-up of
the Issuer or any partial liquidation of the Issuer or distribution to holders
of Common Stock; then, in
each of such cases, the Issuer shall give written notice to the Holder of the
date on which (i) the books of the Issuer shall close or a record shall be taken
for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the action in question and not less than ten (10) days prior
to the record date or the date on which the Issuer’s transfer books are closed
in respect thereto. This Warrant entitles the Holder to receive copies of all
financial and other information distributed or required to be distributed to the
holders of the Common Stock.

    
      
         

      

      
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    10.           Amendment and Waiver.
Any term, covenant, agreement or condition in this Warrant may be amended, or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), by a written instrument or written
instruments executed by the Issuer and the Holders of Warrants exercisable for
at least seventy-five percent (75%) of the shares of Warrant Stock issuable
under the Warrants at the time outstanding; provided, however, that no such
amendment or waiver shall discriminate against any Holder without such Holder’s
prior written consent; provided, further, that no such
amendment or waiver shall reduce the Warrant Share Number, increase the Warrant
Price, shorten the period during which this Warrant may be exercised or modify
any provision of this Section 10 without the consent of the Holder of this
Warrant. No consideration shall be offered or paid to any person to amend or
consent to a waiver or modification of any provision of this Warrant unless the
same consideration is also offered to all Holders.

     

    11.           Governing Law;
Jurisdiction. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This Warrant shall
not be interpreted or construed with any presumption against the party causing
this Warrant to be drafted. The Issuer and the Holder agree that venue for any
dispute arising under this Warrant will lie exclusively in the state or federal
courts located in New York County, New York, and the parties irrevocably waive
any right to raise forum non conveniens or any other argument that New York is
not the proper venue. The Issuer and the Holder irrevocably consent to personal
jurisdiction in the state and federal courts of the state of New York. The
Issuer and the Holder consent to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address in effect
for notices to it under this Warrant and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing in
this Section 11 shall affect or limit any right to serve process in any other
manner permitted by law. The parties hereby waive all rights to a trial by
jury.

     

    12.           Notices. Any notice,
demand, request, waiver or other communication required or permitted to be given
hereunder shall be in writing and shall be effective (a) upon hand delivery by
telecopy, e-mail or facsimile at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day
following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall
be:

    
      
         

      

      
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    (a)           If
to the Issuer:

     

    ActiveCare,
Inc.

    5095 West
2100 South

    Salt Lake
City, UT 84120

    Attention:
James J. Dalton

    Fax No.:
801-974-9553

    

    with
copies (which copies shall not constitute notice) to:

    

    Durham Jones & Pinegar
P.C.

    111 East Broadway, Suite
900

    Salt Lake
City, UT  84111

    Attention:
Kevin R. Pinegar, Esq.

    Fax No.: (801) 415-3500

    

    (b)           If
to any Holder at the address of such Holder set forth on Exhibit A to the
Purchase Agreement or as specified in writing by such Holder with copies (which
copies shall not constitute notice) to:

     

    Haynes and Boone, LLP

    1221 Avenue of the Americas,
26th  Floor

    New York, New York 10022

    Attention: Rick A. Werner,
Esq.

    Fax No.: (212) 884-8234

    

    and

    

    Peter J.
Weisman, P.C.

    767 Third
Avenue, 6th Floor

    New York,
New York 10017

    Fax No.:
(212) 676-5665

    

    Any party
hereto may from time to time change its address for notices by giving written
notice of such changed address to the other party hereto.

     

    13.           Warrant Agent. The
Issuer may, by written notice to each Holder of this Warrant, appoint an agent
having an office in New York, New York for the purpose of issuing shares of
Warrant Stock on the exercise of this Warrant pursuant to subsections (b) and
(c) of Section 2 hereof, exchanging this Warrant pursuant to subsection (f) of
Section 2 hereof or replacing this Warrant pursuant to subsection (d) of Section
3 hereof, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such agent.

    
      
         

      

      
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    14.           Remedies. The Issuer
stipulates that the remedies at law of the Holder of this Warrant in the event
of any default or threatened default by the Issuer in the performance of or
compliance with any of the terms of this Warrant are not and will not be
adequate and that, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

     

    15.           Successors and
Assigns. This Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors and assigns of the Issuer, the
Holder hereof and (to the extent provided herein) the Holders of Warrant Stock
issued pursuant hereto, and shall be enforceable by any such Holder or Holder of
Warrant Stock.

     

    16.           Modification and
Severability. If, in any action before any court or agency legally
empowered to enforce any provision contained herein, any provision hereof is
found to be unenforceable, then such provision shall be deemed modified to the
extent necessary to make it enforceable by such court or agency. If any such
provision is not enforceable as set forth in the preceding sentence, the
unenforceability of such provision shall not affect the other provisions of this
Warrant, but this Warrant shall be construed as if such unenforceable provision
had never been contained herein.

     

    17.           Headings. The
headings of the Sections of this Warrant are for convenience of reference only
and shall not, for any purpose, be deemed a part of this Warrant.

     

    [SIGNATURE
PAGE FOLLOWS]

     

    
      
         

      

      
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    IN
WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year
first above written.

     

    
      	 
      	
              ACTIVECARE,
      INC.

            
	
               

            	 
      
	 
      	
              By:__________________________

            
	 
      	
                   Name:
      James J. Dalton

            
	 
      	
                   Title:
      Chief Executive Officer

            

    

     
 

    
      
         

      

      
        
        

        
          

        

      

      
         

        
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    EXERCISE
FORM

    AMENDED
AND RESTATED CLASS A WARRANT

     

    ACTIVECARE,
INC.

     

    The
undersigned ____________________, pursuant to the provisions of the Amended and
Restated Class A Warrant (the “Warrant”), hereby elects to purchase
_______________ shares of Common Stock of ActiveCare, Inc. covered by the within
Warrant.

     

    
      	
              Dated:

            	 
      	 
      	
              Signature

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Address

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

    

    

    Number of
shares of Common Stock beneficially owned or deemed beneficially owned by the
Holder on the date of Exercise: ___________________________

     

    The
undersigned is an “accredited investor” as defined in Regulation D under the
Securities Act of 1933, as amended.

     

    The
undersigned intends that payment of the Warrant Price shall be made as (check
one):

     

    Cash
Exercise                                       o

     

    Cashless
Exercise                                o

     

    If the
Holder has elected a Cash Exercise, the Holder shall pay the sum of
$______________ by certified or official bank check (or via wire transfer) to
the Issuer in accordance with the terms of the Warrant.

     

    If the
Holder has elected a Cashless Exercise, a certificate shall be issued to the
Holder for the number of shares equal to the whole number portion of the product
of the calculation set forth below, which is _______________. The Issuer shall
pay a cash adjustment in respect of the fractional portion of the product of the
calculation set forth below in an amount equal to the product of the fractional
portion of such product and the Per Share Market Value on the date of exercise,
which product is _____________ .

     

    

    Where:

     

    The
number of shares of Common Stock to be issued to the Holder
_________________  (“X”).

    
      
         

      

      
        
        

        
          

        

      

      
         

        
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    The
number of shares of Common Stock purchasable upon exercise of all of the Warrant
or, if only a portion of the Warrant is being exercised, the portion of the
Warrant being exercised _______________________ (“Y”).

     

    The
Warrant Price ___________________ (“A”).

     

    The Per
Share Market Value of one share of Common Stock on the Trading Day immediately
preceding the date of such election ______________________ (“B”).

     

    
      
         

      

      
        
        

        
          

        

      

      
         

        
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    ASSIGNMENT

     

    FOR VALUE
RECEIVED, ____________________hereby sells, assigns and transfers unto
______________________ the within Warrant and all rights evidenced thereby and
does irrevocably constitute and appoint __________________________, attorney, to
transfer the said Warrant on the books of the within named
corporation.

     

     
 

    
      	
              Dated:

            	 
      	 
      	
              Signature

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Address

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

    

     
 

    PARTIAL
ASSIGNMENT

     

         FOR
VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
___________________ the right to purchase _______________________ shares of
Warrant Stock evidenced by the within Warrant together with all rights therein,
and does irrevocably constitute and appoint _____________________, attorney, to
transfer that part of the said Warrant on the books of the within named
corporation.

     

    
      	
              Dated:

            	 
      	 
      	
              Signature

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Address

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

    

    

    FOR USE
BY THE ISSUER ONLY:

     

    This
Warrant No. W-_______canceled (or transferred or exchanged) this _____ day of
________________, _____________ shares of Common Stock issued therefor in the
name of _______________, Warrant No. W-________ issued for ______________ shares
of Common Stock in the name of ________________________.

     

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
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    THIS
AMENDED AND RESTATED CLASS A WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE
UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL
HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

     

    AMENDED
AND RESTATED CLASS A WARRANT TO PURCHASE

     

    SHARES OF
COMMON STOCK

     

    OF

     

    ACTIVECARE,
INC.

     

    
      	
              No.:
      W-09-003

            	
              Number
      of shares: 285,714

            
	
              Date
      of Issuance: September 10, 2009

               

            	 
      

    

    

    FOR VALUE
RECEIVED, the undersigned, ActiveCare, Inc., a Delaware corporation (together
with its successors and assigns, the “Issuer”), hereby
certifies that HARBORVIEW MASTER FUND, L.P. or its registered assigns is
entitled to subscribe for and purchase, during the Term (as hereinafter
defined), up to TWO HUNDRED EIGHTY FIVE THOUSAND SEVEN HUNDRED FOURTEEN
(285,714) shares (subject to adjustment as hereinafter provided) of the duly
authorized, validly issued, fully paid and non-assessable Common Stock of the
Issuer, at an exercise price per share equal to the Warrant Price then in
effect, subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. Capitalized terms used in this Amended and Restated Class
A Warrant (the “Warrant”) and not
otherwise defined herein shall have the respective meanings specified in Section
8 hereof.

     

    1.           Term. The term of
this Warrant shall commence on September 10, 2009 and shall expire at 6:00 p.m.,
Eastern Time, on March 24, 2015 (such period being the “Term”).

     

    2.           Method of Exercise; Payment;
Issuance of New Warrant; Transfer and Exchange.

     

    (a)           Time of Exercise. The
purchase rights represented by this Warrant may be exercised, from time to time,
in whole or in part during the Term.

     

    (b)           Method of Exercise.
The Holder hereof may exercise this Warrant, in whole or in part, by the
surrender of this Warrant (with the exercise form attached hereto duly executed)
at the principal office of the Issuer, and by the payment to the Issuer of an
amount of consideration therefor equal to the Warrant Price in effect on the
date of such exercise multiplied by the number of shares of Warrant Stock with
respect to which this Warrant is then being exercised, payable at such Holder’s
election (i) by certified or official bank check or by wire transfer
to an account designated by the Issuer, (ii) by “cashless exercise” in
accordance with the provisions of subsection (c) of this Section 2, or (iii) by
a combination of the foregoing methods of payment selected by the Holder of this
Warrant.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

          
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    (c)           Cashless Exercise.
Notwithstanding any provisions herein to the contrary and commencing upon the
earlier of six (6) months following the Original Issue Date and the date the
Warrant Stock becomes eligible for resale pursuant to Rule 144 under the
Securities Act, if (i) the Per Share Market Value of one share of Common Stock
is greater than the Warrant Price (at the date of calculation as set forth
below) and (ii) the Holder at the time of exercise is not able to sell the
Warrant Stock pursuant to an effective registration statement filed under the
Securities Act providing for the resale of the Warrant Stock, in lieu of
exercising this Warrant by payment of cash, the Holder may exercise this Warrant
by a cashless exercise and shall receive the number of shares of Common Stock
equal to an amount (as determined below) by surrender of this Warrant at the
principal office of the Issuer together with the properly endorsed Notice of
Exercise in which event the Issuer shall issue to the Holder a number of shares
of Common Stock computed using the following formula:

     

    
      	 
      	
              X=

            	
              

            
	 
      	 
      	 
      
	
              Where

            	
              X=

            	
              the
      number of shares of Common Stock to be issued to the
    Holder.

            
	 
      	 
      	 
      
	 
      	
              Y=

            	
              the
      number of shares of Common Stock purchasable upon exercise of all of the
      Warrant or, if only a portion of the Warrant is being exercised, the
      portion of the Warrant being exercised.

            
	 
      	 
      	 
      
	 
      	
              A=

            	
              the
      Warrant Price on the Trading Day immediately preceding the date of such
      election.

            
	 
      	 
      	 
      
	 
      	
              B=

            	
              the
      Per Share Market Value of one share of Common
  Stock.

            

    

    

    (d)           Issuance of Stock
Certificates. In the event of any exercise of this Warrant in accordance
with and subject to the terms and conditions hereof, certificates for the shares
of Warrant Stock so purchased shall be dated the date of such exercise and
delivered to the Holder hereof within a reasonable time, not exceeding three (3)
Trading Days after such exercise (the “Delivery Date”) or,
at the request of the Holder (provided that a registration statement under the
Securities Act providing for the resale of the Warrant Stock is then in effect
or the shares of Warrant Stock may be sold pursuant to Rule 144 of the
Securities Act without restriction), issued and delivered to the Depository
Trust Company (“DTC”) account on the
Holder’s behalf via the Deposit Withdrawal Agent Commission System (“DWAC”) within a
reasonable time, not exceeding three (3) Trading Days after such exercise, and
the Holder hereof shall be deemed for all purposes to be the holder of the
shares of Warrant Stock so purchased as of the date of such exercise.
Notwithstanding the foregoing to the contrary, the Issuer or its transfer agent
shall only be obligated to issue and deliver the shares to the DTC on a holder’s
behalf via DWAC if (i) such exercise is in connection with a sale, (ii) such
shares may be issued without restrictive legends and (iii) the Issuer and the
transfer agent are participating in DTC through the DWAC system.
If all of the conditions set forth in clauses (i), (ii) and (iii) above are not
satisfied, the transfer agent shall deliver physical certificates representing
the shares of Warrant Stock to such Holder. The Holder shall deliver this
original Warrant, or an indemnification undertaking with respect to such Warrant
in the case of its loss, theft or destruction, at such time that this Warrant is
fully exercised. With respect to partial exercises of this Warrant, the Issuer
shall keep written records for the Holder of the number of shares of Warrant
Stock exercised as of each date of exercise.

    

    
      
        
           

        

        
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    (e)           Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise. In addition to any
other rights available to the Holder, if the Issuer fails to cause its transfer
agent to transmit to the Holder a certificate or certificates representing the
Warrant Stock pursuant to an exercise on or before the Delivery Date, and if
after such date the Holder is required by its broker to purchase (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Stock which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the
Issuer shall (1) pay in cash to the Holder the amount by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of shares of Warrant Stock that the Issuer was required to deliver to the
Holder in connection with the exercise at issue times (B) the price at which the
sell order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of shares of Warrant Stock for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that would have been
issued had the Issuer timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the immediately
preceding sentence the Issuer shall be required to pay the Holder $1,000. The
Holder shall provide the Issuer written notice indicating the amounts payable to
the Holder in respect of the Buy-In, together with applicable confirmations and
other evidence reasonably requested by the Issuer. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Issuer’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of this Warrant
as required pursuant to the terms hereof.

     

    (f)           Transferability of
Warrant. Subject to Section 2(h) hereof, this Warrant may be transferred
by a Holder, in whole or in part, without the consent of the Issuer. If
transferred pursuant to this paragraph, this Warrant may be transferred on the
books of the Issuer by the Holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant at the principal office of the Issuer,
properly endorsed (by the Holder executing an assignment in the form attached
hereto) and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. This Warrant is exchangeable at the principal
office of the Issuer for Warrants to purchase the same aggregate number of
shares of Warrant Stock, each new Warrant to represent the right to purchase
such number of shares of Warrant Stock as the Holder hereof shall designate at
the time of such exchange. All Warrants issued on transfers or exchanges shall
be dated the Original Issue Date and shall be identical with this Warrant except
as to the number of shares of Warrant Stock issuable pursuant
thereto.

    

    
      
        
           

        

        
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    (g)           Continuing Rights of
Holder. The Issuer will, at the time of or at any time after each
exercise of this Warrant, upon the request of the Holder hereof, acknowledge in
writing the extent, if any, of its continuing obligation to afford to such
Holder all rights to which such Holder shall continue to be entitled after such
exercise in accordance with the terms of this Warrant, provided that if any such
Holder shall fail to make any such request, the failure shall not affect the
continuing obligation of the Issuer to afford such rights to such
Holder.

     

    (h)           Compliance with Securities
Laws.

     

    (i)           The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and
the shares of Warrant Stock to be issued upon exercise hereof are being acquired
solely for the Holder’s own account and not as a nominee for any other party,
and for investment, and that the Holder will not offer, sell or otherwise
dispose of this Warrant or any shares of Warrant Stock to be issued upon
exercise hereof except pursuant to an effective registration statement, or an
exemption from registration, under the Securities Act and any applicable state
securities laws.

     

    (ii)           Except
as provided in paragraph (iii) below, this Warrant and all certificates
representing shares of Warrant Stock issued upon exercise hereof shall be
stamped or imprinted with a legend in substantially the following
form:

     

    THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
IS NOT REQUIRED.

     

    (iii)           The
Issuer agrees to reissue this Warrant or certificates representing any of the
Warrant Stock, without the legend set forth above if at such time, prior to
making any transfer of any such securities, the Holder shall give written notice
to the Issuer describing the manner and terms of such transfer. Such proposed
transfer will not be effected until (i) the Issuer has received an opinion of
counsel reasonably satisfactory to the Issuer, to the effect that the
registration of such securities under the Securities Act is not required in
connection with such proposed transfer, (ii) a registration statement under the
Securities Act covering such proposed disposition has been filed by the Issuer
with the Securities and Exchange Commission and has become effective under the
Securities Act, (iii) the Issuer has received other evidence reasonably
satisfactory to the Issuer that such registration and qualification under the
Securities Act and state securities laws are not required or (iv) the Holder
provides the Issuer with
reasonable assurances that such security can be sold pursuant to Rule 144 under
the Securities Act.  The Issuer will respond to any such notice from a
holder within three (3) Trading Days. In the case of any proposed transfer under
this Section 2(h), the Issuer will use reasonable efforts to comply with any
such applicable state securities or “blue sky” laws, but shall in no event be
required, (x) to qualify to do business in any state where it is not then
qualified, (y) to take any action that would subject it to tax or to the general
service of process in any state where it is not then subject, or (z) to comply
with state securities or “blue sky” laws of any state for which registration by
coordination is unavailable to the Issuer. The restrictions on transfer
contained in this Section 2(h) shall be in addition to, and not by way of
limitation of, any other restrictions on transfer contained in any other section
of this Warrant. Whenever a certificate representing the Warrant Stock is
required to be issued to the Holder without a legend, in lieu of delivering
physical certificates representing the Warrant Stock, the Issuer shall cause its
transfer agent to electronically transmit the Warrant Stock to the Holder by
crediting the account of the Holder’s Prime Broker with DTC through its DWAC
system (provided that the Issuer and the Issuer’s transfer agent are
participating in DTC through the DWAC system).

    

    
      
        
           

        

        
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    (i)           Accredited Investor
Status. In no event may the Holder exercise this Warrant in whole or in
part unless the Holder is an “accredited investor” as defined in Regulation D
under the Securities Act.

     

    3.           Stock Fully Paid;
Reservation and Listing of Shares; Covenants.

     

    (a)           Stock Fully Paid. The
Issuer represents, warrants, covenants and agrees that all shares of Warrant
Stock which may be issued upon the exercise of this Warrant or otherwise
hereunder will, when issued in accordance with the terms of this Warrant, be
duly authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by or through the Issuer. The Issuer further
covenants and agrees that during the period within which this Warrant may be
exercised, the Issuer will at all times have authorized and reserved for the
purpose of issuance upon exercise of this Warrant a number of shares of Common
Stock equal to at least one hundred twenty percent (120%) of the aggregate
number of shares of Common Stock to provide for the exercise of this
Warrant.

     

    (b)           Reservation. If any
shares of Common Stock required to be reserved for issuance upon exercise of
this Warrant or as otherwise provided hereunder require registration or
qualification with any Governmental Authority under any federal or state law
before such shares may be so issued, the Issuer will in good faith use its best
efforts as expeditiously as possible at its expense to cause such shares to be
duly registered or qualified. If the Issuer shall list any shares of Common
Stock on any securities exchange or market it will, at its expense, list
thereon, maintain and increase when necessary such listing, of, all shares of
Warrant Stock from time to time issued upon exercise of this Warrant or as
otherwise provided hereunder, and, to the extent permissible under the
applicable securities exchange rules, all unissued shares of Warrant Stock which
are at any time issuable hereunder, so long as any shares of Common Stock shall
be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.

    

    
      
        
           

        

        
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    (c)           Covenants. The Issuer
shall not by any action, including, without limitation, amending the Certificate
of Incorporation or the Bylaws of the Issuer, or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of the Holder
hereof against dilution (to the extent specifically provided herein) or
impairment. Without limiting the generality of the foregoing, the Issuer will
(i) not permit the par value, if any, of its Common Stock to exceed the then
effective Warrant Price, (ii) not amend or modify any provision of the
Certificate of Incorporation or Bylaws of the Issuer in any manner that would
adversely affect the rights of the Holders of the Warrants, (iii) take all such
action as may be reasonably necessary in order that the Issuer may validly and
legally issue fully paid and nonassessable shares of Common Stock, free and
clear of any liens, claims, encumbrances and restrictions (other than as
provided herein) upon the exercise of this Warrant, and (iv) use its best
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be reasonably
necessary to enable the Issuer to perform its obligations under this
Warrant.

     

    (d)           Loss, Theft, Destruction of
Warrants. Upon receipt of evidence satisfactory to the Issuer of the
ownership of and the loss, theft, destruction or mutilation of any Warrant and,
in the case of any such loss, theft or destruction, upon receipt of indemnity or
security satisfactory to the Issuer or, in the case of any such mutilation, upon
surrender and cancellation of such Warrant, the Issuer will make and deliver, in
lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like
tenor and representing the right to purchase the same number of shares of Common
Stock.

     

    4.           Adjustment of Warrant Price
and Number of Shares Issuable Upon Exercise. The Warrant Price and the
Warrant Share Number shall be subject to adjustment from time to time as set
forth in this Section 4. The Issuer shall give the Holder notice of any event
described below which requires an adjustment pursuant to this Section 4 in
accordance with the notice provisions set forth in Section 5.

     

    (a)           Recapitalization,
Reorganization, Reclassification, Consolidation, Merger or
Sale.

     

    (i)           In
case the Issuer after the Original Issue Date shall do any of the following
(each, a “Triggering
Event”): (A) consolidate or merge with or into any other Person and the
Issuer shall not be the continuing or surviving corporation of such
consolidation or merger, or (B) permit any other Person to consolidate with or
merge into the Issuer and the Issuer shall be the continuing or surviving Person
but, in connection with such consolidation or merger, any Capital Stock of the
Issuer shall be changed into or exchanged for Securities of any other Person or
cash or any other property, or (C) transfer all or substantially all of its
properties or assets to any other Person, or (D) effect a capital reorganization
or reclassification of its Capital Stock, then, and in the case of each such
Triggering Event, proper provision shall be made to the Warrant Price and the
number of shares of Warrant Stock that may be purchased upon exercise of this
Warrant so that, upon the basis and the terms and in the manner provided in this
Warrant, the Holder of this Warrant shall be entitled upon the exercise hereof
at any time after the consummation
of such Triggering Event, to the extent this Warrant is not exercised prior to
such Triggering Event, to receive at the Warrant Price as adjusted to take into
account the consummation of such Triggering Event, in lieu of the Common Stock
issuable upon such exercise of this Warrant prior to such Triggering Event, the
Securities, cash and property to which such Holder would have been entitled upon
the consummation of such Triggering Event if such Holder had exercised the
rights represented by this Warrant immediately prior thereto (including the
right of a stockholder to elect the type of consideration it will receive upon a
Triggering Event), subject to adjustments (subsequent to such corporate action)
as nearly equivalent as possible to the adjustments provided for elsewhere in
this Section 4; provided, however, that the
Holder at its option may in lieu of such adjusted warrant elect to receive an
amount of cash from the Issuer equal to the value of this Warrant as determined
in accordance with the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg L.P. using (1) a price per share of Common Stock equal to
the VWAP of the Common Stock for the Trading Day immediately preceding the date
of consummation of the applicable Triggering Event, (2) a risk-free interest
rate corresponding to the U.S. Treasury rate for a period equal to the remaining
term of this Warrant as of the date of consummation of the applicable Triggering
Event and (3) an expected volatility equal to the 100 day volatility obtained
from the “HVT” function on Bloomberg L.P. determined as of the Trading Day
immediately following the public announcement of the applicable Triggering
Event. Immediately upon the occurrence of a Triggering Event, the Issuer shall
notify the Holder in writing of such Triggering Event and provide the
calculations in determining the amount of issuable Securities, cash or property
issuable upon exercise of the new warrant and the adjusted Warrant Price. Upon
the Holder’s request, the continuing or surviving corporation as a result of
such Triggering Event shall issue to the Holder a new warrant of like tenor
evidencing the right to purchase the adjusted amount of Securities, cash or
property and the adjusted Warrant Price pursuant to the terms and provisions of
this Section 4(a)(i).

    

    
      
        
           

        

        
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    (ii)           In
the event that the Holder has elected not to exercise this Warrant prior to the
consummation of a Triggering Event and has also elected not to receive an amount
in cash equal to the value of this Warrant calculated in accordance with the
Black-Scholes formula pursuant to the provisions of Section 4(a)(i) above, the
surviving entity and/or each Person (other than the Issuer) which may be
required to deliver any Securities, cash or property upon the exercise of this
Warrant as provided herein shall assume, by written instrument delivered to, and
reasonably satisfactory to, the Holder of this Warrant, (A) the obligations of
the Issuer under this Warrant (and if the Issuer shall survive the consummation
of such Triggering Event, such assumption shall be in addition to, and shall not
release the Issuer from, any continuing obligations of the Issuer under this
Warrant) and (B) the obligation to deliver to such Holder such Securities, cash
or property as, in accordance with the foregoing provisions of this subsection
(a). Following a Triggering Event, such Holder shall be entitled to receive, and
the surviving entity and/or each such Person shall have similarly delivered to
such Holder an opinion of counsel for the surviving entity and/or each such
Person, which counsel shall be reasonably satisfactory to such Holder, or in the
alternative, a written acknowledgement executed by the President or Chief
Financial Officer of the Issuer, stating that this Warrant shall thereafter
continue in full force and effect and the terms hereof (including, without
limitation, all of the provisions of this subsection (a)) shall be applicable to
the Securities, cash or property which the surviving entity and/or each such
Person may be required to deliver upon any exercise of this Warrant or the
exercise of any rights pursuant hereto.

    

    
      
        
           

        

        
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    (b)           Stock
Dividends, Subdivisions and Combinations. If at any time the Issuer
shall:

     

    (i)           make
or issue or set a record date for the holders of the Common Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, shares of Common Stock,

     

    (ii)           subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock, or

     

    (iii)           combine
its outstanding shares of Common Stock into a smaller number of shares of Common
Stock,

     

    then (1)
the number of shares of Common Stock for which this Warrant is exercisable
immediately after the occurrence of any such event shall be adjusted to equal
the number of shares of Common Stock which a record holder of the same number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to the occurrence of such event would own or be entitled to receive after the
happening of such event, and (2) the Warrant Price then in effect shall be
adjusted to equal (A) the Warrant Price then in effect multiplied by the number
of shares of Common Stock for which this Warrant is exercisable immediately
prior to the adjustment divided by (B) the number of shares of Common Stock for
which this Warrant is exercisable immediately after such
adjustment.

     

    (c)           Certain Other
Distributions. If at any time the Issuer shall make or issue or set a
record date for the holders of the Common Stock for the purpose of entitling
them to receive any dividend or other distribution of cash, property, evidences
of indebtedness or securities of any nature whatsoever (other than Common
Stock), then (1) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
adjustment multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Per Share Market Value minus the amount
allocable to one share of Common Stock of any such cash so distributable and of
the fair value (as determined in good faith by the Board and supported by an
opinion from an investment banking firm mutually agreed upon by the Issuer and
the Holder) of any and all such evidences of indebtedness, securities or
property so distributable, and (2) the Warrant Price then in effect shall be
adjusted to equal the Warrant Price then in effect multiplied by a fraction (A)
the numerator of which shall be the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to the adjustment and (B) the
denominator of which shall be the number of shares of Common Stock for which
this Warrant is exercisable immediately after such adjustment. A
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value or from no par value to par value) into shares of
Common Stock and shares of any other class of stock shall be deemed a
distribution by the Issuer to the holders of its Common Stock of such shares of
such other class of stock within the meaning of this Section 4(c) and, if the
outstanding shares of Common Stock shall be changed into a larger or smaller
number of shares of Common Stock as a part of such reclassification, such change
shall be deemed a
subdivision or combination, as the case may be, of the outstanding shares of
Common Stock within the meaning of Section 4(b).

    

    
      
        
           

        

        
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    (d)           Issuance of Additional
Shares of Common Stock.

     

    (i)           In
the event the Issuer shall at any time following the Original Issue Date issue
or sell any share of Common Stock (otherwise than as provided in Sections 4(a)
and 4(b) hereof or pursuant to Common Stock Equivalents granted or issued prior
to the Original Issue Date) (an “Additional Share of Common
Stock”) at a price per share less than the Warrant Price then in effect,
or without consideration (in which case such Additional Shares of Common Stock
shall be deemed to have been issued at a price per share of $.00001), the
Warrant Price then in effect upon each such issuance shall be decreased to the
price equal to the consideration per share paid for such Additional Share of
Common Stock, and the number of shares of Common Stock for which this Warrant is
exercisable shall be increased such that the aggregate Warrant Price payable
hereunder, after taking into account the decrease in the Warrant Price, shall be
equal to the aggregate Warrant Price prior to such adjustment; provided, however, that the
Warrant Price shall not be adjusted under this Section 4(d) to an amount less
than $0.25 per share (subject to appropriate adjustments for any stock dividend,
stock split, stock combination, reclassification or similar transaction after
the Original Issue Date).

     

    (e)           Issuance or Modification of
Common Stock Equivalents. In the event the Issuer shall, at any time
following the Original Issue Date: (i) issue or sell any Common Stock Equivalent
with an exercise or conversion price less than the Warrant Price then in effect,
or (ii) modify the conversion or exercise price of any Common Stock Equivalent
issued prior to, on or after the Original Issue Date, to an exercise or
conversion price less than the Warrant Price then in effect, the Warrant Price
then in effect shall be decreased to the exercise or conversion price of such
Common Stock Equivalent, and the number of shares of Common Stock for which this
Warrant is exercisable shall be increased such that the aggregate Warrant Price
payable hereunder, after taking into account the decrease in the Warrant Price,
shall be equal to the aggregate Warrant Price prior to such adjustment; provided, however, that the
Warrant Price shall not be adjusted under this Section 4(e) to an amount less
than $0.25 per share (subject to appropriate adjustments for any stock dividend,
stock split, stock combination, reclassification or similar transaction after
the Original Issue Date).

     

    (f)           Certain Issues
Excepted. Anything herein to the contrary notwithstanding, the Issuer
shall not be required to make any adjustment to the Warrant Price pursuant to
Sections 4(d) or 4(e) hereof upon (i) securities issued (other than for cash) in
connection with a merger, acquisition, or consolidation, (ii) securities issued
pursuant to the conversion or exercise of convertible or exercisable securities
issued or outstanding on or prior to the Original Issue Date (so long as the
conversion or exercise price in such securities are not amended to lower such
price and/or adversely affect the Holders), (iii) securities issued in
connection with bona fide strategic license agreements or other partnering
arrangements so long as such issuances are not for the purpose of raising
capital, (iv) shares of Common Stock or options issued to employees, officers,
consultants or directors of the Company pursuant to any stock or option plan
duly adopted for such purpose by (A) a majority of the non-employee members of
the Board of Directors or a majority of the members of a committee of
non-employee directors established for such purpose and (B) a majority of the
Company’s stockholders (provided that any such issuances
to employees, officers, consultants or directors shall be restricted with no
registration rights, and shall not exceed 750,000 shares and/or options, in the
aggregate (as adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction)) and (vi) securities issued as payment
of dividends on the Series B Convertible Preferred Stock issued pursuant to the
Purchase Agreement.

    

    
      
        
           

        

        
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    (g)           Other Provisions applicable
to Adjustments under this Section. The following provisions shall be
applicable to the making of adjustments of the number of shares of Common Stock
for which this Warrant is exercisable and the Warrant Price then in effect
provided for in this Section 4:

     

    (i)           When Adjustments to Be
Made. The adjustments required by this Section 4 shall be made whenever
and as often as any specified event requiring an adjustment shall occur, except
that any adjustment of the number of shares of Common Stock for which this
Warrant is exercisable that would otherwise be required may be postponed (except
in the case of a subdivision or combination of shares of the Common Stock, as
provided for in Section 4(b)) up to, but not beyond the date of exercise if such
adjustment either by itself or with other adjustments not previously made adds
or subtracts less than one percent (1%) of the shares of Common Stock for which
this Warrant is exercisable immediately prior to the making of such adjustment.
Any adjustment representing a change of less than such minimum amount (except as
aforesaid) which is postponed shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Section 4 and not
previously made, would result in a minimum adjustment or on the date of
exercise. For the purpose of any adjustment, any specified event shall be deemed
to have occurred at the close of business on the date of its
occurrence.

     

    (ii)           Fractional Interests.
In computing adjustments under this Section 4, fractional interests in Common
Stock shall be taken into account to the nearest one one-hundredth (1/100th) of
a share.

     

    (iii)           When Adjustment Not
Required. If the Issuer shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or distribution or
subscription or purchase rights and shall, thereafter and before the
distribution to stockholders thereof, legally abandon its plan to pay or deliver
such dividend, distribution, subscription or purchase rights, then thereafter no
adjustment shall be required by reason of the taking of such record and any such
adjustment previously made in respect thereof shall be rescinded and
annulled.

     

    (h)           Form of Warrant after
Adjustments. The form of this Warrant need not be changed because of any
adjustments in the Warrant Price or the number and kind of Securities
purchasable upon the exercise of this Warrant.

     

    (i)           Escrow of Warrant
Stock. If after any property becomes distributable pursuant to this
Section 4 by reason of the taking of any record of the holders of Common Stock,
but prior to the occurrence of the event for which such record is taken, and the
Holder exercises this Warrant, any shares of Common Stock issuable upon exercise
by reason of such adjustment shall be deemed the last shares of Common Stock for
which this Warrant is exercised (notwithstanding
any other provision to the contrary herein) and such shares or other property
shall be held in escrow for the Holder by the Issuer to be issued to the Holder
upon and to the extent that the event actually takes place, upon payment of the
current Warrant Price. Notwithstanding any other provision to the contrary
herein, if the event for which such record was taken fails to occur or is
rescinded, then such escrowed shares shall be cancelled by the Issuer and
escrowed property returned.

    

    
      
        
           

        

        
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    5.           Notice of Adjustments;
Dispute Resolution. Whenever the Warrant Price or Warrant Share Number
shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5,
each an “adjustment”), the Issuer shall cause its Chief Financial Officer to
prepare and execute a certificate setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Board made any determination hereunder), and the Warrant Price and Warrant Share
Number after giving effect to such adjustment, and shall cause copies of such
certificate to be delivered to the Holder of this Warrant promptly after each
adjustment. Any dispute between the Issuer and the Holder of this Warrant with
respect to the matters set forth in such certificate may at the option of the
Holder of this Warrant be submitted to a national or regional accounting firm
reasonably acceptable to the Issuer and the Holder, provided that the Issuer
shall have three (3) business days after receipt of notice from such Holder of
its selection of such firm to object thereto, in which case such Holder shall
select another such firm and the Issuer shall have no such right of objection.
The firm selected by the Holder of this Warrant as provided in the preceding
sentence shall be instructed to deliver a written opinion as to such matters to
the Issuer and such Holder within ten (10) days after submission to it of such
dispute. Such opinion shall be final and binding on the parties hereto. The
costs and expenses of the initial accounting firm shall be paid equally by the
Issuer and the Holder and, in the case of an objection by the Issuer, the costs
and expenses of the subsequent accounting firm shall be paid in full by the
Issuer. Notwithstanding the foregoing to the contrary, the Issuer shall cause
its transfer agent to promptly issue to the Holder the number of shares of
Warrant Stock that is not disputed in accordance with the terms of this Section
5.

     

    6.           Fractional Shares. No
fractional shares of Warrant Stock will be issued in connection with any
exercise hereof, but in lieu of such fractional shares, the Issuer shall round
the number of shares to be issued upon exercise up to the nearest whole number
of shares.

     

    7.           Ownership Cap and Exercise
Restriction. Notwithstanding anything to the contrary set forth in this
Warrant, at no time may the Holder exercise this Warrant if the number of shares
of Common Stock to be issued pursuant to such exercise would cause the Holder to
be directly or indirectly the beneficial owner (as determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules
thereunder) of more than 4.99% of the Common Stock; provided, however, that upon
the Holder providing the Issuer with sixty-one (61) days notice (pursuant to
Section 12 hereof) (the “Waiver Notice”) that
the Holder would like to waive this Section 7 with regard to any or all shares
of Common Stock issuable upon exercise of this Warrant, this Section 7 will be
of no force or effect with regard to all or a portion of the Warrant referenced
in the Waiver Notice; provided, further, that this
provision shall be of no further force or effect during the sixty-one (61) days
immediately preceding the expiration of the term of this Warrant. For purposes
of this section, the number of shares of Common Stock owned by the Holder shall
include the number of shares of Common Stock issuable upon exercise
of this Warrant but shall exclude the number of shares of Common Stock which are
issuable upon the exercise or conversion of the unexercised or unconverted
portion of any other securities of the Issuer subject to a limitation on
exercise or conversion analogous to the limitation contained herein owned by the
Holder.

    

    
      
        
           

        

        
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    8.           Definitions. For the
purposes of this Warrant, the following terms have the following
meanings:

     

    “Board” shall mean the
Board of Directors of the Issuer.

     

    “Capital Stock” means
and includes (i) any and all shares, interests, participations or other
equivalents of or interests in (however designated) corporate stock, including,
without limitation, shares of preferred or preference stock, (ii) all
partnership interests (whether general or limited) in any Person which is a
partnership, (iii) all membership interests or limited liability company
interests in any limited liability company, and (iv) all equity or ownership
interests in any Person of any other type.

     

    “Certificate of
Incorporation” means the Certificate of Incorporation of the Issuer as in
effect on the Original Issue Date, and as hereafter from time to time amended,
modified, supplemented or restated in accordance with the terms hereof and
thereof and pursuant to applicable law.

     

    “Common Stock” means
the common stock, $0.00001 par value per share, of the Issuer and any other
Capital Stock into which such stock may hereafter be changed.

     

    “Common Stock
Equivalent” means any Convertible Security or warrant, option or other
right to subscribe for or purchase any Additional Shares of Common Stock or any
Convertible Security.

     

    “Convertible
Securities” means evidences of indebtedness, shares of Capital Stock or
other Securities which are or may be at any time convertible into or
exchangeable for Additional Shares of Common Stock. The term “Convertible Security”
means one of the Convertible Securities.

     

    “Governmental
Authority” means any governmental, regulatory or self-regulatory entity,
department, body, official, authority, commission, board, agency or
instrumentality, whether federal, state or local, and whether domestic or
foreign.

     

    “Holders” mean the
Persons who shall from time to time own any Warrant. The term “Holder” means one of
the Holders.

     

    “Independent
Appraiser” means a nationally recognized or major regional investment
banking firm or firm of independent certified public accountants of recognized
standing (which may be the firm that regularly examines the financial statements
of the Issuer) that is regularly engaged in the business of appraising the
Capital Stock or assets of corporations or other entities as going concerns, and
which is not affiliated with either the Issuer or the Holder of any
Warrant.

     

    “Issuer” means
ActiveCare, Inc., a Delaware corporation, and its successors.

    

    
      
        
           

        

        
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    “Majority Holders”
means at any time the Holders of Warrants exercisable for a majority of the
shares of Warrant Stock issuable under the Warrants at the time
outstanding.

     

    “Original Issue Date”
means  September 10, 2009.

     

    “OTC Bulletin Board”
means the over-the-counter electronic bulletin board.

     

    “Other Common” means
any other Capital Stock of the Issuer of any class which shall be authorized at
any time after the Original Issue Date (other than Common Stock) and which shall
have the right to participate in the distribution of earnings and assets of the
Issuer without limitation as to amount.

     

    “Outstanding Common
Stock” means, at any given time, the aggregate amount of outstanding
shares of Common Stock, assuming full exercise, conversion or exchange (as
applicable) of all options, warrants and other Securities which are convertible
into or exercisable or exchangeable for, and any right to subscribe for, shares
of Common Stock that are outstanding at such time.

     

    “Person” means an
individual, corporation, limited liability company, partnership, joint stock
company, trust, unincorporated organization, joint venture, Governmental
Authority or other entity of whatever nature.

     

    “Per Share Market
Value” means on any particular date (a) the closing bid price per share
of the Common Stock on such date on any registered national stock exchange on
which the Common Stock is then listed, or if there is no such price on such
date, then the closing bid price on such exchange or quotation system on the
date nearest preceding such date, or (b) if the Common Stock is not listed then
a registered national stock exchange, the closing bid price for a share of
Common Stock in the over-the-counter market, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated (or similar organization
or agency succeeding to its functions of reporting prices) at the close of
business on such date, or (c) if the Common Stock is not then reported by the
OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of reporting prices), then
the average of the “Pink Sheet” quotes for the five days preceding such date of
determination, or (d) if the Common Stock is not then publicly traded the fair
market value of a share of Common Stock as determined by an Independent
Appraiser selected in good faith by the Majority Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser, shall
have the right to select an additional Independent Appraiser, in which case, the
fair market value shall be equal to the average of the determinations by each
such Independent Appraiser; and provided, further, that all
determinations of the Per Share Market Value shall be appropriately adjusted for
any stock dividends, stock splits or other similar transactions during such
period. The determination of fair market value by an Independent Appraiser shall
be based upon the fair market value of the Issuer determined on a going concern
basis as between a willing buyer and a willing seller and taking into account
all relevant factors determinative of value, and shall be final and binding on
all parties. In determining the fair market value of any shares of Common Stock,
no consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to the
existence or absence of, or any limitations on, voting rights.

    

    
      
        
           

        

        
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    “Purchase Agreement”
means the Series A Convertible Preferred Stock Purchase Agreement dated as of
September 10, 2009, among the Issuer and the Purchasers.

     

    “Purchasers” means the
purchasers of the Series A Convertible Preferred Stock and the Warrants issued
by the Issuer pursuant to the Purchase Agreement.

     

    “Securities” means any
debt or equity securities of the Issuer, whether now or hereafter authorized,
any instrument convertible into or exchangeable for Securities or a Security,
and any option, warrant or other right to purchase or acquire any Security.
“Security”
means one of the Securities.

     

    “Securities Act” means
the Securities Act of 1933, as amended, or any similar federal statute then in
effect.

     

    “Subsidiary” means any
corporation at least 50% of whose outstanding Voting Stock shall at the time be
owned directly or indirectly by the Issuer or by one or more of its
Subsidiaries, or by the Issuer and one or more of its Subsidiaries.

     

    “Term” has the meaning
specified in Section 1 hereof.

     

    “Trading Day” means
(a) a day on which the Common Stock is eligible to be traded on a registered
national stock exchange, or (b) if the Common Stock is not eligible to be traded
on any registered national stock exchange, a day on which the Common Stock is
authorized for quotation on the OTC Bulletin Board, or (c) if the Common Stock
is not eligible to be traded on a registered national stock exchange or
authorized for quotation on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, however, that in the
event that the Common Stock is not listed or quoted as set forth in (a), (b) or
(c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.

     

    “Trading Market” means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the NYSE Amex Equities, the Nasdaq Capital
Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange or the OTC Bulletin Board.

     

    “Voting Stock” means,
as applied to the Capital Stock of any corporation, Capital Stock of any class
or classes (however designated) having ordinary voting power for the election of
a majority of the members of the Board (or other governing body) of such
corporation, other than Capital Stock having such power only by reason of the
happening of a contingency.

     

    “VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York
City time); (b) if the OTC Bulletin Board is not a Trading Market, the volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then
quoted for trading on the OTC Bulletin Board and if prices for the Common Stock
are then reported in the “Pink Sheets” published by Pink OTC Markets Inc. (or a
similar organization or agency succeeding to its functions of reporting prices),
the most recent bid price per share of the Common Stock so reported; or (d) in
all other cases, the fair market value of a share of Common Stock as determined
by an Independent Appraiser selected in good faith by the Majority Holders and
reasonably acceptable to the Company. 

    

    
      
        
           

        

        
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    “Warrants” means the
Warrants issued and sold pursuant to the Purchase Agreement, including, without
limitation, this Warrant, and any other warrants of like tenor issued in
substitution or exchange for any thereof pursuant to the provisions of Section
2(c), 2(d) or 2(e) hereof or of any of such other Warrants.

     

    “Warrant Price”
initially means $1.75 as such price may be adjusted from time to time as shall
result from the adjustments specified in this Warrant, including Section 4
hereto.

     

    “Warrant Share Number”
means at any time the aggregate number of shares of Warrant Stock which may at
such time be purchased upon exercise of this Warrant, after giving effect to all
prior adjustments and increases to such number made or required to be made under
the terms hereof.

     

    “Warrant Stock” means
Common Stock issued or issuable upon exercise of any Warrant or Warrants or
otherwise issuable pursuant to any Warrant or Warrants.

     

    9.           Other Notices. In
case at any time:

     

    (a)           the
Issuer shall make any distributions to the holders of Common Stock;
or

     

    (b)           the
Issuer shall authorize the granting to all holders of its Common Stock of rights
to subscribe for or purchase any Securities of the Issuer; or

     

    (c)           there
shall be any reclassification of the Capital Stock of the Issuer;
or

     

    (d)           there
shall be any capital reorganization by the Issuer; or

     

    (e)           there
shall be any (i) consolidation or merger involving the Issuer or (ii) sale,
transfer or other disposition of all or substantially all of the Issuer’s
property, assets or business (except a merger or other reorganization in which
the Issuer shall be the surviving corporation and its shares of Capital Stock
shall continue to be outstanding and unchanged and except a consolidation,
merger, sale, transfer or other disposition involving a wholly-owned
Subsidiary); or

     

    (f)           there
shall be a voluntary or involuntary dissolution, liquidation or winding-up of
the Issuer or any partial liquidation of the Issuer or distribution to holders
of Common Stock; then, in
each of such cases, the Issuer shall give written notice to the Holder of the
date on which (i) the books of the Issuer shall close or a record shall be taken
for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the action in question and not less than ten (10) days prior
to the record date or the date on which the Issuer’s transfer books are closed
in respect thereto. This Warrant entitles the Holder to receive copies of all
financial and other information distributed or required to be distributed to the
holders of the Common Stock. 

    

    
      
        
           

        

        
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    10.           Amendment and Waiver.
Any term, covenant, agreement or condition in this Warrant may be amended, or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), by a written instrument or written
instruments executed by the Issuer and the Holders of Warrants exercisable for
at least seventy-five percent (75%) of the shares of Warrant Stock issuable
under the Warrants at the time outstanding; provided, however, that no such
amendment or waiver shall discriminate against any Holder without such Holder’s
prior written consent; provided, further, that no such
amendment or waiver shall reduce the Warrant Share Number, increase the Warrant
Price, shorten the period during which this Warrant may be exercised or modify
any provision of this Section 10 without the consent of the Holder of this
Warrant. No consideration shall be offered or paid to any person to amend or
consent to a waiver or modification of any provision of this Warrant unless the
same consideration is also offered to all Holders.

     

    11.           Governing Law;
Jurisdiction. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This Warrant shall
not be interpreted or construed with any presumption against the party causing
this Warrant to be drafted. The Issuer and the Holder agree that venue for any
dispute arising under this Warrant will lie exclusively in the state or federal
courts located in New York County, New York, and the parties irrevocably waive
any right to raise forum non conveniens or any other argument that New York is
not the proper venue. The Issuer and the Holder irrevocably consent to personal
jurisdiction in the state and federal courts of the state of New York. The
Issuer and the Holder consent to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address in effect
for notices to it under this Warrant and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing in
this Section 11 shall affect or limit any right to serve process in any other
manner permitted by law. The parties hereby waive all rights to a trial by
jury.

     

    12.           Notices. Any notice,
demand, request, waiver or other communication required or permitted to be given
hereunder shall be in writing and shall be effective (a) upon hand delivery by
telecopy, e-mail or facsimile at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day
following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall
be:

    

    
      
        
           

        

        
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    (a)           If
to the Issuer:

     

    ActiveCare,
Inc.

    5095 West
2100 South

    Salt Lake
City, UT 84120

    Attention:
James J. Dalton

    Fax No.: 801-974-9553

    

    with
copies (which copies shall not constitute notice) to:

    

    Durham Jones & Pinegar
P.C.

    111 East Broadway, Suite
900

    Salt Lake
City, UT  84111

    Attention:
Kevin R. Pinegar, Esq.

    Fax No.: (801) 415-3500

    

    (b)           If
to any Holder at the address of such Holder set forth on Exhibit A to the
Purchase Agreement or as specified in writing by such Holder with copies (which
copies shall not constitute notice) to:

     

    Haynes and Boone, LLP

    1221 Avenue of the Americas,
26th  Floor

    New York, New York 10022

    Attention: Rick A. Werner,
Esq.

    Fax No.: (212) 884-8234

    

    and

    

    Peter J.
Weisman, P.C.

    767 Third
Avenue, 6th Floor

    New York,
New York 10017

    Fax No.:
(212) 676-5665

    

    Any party
hereto may from time to time change its address for notices by giving written
notice of such changed address to the other party hereto.

     

    13.           Warrant Agent. The
Issuer may, by written notice to each Holder of this Warrant, appoint an agent
having an office in New York, New York for the purpose of issuing shares of
Warrant Stock on the exercise of this Warrant pursuant to subsections (b) and
(c) of Section 2 hereof, exchanging this Warrant pursuant to subsection (f) of
Section 2 hereof or replacing this Warrant pursuant to subsection (d) of Section
3 hereof, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such agent.

    

    
      
        
           

        

        
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    14.           Remedies. The Issuer
stipulates that the remedies at law of the Holder of this Warrant in the event
of any default or threatened default by the Issuer in the performance of or
compliance with any of the terms of this Warrant are not and will not be
adequate and that, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

     

    15.           Successors and
Assigns. This Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors and assigns of the Issuer, the
Holder hereof and (to the extent provided herein) the Holders of Warrant Stock
issued pursuant hereto, and shall be enforceable by any such Holder or Holder of
Warrant Stock.

     

    16.           Modification and
Severability. If, in any action before any court or agency legally
empowered to enforce any provision contained herein, any provision hereof is
found to be unenforceable, then such provision shall be deemed modified to the
extent necessary to make it enforceable by such court or agency. If any such
provision is not enforceable as set forth in the preceding sentence, the
unenforceability of such provision shall not affect the other provisions of this
Warrant, but this Warrant shall be construed as if such unenforceable provision
had never been contained herein.

     

    17.           Headings. The
headings of the Sections of this Warrant are for convenience of reference only
and shall not, for any purpose, be deemed a part of this Warrant.

     

    [SIGNATURE
PAGE FOLLOWS]

    

    
      
        
           

        

        
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    IN
WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year
first above written.

     

    
      	 
      	
              ACTIVECARE,
      INC.

            
	
               

            	 
      
	 
      	
              By:__________________________

            
	 
      	
                   Name:
      James J. Dalton

            
	 
      	
                   Title:
      Chief Executive Officer

            

    

     
 

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

          
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    EXERCISE
FORM

    AMENDED
AND RESTATED CLASS A WARRANT

     

    ACTIVECARE,
INC.

     

    The
undersigned ____________________, pursuant to the provisions of the Amended and
Restated Class A Warrant (the “Warrant”), hereby elects to purchase
_______________ shares of Common Stock of ActiveCare, Inc. covered by the within
Warrant.

     

    
      	
              Dated:

            	 
      	 
      	
              Signature

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Address

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

    

    

    Number of
shares of Common Stock beneficially owned or deemed beneficially owned by the
Holder on the date of Exercise: ___________________________

     

    The
undersigned is an “accredited investor” as defined in Regulation D under the
Securities Act of 1933, as amended.

     

    The
undersigned intends that payment of the Warrant Price shall be made as (check
one):

     

    Cash
Exercise                                       o

     

    Cashless
Exercise                                o

     

    If the
Holder has elected a Cash Exercise, the Holder shall pay the sum of
$______________ by certified or official bank check (or via wire transfer) to
the Issuer in accordance with the terms of the Warrant.

     

    If the
Holder has elected a Cashless Exercise, a certificate shall be issued to the
Holder for the number of shares equal to the whole number portion of the product
of the calculation set forth below, which is _______________. The Issuer shall
pay a cash adjustment in respect of the fractional portion of the product of the
calculation set forth below in an amount equal to the product of the fractional
portion of such product and the Per Share Market Value on the date of exercise,
which product is _____________ .

     

    

    Where:

     

    The
number of shares of Common Stock to be issued to the Holder
_________________  (“X”).

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

          
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    The
number of shares of Common Stock purchasable upon exercise of all of the Warrant
or, if only a portion of the Warrant is being exercised, the portion of the
Warrant being exercised _______________________ (“Y”).

     

    The
Warrant Price ___________________ (“A”).

     

    The Per
Share Market Value of one share of Common Stock on the Trading Day immediately
preceding the date of such election ______________________ (“B”).

     

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

          
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    ASSIGNMENT

     

    FOR VALUE
RECEIVED, ____________________hereby sells, assigns and transfers unto
______________________ the within Warrant and all rights evidenced thereby and
does irrevocably constitute and appoint __________________________, attorney, to
transfer the said Warrant on the books of the within named
corporation.

     

     
 

    
      	
              Dated:

            	 
      	 
      	
              Signature

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Address

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

    

     
 

    PARTIAL
ASSIGNMENT

     

         FOR
VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
___________________ the right to purchase _______________________ shares of
Warrant Stock evidenced by the within Warrant together with all rights therein,
and does irrevocably constitute and appoint _____________________, attorney, to
transfer that part of the said Warrant on the books of the within named
corporation.

     

    
      	
              Dated:

            	 
      	 
      	
              Signature

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              Address

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

    

    

    FOR USE
BY THE ISSUER ONLY:

     

    This
Warrant No. W-_______canceled (or transferred or exchanged) this _____ day of
________________, _____________ shares of Common Stock issued therefor in the
name of _______________, Warrant No. W-________ issued for ______________ shares
of Common Stock in the name of ________________________.

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