Document:

Exhibit 10.2

    
      

    

    EMPLOYMENT
      AGREEMENT

     

    THIS
      AGREEMENT is made as of this 9th day of October, 2006, by and
      between The
      Banker’s Store, Inc.,
      a New
      York corporation (the "Company"), and Samuel
      J. Stone, a
      Kentucky resident ("Executive Officer").

     

    RECITALS

     

    WHEREAS,
      the Company desires to employ Executive Officer as its Chief Financial Officer
      and Executive Officer desires to be employed by the Company as Chief Financial
      Officer; and

     

    WHEREAS,
      Executive Officer and the Company have reached an agreement with respect to
      the
      terms and conditions of said employment, including compensation, which are
      hereinafter set forth.

     

    NOW,
      THEREFORE, the Company and Executive Officer, in consideration of the mutual
      promises hereinafter set forth, agree as follows:

     

    ARTICLE
      I

     

    Employment

     

    The
      Company shall employ Executive Officer and Executive Officer shall serve the
      Company as its Chief Financial Officer. Executive Officer shall devote his
      full
      business time and attention to the Company and have such authority, powers,
      functions, duties and responsibilities as are customarily possessed by persons
      serving in similar corporate positions, subject to the provisions of applicable
      law and the Company’s Certificate of Incorporation and Bylaws. Company shall
      elect Executive Officer to the Board of Directors of Company.

     

    ARTICLE
      II

     

    Term

     

    The
      term
      of employment of Executive Officer by the Company under this Agreement shall
      commence as of the date hereof and shall continue until the second anniversary
      of the date hereof unless terminated prior thereto in accordance with the
      provisions of Paragraphs 4.1and
      4.2,
      below
      (“Initial Term”). The term hereof shall be automatically extended for one (1)
      additional year at the end of the Initial Term (“Extension Period”) and for an
      additional one(1) year period at the end of each Extension Period, unless either
      party shall have given notice to the other party at least sixty (60) days prior
      to the end of the Initial Term (or the end of the applicable Extension Period)
      that the Agreement shall not be so extended.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      III

     

    Compensation

     

    In
      consideration of his services to the Company hereunder, Executive Officer shall
      be compensated as follows:

     

    3.1    Base
      Salary.
      The
      Company shall pay to Executive Officer during the term hereof an annual base
      salary of One Hundred Two Thousand Dollars ($102,000) payable in accordance
      with
      its regular payroll practices. 

     

    3.2    Stock
      Option.
      The
      Company shall grant Executive Officer the following options (“Options”) to
      purchase an aggregate of Four Hundred Fifty Four Thousand, Five Hundred
      Forty-Five (454,545) shares of the Company’s common stock: (a) an Option to
      purchase Two Hundred Fifty Thousand (250,000) shares of the Company’s common
      stock to be granted within 30 days of the date on which Executive Officer’s
      employment commences with the Company; (b) an Option to purchase One Hundred
      Two
      Thousand Two Hundred Seventy Three (102,273) shares of the Company’s common
      stock to be granted on the first anniversary of the date of this Agreement;
      and
      (c) an Option to purchase One Hundred Two Thousand, Two Hundred Seventy Two
      (102,272) shares of the Company’s common stock to be granted on the second
      anniversary of the date of this Agreement. Each of the Options shall have a
      term
      of five (5) years, shall vest in three equal annual installments commencing
      on
      the first anniversary of the date of grant and have an exercise price equal
      to
      the fair market value of a share of the Company’s common stock on the date of
      grant (as determined in good faith by the Company’s Board of Directors). Each
      Option shall be evidenced by an option agreement, the terms of which shall
      be
      consistent with the terms and conditions set forth in this Agreement, terms
      and
      conditions deemed advisable by the Company’s Board of Directors and applicable
      laws and regulations. 

     

    3.3    Withholding.
      The
      Company shall deduct from the payments to be made to Executive Officer under
      this Agreement any federal, state or local withholding or other taxes or charges
      which the Company is from time to time required to deduct under applicable
      laws
      and regulations and all amounts payable to Executive Officer under this
      Agreement are stated herein before any such deduction. The Company shall have
      the right to rely upon a written opinion of legal counsel if any questions
      should arise as to any such deductions.

     

    3.4    Bonus.
      Executive Officer shall be considered for a bonus annually by the Board of
      Directors based upon his performance during the preceding year. Bonuses may
      be
      paid in cash or stock or a combination thereof at the discretion of the
      Board.

     

    ARTICLE
      IV

     

    Termination

     

    4.1    Termination.
      Notwithstanding anything contained herein to the contrary, the employment of
      Executive Officer under this Agreement shall terminate upon the occurrence
      of
      any of the following:

     

    (a)    The
      death
      of Executive Officer.

     

    
      
        
        

      

      
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    (b)    In
      the
      event of Executive Officer's disability. For purposes hereof, Executive Officer
      shall be considered to be disabled if he is unable to perform his normal duties
      under this Agreement for a continuous period of six (6) months by reason of
      physical or mental illness or incapacity or if Executive Officer is unable
      to
      perform his normal duties under this Agreement for periods of physical or mental
      illness or incapacity aggregating six (6) months during the term of this
      Agreement. If there is any dispute as to whether Executive Officer is or was
      physically or mentally unable to perform his duties under this Agreement such
      questions shall be submitted to a licensed physician agreed upon by the parties.
      Executive Officer shall submit to such examinations and provide any information
      such physician may request. The determination of such physician as to
      Executive's physical or mental condition shall be binding and conclusive upon
      the parties. 

     

    (c)    At
      the
      option of the Company, in the event Executive Officer shall engage in any act
      constituting "misconduct" (as hereinafter defined). As used herein, "misconduct"
      shall mean (i) any act which is materially injurious to the Company, monetarily
      or otherwise, including but not limited to, dishonesty, fraud, theft, illegal
      conduct, neglect or misconduct; (ii) chronic absence from work other than by
      reason of illness, (iii) use of alcohol or drugs in such a manner as to
      interfere with the performance of Executive Officer's duties for the Company,
      (iv) commission of a felony or misdemeanor involving moral turpitude, (v)
      continued neglect or failure of Executive Officer to perform such duties as
      may
      be reasonably requested by the Chairman of the Board or the Board of Directors
      of the Company consistent with Article I hereof, (vi) violation of the Company’s
      employee conduct and/or business ethics policies as they exist during the term
      of this Agreement, or (vii) the breach by Executive Officer of any of the
      covenants set forth in Articles VI or VII, below.

     

    (d)    Notice
      and Opportunity to Cure. Notwithstanding the foregoing, it shall be a condition
      precedent to the Company's right to terminate Officer's employment "cause"
      and
      Officer's right to terminate for "cause" that (i) the party seeking termination
      shall first have given the other party written notice stating with specificity
      the reason for the termination ("breach") and (ii) if such breach is susceptible
      of cure or remedy, a period of thirty (30) days from and after the giving of
      such notice shall have elapsed without the breaching party having effectively
      cured or remedied such breach during such 30-day period, unless such breach
      cannot be cured or remedied within thirty (30) days, in which case the period
      for remedy or cure shall be extended for a reasonable time (not to exceed an
      additional thirty (30) days provided the breaching party has made and continues
      to make a diligent effort to effect such a remedy or cure.

     

    4.2    Termination
      by Executive Officer for Cause.
      Executive Officer shall be entitled to terminate his employment with the Company
      “for cause” if; (a) the Company materially breaches any material provision in
      this Agreement; or (b) following a Change in Control (as defined below), the
      salary of the Executive Officer is reduced or he is removed from the position
      of
      Chief Financial Officer. For
      purposes of this Agreement, a “Change in Control” shall mean:

     

    (a)    After
      the
      date of this Agreement, the Company adopts any plan of liquidation providing
      for
      the distribution of all or substantially all of its assets;

     

    (b)    After
      the
      date of this Agreement, all or substantially all of the assets or business
      of
      the Company are disposed of pursuant to a merger, consolidation or other
      transaction (unless the shareholders of the Company immediately prior to such
      merger, consolidation or other transaction beneficially own, directly or
      indirectly, in substantially the same proportion as they owned the voting
      securities (“Voting Securities”) of the Company, all of the Voting Securities or
      other ownership interests of the entity or entities, if any, that succeed to
      the
      business of the Company);

     

    
      
        
        

      

      
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    (c)    After
      the
      date of this Agreement, the Company combines with another company and is the
      surviving corporation but, immediately after the combination, the respective
      shareholders of the Company immediately prior to the combination hold, directly
      or indirectly, 50% or less of the Voting Securities of the combined company;
      

     

    (d)    After
      the
      date of this Agreement, any event or transaction occurs, immediately after
      which
      the current shareholders of the Company hold directly or indirectly less than
      50% of the respective Voting Securities of the Company, or 

     

    (e)    The
      individuals who, as of the date of this Agreement, are members of the Board
      of
      Directors of the Company ("Incumbent Board") cease for any reason to constitute
      at least a majority of such Board; provided, however, that if any new director
      is approved by a vote of at least a majority of the Incumbent Board of the
      Company, such new director shall, for all purposes of the Plan, be considered
      as
      a member of the Incumbent Board; provided further, however, that no individual
      shall be considered a member of the Incumbent Board if such individual initially
      assumed office as a result of either an actual or threatened election contest
      (as described in Rule14a-1 promulgated under the Securities Exchange Act of
      1934) ("Election Contest") or other actual or threatened solicitation of proxies
      or consents by or on behalf of any person or entity other than the Board of
      the
      Company ("Proxy Contest") including by reason of any agreement intended to
      avoid
      or settle any Election Contest or Proxy Contest.

     

    4.3    Consequences
      of Termination.
      If
      Executive Officer's employment is terminated pursuant to Paragraph 4.1
      above,
      the Company shall not be obligated to make further payments to Executive
      Officer, other than to pay his salary prorated through the week in which such
      termination occurs. If Executive Officer's employment hereunder is terminated
      (i) by Executive Officer pursuant to Paragraph 4.2
      or (ii)
      by the Company for any reason other than those described in Paragraph
4.1,
      above,
      Executive Officer shall be entitled to receive from the Company the monthly
      salary to which Executive Officer would have been entitled under Paragraph
      3.1,
      above,
      for a period of twelve (12) months following termination of employment. The
      Company shall make such termination payments in accordance with its regular
      payroll practices. 

     

    ARTICLE
      V

     

    Expenses
      and Fringe Benefits; Indemnification

     

    5.1    Expenses;
      Housing Allowance.
      To the
      same extent it does so for other executives of similar rank and responsibility,
      the Company shall pay or reimburse Executive Officer in accordance with the
      Company's past practice, for reasonable travel expenses ordinarily and
      necessarily incurred by Executive Officer in furtherance of the business of
      the
      Company. Executive Officer shall be required to submit on the same basis as
      other employees of the Company an itemized account of such expenditures and
      such
      proof as may be necessary to establish to the satisfaction of the Company that
      such expenses are ordinary and necessary expenses incurred by Executive Officer
      in furtherance of the business of the Company. The Company agrees to reimburse
      Executive Officer the amount of $500 per month during the first year of this
      Agreement, for housing expenses. 

     

    
      
        
        

      

      
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    5.2    Fringe
      Benefits.
      Executive Officer shall be entitled to participate in any individual or group
      life insurance, health insurance, qualified pension or profit sharing plan
      or
      any other fringe benefit program which the Company may from time to time make
      available to its executive employees, but Executive Officer acknowledges that
      he
      shall have no vested rights in any such programs except as expressly provided
      under the terms thereof and that such programs may be terminated as well as
      supplemented. The compensation payable to Executive Officer pursuant to
      Paragraph 3.1,
      above,
      shall be subject to reduction by reason of Executive Officer's participation
      in
      any fringe benefit program which provides for or allows employee contributions
      out of an employee's annual salary or other compensation; provided,
      however,
      Executive Officer shall have no right to participate in plans which by the
      terms
      thereof are discretionary in nature and Executive Officer shall have no right
      to
      continue to participate in any plans after termination, except as required
      by
      law.

     

    5.3    Vacation
      and Sick Days.
      Executive Officer shall be entitled to ten (10) vacation days and five (5)
      sick
      or personal days in every twelve (12) month period under this
      Agreement.

     

    5.4    Indemnification;
      Directors’ and Officers’ Insurance.
      The
      Company agrees that if Executive Officer is made a party, or is threatened
      to be
      made a party, to any action, suit or proceeding, whether civil, criminal,
      administrative or investigative (a “Proceeding”), by reason of the fact that he
      is or was a director, officer, employee, or representative of the Company or
      is
      or was serving at the request of the Company as a director, officer, member,
      employee, representative, or agent of another corporation, partnership, joint
      venture, trust or other enterprise, whether or not the basis of such Proceeding
      is Executive Officer’s alleged action in an official capacity while serving as a
      director, officer, member, employee or agent, Executive Officer shall be
      indemnified and held harmless by the Company to the fullest extent permitted
      by
      law against all costs, expenses, claims, actions and liabilities (including,
      without limitation, reasonable attorney’s fees) reasonably incurred or suffered
      by Executive Officer in connection therewith, and such indemnification shall
      continue as to Executive Officer even if he has ceased to be a director, member,
      employee, representative, or agent of the Company or other entity and shall
      inure to the benefit of Executive Officer’s heirs, executors and administrators.
      To the extent the Company obtains or maintains a directors’ and officers’
liability insurance policy covering any executive officers of the Company,
      the
      Company agrees to provide such coverage to Executive Officer and to continue
      such coverage or the maximum coverage available during the term of this
      Agreement to the extent available at rates not in excess of 125% of current
      or
      initial rates. 

     

    
      
        
        

      

      
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    ARTICLE
      VI

     

    Nondisclosure
      of Proprietary

    Information,
      Surrender of Records

     

    6.1    Proprietary
      Information.
      Executive Officer shall not at any time while he is employed by the Company
      or
      at any time thereafter disclose any proprietary information (as hereafter
      defined) to any individual or entity other than as required in the ordinary
      course of business unless such disclosure has been authorized by the Board
      of
      Directors or by the Chairman of the Board of the Company. For purposes hereof,
      the term "proprietary information" shall mean (i) the name or address of any
      customer (as hereafter defined) or any information concerning the transactions
      of such customer with the Company, (ii) any information relating to the
      marketing methods, sources of supply, pricing information, or business plans
      of
      the Company, (iv) any information which is generally regarded as confidential
      in
      the Company’s industry, (v) computer programs and software which may be
      developed from time to time by the Company and its employees, including
      Executive Officer, and (vi) any other information determined to be confidential
      or proprietary by resolution of the Board of Directors of the Company and which
      at the time of such determination or thereafter is not in the public domain
      or
      does not enter the public domain without disclosure by Executive Officer. For
      purposes hereof, a "customer" of the Company shall mean any individual or entity
      who has entered into any transaction with the Company or who has made an inquiry
      to the Company concerning its products or services whether through use of the
      Company’s website, electronic mail, telephone, mail or personal
      contact.

     

    6.2    Confidentiality
      and Surrender of Records.
      Executive Officer shall not at any time while he is employed by the Company
      or
      at any time thereafter, without the prior approval of the Chairman of the Board
      or the Board of Directors of the Company, give any confidential records (as
      hereafter defined) to any individual or entity or permit any inspection or
      copying thereof by any individual or entity other than an individual or entity
      who during his employment by the Company has a reasonable need to know the
      contents of such confidential records in the ordinary course of business or
      an
      individual or entity providing bona fide consulting, legal or accounting
      services to the Company who has a reasonable need to know the contents of such
      confidential records in the course of providing services to the Company. For
      purposes hereof, "confidential records" mean all correspondence, memoranda,
      files, customer lists, electronic or computerized information, and all other
      documents of any kind which may be in Executive Officer's possession or under
      his control which contain any proprietary information as defined in Paragraph
      6.1,
      above.
      Upon the termination of his employment, Executive Officer shall immediately
      surrender to the Company all confidential records in his possession or under
      his
      control.

     

    
      
        
        

      

      
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    ARTICLE
      VII

     

    Covenant
      Not to Compete

     

    7.1    Covenant
      Not to Compete.
      Executive Officer agrees that he shall not at any time while he is employed
      by
      the Company pursuant to this Agreement or any time for a period of one (1)
      year
      following the termination of his employment (such period not to include any
      period of violation of, or period required for litigation to enforce, the
      covenants contained in this Article VII) either directly or indirectly as agent,
      stockholder, employee, officer, director, trustee, partner, proprietor or
      otherwise (except as the holder of no more than five percent (5%) of the stock
      of a publicly held company, provided Executive Officer does not participate
      in
      the business of such company or render advice or assistance to it), engage
      in,
      or render advice or assistance to (other than on behalf of the Company), or
      be
      employed by any person, firm or entity located or engaged in, a business which
      competes with the business of the Company in an area within a 50-mile radius
      of
      any county in which the Company derived 10% or more of its revenues during
      the
      twelve (12) month period preceding such action. 

     

    7.2    Covenant
      Not to Solicit Employees.
      Executive Officer agrees that he shall not at any time while he is employed
      by
      the Company pursuant to this Agreement or any time for a period of one (1)
      year
      following the termination of his employment (such period not to include any
      period of violation of, or period required for litigation to enforce, the
      covenants in this Article VII), directly or indirectly, solicit or induce,
      or
      attempt to solicit or induce, any employee of the Company to leave the Company
      for any reason whatsoever or hire any individual employed by the Company. For
      purposes of this Paragraph 7.2, employee shall mean any individual employed
      by
      the Company within the three (3) month period prior to, and including, the
      last
      day of Executive Officer’s employment with the Company.

     

    7.3    Enforcement.
      Executive Officer recognizes that irreparable injury may result to the Company,
      its business and property, in the event of a breach by him of the restrictions
      imposed by this Article and agrees that if he shall engage in any act in
      violation of the provisions hereof the Company shall be entitled, in addition
      to
      such other remedies and damages as may be available, to an injunction
      prohibiting him from engaging in any such act. Executive Officer further agrees
      that if any court should finally determine that the restriction provided in
      this
      Article is too broad as to area or time covered, or otherwise, that said area
      or
      time covered or other restriction may be limited to whatever extent such court
      deems reasonable and this Agreement may be enforced as so limited. If any court
      should finally determine that conduct of Executive Officer is not in violation
      of Article VII, Company shall promptly reimburse Executive Officer for
      reasonable legal fees and expenses incurred in such litigation.

     

    ARTICLE
      VIII

     

    Miscellaneous

     

    8.1    Notices.
      Any
      notice required or permitted to be given under this Agreement shall be
      sufficient if in writing and personally delivered or sent by registered or
      certified mail, postage prepaid (in which case notice will be deemed to have
      been given on the third day after mailing), or by overnight delivery by a
      reliable overnight courier service (in which case notice will be deemed to
      have
      been given on the day after delivery to such courier service). Notices shall
      be
      directed to Executive Officer at the following
      address:               
    
illegible                     
and notices to the Company, shall be directed to the Chairman of the
      Board of
      the Company, at 1535 Memphis Junction Road, Bowling Green, Kentucky 42101,
      as
      the case may be, or to such other address as either party hereto shall specify
      by notice given as provided herein.

     

    
      
        
        

      

      
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    8.2    Assignment.
      This
      Agreement shall not be assignable by the Company without Executive Officer's
      consent except that if the Company shall merge or consolidate with or into
      or
      transfer substantially all of its assets, to another corporation or other form
      of business organization, this Agreement may be assigned in connection therewith
      and shall continue to bind Executive Officer and the successor of the Company
      resulting from any such merger, consolidation or transfer. This Agreement shall
      not be assignable by Executive Officer, nor may Executive Officer assign, pledge
      or encumber his interest in this Agreement or any part hereof without the prior
      written consent of the Company.

     

    8.3    Applicable
      Law.
      This
      Agreement and all questions of its interpretation, enforcement and the rights
      and remedies of the parties hereto shall be governed and construed in accordance
      with the internal laws of the Commonwealth of Kentucky.

     

    8.4    Binding
      Effect.
      This
      Agreement and the terms, covenants and conditions hereof shall be binding upon
      and shall inure to the benefit of the parties hereto and their respective heirs,
      beneficiaries, successors and assigns, specifically including any successor
      to
      the Company, whether arising by merger, consolidation or otherwise.

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      day,
      month and year first above written.

     

     

    
      	 	
              THE
                BANKER’S STORE, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	 	
              Paul
                D. Clark

            
	 	 	 
	 	
              Title:

            	
              President
                and Chief Executive Officer

            
	 	 	 
	 	 	 
	 	
              EXECUTIVE
                OFFICER:

            
	 	 	 
	 	 	 
	 	
              /s/
                Samuel J. Stone

            
	 	
              Samuel
                J. Stone

            
	 	 	 
	 	 	 
	 	
              Address:

            
	 	 	 
	 	illegible
	 	illegible

    

     

     

      8WARRANT

     

    THE
      SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
      SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
      OR
      APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
      SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
      OR
      APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
      SAID
      ACT. NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE PLEDGED IN CONNECTION
      WITH A BONA FIDE MARGIN ACCOUNT.

     

    TITAN
      GLOBAL HOLDINGS, INC.

    Warrant
      To Purchase Common Stock

     

    
      	
              Warrant
                No.: TTGL-1-2

            	
              Number
                of Shares:

            	
              250,000

            
	 	
              Warrant
                Exercise Price:

            	
              $
                1.00

            
	 	
              Expiration
                Date: 

            	
              October
                10, 2011

            

    

     

    Date
      of
      Issuance: October 10, 2011

    

    Titan
      Global Holdings, Inc., a Nevada corporation (the “Company”),
      hereby certifies that, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, Cornell
      Capital Partners, LP
      (the
“Holder”),
      the
      registered holder hereof or its permitted assigns, is entitled, subject to
      the
      terms set forth below, to purchase from the Company upon surrender of this
      Warrant, at any time or times on or after the date hereof, but not after
      11:59 P.M. Eastern Time on the Expiration Date (as defined herein) Two
      Hundred Fifty Thousand (250,000) fully paid and nonassessable shares of Common
      Stock (as defined herein) of the Company (the “Warrant
      Shares”)
      at the
      exercise price per share provided in Section 1(b) below or as subsequently
      adjusted; provided, however, that in no event shall the holder be entitled
      to
      exercise this Warrant for a number of Warrant Shares in excess of that number
      of
      Warrant Shares which, upon giving effect to such exercise, would cause the
      aggregate number of shares of Common Stock beneficially owned by the holder
      and
      its affiliates to exceed 4.99% of the outstanding shares of the Common Stock
      following such exercise, except within sixty (60) days of the Expiration Date
      (however, such restriction may be waived by Holder (but only as to itself and
      not to any other holder) upon not less than 65 days prior notice to the
      Company). For purposes of the foregoing proviso, the aggregate number of shares
      of Common Stock beneficially owned by the holder and its affiliates shall
      include the number of shares of Common Stock issuable upon exercise of this
      Warrant with respect to which the determination of such proviso is being made,
      but shall exclude shares of Common Stock which would be issuable upon
      (i) exercise of the remaining, unexercised Warrants beneficially owned by
      the holder and its affiliates and (ii) exercise or conversion of the
      unexercised or unconverted portion of any other securities of the Company
      beneficially owned by the holder and its affiliates (including, without
      limitation, any convertible notes or preferred stock) subject to a limitation
      on
      conversion or exercise analogous to the limitation contained herein. Except
      as
      set forth in the preceding sentence, for purposes of this paragraph, beneficial
      ownership shall be calculated in accordance with Section 13(d) of the Securities
      Exchange Act of 1934, as amended. For purposes of this Warrant, in determining
      the number of outstanding shares of Common Stock a holder may rely on the number
      of outstanding shares of Common Stock as reflected in (1) the Company’s most
      recent Form 10-QSB or Form 10-KSB, as the case may be, (2) a more recent public
      announcement by the Company or (3) any other notice by the Company or its
      transfer agent setting forth the number of shares of Common Stock outstanding.
      Upon the written request of any holder, the Company shall promptly, but in
      no
      event later than one (1) Business Day following the receipt of such notice,
      confirm in writing to any such holder the number of shares of Common Stock
      then
      outstanding. In any case, the number of outstanding shares of Common Stock
      shall
      be determined after giving effect to the exercise of Warrants (as defined below)
      by such holder and its affiliates since the date as of which such number of
      outstanding shares of Common Stock was reported.

     

    
      
        
        

      

      
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    Section
      1.

     

    (a) This
      Warrant is one of the warrants issued pursuant to Section 4(g) of the Securities
      Purchase Agreement (“Securities
      Purchase Agreement”)
      dated
      the date hereof between the Company and the Buyers listed on Schedule I thereto
      or issued in exchange or substitution thereafter or replacement thereof. Each
      Capitalized term used, and not otherwise defined herein, shall have the meaning
      ascribed thereto in the Securities Purchase Agreement.

     

    (b) Definitions.
      The
      following words and terms as used in this Warrant shall have the following
      meanings:

     

    (i) “Approved
      Stock Plan”
means
      a
      stock option plan that has been approved by the Board of Directors of the
      Company, pursuant to which the Company’s securities may be issued only to any
      employee, officer or director for services provided to the Company.

     

    (ii) “Business
      Day”
means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      the City of New York are authorized or required by law to remain
      closed.

     

    (iii) “Closing
      Bid Price”
means
      the closing bid price of Common Stock as quoted on the Principal Market (as
      reported by Bloomberg Financial Markets (“Bloomberg”)
      through its “Volume at Price” function).

     

    (iv) “Common
      Stock”
means
      (i) the Company’s common stock, par value $0.001 per share, and
      (ii) any capital stock into which such Common Stock shall have been changed
      or any capital stock resulting from a reclassification of such Common
      Stock.

     

    (v) “Event
      of Default”
means
      an event of default under the Securities Purchase Agreement or the Convertible
      Debentures issued in connection therewith.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (vi) “Excluded
      Securities”
means,
      (a) shares issued or deemed to have been issued by the Company pursuant to
      an
      Approved Stock Plan, (b) shares of Common Stock issued or deemed to be issued
      by
      the Company upon the conversion, exchange or exercise of any right, option,
      obligation or security outstanding on the date prior to date of the Securities
      Purchase Agreement, provided that the terms of such right, option, obligation
      or
      security are not amended or otherwise modified on or after the date of the
      Securities Purchase Agreement, and provided that the conversion price, exchange
      price, exercise price or other purchase price is not reduced, adjusted or
      otherwise modified and the number of shares of Common Stock issued or issuable
      is not increased (whether by operation of, or in accordance with, the relevant
      governing documents or otherwise) on or after the date of the Securities
      Purchase Agreement, (c) the shares of Common Stock issued or deemed to be
      issued by the Company upon conversion of the Convertible Debentures or exercise
      of the Warrants, (d) shares of Common Stock issued in connection with employment
      or consulting agreement(s), and (e) shares of Common Stock issued in connection
      with the acquisition of a business or assets by the Company or any subsidiary
      thereof. 

     

    (vii) “Expiration
      Date”
means
      October 10, 2011.

     

    (viii) “Issuance
      Date”
means
      the date hereof.

     

    (ix) “Options”
means
      any rights, warrants or options to subscribe for or purchase Common Stock or
      Convertible Securities. 

     

    (x) “Person”
means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof.

     

    (xi) “Principal
      Market”
means
      on any of (a) the American Stock Exchange, (b) New York Stock Exchange, (c)
      the
      Nasdaq National Market, (d) the Nasdaq Capital Market, or (e) the Nasdaq OTC
      Bulletin Board (“OTCBB”)
      

     

    (xii) “Securities
      Act”
means
      the Securities Act of 1933, as amended. 

     

    (xiii) “Warrant”
means
      this Warrant and all Warrants issued in exchange, transfer or replacement
      thereof. 

     

    (xiv) “Warrant
      Exercise Price”
shall
      be $1.00 per share or as subsequently adjusted as provided in Section 8
      hereof. 

     

    (c) Other
      Definitional Provisions. 

     

    (i) Except
      as
      otherwise specified herein, all references herein (A) to the Company shall
      be deemed to include the Company’s successors and (B) to any applicable law
      defined or referred to herein shall be deemed references to such applicable
      law
      as the same may have been or may be amended or supplemented from time to time.
      

     

    (ii) When
      used
      in this Warrant, the words “herein”,
      “hereof”,
      and
“hereunder”
      and
      words of similar import, shall refer to this Warrant as a whole and not to
      any
      provision of this Warrant, and the words “Section”,
      “Schedule”,
      and
“Exhibit”
shall
      refer to Sections of, and Schedules and Exhibits to, this Warrant unless
      otherwise specified. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (iii) Whenever
      the context so requires, the neuter gender includes the masculine or feminine,
      and the singular number includes the plural, and vice versa. 

     

    Section
      2. Exercise
      of Warrant.
      

     

    (a) Subject
      to the terms and conditions hereof, this Warrant may be exercised by the holder
      hereof then registered on the books of the Company, pro rata as hereinafter
      provided, at any time on any Business Day on or after the opening of business
      on
      such Business Day, commencing with the first day after the date hereof, and
      prior to 11:59 P.M. Eastern Time on the Expiration Date (i) by delivery of
      a written notice, in the form of the subscription notice attached as
Exhibit
      A
      hereto
      (the “Exercise
      Notice”),
      of
      such holder’s election to exercise this Warrant, which notice shall specify the
      number of Warrant Shares to be purchased, payment to the Company of an
      amount equal to the Warrant Exercise Price(s) applicable to the Warrant Shares
      being purchased, multiplied by the number of Warrant Shares (at the
      applicable Warrant Exercise Price) as to which this Warrant is being
      exercised (plus any applicable issue or transfer taxes) (the “Aggregate
      Exercise Price”)
      in
      cash or wire transfer of immediately available funds and the surrender of this
      Warrant (or an indemnification undertaking with respect to this Warrant in
      the
      case of its loss, theft or destruction) to a common carrier for overnight
      delivery to the Company as soon as practicable following such date
      (“Cash
      Basis”)
      or
      (ii) if at the time of exercise, the Warrant Shares are not subject to an
      effective registration statement or if an Event of Default has occurred, by
      delivering an Exercise Notice and in lieu of making payment of the Aggregate
      Exercise Price in cash or wire transfer, elect instead to receive upon such
      exercise the “Net Number” of shares of Common Stock determined according to the
      following formula (the “Cashless
      Exercise”):
      

     

    Net
      Number = (A
      x
      B) - (A x C)

    B

    

    For
      purposes of the foregoing formula: 

    

    A
      = the
      total number of Warrant Shares with respect to which this Warrant is then being
      exercised. 

    

    B
      = the
      Closing Bid Price of the Common Stock on the date of exercise of the
      Warrant.

    

    C
      = the
      Warrant Exercise Price then in effect for the applicable Warrant Shares at
      the
      time of such exercise. 

    

    In
      the
      event of any exercise of the rights represented by this Warrant in compliance
      with this Section 2, the Company shall on or before the fifth (5th)
      Business Day following the date of receipt of the Exercise Notice, the Aggregate
      Exercise Price and this Warrant (or an indemnification undertaking with respect
      to this Warrant in the case of its loss, theft or destruction) and the receipt
      of the representations of the holder specified in Section 6 hereof, if requested
      by the Company (the “Exercise
      Delivery Documents”),
      and
      if the Common Stock is DTC eligible, credit such aggregate number of shares
      of
      Common Stock to which the holder shall be entitled to the holder’s or its
      designee’s balance account with The Depository Trust Company; provided, however,
      if the holder who submitted the Exercise Notice requested physical delivery
      of
      any or all of the Warrant Shares, or, if the Common Stock is not DTC eligible
      then the Company shall, on or before the fifth (5th)
      Business Day following receipt of the Exercise Delivery Documents, issue and
      surrender to a common carrier for overnight delivery to the address specified
      in
      the Exercise Notice, a certificate, registered in the name of the holder, for
      the number of shares of Common Stock to which the holder shall be entitled
      pursuant to such request. Upon delivery of the Exercise Notice and Aggregate
      Exercise Price referred to in clause (i) or (ii) above the holder of this
      Warrant shall be deemed for all corporate purposes to have become the holder
      of
      record of the Warrant Shares with respect to which this Warrant has been
      exercised. In the case of a dispute as to the determination of the Warrant
      Exercise Price, the Closing Bid Price or the arithmetic calculation of the
      Warrant Shares, the Company shall promptly issue to the holder the number of
      Warrant Shares that is not disputed and shall submit the disputed determinations
      or arithmetic calculations to the holder via facsimile within one (1) Business
      Day of receipt of the holder’s Exercise Notice. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (b) If
      the
      holder and the Company are unable to agree upon the determination of the Warrant
      Exercise Price or arithmetic calculation of the Warrant Shares within one (1)
      day of such disputed determination or arithmetic calculation being submitted
      to
      the holder, then the Company shall immediately submit via facsimile (i) the
      disputed determination of the Warrant Exercise Price or the Closing Bid Price
      to
      an independent, reputable investment banking firm or (ii) the disputed
      arithmetic calculation of the Warrant Shares to its independent, outside
      accountant. The Company shall cause the investment banking firm or the
      accountant, as the case may be, to perform the determinations or calculations
      and notify the Company and the holder of the results no later than forty-eight
      (48) hours from the time it receives the disputed determinations or
      calculations. Such investment banking firm’s or accountant’s determination or
      calculation, as the case may be, shall be deemed conclusive absent manifest
      error.

     

    (c) Unless
      the rights represented by this Warrant shall have expired or shall have been
      fully exercised, the Company shall, as soon as practicable and in no event
      later
      than five (5) Business Days after any exercise and at its own expense, issue
      a
      new Warrant identical in all respects to this Warrant exercised except it shall
      represent rights to purchase the number of Warrant Shares purchasable
      immediately prior to such exercise under this Warrant exercised, less the number
      of Warrant Shares with respect to which such Warrant is exercised.

     

    (d) No
      fractional Warrant Shares are to be issued upon any pro rata exercise of this
      Warrant, but rather the number of Warrant Shares issued upon such exercise
      of
      this Warrant shall be rounded up or down to the nearest whole
      number.

     

    (e) If
      the
      Company or its Transfer Agent shall fail for any reason or for no reason to
      issue to the holder within ten (10) days of receipt of the Exercise
      Delivery Documents, a certificate for the number of Warrant Shares to which
      the
      holder is entitled or to credit the holder’s balance account with The Depository
      Trust Company for such number of Warrant Shares to which the holder is entitled
      upon the holder’s exercise of this Warrant, the Company shall, in addition to
      any other remedies under this Warrant or otherwise available to such holder,
      pay
      as additional damages in cash to such holder on each day the issuance of such
      certificate for Warrant Shares is not timely effected an amount equal to 0.025%
      of the product of (A) the sum of the number of Warrant Shares not issued to
      the
      holder on a timely basis and to which the holder is entitled, and (B) the
      Closing Bid Price of the Common Stock for the trading day immediately preceding
      the last possible date which the Company could have issued such Common Stock
      to
      the holder without violating this Section 2.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (f) If
      within
      ten (10) days after the Company’s receipt of the Exercise Delivery Documents,
      the Company fails to deliver a new Warrant to the holder for the number of
      Warrant Shares to which such holder is entitled pursuant to Section 2 hereof,
      then, in addition to any other available remedies under this Warrant, or
      otherwise available to such holder, the Company shall pay as additional damages
      in cash to such holder on each day after such tenth (10th)
      day
      that such delivery of such new Warrant is not timely effected in an amount
      equal
      to 0.25% of the product of (A) the number of Warrant Shares represented by
      the portion of this Warrant which is not being exercised and (B) the
      Closing Bid Price of the Common Stock for the trading day immediately preceding
      the last possible date which the Company could have issued such Warrant to
      the
      holder without violating this Section 2.

     

    Section
      3. Covenants
      as to Common Stock.
      The
      Company hereby covenants and agrees as follows:

     

    (a) This
      Warrant is, and any Warrants issued in substitution for or replacement of this
      Warrant will upon issuance be, duly authorized and validly issued.

     

    (b) All
      Warrant Shares which may be issued upon the exercise of the rights represented
      by this Warrant will, upon issuance, be validly issued, fully paid and
      nonassessable and free from all taxes, liens and charges with respect to the
      issue thereof.

     

    (c) During
      the period within which the rights represented by this Warrant may be exercised,
      the Company will at all times have authorized and reserved at least one hundred
      percent (100%) of the number of shares of Common Stock needed to provide for
      the
      exercise of the rights then represented by this Warrant and the par value of
      said shares will at all times be less than or equal to the applicable Warrant
      Exercise Price. If at any time the Company does not have a sufficient number
      of
      shares of Common Stock authorized and available, then the Company shall call
      and
      hold a special meeting of its stockholders within sixty (60) days of that
      time for the sole purpose of increasing the number of authorized shares of
      Common Stock.

     

    (d) If
      at any
      time after the date hereof the Company shall file a registration statement,
      the
      Company shall include the Warrant Shares issuable to the holder, pursuant to
      the
      terms of this Warrant and shall maintain, so long as any other shares of Common
      Stock shall be so listed, such listing of all Warrant Shares from time to time
      issuable upon the exercise of this Warrant; and the Company shall so list on
      each national securities exchange or automated quotation system, as the case
      may
      be, and shall maintain such listing of, any other shares of capital stock of
      the
      Company issuable upon the exercise of this Warrant if and so long as any shares
      of the same class shall be listed on such national securities exchange or
      automated quotation system.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (e) The
      Company will not, by amendment of its Articles of Incorporation or through
      any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities, or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms to be observed or performed by
      it
      hereunder, but will at all times in good faith assist in the carrying out of
      all
      the provisions of this Warrant and in the taking of all such action as may
      reasonably be requested by the holder of this Warrant in order to protect the
      exercise privilege of the holder of this Warrant against dilution or other
      impairment, consistent with the tenor and purpose of this Warrant. The Company
      will not increase the par value of any shares of Common Stock receivable upon
      the exercise of this Warrant above the Warrant Exercise Price then in effect,
      and (ii) will take all such actions as may be necessary or appropriate in
      order that the Company may validly and legally issue fully paid and
      nonassessable shares of Common Stock upon the exercise of this
      Warrant.

     

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

     

    Section
      4. Taxes.
      The
      Company shall pay any and all taxes, except any applicable withholding, which
      may be payable with respect to the issuance and delivery of Warrant Shares
      upon
      exercise of this Warrant.

     

    Section
      5. Warrant
      Holder Not Deemed a Stockholder.
      Except
      as otherwise specifically provided herein, no holder, as such, of this Warrant
      shall be entitled to vote or receive dividends or be deemed the holder of shares
      of capital stock of the Company for any purpose, nor shall anything contained
      in
      this Warrant be construed to confer upon the holder hereof, as such, any of
      the
      rights of a stockholder of the Company or any right to vote, give or withhold
      consent to any corporate action (whether any reorganization, issue of stock,
      reclassification of stock, consolidation, merger, conveyance or otherwise),
      receive notice of meetings, receive dividends or subscription rights, or
      otherwise, prior to the issuance to the holder of this Warrant of the Warrant
      Shares which he or she is then entitled to receive upon the due exercise of
      this
      Warrant. In addition, nothing contained in this Warrant shall be construed
      as
      imposing any liabilities on such holder to purchase any securities (upon
      exercise of this Warrant or otherwise) or as a stockholder of the Company,
      whether such liabilities are asserted by the Company or by creditors of the
      Company. Notwithstanding this Section 5, the Company will provide the holder
      of
      this Warrant with copies of the same notices and other information given to
      the
      stockholders of the Company generally, contemporaneously with the giving thereof
      to the stockholders.

     

    Section
      6. Representations
      of Holder.
      The
      holder of this Warrant, by the acceptance hereof, represents that it is
      acquiring this Warrant and the Warrant Shares for its own account for investment
      only and not with a view towards, or for resale in connection with, the public
      sale or distribution of this Warrant or the Warrant Shares, except pursuant
      to
      sales registered or exempted under the Securities Act; provided, however, that
      by making the representations herein, the holder does not agree to hold this
      Warrant or any of the Warrant Shares for any minimum or other specific term
      and
      reserves the right to dispose of this Warrant and the Warrant Shares at any
      time
      in accordance with or pursuant to a registration statement or an exemption
      under
      the Securities Act. The holder of this Warrant further represents, by acceptance
      hereof, that, as of this date, such holder is an “accredited investor” as such
      term is defined in Rule 501(a)(1) of Regulation D promulgated by the
      Securities and Exchange Commission under the Securities Act (an “Accredited
      Investor”).
      Upon
      exercise of this Warrant the holder shall, if requested by the Company, confirm
      in writing, in a form satisfactory to the Company, that the Warrant Shares
      so
      purchased are being acquired solely for the holder’s own account and not as a
      nominee for any other party, for investment, and not with a view toward
      distribution or resale and that such holder is an Accredited Investor. If such
      holder cannot make such representations because they would be factually
      incorrect, it shall be a condition to such holder’s exercise of this Warrant
      that the Company receive such other representations as the Company considers
      reasonably necessary to assure the Company that the issuance of its securities
      upon exercise of this Warrant shall not violate any United States or state
      securities laws.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Section
      7. Ownership
      and Transfer.

     

    (a) The
      Company shall maintain at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to the holder hereof),
      a
      register for this Warrant, in which the Company shall record the name and
      address of the person in whose name this Warrant has been issued, as well as
      the
      name and address of each transferee. The Company may treat the person in whose
      name any Warrant is registered on the register as the owner and holder thereof
      for all purposes, notwithstanding any notice to the contrary, but in all events
      recognizing any transfers made in accordance with the terms of this
      Warrant.

     

    Section
      8. Adjustment
      of Warrant Exercise Price and Number of Shares.
      The
      Warrant Exercise Price and the number of shares of Common Stock issuable upon
      exercise of this Warrant shall be adjusted from time to time as
      follows:

     

    (a) Adjustment
      of Warrant Exercise Price and Number of Shares upon Issuance of Common
      Stock.
      If and
      whenever on or after the Issuance Date of this Warrant, the Company issues
      or
      sells, or is deemed to have issued or sold, any shares of Common
      Stock (other than Excluded Securities) for a consideration per share less
      than a price (the “Applicable
      Price”)
      equal
      to the Warrant Exercise Price in effect immediately prior to such issuance
      or
      sale, then immediately after such issue or sale the Warrant Exercise Price
      then
      in effect shall be reduced to an amount equal to such consideration per share.
      Upon each such adjustment of the Warrant Exercise Price hereunder, the number
      of
      Warrant Shares issuable upon exercise of this Warrant shall be adjusted to
      the
      number of shares determined by multiplying the Warrant Exercise Price in effect
      immediately prior to such adjustment by the number of Warrant Shares issuable
      upon exercise of this Warrant immediately prior to such adjustment and dividing
      the product thereof by the Warrant Exercise Price resulting from such
      adjustment.

     

    (b) Effect
      on Warrant Exercise Price of Certain Events.
      For
      purposes of determining the adjusted Warrant Exercise Price under Section 8(a)
      above, the following shall be applicable:

     

    (i) Issuance
      of Options.
      If
      after the date hereof, the Company in any manner grants any Options and the
      lowest price per share for which one share of Common Stock is issuable upon
      the
      exercise of any such Option or upon conversion or exchange of any convertible
      securities issuable upon exercise of any such Option is less than the Applicable
      Price, then such share of Common Stock shall be deemed to be outstanding and
      to
      have been issued and sold by the Company at the time of the granting or sale
      of
      such Option for such price per share. For purposes of this Section 8(b)(i),
      the
      lowest price per share for which one share of Common Stock is issuable upon
      exercise of such Options or upon conversion or exchange of such Convertible
      Securities shall be equal to the sum of the lowest amounts of consideration
      (if
      any) received or receivable by the Company with respect to any one share of
      Common Stock upon the granting or sale of the Option, upon exercise of the
      Option or upon conversion or exchange of any convertible security issuable
      upon
      exercise of such Option. No further adjustment of the Warrant Exercise Price
      shall be made upon the actual issuance of such Common Stock or of such
      convertible securities upon the exercise of such Options or upon the actual
      issuance of such Common Stock upon conversion or exchange of such convertible
      securities.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (ii) Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any convertible securities and the lowest
      price per share for which one share of Common Stock is issuable upon the
      conversion or exchange thereof is less than the Applicable Price, then such
      share of Common Stock shall be deemed to be outstanding and to have been issued
      and sold by the Company at the time of the issuance or sale of such convertible
      securities for such price per share. For the purposes of this
      Section 8(b)(ii), the lowest price per share for which one share of Common
      Stock is issuable upon such conversion or exchange shall be equal to the sum
      of
      the lowest amounts of consideration (if any) received or receivable by the
      Company with respect to one share of Common Stock upon the issuance or sale
      of
      the convertible security and upon conversion or exchange of such convertible
      security. No further adjustment of the Warrant Exercise Price shall be made
      upon
      the actual issuance of such Common Stock upon conversion or exchange of such
      convertible securities, and if any such issue or sale of such convertible
      securities is made upon exercise of any Options for which adjustment of the
      Warrant Exercise Price had been or are to be made pursuant to other provisions
      of this Section 8(b), no further adjustment of the Warrant Exercise Price shall
      be made by reason of such issue or sale. 

     

    (iii) Change
      in Option Price or Rate of Conversion.
      If the
      purchase price provided for in any Options, the additional consideration, if
      any, payable upon the issue, conversion or exchange of any convertible
      securities, or the rate at which any convertible securities are convertible
      into
      or exchangeable for Common Stock changes at any time, the Warrant Exercise
      Price
      in effect at the time of such change shall be adjusted to the Warrant Exercise
      Price which would have been in effect at such time had such Options or
      convertible securities provided for such changed purchase price, additional
      consideration or changed conversion rate, as the case may be, at the time
      initially granted, issued or sold and the number of Warrant Shares issuable
      upon
      exercise of this Warrant shall be correspondingly readjusted. For purposes
      of
      this Section 8(b)(iii), if the terms of any Option or convertible security
      that
      was outstanding as of the Issuance Date of this Warrant are changed in the
      manner described in the immediately preceding sentence, then such Option or
      convertible security and the Common Stock deemed issuable upon exercise,
      conversion or exchange thereof shall be deemed to have been issued as of the
      date of such change. No adjustment pursuant to this Section 8(b) shall be
      made if such adjustment would result in an increase of the Warrant Exercise
      Price then in effect.

     

    (iv) Calculation
      of Consideration Received.
      If any
      Common Stock, Options or convertible securities are issued or sold or deemed
      to
      have been issued or sold for cash, the consideration received therefore will
      be
      deemed to be the net amount received by the Company therefore. If any Common
      Stock, Options or convertible securities are issued or sold for a consideration
      other than cash, the amount of such consideration received by the Company will
      be the fair value of such consideration, except where such consideration
      consists of marketable securities, in which case the amount of consideration
      received by the Company will be the market price of such securities on the
      date
      of receipt of such securities. If any Common Stock, Options or convertible
      securities are issued to the owners of the non-surviving entity in connection
      with any merger in which the Company is the surviving entity, the amount of
      consideration therefore will be deemed to be the fair value of such portion
      of
      the net assets and business of the non-surviving entity as is attributable
      to
      such Common Stock, Options or convertible securities, as the case may be. The
      fair value of any consideration other than cash or securities will be determined
      jointly by the Company and the holders of Warrants representing at least
      two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants
      then
      outstanding. If such parties are unable to reach agreement within ten (10)
      days after the occurrence of an event requiring valuation (the “Valuation
      Event”),
      the
      fair value of such consideration will be determined within five (5) Business
      Days after the tenth (10th)
      day
      following the Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the holders of Warrants representing at least
      two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants
      then
      outstanding. The determination of such appraiser shall be final and binding
      upon
      all parties and the fees and expenses of such appraiser shall be borne jointly
      by the Company and the holders of Warrants.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (v) Integrated
      Transactions.
      In case
      any Option is issued in connection with the issue or sale of other securities
      of
      the Company, together comprising one integrated transaction in which no specific
      consideration is allocated to such Options by the parties thereto, the Options
      will be deemed to have been issued for a consideration of $.01.

     

    (vi) Treasury
      Shares.
      The
      number of shares of Common Stock outstanding at any given time does not include
      shares owned or held by or for the account of the Company, and the disposition
      of any shares so owned or held will be considered an issue or sale of Common
      Stock.

     

    (vii) Record
      Date.
      If the
      Company takes a record of the holders of Common Stock for the purpose of
      entitling them (1) to receive a dividend or other distribution payable in
      Common Stock, Options or in convertible securities or (2) to subscribe for
      or purchase Common Stock, Options or convertible securities, then such record
      date will be deemed to be the date of the issue or sale of the shares of Common
      Stock deemed to have been issued or sold upon the declaration of such dividend
      or the making of such other distribution or the date of the granting of such
      right of subscription or purchase, as the case may be.

     

    (c) Adjustment
      of Warrant Exercise Price upon Subdivision or Combination of Common
      Stock.
      If the
      Company at any time after the date of issuance of this Warrant subdivides (by
      any stock split, stock dividend, recapitalization or otherwise) one or more
      classes of its outstanding shares of Common Stock into a greater number of
      shares, any Warrant Exercise Price in effect immediately prior to such
      subdivision will be proportionately reduced and the number of shares of Common
      Stock obtainable upon exercise of this Warrant will be proportionately
      increased. If the Company at any time after the date of issuance of this Warrant
      combines (by combination, reverse stock split or otherwise) one or more classes
      of its outstanding shares of Common Stock into a smaller number of shares,
      any
      Warrant Exercise Price in effect immediately prior to such combination will
      be
      proportionately increased and the number of Warrant Shares issuable upon
      exercise of this Warrant will be proportionately decreased. Any adjustment
      under
      this Section 8(c) shall become effective at the close of business on the
      date the subdivision or combination becomes effective.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (d) Distribution
      of Assets.
      If the
      Company shall declare or make any dividend or other distribution of its assets
      (or rights to acquire its assets) to holders of Common Stock, by way of return
      of capital or otherwise (including, without limitation, any distribution of
      cash, stock or other securities, property or options by way of a dividend,
      spin
      off, reclassification, corporate rearrangement or other similar transaction)
      (a
“Distribution”),
      at
      any time after the issuance of this Warrant, then, in each such
      case:

     

    (i) any
      Warrant Exercise Price in effect immediately prior to the close of business
      on
      the record date fixed for the determination of holders of Common Stock
      entitled to
      receive the Distribution shall be reduced, effective as of the close of business
      on such record date, to a price determined by multiplying such Warrant Exercise
      Price by a fraction of which (A) the numerator shall be the Closing Sale Price
      of the Common Stock on the trading day immediately preceding such record date
      minus the value of the Distribution (as determined in good faith by the
      Company’s Board of Directors) applicable to one share of Common Stock, and (B)
      the denominator shall be the Closing Sale Price of the Common Stock on the
      trading day immediately preceding such record date; and

     

    (ii) either
      (A) the number of Warrant Shares obtainable upon exercise of this Warrant shall
      be increased to a number of shares equal to the number of shares of Common
      Stock
      obtainable immediately prior to the close of business on the record date fixed
      for the determination of holders of Common Stock entitled to receive the
      Distribution multiplied by the reciprocal of the fraction set forth in the
      immediately preceding clause (i), or (B) in the event that the Distribution
      is
      of common stock of a company whose common stock is traded on a national
      securities exchange or a national automated quotation system, then the holder
      of
      this Warrant shall receive an additional warrant to purchase Common Stock,
      the
      terms of which shall be identical to those of this Warrant, except that such
      warrant shall be exercisable into the amount of the assets that would have
      been
      payable to the holder of this Warrant pursuant to the Distribution had the
      holder exercised this Warrant immediately prior to such record date and with
      an
      exercise price equal to the amount by which the exercise price of this Warrant
      was decreased with respect to the Distribution pursuant to the terms of the
      immediately preceding clause (i).

     

    (e) Certain
      Events.
      If any
      event occurs of the type contemplated by the provisions of this Section 8
      but not expressly provided for by such provisions (including, without
      limitation, the granting of stock appreciation rights, phantom stock rights
      or
      other rights with equity features), then the Company’s Board of Directors will
      make an appropriate adjustment in the Warrant Exercise Price and the number
      of
      shares of Common Stock obtainable upon exercise of this Warrant so as to protect
      the rights of the holders of the Warrants; provided, except as set forth in
      section 8(c),that no such adjustment pursuant to this Section 8(e) will increase
      the Warrant Exercise Price or decrease the number of shares of Common Stock
      obtainable as otherwise determined pursuant to this Section 8.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (f) Notices.

     

    (i) Immediately
      upon any adjustment of the Warrant Exercise Price, the Company will give written
      notice thereof to the holder of this Warrant, setting forth in reasonable
      detail, and certifying, the calculation of such adjustment.

     

    (ii) The
      Company will give written notice to the holder of this Warrant at least ten
      (10)
      days prior to the date on which the Company closes its books or takes a record
      (A) with respect to any dividend or distribution upon the Common Stock,
      (B) with respect to any pro rata subscription offer to holders of Common
      Stock or (C) for determining rights to vote with respect to any Organic
      Change (as defined below), dissolution or liquidation, provided that such
      information shall be made known to the public prior to or in conjunction with
      such notice being provided to such holder.

     

    (iii) The
      Company will also give written notice to the holder of this Warrant at least
      ten
      (10) days prior to the date on which any Organic Change, dissolution or
      liquidation will take place, provided that such information shall be made known
      to the public prior to or in conjunction with such notice being provided to
      such
      holder.

     

    Section
      9. Purchase
      Rights; Reorganization, Reclassification, Consolidation, Merger or
      Sale.

     

    (a) In
      addition to any adjustments pursuant to Section 8 above, if at any time the
      Company grants, issues or sells any Options, Convertible Securities or rights
      to
      purchase stock, warrants, securities or other property pro rata to the record
      holders of any class of Common Stock (the “Purchase
      Rights”),
      then
      the holder of this Warrant will be entitled to acquire, upon the terms
      applicable to such Purchase Rights, the aggregate Purchase Rights which such
      holder could have acquired if such holder had held the number of shares of
      Common Stock acquirable upon complete exercise of this Warrant immediately
      before the date on which a record is taken for the grant, issuance or sale
      of
      such Purchase Rights, or, if no such record is taken, the date as of which
      the
      record holders of Common Stock are to be determined for the grant, issue or
      sale
      of such Purchase Rights.

     

    (b) Any
      recapitalization, reorganization, reclassification, consolidation, merger,
      sale
      of all or substantially all of the Company’s assets to another Person or other
      transaction in each case which is effected in such a way that holders of Common
      Stock are entitled to receive (either directly or upon subsequent liquidation)
      stock, securities or assets with respect to or in exchange for Common Stock
      is
      referred to herein as an “Organic
      Change.”
Prior
      to the consummation of any (i) sale of all or substantially all of the Company’s
      assets to an acquiring Person or (ii) other Organic Change following which
      the
      Company is not a surviving entity, the Company will secure from the Person
      purchasing such assets or the successor resulting from such Organic Change
      (in
      each case, the “Acquiring
      Entity”)
      a
      written agreement (in form and substance satisfactory to the holders of Warrants
      representing at least two-thirds (iii) of the Warrant Shares issuable upon
      exercise of the Warrants then outstanding) to deliver to each holder of Warrants
      in exchange for such Warrants, a security of the Acquiring Entity evidenced
      by a
      written instrument substantially similar in form and substance to this Warrant
      and satisfactory to the holders of the Warrants (including an adjusted warrant
      exercise price equal to the value for the Common Stock reflected by the terms
      of
      such consolidation, merger or sale, and exercisable for a corresponding number
      of shares of Common Stock acquirable and receivable upon exercise of the
      Warrants without regard to any limitations on exercise, if the value so
      reflected is less than any Applicable Warrant Exercise Price immediately prior
      to such consolidation, merger or sale). Prior to the consummation of any other
      Organic Change, the Company shall make appropriate provision (in form and
      substance satisfactory to the holders of Warrants representing a
      majority of
      the
      Warrant Shares issuable upon exercise of the Warrants then outstanding) to
      insure that each of the holders of the Warrants will thereafter have the right
      to acquire and receive in lieu of or in addition to (as the case may be) the
      Warrant Shares immediately theretofore issuable and receivable upon the exercise
      of such holder’s Warrants (without regard to any limitations on exercise),
      such shares of stock, securities or assets that would have been issued or
      payable in such Organic Change with respect to or in exchange for the number
      of
      Warrant Shares which would have been issuable and receivable upon the exercise
      of such holder’s Warrant as of the date of such Organic Change (without taking
      into account any limitations or restrictions on the exercisability of this
      Warrant).

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Section
      10. Lost,
      Stolen, Mutilated or Destroyed Warrant.
      If this
      Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly,
      on
      receipt of an indemnification undertaking (or, in the case of a mutilated
      Warrant, the Warrant), issue a new Warrant of like denomination and tenor as
      this Warrant so lost, stolen, mutilated or destroyed.

     

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

     

    
      	
              If
                to Holder:

            	 	
              Cornell
                Capital Partners, LP

            
	 	 	
              101
                Hudson Street - Suite 3700

            
	 	 	
              Jersey
                City, NJ 07302

            
	 	 	
              Attention: Mark
                A. Angelo

            
	 	 	
              Telephone: (201)
                985-8300

            
	 	 	
              Facsimile: (201)
                985-8266

            
	 	 	 
	
              With
                Copy to:

            	 	
              David
                Gonzalez, Esq.

            
	 	 	
              101
                Hudson Street - Suite 3700

            
	 	 	
              Jersey
                City, NJ 07302

            
	 	 	
              Telephone: (201)
                985-8300

            
	 	 	
              Facsimile: (201)
                985-8266

            
	 	 	 
	 	 	 

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
              If
                to the Company, to:

            	 	
              Titan
                Global Holdings, Inc.

            
	 	 	
              407
                International Parkway - Suite 403

            
	 	 	
              Richardson,
                Texas 75081

            
	 	 	
              Attention:
                Bryan M. Chance, President & CEO

            
	 	 	
              Telephone: (972)
                470-9100

            
	 	 	
              Facsimile: (972)
                767-3117

            
	 	 	 
	
              With
                a copy to:

            	 	
              Sichenzia
                Ross Friedman Ference LLP

            
	 	 	
              1065
                Avenue of the Americas

            
	 	 	
              New
                York, NY 10018

            
	 	 	
              Attention:
                Thomas A. Rose, Esq.

            
	 	 	
              Telephone:
                (212) 930-9700

            
	 	 	
              Facsimile:
                (212) 930-9725

            

    

    

    If
      to a
      holder of this Warrant, to it at the address and facsimile number set forth
      on
Exhibit C
      hereto,
      with copies to such holder’s representatives as set forth on Exhibit C,
      or at
      such other address and facsimile as shall be delivered to the Company upon
      the
      issuance or transfer of this Warrant. Each party shall provide five days’ prior
      written notice to the other party of any change in address or facsimile number.
      Written confirmation of receipt (A) given by the recipient of such notice,
      consent, facsimile, waiver or other communication, (or (B) provided by a
      nationally recognized overnight delivery service shall be rebuttable evidence
      of
      personal service, receipt by facsimile or receipt from a nationally recognized
      overnight delivery service in accordance with clause (i), (ii) or (iii) above,
      respectively.

     

    Section
      12. Date.
      The
      date of this Warrant is set forth on page 1 hereof. This Warrant, in all
      events, shall be wholly void and of no effect after the close of business on
      the
      Expiration Date, except that notwithstanding any other provisions hereof, the
      provisions of Section 8(b) shall continue in full force and effect after
      such date as to any Warrant Shares or other securities issued upon the exercise
      of this Warrant.

     

    Section
      13. Amendment
      and Waiver.
      Except
      as otherwise provided herein, the provisions of the Warrants may be amended
      and
      the Company may take any action herein prohibited, or omit to perform any act
      herein required to be performed by it, only if the Company has obtained the
      written consent of the holders of Warrants representing at least two-thirds
      of
      the Warrant Shares issuable upon exercise of the Warrants then outstanding;
      provided that, except for Section 8(d), no such action may increase the Warrant
      Exercise Price or decrease the number of shares or class of stock obtainable
      upon exercise of any Warrant without the written consent of the holder of such
      Warrant.

     

    Section
      14. Descriptive
      Headings; Governing Law.
      The
      descriptive headings of the several sections and paragraphs of this Warrant
      are
      inserted for convenience only and do not constitute a part of this Warrant.
      The
      corporate laws of the State of Nevada shall govern all issues concerning the
      relative rights of the Company and its stockholders. All other questions
      concerning the construction, validity, enforcement and interpretation of this
      Agreement shall be governed by the internal laws of the State of New Jersey,
      without giving effect to any choice of law or conflict of law provision or
      rule
      (whether of the State of New Jersey or any other jurisdictions) that would
      cause
      the application of the laws of any jurisdictions other than the State of New
      Jersey. Each party hereby irrevocably submits to the exclusive jurisdiction
      of
      the state and federal courts sitting in Hudson County and the United States
      District Court for the District of New Jersey, for the adjudication of any
      dispute hereunder or in connection herewith or therewith, or with any
      transaction contemplated hereby or discussed herein, and hereby irrevocably
      waives, and agrees not to assert in any suit, action or proceeding, any claim
      that it is not personally subject to the jurisdiction of any such court, that
      such suit, action or proceeding is brought in an inconvenient forum or that
      the
      venue of such suit, action or proceeding is improper. Each party hereby
      irrevocably waives personal service of process and consents to process being
      served in any such suit, action or proceeding by mailing a copy thereof to
      such
      party at the address for such notices to it under this Agreement and agrees
      that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing contained herein shall be deemed to limit in any way any right
      to serve process in any manner permitted by law. 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Section
      15. Waiver
      of Jury Trial.
      AS
      A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
      PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
      RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
      ASSOCIATED WITH THIS TRANSACTION.

     

    REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    
      
        2

        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be signed as of the date first set forth
      above.

     

    
      	 	 	
              TITAN
                GLOBAL HOLDINGS, INC.

            
	 	 	 
	 	 By:	
              /s/
                Bryan M. Chance   

            
	 	 	
              Name: Bryan
                M. Chance

            
	 	 	
              Title: President
                & CEO

            

    

    
      
        
          1

        

        
        

      

      
        16

        
          

        

      

      
        
        

        
        

      

    

     

    EXHIBIT
      A TO WARRANT

     

     

    EXERCISE
      NOTICE

     

    TO
      BE EXECUTED 

    BY
      THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

     

    TITAN
      GLOBAL HOLDINGS, INC.

     

    The
      undersigned holder hereby exercises the right to purchase ______________ of
      the
      shares of Common Stock (“Warrant
      Shares”)
      of
      Titan Global Holdings, Inc. (the “Company”),
      evidenced by the attached Warrant (the “Warrant”).
      Capitalized terms used herein and not otherwise defined shall have the
      respective meanings set forth in the Warrant.

     

    Specify
      Method of exercise by check mark:

     

    1.
      ___ Cash
      Exercise

     

    (a)
      Payment
      of Warrant Exercise Price.
      The
      holder shall pay the Aggregate Exercise Price of $______________ to the Company
      in accordance with the terms of the Warrant. 

     

    (b)
      Delivery
      of Warrant Shares.
      The
      Company shall deliver to the holder _________
      Warrant
      Shares in accordance with the terms of the Warrant. 

     

    2.
      ___ Cashless
      Exercise

     

    (a)
      Payment
      of Warrant Exercise Price.
      In lieu
      of making payment of the Aggregate Exercise Price, the holder elects to receive
      upon such exercise the Net Number of shares of Common Stock determined in
      accordance with the terms of the Warrant. 

     

    (b)
      Delivery
      of Warrant Shares.
      The
      Company shall deliver to the holder _________
      Warrant
      Shares in accordance with the terms of the Warrant. 

     

    
      	 	 	 	 
	 	Date:
              _______________ __, ______	 
	 	 
 	 
 	 
 
	 	Name
              of Registered
              Holder	  	 
	By:	 	
            
	Name:	
              
 	 
	Title:	
              
 	 
	 	
              

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B TO WARRANT

     

    FORM
      OF WARRANT POWER

     

    FOR
      VALUE RECEIVED,
      the
      undersigned does hereby assign and transfer to ________________, Federal
      Identification No. __________, a warrant to purchase ____________ shares of
      the capital stock of Titan Global Holdings, Inc. represented by warrant
      certificate no. _____, standing in the name of the undersigned on the books
      of said corporation. The undersigned does hereby irrevocably constitute and
      appoint ______________, attorney to transfer the warrants of said corporation,
      with full power of substitution in the premises.

     

    
      	Dated:	
                    

            	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 By:	
                    

            
	 	 	 	 	 Name:	
              
                
      

            
	 	 	 	 	 Title:	
              
                
      

            
	 	 	 	 	 	
              

            

    

     

    
      
        
        

      

      
        B-1

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