Document:

Exhibit
      4.1

    

    NEITHER
      THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE
      HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
      SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE
      OF
      THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
      OR
      OTHER LOAN SECURED BY SUCH SECURITIES.

    

    CAPE
      COASTAL TRADING CORPORATION

    

    FORM
      OF
      WARRANT

    
      
        	 	 
	Warrant
                No.: DEC005-0XX 	
                Dated:
                  December 30, 2005 

              
	 	 

      

    

    Cape
      Coastal Trading Corporation, a Delaware corporation (the “Company”),
      hereby
      certifies that, for value received, ____________________ or its registered
      assigns (the “Holder”),
      is
      entitled to purchase from the Company up to a total of _________ (X,XXX) shares
      of common stock, $0.001 par value per share (the “Common
      Stock”),
      of the
      Company (each such share, a “Warrant
      Share”
and
      all
      such shares issuable under the warrants, the “Warrant
      Shares”)
      at an
      exercise price equal to $5.85 per share (as adjusted from time to time as
      provided in Section 9, the “Exercise
      Price”),
      at any
      time and from the date hereof and through and including the date that is five
      (5) years from the date of issuance hereof (the “Expiration
      Date”),
      and
      subject to the following terms and conditions. This Warrant (“Warrant”)
      is one
      of a series of similar warrants issued pursuant to that certain Securities
      Purchase Agreement, dated as of December 22, 2005, by and among the Company,
      uBid, Inc. and the Investors identified therein (the “Purchase
      Agreement”).
      All
      such warrants are referred to herein, collectively, as the “Warrants”
and
      the
      holders thereof along with the Holder named herein, the “Holders.”

    

    1. Definitions.
      In
      addition to the terms defined elsewhere in this Warrant, capitalized terms
      that
      are not otherwise defined herein have the meanings given to such terms in the
      Purchase Agreement.

    

    2. Registration
      of Warrant.
      The
      Company shall register this Warrant, upon records to be maintained by the
      Company for that purpose (the “Warrant
      Register”),
      in the
      name of the record Holder hereof from time to time. The Company may deem and
      treat the registered Holder of this Warrant as the absolute owner hereof for
      the
      purpose of any exercise hereof or any distribution to the Holder, and for all
      other purposes, absent actual notice to the contrary.

     

    
      
        
        

      

      
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    3. Registration
      of Transfers.
      The
      Company shall register the transfer of any portion of this Warrant in the
      Warrant Register, upon surrender of this Warrant, with the Form of Assignment
      attached hereto duly completed and signed, to the Transfer Agent or to the
      Company at its address specified herein. Upon any such registration or transfer,
      a new warrant to purchase Common Stock, in substantially the form of this
      Warrant (any such new warrant, a “New
      Warrant”),
      evidencing the portion of this Warrant so transferred shall be issued to the
      transferee and a New Warrant evidencing the remaining portion of this Warrant
      not so transferred, if any, shall be issued to the transferring Holder. The
      acceptance of the New Warrant by the transferee thereof shall be deemed the
      acceptance by such transferee of all of the rights and obligations of a holder
      of a Warrant.

    

    4. Exercise
      and Duration of Warrants.
      

    

    (a) This
      Warrant shall be exercisable by the registered Holder at any time and from
      time
      to time on or after the date hereof to and including the Expiration Date. At
      6:30 P.M., New York City time on the Expiration Date, the portion of this
      Warrant not exercised prior thereto shall be and become void and of no value;
      provided that, if the average of the Closing Prices for the five Trading Days
      immediately prior to (but not including) the Expiration Date exceeds the
      Exercise Price on the Expiration Date, provided further that, if on the
      Expiration Date, there is no effective Registration Statement covering the
      resale of the Warrant Shares, or no current prospectus available, then this
      Warrant shall be deemed to have been exercised in full (to the extent not
      previously exercised) on a “cashless exercise” basis at 6:30 P.M. New York City
      time on the Expiration Date. A “cashless exercise” means that in lieu of paying
      the aggregate purchase price for the shares being purchased upon exercise of
      the
      Warrants in cash, the Holder will forfeit a number of shares underlying the
      Warrants pursuant to Section
      10
      below.

    

    (b) A
      Holder
      may exercise this Warrant by delivering to the Company (i) an exercise notice,
      in the form attached hereto (the “Exercise
      Notice”),
      appropriately completed and duly signed, and (ii) payment of the Exercise Price
      for the number of Warrant Shares as to which this Warrant is being exercised
      (which may take the form of a “cashless exercise” if so indicated in the
      Exercise Notice only if a “cashless exercise” may occur at such time pursuant to
      Section 10 below), and the date such items are delivered to the Company (as
      determined in accordance with the notice provisions hereof) is an “Exercise
      Date.”
The
      Holder shall not be required to deliver the original Warrant in order to effect
      an exercise hereunder. Execution and delivery of the Exercise Notice shall
      have
      the same effect as cancellation of the original Warrant and issuance of a New
      Warrant evidencing the right to purchase the remaining number of Warrant
      Shares.

    

    (c) Exercise
      Disputes.
      In the
      case of any dispute with respect to the number of shares to be issued upon
      exercise of this Warrant, the Company shall promptly issue such number of shares
      of Common Stock that is not disputed and shall submit the disputed
      determinations or arithmetic calculations to the Holder via facsimile within
      two
      (2) Business Days of receipt of the Holder's election to purchase Warrant
      Shares. If the Holder and the Company are unable to agree as to the
      determination of the Purchase Price within two (2) Business Days of such
      disputed determination or arithmetic calculation being submitted to the Holder,
      then the Company shall in accordance with this Section, submit via facsimile
      the
      disputed determination to an independent reputable accounting firm of national
      standing, selected jointly by the Company and the Holder. The Company shall
      cause such accounting firm to perform the determinations or calculations and
      notify the Company and the Holder of the results within forty-eight (48) hours
      from the time it receives the disputed determinations of calculations. Such
      accounting firm's determination shall be binding upon all parties absent
      manifest error. The Company shall then on the next Business Day issue
      certificate(s) representing the appropriate number of Warrant Shares of Common
      Stock in accordance with such accounting firm's determination and this Section.
      The prevailing party shall be entitled to reimbursement of all fees and expenses
      of such determination and calculation.

     

    
      
        
        

      

      
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    5. Delivery
      of Warrant Shares.
      

    

    (a) Upon
      exercise of this Warrant, the Company shall promptly (but in no event later
      than
      three Trading Days after the Exercise Date) issue or cause to be issued and
      cause to be delivered to or upon the written order of the Holder and in such
      name or names as the Holder may designate, a certificate for the Warrant Shares
      issuable upon such exercise, free of restrictive legends unless a registration
      statement covering the resale of the Warrant Shares and naming the Holder as
      a
      selling stockholder thereunder is not then effective and the Warrant Shares
      are
      not freely transferable without volume restrictions pursuant to Rule 144 under
      the Securities Act. The Holder, or any Person so designated by the Holder to
      receive Warrant Shares, shall be deemed to have become holder of record of
      such
      Warrant Shares as of the Exercise Date. The Company shall, upon request of
      the
      Holder, use its best efforts to deliver Warrant Shares hereunder electronically
      through the Depository Trust Corporation or another established clearing
      corporation performing similar functions.

    

    (b) This
      Warrant is exercisable, either in its entirety or, from time to time, for a
      portion of the number of Warrant Shares. Upon surrender of this Warrant
      following one or more partial exercises, the Company shall issue or cause to
      be
      issued, at its expense, a New Warrant evidencing the right to purchase the
      remaining number of Warrant Shares.

    

    (c) In
      addition to any other rights available to a Holder, if the Company fails to
      deliver to the Holder a certificate representing Warrant Shares by the third
      Trading Day after the date on which delivery of such certificate is required
      by
      this Warrant, and if after such third Trading Day the Holder purchases (in
      an
      open market transaction or otherwise) shares of Common Stock to deliver in
      satisfaction of a sale by the Holder of the Warrant Shares that the Holder
      anticipated receiving from the Company (a “Buy-In”),
      then
      the Company shall, within three Trading Days after the Holder’s request and in
      the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to
      the Holder’s total purchase price (including brokerage commissions, if any) for
      the shares of Common Stock so purchased (the “Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate (and to issue
      such Common Stock) shall terminate, or (ii) promptly honor its obligation to
      deliver to the Holder a certificate or certificates representing such Common
      Stock and pay cash to the Holder in an amount equal to the excess (if any)
      of
      the Buy-In Price over the product of (A) such number of shares of Common Stock,
      times (B) the Closing Price on the date of the event giving rise to the
      Company’s obligation to deliver such certificate.

    

    (d) The
      Company’s obligations to issue and deliver Warrant Shares in accordance with the
      terms hereof are absolute and unconditional, irrespective of any action or
      inaction by the Holder to enforce the same, any waiver or consent with respect
      to any provision hereof, the recovery of any judgment against any Person or
      any
      action to enforce the same, or any setoff, counterclaim, recoupment, limitation
      or termination, or any breach or alleged breach by the Holder or any other
      Person of any obligation to the Company or any violation or alleged violation
      of
      law by the Holder or any other Person, and irrespective of any other
      circumstance which might otherwise limit such obligation of the Company to
      the
      Holder in connection with the issuance of Warrant Shares. 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 Company’s failure to
      timely deliver certificates representing shares of Common Stock upon exercise
      of
      the Warrant as required pursuant to the terms hereof.

     

    
      
        
        

      

      
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    6. Charges,
      Taxes and Expenses.
      Issuance
      and delivery of certificates for shares of Common Stock upon exercise of this
      Warrant shall be made without charge to the Holder for any issue or transfer
      tax, withholding tax, transfer agent fee or other incidental tax or expense
      in
      respect of the issuance of such certificates, all of which taxes and expenses
      shall be paid by the Company; provided, however, that the Company shall not
      be
      required to pay any tax which may be payable in respect of any transfer involved
      in the registration of any certificates for Warrant Shares or Warrants in a
      name
      other than that of the Holder. The Holder shall be responsible for all other
      tax
      liability that may arise as a result of holding or transferring this Warrant
      or
      receiving Warrant Shares upon exercise hereof.

    

    7. Replacement
      of Warrant.
      If this
      Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or
      cause to be issued in exchange and substitution for and upon cancellation
      hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
      only
      upon receipt of evidence reasonably satisfactory to the Company of such loss,
      theft or destruction and customary and reasonable bond or indemnity, if
      requested. Applicants for a New Warrant under such circumstances shall also
      comply with such other reasonable regulations and procedures and pay such other
      reasonable third-party costs as the Company may prescribe.

    

    8. Reservation
      of Warrant Shares.
      The
      Company covenants that it will at all times reserve and keep available out
      of
      the aggregate of its authorized but unissued and otherwise unreserved Common
      Stock, solely for the purpose of enabling it to issue Warrant Shares upon
      exercise of this Warrant as herein provided, 130% of the number of Warrant
      Shares which are then issuable and deliverable upon the exercise of this entire
      Warrant, free from preemptive rights or any other contingent purchase rights
      of
      persons other than the Holder (after giving effect to the adjustments and
      restrictions of Section
      9,
      if any).
      The Company covenants that all Warrant Shares so issuable and deliverable shall,
      upon issuance and the payment of the applicable Exercise Price in accordance
      with the terms hereof, be duly and validly authorized, issued and fully paid
      and
      nonassessable. The Company will take all such action as may be necessary to
      assure that such shares of Common Stock may be issued as provided herein without
      violation of any applicable law or regulation, or of any requirements of any
      securities exchange or automated quotation system upon which the Common Stock
      may be listed.

    

    9. Certain
      Adjustments.
      The
      Exercise Price and number of Warrant Shares issuable upon exercise of this
      Warrant are subject to adjustment from time to time as set forth in this
Section
      9.

     

    
      
        
        

      

      
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    (a) Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding, (i) pays a stock
      dividend on its Common Stock or otherwise makes a distribution on any class
      of
      capital stock that is payable in shares of Common Stock, (ii) subdivides
      outstanding shares of Common Stock into a larger number of shares, or (iii)
      combines outstanding shares of Common Stock into a smaller number of shares,
      then in each such case the Exercise Price shall be multiplied by a fraction
      of
      which the numerator shall be the number of shares of Common Stock outstanding
      immediately before such event and of which the denominator shall be the number
      of shares of Common Stock outstanding immediately after such event. Any
      adjustment made pursuant to clause (i) of this paragraph shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution, and any adjustment pursuant to clause
      (ii) or (iii) of this paragraph shall become effective immediately after the
      effective date of such subdivision or combination.

    

    (b) Distributions
      Made Prior to Exercise.
      If the
      Company, at any time while this Warrant is outstanding, distributes to holders
      of Common Stock (i) evidences of its indebtedness, (ii) any security (other
      than
      a distribution of Common Stock covered by Section 9(a)), (iii) rights or
      warrants to subscribe for or purchase any security, or (iv) any other asset
      (in
      each case, a “Distribution”),
      then
      in each such case any 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
      Exercise Price by a fraction of which (i) the numerator shall be the Weighted
      Average Price1 
      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 (ii) the denominator
      shall be the Weighted Average Price of the Common Stock on the Trading Day
      immediately preceding such record date.

    

    (c) Notwithstanding
      the provisions set forth in Section
      9(b)
      above, if
      the Company, at any time while this Warrant is outstanding, makes a Distribution
      to the holders of Common Stock, then in each such case the Holder shall have
      the
      option to receive such Distribution which would have been made to the Holder
      had
      such Holder been the holder of such Warrant Shares on the record date for the
      determination of stockholders entitled to such Distribution; provided,
      however,
      if the
      Holder elects to receive such Distribution, it will not be entitled to receive
      the adjustment to the Exercise Price specified in clause (b) above.

     

     

      
        

      

    

    
      1“Weighted
        Average Price" means, for any security as of any date, the dollar
        volume-weighted average price for such security on NASDAQ during the period
        beginning at 9:30:01 a.m., New York Time (or such other time as NASDAQ publicly
        announces is the official open of trading), and ending at 4:00:00 p.m., New
        York
        Time (or such other time as NASDAQ publicly announces is the official close
        of
        trading) as reported by Bloomberg (means Bloomberg Financial Markets) through
        its "Volume at Price" functions, or, if the foregoing does not apply, the
        dollar
        volume-weighted average price of such security in the over-the-counter market
        on
        the electronic bulletin board for such security during the period beginning
        at
        9:30:01 a.m., New York Time (or such other time as such Principal Market
        publicly announces is the official open of trading), and ending at 4:00:00
        p.m.,
        New York Time (or such other time as such market publicly announces is the
        official close of trading) as reported by Bloomberg, if no dollar
        volume-weighted average price is reported for such security by Bloomberg
        for
        such hours, the average of the highest closing bid price and the lowest closing
        ask price of any of the market makers for such security as reported in the
        "pink
        sheets" by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).
        If
        the Weighted Average Price cannot be calculated for a security on a particular
        date on any of the foregoing bases, the Weighted Average Price of such security
        on such date shall be the fair market value as mutually determined by the
        Company in good faith. All such determinations shall be appropriately adjusted
        for any share dividend, share split, share combination or other similar
        transaction during the applicable calculation period.

    

     

    
      
        
        

      

      
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    (d) Fundamental
      Transactions.
      (1) If,
      at any time while this Warrant is outstanding, (i) the Company effects any
      merger or consolidation of the Company with or into (whether or not the Company
      is the surviving corporation) another Person, (ii) the Company effects any
      sale,
      assignment, transfer, conveyance or other disposition of all or substantially
      all of its assets in one or a series of related transactions; provided, however,
      that for avoidance of doubt, the granting of a lien on all or substantially
      all
      of the Company's assets as collateral shall not be deemed a Fundamental
      Transaction hereunder, (iii) allow another Person to make a purchase, tender
      or
      exchange offer that is accepted by the holders of more than the 50% of either
      the outstanding shares of Common Stock (not including any shares of Common
      Stock
      held by the Person or Persons making or party to, or associated or affiliated
      with the Persons making or party to, such purchase, tender or exchange offer),
      (iv) consummate a stock purchase agreement or other business combination
      (including, without limitation, a reorganization, recapitalization, spin-off
      or
      scheme of arrangement) with another Person whereby such other Person acquires
      more than the 50% of the outstanding shares of Common Stock (not including
      any
      shares of Common Stock held by the other Person or other Persons making or
      party
      to, or associated or affiliated with the other Persons making or party to,
      such
      stock purchase agreement or other business combination), or (v) the Company
      effects any reclassification of the Common Stock or any compulsory share
      exchange pursuant to which the Common Stock is effectively converted into or
      exchanged for other securities, cash or property (other than as a result of
      a
      subdivision or combination of shares of Common Stock covered by Section
      9(a)
      above)
      (in any such case, a “Fundamental
      Transaction”),
      then
      the Holder shall have the right thereafter to receive, upon exercise of this
      Warrant, the same amount and kind of securities, cash or property as it would
      have been entitled to receive upon the occurrence of such Fundamental
      Transaction if it had been, immediately prior to such Fundamental Transaction,
      the holder of the number of Warrant Shares then issuable upon exercise in full
      of this Warrant (the “Alternate
      Consideration”).
      The
      aggregate Exercise Price for this Warrant will not be affected by any such
      Fundamental Transaction, but the Company shall apportion such aggregate Exercise
      Price among the Alternate Consideration in a reasonable manner reflecting the
      relative value of any different components of the Alternate Consideration.
      If
      holders of Common Stock are given any choice as to the securities, cash or
      property to be received in a Fundamental Transaction, then the Holder shall
      be
      given the same choice as to the Alternate Consideration it receives upon any
      exercise of this Warrant following such Fundamental Transaction. At the Holder’s
      request, any successor to the Company or surviving entity in such Fundamental
      Transaction shall issue to the Holder a new warrant consistent with the
      foregoing provisions and evidencing the Holder’s right to purchase the Alternate
      Consideration for the aggregate Exercise Price upon exercise thereof. The terms
      of any agreement pursuant to which a Fundamental Transaction is effected shall
      include terms requiring any such successor or surviving entity to comply with
      the provisions of this paragraph (d) and insuring that the Warrant (or any
      such
      replacement security) will be similarly adjusted upon any subsequent transaction
      analogous to a Fundamental Transaction. 

    

    (2) Notwithstanding
      the foregoing and the provisions of Section 4(b) above, in the event of a
      Fundamental Transaction in which (i) the surviving entity in the Fundamental
      Transaction is not a publicly traded company and (ii) the consideration to
      be
      delivered to the holders of Common Stock upon the occurrence of such Fundamental
      Transaction does not consist solely of publicly traded securities, if the Holder
      has not exercised the Warrant in full prior to the consummation of such
      Fundamental Transaction, then
      the Holder shall have the right to require any successor to the Company or
      surviving entity in such Fundamental Transaction to purchase this Warrant from
      the Holder by paying to the Holder, simultaneously with the consummation of
      such
      Fundamental Transaction and
      in lieu
      of the warrant referred to in Section 9(d)(1), cash in an amount equal to the
      value of the remaining unexercised portion of this Warrant on the date of such
      consummation, which value shall be determined by use of the Black and Scholes
      Option Pricing Model reflecting (i) 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 such date of request and (ii) an expected volatility equal to the lesser
      of 60% and the 100 day volatility obtained from the HVT function on
      Bloomberg.

     

    
      
        
        

      

      
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    (e) Adjustment
      Upon Issuance of Shares of Common Stock.
      If and
      whenever on or after the issuance date of this Warrant through the first
      (1st)
      anniversary thereof, the Company issues or sells, or in accordance with this
      Section 9 is deemed to have issued or sold, any shares of Common Stock
      (including the issuance or sale of shares of Common Stock owned or held by
      or
      for the account of the Company) for a consideration per share (the "New
      Issuance Price")
      less
      than a price (the "Applicable
      Price")
      equal
      to the Exercise Price in effect immediately prior to such issue or sale or
      deemed issuance or sale (the foregoing a "Dilutive
      Issuance"),
      then
      immediately after such Dilutive Issuance, the Exercise Price then in effect
      shall be reduced to an amount equal to the New Issuance Price.
      If
      and
      whenever after such first (1st)
      anniversary, the Company issues or sells, or in accordance with this Section
      9
      is deemed to have issued or sold, any shares of Common Stock (including the
      issuance or sale of shares of Common Stock owned or held by or for the account
      of the Company) in a Dilutive Issuance, then immediately after such Dilutive
      Issuance, the Exercise Price then in effect shall be reduced to an amount equal
      to the product
      of (A) the Exercise Price in effect immediately prior to such Dilutive Issuance
      and (B) the quotient determined by dividing (1) the sum of (I) the product
      derived by multiplying the Exercise Price in effect immediately prior to such
      Dilutive Issuance and the number of shares of Common Stock Deemed Outstanding
      immediately prior to such Dilutive Issuance plus (II) the consideration, if
      any,
      received by the Company upon such Dilutive Issuance, by (2) the product derived
      by multiplying (I) the Exercise Price in effect immediately prior to such
      Dilutive Issuance by (II) the number of shares of Common Stock Deemed
      Outstanding immediately after such Dilutive Issuance. Upon
      each
      such adjustment of the Exercise Price hereunder, the number of Warrant Shares
      shall be adjusted to the number of shares of Common Stock determined by
      multiplying the Exercise Price in effect immediately prior to such adjustment
      by
      the number of Warrant Shares acquirable upon exercise of this Warrant
      immediately prior to such adjustment and dividing the product thereof by the
      Exercise Price resulting from such adjustment. For purposes of determining
      the
      adjusted Exercise Price under this Section 9(e), the following shall be
      applicable:

    

    (i) Issuance
      of Options.
      If 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, exercise 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 9(e)(i), the "lowest price
      per share for which one share of Common Stock is issuable upon exercise of
      such
      Options or upon conversion, exercise 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
      and
      upon conversion, exercise or exchange of any Convertible Security issuable
      upon
      exercise of such Option. No further adjustment of the Exercise Price or number
      of Warrant Shares shall be made upon the actual issuance of such shares of
      Common Stock or of such Convertible Securities upon the exercise of such Options
      or upon the actual issuance of such shares of Common Stock upon conversion,
      exercise or exchange of such Convertible Securities. 

    

    
      
        
        

      

      
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    (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, exercise 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 9(e)(ii), the "lowest price per share for which one share of Common
      Stock is issuable upon the conversion, exercise 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, exercise or exchange
      of
      such Convertible Security. No further adjustment of the Exercise Price or number
      of Warrant Shares shall be made upon the actual issuance of such shares of
      Common Stock upon conversion, exercise 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 this Warrant has been
      or is
      to be made pursuant to other provisions of this Section 9(e), no further
      adjustment of the Exercise Price or number of Warrant Shares 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, exercise or exchange of any Convertible
      Securities, or the rate at which any Convertible Securities are convertible
      into
      or exercisable or exchangeable for shares of Common Stock increases or decreases
      at any time, the Exercise Price and the number of Warrant Shares in effect
      at
      the time of such increase or decrease shall be adjusted to the Exercise Price
      and the number of Warrant Shares which would have been in effect at such time
      had such Options or Convertible Securities provided for such increased or
      decreased purchase price, additional consideration or increased or decreased
      conversion rate, as the case may be, at the time initially granted, issued
      or
      sold. For purposes of this Section 9(e)(iii), if the terms of any Option or
      Convertible Security that was outstanding as of the date of issuance of this
      Warrant are increased or decreased in the manner described in the immediately
      preceding sentence, then such Option or Convertible Security and the shares
      of
      Common Stock deemed issuable upon exercise, conversion or exchange thereof
      shall
      be deemed to have been issued as of the date of such increase or decrease.
      No
      adjustment pursuant to this Section 9(e) shall be made if such adjustment would
      result in an increase of the Exercise Price then in effect or a decrease in
      the
      number of Warrant Shares.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (iv) Calculation
      of Consideration Received.
      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 $0.01. If any shares
      of Common Stock, Options or Convertible Securities are issued or sold or deemed
      to have been issued or sold for cash, the consideration received therefor will
      be deemed to be the net amount received by the Company therefor. If any shares
      of 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 securities which are listed on a securities exchange
      or stock market, in which case the amount of consideration received by the
      Company will be the Closing Sale Price of such security on the date of receipt.
      If any shares of 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 therefor 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 shares of 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
      Board of Directors of the Company and the Required Holders. 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
      day following the Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the Required Holders. The determination of such
      appraiser shall be final and binding upon all parties absent manifest error
      and
      the fees and expenses of such appraiser shall be borne by the
      Company.

    

    (v) Record
      Date.
      If the
      Company takes a record of the holders of shares of Common Stock for the purpose
      of entitling them (A) to receive a dividend or other distribution payable
      in shares of Common Stock, Options or in Convertible Securities or (B) to
      subscribe for or purchase shares of 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.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (vi) Notwithstanding
      the foregoing, no adjustment will be made under this Section
      9(e)
      upon the
      issuance of equity securities or securities convertible into equity securities
      (a) in connection with employee benefit plans or other plans approved by the
      Board of Directors for the benefit of employees, consultants or directors of
      the
      Company or its subsidiaries, (b) stock dividends or other events to which
Section
      9(a)
      applies,
      or in connection with Options or Convertible Securities outstanding immediately
      prior to the Closing; provided that the terms of such Options or Convertible
      Securities are not amended, modified or changed after the date hereof, (c)
      issued or assumed in connection with the Merger Agreement or the Securities
      Purchase Agreement, (d) in connection with a bona fide acquisition by the
      Company or to strategic partners in a transaction the primary purpose of which
      is not to raise equity funds, or (e) pursuant to a firm commitment underwritten
      public offering with a nationally recognized underwriter which generates gross
      proceeds in excess of $50 million (other than an "at the market offering" as
      defined in Rule 415(a)(4) under the 1933 Act and "equity lines"). 

    

    (vii) For
      purposes of this Warrant, (A) "Common
      Stock Deemed Outstanding"
      means,
      at any given time, the number of shares of Common Stock actually outstanding
      at
      such time, plus the number of shares of Common Stock deemed to be outstanding
      pursuant to Sections 9(e)(i) and 9(e)(ii) hereof regardless of whether the
      Options or Convertible Securities are actually exercisable at such time, but
      excluding any shares of Common Stock owned or held by or for the account of
      the
      Company or issuable upon conversion and exercise, as applicable, of the
      Warrants; (B) "Convertible
      Securities"
      means
      any stock or securities (other than Options) directly or indirectly convertible
      into or exercisable or exchangeable for shares of Common Stock; and (C)
      "Options"
      means
      any rights, warrants or options to subscribe for or purchase shares of Common
      Stock or Convertible Securities.

    

    (f) Number
      of Warrant Shares.
      Simultaneously with any adjustment to the Exercise Price pursuant to paragraph
      (a) of this Section, the number of Warrant Shares that may be purchased upon
      exercise of this Warrant shall be increased or decreased proportionately, as
      applicable, so that after such adjustment the aggregate Exercise Price payable
      hereunder for the increased or decreased, as applicable, number of Warrant
      Shares shall be the same as the aggregate Exercise Price in effect immediately
      prior to such adjustment.

    

    (g) Calculations.
      All
      calculations under this Section
      9
      shall be
      made to the nearest cent or the nearest 1/100th of a share, as applicable.
      The
      number of shares of Common Stock outstanding at any given time shall not include
      shares owned or held by or for the account of the Company, and the disposition
      of any such shares shall be considered an issue or sale of Common
      Stock.

    

    (h) Notice
      of Adjustments.
      Upon the
      occurrence of each adjustment pursuant to this Section
      9,
      the
      Company at its expense will promptly compute such adjustment in accordance
      with
      the terms of this Warrant and prepare a certificate setting forth such
      adjustment, including a statement of the adjusted Exercise Price and adjusted
      number or type of Warrant Shares or other securities issuable upon exercise
      of
      this Warrant (as applicable), describing the transactions giving rise to such
      adjustments and showing in detail the facts upon which such adjustment is based.
      Upon written request, the Company will promptly deliver a copy of each such
      certificate to the Holder and to the Company’s Transfer Agent.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (i) Notice
      of Corporate Events.
      If the
      Company (i) declares a dividend or any other distribution of cash, securities
      or
      other property in respect of its Common Stock, including without limitation
      any
      granting of rights or warrants to subscribe for or purchase any capital stock
      of
      the Company or any Subsidiary, (ii) authorizes or approves, enters into any
      agreement contemplating or solicits stockholder approval for any Fundamental
      Transaction or (iii) authorizes the voluntary dissolution, liquidation or
      winding up of the affairs of the Company, then the Company shall deliver to
      the
      Holder a notice describing the material terms and conditions of such
      transaction, at least ten calendar days prior to the applicable record or
      effective date on which a Person would need to hold Common Stock in order to
      participate in or vote with respect to such transaction, and the Company will
      take all steps reasonably necessary in order to insure that the Holder is given
      the practical opportunity to exercise this Warrant prior to such time so as
      to
      participate in or vote with respect to such transaction; provided, however,
      that
      the failure to deliver such notice or any defect therein shall not affect the
      validity of the corporate action required to be described in such notice.

    

    10. Payment
      of Exercise Price.
      The
      Holder shall pay the Exercise Price in immediately available funds (a “cash
      exercise”); provided, however, that if at any time after the date that is one
      (1) year after the date of this Warrant (the “Required
      Effective Date”)
      a
      Registration Statement covering the resale of the Warrant Shares is not
      effective on the Exercise Date, or no current prospectus is available, the
      Holder may satisfy its obligation to pay the Exercise Price through a “cashless
      exercise,” in which event the Company shall issue to the Holder the number of
      Warrant Shares determined as follows:

    
      	 	 
	 	
              X
                =
                Y [(A-B)/A]

            
	
              where:

            	 
	 	
              X
                =
                the number of Warrant Shares to be issued to the
                Holder.

            
	 	 
	 	
              Y
                =
                the number of Warrant Shares with respect to which this Warrant is
                being
                exercised (prior to cashless exercise).

            
	 	 
	 	
              A
                =
                the average of the Closing Prices for the five Trading Days immediately
                prior to (but not including) the Exercise Date.

            
	 	 
	 	
              B
                =
                the Exercise Price.

            

    

    

    For
      purposes of Rule 144 promulgated under the Securities Act, it is intended,
      understood and acknowledged that the Warrant Shares issued in a cashless
      exercise transaction shall be deemed to have been acquired by the Holder, and
      the holding period for the Warrant Shares shall be deemed to have commenced,
      on
      the date this Warrant was originally issued pursuant to the Purchase
      Agreement.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    11. Limitation
      on Exercise.
      

    

    (a) Notwithstanding
      anything to the contrary contained herein, the number of shares of Common Stock
      that may be acquired by the Holder upon any exercise of this Warrant (or
      otherwise in respect hereof) shall be limited to the extent necessary to insure
      that, following such exercise (or other issuance), the total number of shares
      of
      Common Stock then beneficially owned by such Holder and its Affiliates and
      any
      other Persons whose beneficial ownership of Common Stock would be aggregated
      with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not
      exceed 9.999% (the “Maximum
      Percentage”)
      of the
      total number of issued and outstanding shares of Common Stock (including for
      such purpose the shares of Common Stock issuable upon such exercise). For such
      purposes, beneficial ownership shall be determined in accordance with Section
      13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
      The Company’s obligation to issue shares of Common Stock in excess of the
      limitation referred to in this Section shall be suspended (and shall not
      terminate or expire notwithstanding any contrary provisions hereof) until such
      time, if any, as such shares of Common Stock may be issued in compliance with
      such limitation, but in no event later than the Expiration Date. By written
      notice to the Company, the Holder may waive the provisions of this Section
      or
      increase or decrease the Maximum Percentage to any other percentage specified
      in
      such notice, but (i) any such waiver or increase will not be effective until
      the
      61st day after such notice is delivered to the Company, and (ii) any such waiver
      or increase or decrease will apply only to the Holder and not to any other
      holder of Warrants.

    

    12. Fractional
      Shares.
      The
      Company shall not be required to issue or cause to be issued fractional Warrant
      Shares on the exercise of this Warrant. If any fraction of a Warrant Share
      would, except for the provisions of this Section, be issuable upon exercise
      of
      this Warrant, the number of Warrant Shares to be issued will be rounded up
      to
      the nearest whole share.

    

    13. Notices.
      Any and
      all notices or other communications or deliveries hereunder (including without
      limitation any Exercise Notice) shall be in writing and shall be deemed given
      and effective on the earliest of (i) the date of transmission, if such notice
      or
      communication is delivered via facsimile at the facsimile number specified
      in
      the Purchase Agreement prior to 6:30 p.m. (New York City time) on a Trading
      Day,
      (ii) the next Trading Day after the date of transmission, if such notice or
      communication is delivered via facsimile at the facsimile number specified
      in
      the Purchase Agreement on a day that is not a Trading Day or later than 6:30
      p.m. (New York City time) on any Trading Day, (iii) the Trading Day following
      the date of mailing, if sent by nationally recognized overnight courier service,
      or (iv) upon actual receipt by the party to whom such notice is required to
      be
      given. The address for such notices or communications shall be as set forth
      in
      the Purchase Agreement.

    

    14. Warrant
      Agent.
      The
      Company shall serve as warrant agent under this Warrant. Upon 30 days' notice
      to
      the Holder, the Company may appoint a new warrant agent. Any corporation into
      which the Company or any new warrant agent may be merged or any corporation
      resulting from any consolidation to which the Company or any new warrant agent
      shall be a party or any corporation to which the Company or any new warrant
      agent transfers substantially all of its corporate trust or stockholders
      services business shall be a successor warrant agent under this Warrant without
      any further act. Any such successor warrant agent shall promptly cause notice
      of
      its succession as warrant agent to be mailed (by first class mail, postage
      prepaid) to the Holder at the Holder's last address as shown on the Warrant
      Register.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    15. Registration
      of Warrant Shares.
      The
      Company shall prepare and file with the SEC a “Shelf” Registration Statement on
      Form S-3 covering the resale of all “Registrable Securities” (as that term is
      defined under the Purchase Agreement) for an offering pursuant to the Securities
      Act of 1933, as amended, in accordance with the terms of the Purchase
      Agreement.

    

    16. Miscellaneous.

    

    (a) Subject
      to
      the restrictions on transfer set forth on the first page hereof, this Warrant
      may be assigned by the Holder. This Warrant may not be assigned by the Company,
      except to a successor in the event of a Fundamental Transaction. This Warrant
      shall be binding on and inure to the benefit of the parties hereto and their
      respective successors and assigns. Subject to the preceding sentence, nothing
      in
      this Warrant shall be construed to give to any Person other than the Company
      and
      the Holder any legal or equitable right, remedy or cause of action under this
      Warrant. 

    

    (b) The
      Company will not, by amendment of its governing documents or through any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or any other voluntary action, seek to call or redeem this
      Warrant or 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 action as may
      be
      necessary or appropriate in order to protect the rights of the Holder against
      dilution or other impairment. Without limiting the generality of the foregoing,
      the Company (i) will not increase the par value of any Warrant Shares above
      the
      amount payable therefor on such exercise, (ii) will take all such action as
      may
      be reasonably necessary or appropriate in order that the Company may validly
      and
      legally issue fully paid and nonassessable Warrant Shares, free from all taxes,
      liens, security interests, encumbrances, preemptive or similar rights and
      charges of stockholders (other than those imposed by the Investors), on the
      exercise of the Warrant, and (iii) will not close its stockholder books or
      records in any manner which interferes with the timely exercise of this
      Warrant.

    

    (c) Remedies;
      Specific Performance.
      The
      Company acknowledges and agrees that there would be no adequate remedy at law
      to
      the Holder of this Warrant in the event of any default or threatened default
      by
      the Company in the performance of or compliance with any of the terms of this
      Warrant and accordingly, the Company agrees that, in addition to any other
      remedy to which the Holder may be entitled at law or in equity, the Holder
      shall
      be entitled to seek to compel specific performance of the obligations of the
      Company under this Warrant, without the posting of any bond, in accordance
      with
      the terms and conditions of this Warrant in any court of the United States
      or
      any State thereof having jurisdiction, and if any action should be brought
      in
      equity to enforce any of the provisions of this Warrant, the Company shall
      not
      raise the defense that there is an adequate remedy at law. Except as otherwise
      provided by law, a delay or omission by the Holder hereof in exercising any
      right or remedy accruing upon any such breach shall not impair the right or
      remedy or constitute a waiver of or acquiescence in any such breach. No remedy
      shall be exclusive of any other remedy. All available remedies shall be
      cumulative.

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (d) Amendments
      and Waivers.
      The
      Company may, without the consent of the Holders, by supplemental agreement
      or
      otherwise, (i) make any changes or corrections in this Agreement that are
      required to cure any ambiguity or to correct or supplement any provision herein
      which may be defective or inconsistent with any other provision herein or (ii)
      add to the covenants and agreements of the Company for the benefit of the
      Holders (including, without limitation, reduce the Exercise Price or extend
      the
      Expiration Date), or surrender any rights or power reserved to or conferred
      upon
      the Company in this Agreement; provided that, in the case of (i) or (ii), such
      changes or corrections shall not adversely affect the interests of Holders
      of
      then outstanding Warrants in any material respect. This Warrant may also be
      amended or waived with the consent of the Company and the Holder. Further,
      the
      Company may, with the consent, in writing or at a meeting, of the Holders (the
      "Required
      Holders")
      of the
      then outstanding Warrants exercisable for two-thirds (2/3) or greater of the
      Common Stock eligible under such Warrants, amend in any way, by supplemental
      agreement or otherwise, this Warrant and/or all of the outstanding Warrants;
      provided, however, that (i) no such amendment by its express terms shall
      adversely affect any Holder differently than it affects all other Holders,
      unless such Holder consents thereto, and (ii) no such amendment concerning
      the
      number of Warrant Shares or Exercise Price shall be made unless any Holder
      who
      will be affected by such amendment consents thereto. If a new Warrant Agent
      is
      appointed by the Company, it shall at the request of the Company, and without
      need of independent inquiry as to whether such supplemental agreement is
      permitted by the terms of this Section
      16(d),
      join
      with the Company in the execution and delivery of any such supplemental
      agreements, but shall not be required to join in such execution and delivery
      for
      such supplemental agreement to become effective. 

    

    (e) GOVERNING
      LAW; VENUE; WAIVER OF JURY TRIAL.
      THE
      CORPORATE LAWS OF THE STATE OF NEW YORK SHALL GOVERN ALL ISSUES CONCERNING
      THE
      RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL QUESTIONS CONCERNING
      THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT
      SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
      OF
      THE STATE OF NEW YORK. THE COMPANY AND INVESTORS HEREBY IRREVOCABLY SUBMIT
      TO
      THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY
      OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT
      BY
      THE COMPANY OR ANY INVESTOR HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY
      TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY
      WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY
      THE
      COMPANY OR ANY INVESTOR, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
      JURISDICTION OF ANY SUCH COURT, OR THAT 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 VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY
      (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR 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. THE COMPANY AND INVESTORS HEREBY WAIVE ALL RIGHTS TO A TRIAL
      BY JURY.

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (f) The
      headings herein are for convenience only, do not constitute a part of this
      Warrant and shall not be deemed to limit or affect any of the provisions
      hereof.

    

    (g) In
      case
      any one or more of the provisions of this Warrant shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Warrant shall not in any way be affected or
      impaired thereby and the parties will attempt in good faith to agree upon a
      valid and enforceable provision which shall be a commercially reasonable
      substitute therefor, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant.

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK,

    SIGNATURE
      PAGE FOLLOWS]

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

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

    
      	 	 	 
	 	
              CAPE
                COASTAL TRADING CORPORATION

            
	 
 	 
 	 
 
	 	By:  	 
	 	 	
              
  
	 	Name: 	 
	 	 	
              
  
	 	Title: 	 
	 	 	
              
  
	 	
            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    FORM
      OF
      EXERCISE NOTICE

    

    (To
      be
      executed by the Holder to exercise the right to purchase shares of Common Stock
      under the foregoing Warrant)

    

    To:
      [COMPANY NAME]

    

    The
      undersigned is the Holder of Warrant No. _______ (the “Warrant”) issued by Cape
      Coastal Trading Corporation, a Delaware corporation (the “Company”). Capitalized
      terms used herein and not otherwise defined have the respective meanings set
      forth in the Warrant.

    

    
      	 	
              (a)

            	
              The
                Warrant is currently exercisable to purchase a total of ______________
                Warrant Shares.

            

    

    

    (b) The
      undersigned Holder hereby exercises its right to purchase _________________
      Warrant Shares pursuant to the Warrant.

    

    (c) The
      Holder
      intends that payment of the Exercise Price shall be made as (check
      one):

    

    ____ “Cash
      Exercise” under Section 10

    ____ “Cashless
      Exercise” under Section 10

    

    (d) If
      the
      holder has elected a Cash Exercise, the holder shall pay the sum of
      $____________ to the Company in accordance with the terms of the
      Warrant.

    

    (e) Pursuant
      to this exercise, the Company shall deliver to the holder _______________
      Warrant Shares in accordance with the terms of the Warrant.

    

    (f) Following
      this exercise, the Warrant shall be exercisable to purchase a total of
      ______________ Warrant Shares.

    

    (g) Notwithstanding
      anything to the contrary contained herein, this Exercise Notice shall constitute
      a representation by the Holder that, after giving effect to the exercise
      provided for in this Exercise Notice, the Holder (together with its affiliates)
      will not have beneficial ownership (together with the beneficial ownership
      of
      such Person's affiliates) of a number of shares of Common Stock which exceeds
      the Maximum Percentage of the total outstanding shares of Common Stock as
      determined pursuant to the provisions of Section 11(a) of the
      Warrant.

    
      	 	 	 	 
	Dated: ________________________,
              _________	 	 	
              Name
                of Holder: 

            
	 	 	 	 
	 	 	 	(Print) 
	 	 	 	
              
                
  

            
	 	 	 	
              By: 

            
	 	 	 	
              
                
  

            
	 	 	 	
              Name: 

            
	 	 	 	
              
                
  

            
	
            	 	 	
              Title:

            
	 	 	 	
              
                
 

            
	 	 	 	
              (Signature
                must conform in all respects to name

              of
                holder as specified on the face of the
                Warrant)

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    FORM
      OF
      ASSIGNMENT

    

    [To
      be
      completed and signed only upon transfer of Warrant]

    

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto
      ________________________________ the right represented by the within Warrant
      to
      purchase ____________ shares of Common Stock of Cape Coastal Trading Corporation
      to which the within Warrant relates and appoints ________________ attorney
      to
      transfer said right on the books of Cape Coastal Trading Corporation with full
      power of substitution in the premises.

     

    
      	 	 	 	 
	Dated: ________________________,
              _________	 	 	
               

            
	 	 	 	 
	 	 	 	 

              

              (Signature
                must conform in all respects to name of holder

              as
                specified on the face of the Warrant)

            
	 	 	 	
                

            
	 	 	 	
              
                

                Address
                  of Transferee  

              

            
	 	 	 	
                

            
	 	 	 	
              
                
 

            
	 	 	 	
              
                
   

            
	 	 	 	 
	
              In
                the presence of:Exhibit
      4.2

    

    NEITHER
      THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE
      HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
      SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE
      OF
      THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
      OR
      OTHER LOAN SECURED BY SUCH SECURITIES.

    

    CAPE
      COASTAL TRADING CORPORATION

    

    FORM
      OF
      WARRANT

    

    
      	
              Warrant
                No.: DEC005-0XX

            	
              Dated:
                December 30, 2005

            

    

    

    Cape
      Coastal Trading Corporation, a Delaware corporation (the “Company”),
      hereby
      certifies that, for value received, ____________________ or its registered
      assigns (the “Holder”),
      is
      entitled to purchase from the Company up to a total of _________ (X,XXX) shares
      of common stock, $0.001 par value per share (the “Common
      Stock”),
      of the
      Company (each such share, a “Warrant
      Share”
and
      all
      such shares issuable under the warrants, the “Warrant
      Shares”)
      at an
      exercise price equal to $4.50 per share (as adjusted from time to time as
      provided in Section 9, the “Exercise
      Price”),
      at any
      time and from the date hereof and through and including the date that is five
      (5) years from the date of issuance hereof (the “Expiration
      Date”),
      and
      subject to the following terms and conditions. This Warrant (“Warrant”)
      is
      issued in connection with services provided by the Holder related to that
      certain Securities Purchase Agreement, dated as of December 22, 2005, by and
      among the Company, uBid, Inc. and the Investors identified therein (the
“Purchase
      Agreement”)
      to
      which the Holder is a third party beneficiary. All such warrants are referred
      to
      herein, collectively, as the “Warrants”
and
      the
      holders thereof along with the Holder named herein, the “Holders.”

    

    1. Definitions.
      In
      addition to the terms defined elsewhere in this Warrant, capitalized terms
      that
      are not otherwise defined herein have the meanings given to such terms in the
      Purchase Agreement.

    

    2. Registration
      of Warrant.
      The
      Company shall register this Warrant, upon records to be maintained by the
      Company for that purpose (the “Warrant
      Register”),
      in the
      name of the record Holder hereof from time to time. The Company may deem and
      treat the registered Holder of this Warrant as the absolute owner hereof for
      the
      purpose of any exercise hereof or any distribution to the Holder, and for all
      other purposes, absent actual notice to the contrary.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3. Registration
      of Transfers.
      The
      Company shall register the transfer of any portion of this Warrant in the
      Warrant Register, upon surrender of this Warrant, with the Form of Assignment
      attached hereto duly completed and signed, to the Transfer Agent or to the
      Company at its address specified herein. Upon any such registration or transfer,
      a new warrant to purchase Common Stock, in substantially the form of this
      Warrant (any such new warrant, a “New
      Warrant”),
      evidencing the portion of this Warrant so transferred shall be issued to the
      transferee and a New Warrant evidencing the remaining portion of this Warrant
      not so transferred, if any, shall be issued to the transferring Holder. The
      acceptance of the New Warrant by the transferee thereof shall be deemed the
      acceptance by such transferee of all of the rights and obligations of a holder
      of a Warrant.

    

    4. Exercise
      and Duration of Warrants.
      

    

    (a) This
      Warrant shall be exercisable by the registered Holder at any time and from
      time
      to time on or after the date hereof to and including the Expiration Date. At
      6:30 P.M., New York City time on the Expiration Date, the portion of this
      Warrant not exercised prior thereto shall be and become void and of no value;
      provided that, if the average of the Closing Prices for the five Trading Days
      immediately prior to (but not including) the Expiration Date exceeds the
      Exercise Price on the Expiration Date, provided further that, if on the
      Expiration Date, there is no effective Registration Statement covering the
      resale of the Warrant Shares, or no current prospectus available, then this
      Warrant shall be deemed to have been exercised in full (to the extent not
      previously exercised) on a “cashless exercise” basis at 6:30 P.M. New York City
      time on the Expiration Date. A “cashless exercise” means that in lieu of paying
      the aggregate purchase price for the shares being purchased upon exercise of
      the
      Warrants in cash, the Holder will forfeit a number of shares underlying the
      Warrants pursuant to Section
      10
      below.

    

    (b) A
      Holder
      may exercise this Warrant by delivering to the Company (i) an exercise notice,
      in the form attached hereto (the “Exercise
      Notice”),
      appropriately completed and duly signed, and (ii) payment of the Exercise Price
      for the number of Warrant Shares as to which this Warrant is being exercised
      (which may take the form of a “cashless exercise” if so indicated in the
      Exercise Notice only if a “cashless exercise” may occur at such time pursuant to
      Section 10 below), and the date such items are delivered to the Company (as
      determined in accordance with the notice provisions hereof) is an “Exercise
      Date.”
The
      Holder shall not be required to deliver the original Warrant in order to effect
      an exercise hereunder. Execution and delivery of the Exercise Notice shall
      have
      the same effect as cancellation of the original Warrant and issuance of a New
      Warrant evidencing the right to purchase the remaining number of Warrant
      Shares.

    

    (c) Exercise
      Disputes.
      In the
      case of any dispute with respect to the number of shares to be issued upon
      exercise of this Warrant, the Company shall promptly issue such number of shares
      of Common Stock that is not disputed and shall submit the disputed
      determinations or arithmetic calculations to the Holder via facsimile within
      two
      (2) Business Days of receipt of the Holder’s election to purchase Warrant
      Shares. If the Holder and the Company are unable to agree as to the
      determination of the Purchase Price within two (2) Business Days of such
      disputed determination or arithmetic calculation being submitted to the Holder,
      then the Company shall in accordance with this Section, submit via facsimile
      the
      disputed determination to an independent reputable accounting firm of national
      standing, selected jointly by the Company and the Holder. The Company shall
      cause such accounting firm to perform the determinations or calculations and
      notify the Company and the Holder of the results within forty-eight (48) hours
      from the time it receives the disputed determinations of calculations. Such
      accounting firm’s determination shall be binding upon all parties absent
      manifest error. The Company shall then on the next Business Day issue
      certificate(s) representing the appropriate number of Warrant Shares of Common
      Stock in accordance with such accounting firm’s determination and this Section.
      The prevailing party shall be entitled to reimbursement of all fees and expenses
      of such determination and calculation.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    5. Delivery
      of Warrant Shares.
      

    

    (a) Upon
      exercise of this Warrant, the Company shall promptly (but in no event later
      than
      three Trading Days after the Exercise Date) issue or cause to be issued and
      cause to be delivered to or upon the written order of the Holder and in such
      name or names as the Holder may designate, a certificate for the Warrant Shares
      issuable upon such exercise, free of restrictive legends unless a registration
      statement covering the resale of the Warrant Shares and naming the Holder as
      a
      selling stockholder thereunder is not then effective and the Warrant Shares
      are
      not freely transferable without volume restrictions pursuant to Rule 144 under
      the Securities Act. The Holder, or any Person so designated by the Holder to
      receive Warrant Shares, shall be deemed to have become holder of record of
      such
      Warrant Shares as of the Exercise Date. The Company shall, upon request of
      the
      Holder, use its best efforts to deliver Warrant Shares hereunder electronically
      through the Depository Trust Corporation or another established clearing
      corporation performing similar functions.

    

    (b) This
      Warrant is exercisable, either in its entirety or, from time to time, for a
      portion of the number of Warrant Shares. Upon surrender of this Warrant
      following one or more partial exercises, the Company shall issue or cause to
      be
      issued, at its expense, a New Warrant evidencing the right to purchase the
      remaining number of Warrant Shares.

    

    (c) In
      addition to any other rights available to a Holder, if the Company fails to
      deliver to the Holder a certificate representing Warrant Shares by the third
      Trading Day after the date on which delivery of such certificate is required
      by
      this Warrant, and if after such third Trading Day the Holder purchases (in
      an
      open market transaction or otherwise) shares of Common Stock to deliver in
      satisfaction of a sale by the Holder of the Warrant Shares that the Holder
      anticipated receiving from the Company (a “Buy-In”),
      then
      the Company shall, within three Trading Days after the Holder’s request and in
      the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to
      the Holder’s total purchase price (including brokerage commissions, if any) for
      the shares of Common Stock so purchased (the “Buy-In
      Price”),
      at
      which point the Company’s obligation to deliver such certificate (and to issue
      such Common Stock) shall terminate, or (ii) promptly honor its obligation to
      deliver to the Holder a certificate or certificates representing such Common
      Stock and pay cash to the Holder in an amount equal to the excess (if any)
      of
      the Buy-In Price over the product of (A) such number of shares of Common Stock,
      times (B) the Closing Price on the date of the event giving rise to the
      Company’s obligation to deliver such certificate.

    

    (d) The
      Company’s obligations to issue and deliver Warrant Shares in accordance with the
      terms hereof are absolute and unconditional, irrespective of any action or
      inaction by the Holder to enforce the same, any waiver or consent with respect
      to any provision hereof, the recovery of any judgment against any Person or
      any
      action to enforce the same, or any setoff, counterclaim, recoupment, limitation
      or termination, or any breach or alleged breach by the Holder or any other
      Person of any obligation to the Company or any violation or alleged violation
      of
      law by the Holder or any other Person, and irrespective of any other
      circumstance which might otherwise limit such obligation of the Company to
      the
      Holder in connection with the issuance of Warrant Shares. 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 Company’s failure to
      timely deliver certificates representing shares of Common Stock upon exercise
      of
      the Warrant as required pursuant to the terms hereof.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    6. Charges,
      Taxes and Expenses.
      Issuance
      and delivery of certificates for shares of Common Stock upon exercise of this
      Warrant shall be made without charge to the Holder for any issue or transfer
      tax, withholding tax, transfer agent fee or other incidental tax or expense
      in
      respect of the issuance of such certificates, all of which taxes and expenses
      shall be paid by the Company; provided, however, that the Company shall not
      be
      required to pay any tax which may be payable in respect of any transfer involved
      in the registration of any certificates for Warrant Shares or Warrants in a
      name
      other than that of the Holder. The Holder shall be responsible for all other
      tax
      liability that may arise as a result of holding or transferring this Warrant
      or
      receiving Warrant Shares upon exercise hereof.

    

    7. Replacement
      of Warrant.
      If this
      Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or
      cause to be issued in exchange and substitution for and upon cancellation
      hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
      only
      upon receipt of evidence reasonably satisfactory to the Company of such loss,
      theft or destruction and customary and reasonable bond or indemnity, if
      requested. Applicants for a New Warrant under such circumstances shall also
      comply with such other reasonable regulations and procedures and pay such other
      reasonable third-party costs as the Company may prescribe.

    

    8. Reservation
      of Warrant Shares.
      The
      Company covenants that it will at all times reserve and keep available out
      of
      the aggregate of its authorized but unissued and otherwise unreserved Common
      Stock, solely for the purpose of enabling it to issue Warrant Shares upon
      exercise of this Warrant as herein provided, 130% of the number of Warrant
      Shares which are then issuable and deliverable upon the exercise of this entire
      Warrant, free from preemptive rights or any other contingent purchase rights
      of
      persons other than the Holder (after giving effect to the adjustments and
      restrictions of Section
      9,
      if any).
      The Company covenants that all Warrant Shares so issuable and deliverable shall,
      upon issuance and the payment of the applicable Exercise Price in accordance
      with the terms hereof, be duly and validly authorized, issued and fully paid
      and
      nonassessable. The Company will take all such action as may be necessary to
      assure that such shares of Common Stock may be issued as provided herein without
      violation of any applicable law or regulation, or of any requirements of any
      securities exchange or automated quotation system upon which the Common Stock
      may be listed.

    

    9. Certain
      Adjustments.
      The
      Exercise Price and number of Warrant Shares issuable upon exercise of this
      Warrant are subject to adjustment from time to time as set forth in this
Section
      9.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (a) Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding, (i) pays a stock
      dividend on its Common Stock or otherwise makes a distribution on any class
      of
      capital stock that is payable in shares of Common Stock, (ii) subdivides
      outstanding shares of Common Stock into a larger number of shares, or (iii)
      combines outstanding shares of Common Stock into a smaller number of shares,
      then in each such case the Exercise Price shall be multiplied by a fraction
      of
      which the numerator shall be the number of shares of Common Stock outstanding
      immediately before such event and of which the denominator shall be the number
      of shares of Common Stock outstanding immediately after such event. Any
      adjustment made pursuant to clause (i) of this paragraph shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution, and any adjustment pursuant to clause
      (ii) or (iii) of this paragraph shall become effective immediately after the
      effective date of such subdivision or combination.

    

    (b) Distributions
      Made Prior to Exercise.
      If the
      Company, at any time while this Warrant is outstanding, distributes to holders
      of Common Stock (i) evidences of its indebtedness, (ii) any security (other
      than
      a distribution of Common Stock covered by Section 9(a)), (iii) rights or
      warrants to subscribe for or purchase any security, or (iv) any other asset
      (in
      each case, a “Distribution”),
      then
      in each such case any 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
      Exercise Price by a fraction of which (i) the numerator shall be the Weighted
      Average Price1 
      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 (ii) the denominator
      shall be the Weighted Average Price of the Common Stock on the Trading Day
      immediately preceding such record date.

    

    (c) Notwithstanding
      the provisions set forth in Section
      9(b)
      above, if
      the Company, at any time while this Warrant is outstanding, makes a Distribution
      to the holders of Common Stock, then in each such case the Holder shall have
      the
      option to receive such Distribution which would have been made to the Holder
      had
      such Holder been the holder of such Warrant Shares on the record date for the
      determination of stockholders entitled to such Distribution; provided,
      however,
      if the
      Holder elects to receive such Distribution, it will not be entitled to receive
      the adjustment to the Exercise Price specified in clause (b) above.

     

     

      
        

      

    

    
      1“Weighted
        Average Price” means, for any security as of any date, the dollar
        volume-weighted average price for such security on NASDAQ during the period
        beginning at 9:30:01 a.m., New York Time (or such other time as NASDAQ publicly
        announces is the official open of trading), and ending at 4:00:00 p.m., New
        York
        Time (or such other time as NASDAQ publicly announces is the official close
        of
        trading) as reported by Bloomberg (means Bloomberg Financial Markets) through
        its “Volume at Price” functions, or, if the foregoing does not apply, the dollar
        volume-weighted average price of such security in the over-the-counter market
        on
        the electronic bulletin board for such security during the period beginning
        at
        9:30:01 a.m., New York Time (or such other time as such Principal Market
        publicly announces is the official open of trading), and ending at 4:00:00
        p.m.,
        New York Time (or such other time as such market publicly announces is the
        official close of trading) as reported by Bloomberg, if no dollar
        volume-weighted average price is reported for such security by Bloomberg
        for
        such hours, the average of the highest closing bid price and the lowest closing
        ask price of any of the market makers for such security as reported in the
“pink
        sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If
        the Weighted Average Price cannot be calculated for a security on a particular
        date on any of the foregoing bases, the Weighted Average Price of such security
        on such date shall be the fair market value as mutually determined by the
        Company in good faith. All such determinations shall be appropriately adjusted
        for any share dividend, share split, share combination or other similar
        transaction during the applicable calculation period.

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (d) Fundamental
      Transactions.
      

    

    (i) If,
      at any
      time while this Warrant is outstanding, (i) the Company effects any merger
      or
      consolidation of the Company with or into (whether or not the Company is the
      surviving corporation) another Person, (ii) the Company effects any sale,
      assignment, transfer, conveyance or other disposition of all or substantially
      all of its assets in one or a series of related transactions; provided, however,
      that for avoidance of doubt, the granting of a lien on all or substantially
      all
      of the Company’s assets as collateral shall not be deemed a Fundamental
      Transaction hereunder, (iii) allow another Person to make a purchase, tender
      or
      exchange offer that is accepted by the holders of more than the 50% of either
      the outstanding shares of Common Stock (not including any shares of Common
      Stock
      held by the Person or Persons making or party to, or associated or affiliated
      with the Persons making or party to, such purchase, tender or exchange offer),
      (iv) consummate a stock purchase agreement or other business combination
      (including, without limitation, a reorganization, recapitalization, spin-off
      or
      scheme of arrangement) with another Person whereby such other Person acquires
      more than the 50% of the outstanding shares of Common Stock (not including
      any
      shares of Common Stock held by the other Person or other Persons making or
      party
      to, or associated or affiliated with the other Persons making or party to,
      such
      stock purchase agreement or other business combination), or (v) the Company
      effects any reclassification of the Common Stock or any compulsory share
      exchange pursuant to which the Common Stock is effectively converted into or
      exchanged for other securities, cash or property (other than as a result of
      a
      subdivision or combination of shares of Common Stock covered by Section
      9(a)
      above)
      (in any such case, a “Fundamental
      Transaction”),
      then
      the Holder shall have the right thereafter to receive, upon exercise of this
      Warrant, the same amount and kind of securities, cash or property as it would
      have been entitled to receive upon the occurrence of such Fundamental
      Transaction if it had been, immediately prior to such Fundamental Transaction,
      the holder of the number of Warrant Shares then issuable upon exercise in full
      of this Warrant (the “Alternate
      Consideration”).
      The
      aggregate Exercise Price for this Warrant will not be affected by any such
      Fundamental Transaction, but the Company shall apportion such aggregate Exercise
      Price among the Alternate Consideration in a reasonable manner reflecting the
      relative value of any different components of the Alternate Consideration.
      If
      holders of Common Stock are given any choice as to the securities, cash or
      property to be received in a Fundamental Transaction, then the Holder shall
      be
      given the same choice as to the Alternate Consideration it receives upon any
      exercise of this Warrant following such Fundamental Transaction. At the Holder’s
      request, any successor to the Company or surviving entity in such Fundamental
      Transaction shall issue to the Holder a new warrant consistent with the
      foregoing provisions and evidencing the Holder’s right to purchase the Alternate
      Consideration for the aggregate Exercise Price upon exercise thereof. The terms
      of any agreement pursuant to which a Fundamental Transaction is effected shall
      include terms requiring any such successor or surviving entity to comply with
      the provisions of this paragraph (d) and insuring that the Warrant (or any
      such
      replacement security) will be similarly adjusted upon any subsequent transaction
      analogous to a Fundamental Transaction. 

    

    (ii) Notwithstanding
      the foregoing and the provisions of Section 4(b) above, in the event of a
      Fundamental Transaction in which (i) the surviving entity in the Fundamental
      Transaction is not a publicly traded company and (ii) the consideration to
      be
      delivered to the holders of Common Stock upon the occurrence of such Fundamental
      Transaction does not consist solely of publicly traded securities, if the Holder
      has not exercised the Warrant in full prior to the consummation of such
      Fundamental Transaction, then
      the Holder shall have the right to require any successor to the Company or
      surviving entity in such Fundamental Transaction to purchase this Warrant from
      the Holder by paying to the Holder, simultaneously with the consummation of
      such
      Fundamental Transaction and
      in lieu
      of the warrant referred to in Section 9(d)(1), cash in an amount equal to the
      value of the remaining unexercised portion of this Warrant on the date of such
      consummation, which value shall be determined by use of the Black and Scholes
      Option Pricing Model reflecting (i) 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 such date of request and (ii) an expected volatility equal to the lesser
      of 60% and the 100 day volatility obtained from the HVT function on
      Bloomberg.

    

    
      
        
        

      

      
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    (e) Adjustment
      Upon Issuance of Shares of Common Stock.
      If and
      whenever on or after the issuance date of this Warrant through the first
      (1st)
      anniversary thereof, the Company issues or sells, or in accordance with this
      Section 9 is deemed to have issued or sold, any shares of Common Stock
      (including the issuance or sale of shares of Common Stock owned or held by
      or
      for the account of the Company) for a consideration per share (the “New
      Issuance Price”)
      less
      than a price (the “Applicable
      Price”)
      equal
      to the Exercise Price in effect immediately prior to such issue or sale or
      deemed issuance or sale (the foregoing a “Dilutive
      Issuance”),
      then
      immediately after such Dilutive Issuance, the Exercise Price then in effect
      shall be reduced to an amount equal to the New Issuance Price.
      If
      and
      whenever after such first (1st)
      anniversary, the Company issues or sells, or in accordance with this Section
      9
      is deemed to have issued or sold, any shares of Common Stock (including the
      issuance or sale of shares of Common Stock owned or held by or for the account
      of the Company) in a Dilutive Issuance, then immediately after such Dilutive
      Issuance, the Exercise Price then in effect shall be reduced to an amount equal
      to the product
      of (A) the Exercise Price in effect immediately prior to such Dilutive Issuance
      and (B) the quotient determined by dividing (1) the sum of (I) the product
      derived by multiplying the Exercise Price in effect immediately prior to such
      Dilutive Issuance and the number of shares of Common Stock Deemed Outstanding
      immediately prior to such Dilutive Issuance plus (II) the consideration, if
      any,
      received by the Company upon such Dilutive Issuance, by (2) the product derived
      by multiplying (I) the Exercise Price in effect immediately prior to such
      Dilutive Issuance by (II) the number of shares of Common Stock Deemed
      Outstanding immediately after such Dilutive Issuance. Upon
      each
      such adjustment of the Exercise Price hereunder, the number of Warrant Shares
      shall be adjusted to the number of shares of Common Stock determined by
      multiplying the Exercise Price in effect immediately prior to such adjustment
      by
      the number of Warrant Shares acquirable upon exercise of this Warrant
      immediately prior to such adjustment and dividing the product thereof by the
      Exercise Price resulting from such adjustment. For purposes of determining
      the
      adjusted Exercise Price under this Section 9(e), the following shall be
      applicable:

    

    (i) Issuance
      of Options.
      If 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, exercise 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 9(e)(i), the “lowest price
      per share for which one share of Common Stock is issuable upon exercise of
      such
      Options or upon conversion, exercise 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
      and
      upon conversion, exercise or exchange of any Convertible Security issuable
      upon
      exercise of such Option. No further adjustment of the Exercise Price or number
      of Warrant Shares shall be made upon the actual issuance of such shares of
      Common Stock or of such Convertible Securities upon the exercise of such Options
      or upon the actual issuance of such shares of Common Stock upon conversion,
      exercise or exchange of such Convertible Securities. 

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (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, exercise 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 9(e)(ii), the “lowest price per share for which one share of Common
      Stock is issuable upon the conversion, exercise 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, exercise or exchange
      of
      such Convertible Security. No further adjustment of the Exercise Price or number
      of Warrant Shares shall be made upon the actual issuance of such shares of
      Common Stock upon conversion, exercise 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 this Warrant has been
      or is
      to be made pursuant to other provisions of this Section 9(e), no further
      adjustment of the Exercise Price or number of Warrant Shares 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, exercise or exchange of any Convertible
      Securities, or the rate at which any Convertible Securities are convertible
      into
      or exercisable or exchangeable for shares of Common Stock increases or decreases
      at any time, the Exercise Price and the number of Warrant Shares in effect
      at
      the time of such increase or decrease shall be adjusted to the Exercise Price
      and the number of Warrant Shares which would have been in effect at such time
      had such Options or Convertible Securities provided for such increased or
      decreased purchase price, additional consideration or increased or decreased
      conversion rate, as the case may be, at the time initially granted, issued
      or
      sold. For purposes of this Section 9(e)(iii), if the terms of any Option or
      Convertible Security that was outstanding as of the date of issuance of this
      Warrant are increased or decreased in the manner described in the immediately
      preceding sentence, then such Option or Convertible Security and the shares
      of
      Common Stock deemed issuable upon exercise, conversion or exchange thereof
      shall
      be deemed to have been issued as of the date of such increase or decrease.
      No
      adjustment pursuant to this Section 9(e) shall be made if such adjustment would
      result in an increase of the Exercise Price then in effect or a decrease in
      the
      number of Warrant Shares.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (iv) Calculation
      of Consideration Received.
      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 $0.01. If any shares
      of Common Stock, Options or Convertible Securities are issued or sold or deemed
      to have been issued or sold for cash, the consideration received therefor will
      be deemed to be the net amount received by the Company therefor. If any shares
      of 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 securities which are listed on a securities exchange
      or stock market, in which case the amount of consideration received by the
      Company will be the Closing Sale Price of such security on the date of receipt.
      If any shares of 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 therefor 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 shares of 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
      Board of Directors of the Company and the Required Holders. 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
      day following the Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the Required Holders. The determination of such
      appraiser shall be final and binding upon all parties absent manifest error
      and
      the fees and expenses of such appraiser shall be borne by the
      Company.

    

    (v) Record
      Date.
      If the
      Company takes a record of the holders of shares of Common Stock for the purpose
      of entitling them (A) to receive a dividend or other distribution payable
      in shares of Common Stock, Options or in Convertible Securities or (B) to
      subscribe for or purchase shares of 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.

    

    (vi) Notwithstanding
      the foregoing, no adjustment will be made under this Section
      9(e)
      upon the
      issuance of equity securities or securities convertible into equity securities
      (a) in connection with employee benefit plans or other plans approved by the
      Board of Directors for the benefit of employees, consultants or directors of
      the
      Company or its subsidiaries, (b) stock dividends or other events to which
Section
      9(a)
      applies,
      or in connection with Options or Convertible Securities outstanding immediately
      prior to the Closing; provided that the terms of such Options or Convertible
      Securities are not amended, modified or changed after the date hereof, (c)
      issued or assumed in connection with the Merger Agreement or the Securities
      Purchase Agreement, (d) in connection with a bona fide acquisition by the
      Company or to strategic partners in a transaction the primary purpose of which
      is not to raise equity funds, or (e) pursuant to a firm commitment underwritten
      public offering with a nationally recognized underwriter which generates gross
      proceeds in excess of $50 million (other than an “at the market offering” as
      defined in Rule 415(a)(4) under the 1933 Act and “equity lines”). 

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (vii) For
      purposes of this Warrant, (A) “Common
      Stock Deemed Outstanding”
means,
      at any given time, the number of shares of Common Stock actually outstanding
      at
      such time, plus the number of shares of Common Stock deemed to be outstanding
      pursuant to Sections 9(e)(i) and 9(e)(ii) hereof regardless of whether the
      Options or Convertible Securities are actually exercisable at such time, but
      excluding any shares of Common Stock owned or held by or for the account of
      the
      Company or issuable upon conversion and exercise, as applicable, of the
      Warrants; (B) “Convertible
      Securities”
means
      any stock or securities (other than Options) directly or indirectly convertible
      into or exercisable or exchangeable for shares of Common Stock; and (C)
“Options”
means
      any rights, warrants or options to subscribe for or purchase shares of Common
      Stock or Convertible Securities.

    

    (f) Number
      of Warrant Shares.
      Simultaneously with any adjustment to the Exercise Price pursuant to paragraph
      (a) of this Section, the number of Warrant Shares that may be purchased upon
      exercise of this Warrant shall be increased or decreased proportionately, as
      applicable, so that after such adjustment the aggregate Exercise Price payable
      hereunder for the increased or decreased, as applicable, number of Warrant
      Shares shall be the same as the aggregate Exercise Price in effect immediately
      prior to such adjustment.

    

    (g) Calculations.
      All
      calculations under this Section
      9
      shall be
      made to the nearest cent or the nearest 1/100th of a share, as applicable.
      The
      number of shares of Common Stock outstanding at any given time shall not include
      shares owned or held by or for the account of the Company, and the disposition
      of any such shares shall be considered an issue or sale of Common
      Stock.

    

    (h) Notice
      of Adjustments.
      Upon the
      occurrence of each adjustment pursuant to this Section
      9,
      the
      Company at its expense will promptly compute such adjustment in accordance
      with
      the terms of this Warrant and prepare a certificate setting forth such
      adjustment, including a statement of the adjusted Exercise Price and adjusted
      number or type of Warrant Shares or other securities issuable upon exercise
      of
      this Warrant (as applicable), describing the transactions giving rise to such
      adjustments and showing in detail the facts upon which such adjustment is based.
      Upon written request, the Company will promptly deliver a copy of each such
      certificate to the Holder and to the Company’s Transfer Agent.

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (i) Notice
      of Corporate Events.
      If the
      Company (i) declares a dividend or any other distribution of cash, securities
      or
      other property in respect of its Common Stock, including without limitation
      any
      granting of rights or warrants to subscribe for or purchase any capital stock
      of
      the Company or any Subsidiary, (ii) authorizes or approves, enters into any
      agreement contemplating or solicits stockholder approval for any Fundamental
      Transaction or (iii) authorizes the voluntary dissolution, liquidation or
      winding up of the affairs of the Company, then the Company shall deliver to
      the
      Holder a notice describing the material terms and conditions of such
      transaction, at least ten calendar days prior to the applicable record or
      effective date on which a Person would need to hold Common Stock in order to
      participate in or vote with respect to such transaction, and the Company will
      take all steps reasonably necessary in order to insure that the Holder is given
      the practical opportunity to exercise this Warrant prior to such time so as
      to
      participate in or vote with respect to such transaction; provided, however,
      that
      the failure to deliver such notice or any defect therein shall not affect the
      validity of the corporate action required to be described in such notice.

    

    10. Payment
      of Exercise Price.
      The
      Holder shall pay the Exercise Price in immediately available funds (a “cash
      exercise”); provided, however, that if at any time after the date that is one
      (1) year after the date of this Warrant (the “Required
      Effective Date”)
      a
      Registration Statement covering the resale of the Warrant Shares is not
      effective on the Exercise Date, or no current prospectus is available, the
      Holder may satisfy its obligation to pay the Exercise Price through a “cashless
      exercise,” in which event the Company shall issue to the Holder the number of
      Warrant Shares determined as follows:

    
      	 	 
	 	
              X
                =
                Y [(A-B)/A]

            
	
              where:

            	 
	 	
              X
                =
                the number of Warrant Shares to be issued to the
                Holder.

            
	 	 
	 	
              Y
                =
                the number of Warrant Shares with respect to which this Warrant is
                being
                exercised (prior to cashless exercise).

            
	 	 
	 	
              A
                =
                the average of the Closing Prices for the five Trading Days immediately
                prior to (but not including) the Exercise Date.

            
	 	 
	 	
              B
                =
                the Exercise Price.

            

    

    

    For
      purposes of Rule 144 promulgated under the Securities Act, it is intended,
      understood and acknowledged that the Warrant Shares issued in a cashless
      exercise transaction shall be deemed to have been acquired by the Holder, and
      the holding period for the Warrant Shares shall be deemed to have commenced
      on
      the date this Warrant was originally issued.

    

    11. Limitation
      on Exercise.
      

    

    (a) Notwithstanding
      anything to the contrary contained herein, the number of shares of Common Stock
      that may be acquired by the Holder upon any exercise of this Warrant (or
      otherwise in respect hereof) shall be limited to the extent necessary to insure
      that, following such exercise (or other issuance), the total number of shares
      of
      Common Stock then beneficially owned by such Holder and its Affiliates and
      any
      other Persons whose beneficial ownership of Common Stock would be aggregated
      with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not
      exceed 9.999% (the “Maximum
      Percentage”)
      of the
      total number of issued and outstanding shares of Common Stock (including for
      such purpose the shares of Common Stock issuable upon such exercise). For such
      purposes, beneficial ownership shall be determined in accordance with Section
      13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
      The Company’s obligation to issue shares of Common Stock in excess of the
      limitation referred to in this Section shall be suspended (and shall not
      terminate or expire notwithstanding any contrary provisions hereof) until such
      time, if any, as such shares of Common Stock may be issued in compliance with
      such limitation, but in no event later than the Expiration Date. By written
      notice to the Company, the Holder may waive the provisions of this Section
      or
      increase or decrease the Maximum Percentage to any other percentage specified
      in
      such notice, but (i) any such waiver or increase will not be effective until
      the
      61st day after such notice is delivered to the Company, and (ii) any such waiver
      or increase or decrease will apply only to the Holder and not to any other
      holder of Warrants.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    12. Fractional
      Shares.
      The
      Company shall not be required to issue or cause to be issued fractional Warrant
      Shares on the exercise of this Warrant. If any fraction of a Warrant Share
      would, except for the provisions of this Section, be issuable upon exercise
      of
      this Warrant, the number of Warrant Shares to be issued will be rounded up
      to
      the nearest whole share.

    

    13. Notices.
      Any and
      all notices or other communications or deliveries hereunder (including without
      limitation any Exercise Notice) shall be in writing and shall be deemed given
      and effective on the earliest of (i) the date of transmission, if such notice
      or
      communication is delivered via facsimile prior to 6:30 p.m. (New York City
      time)
      on a Trading Day, (ii) the next Trading Day after the date of transmission,
      if
      such notice or communication is delivered via facsimile on a day that is not
      a
      Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day,
      (iii) the Trading Day following the date of mailing, if sent by nationally
      recognized overnight courier service, or (iv) upon actual receipt by the party
      to whom such notice is required to be given. The address for such notices or
      communications shall be provided by the Holder to the Company.

    

    14. Warrant
      Agent.
      The
      Company shall serve as warrant agent under this Warrant. Upon 30 days’ notice to
      the Holder, the Company may appoint a new warrant agent. Any corporation into
      which the Company or any new warrant agent may be merged or any corporation
      resulting from any consolidation to which the Company or any new warrant agent
      shall be a party or any corporation to which the Company or any new warrant
      agent transfers substantially all of its corporate trust or stockholders
      services business shall be a successor warrant agent under this Warrant without
      any further act. Any such successor warrant agent shall promptly cause notice
      of
      its succession as warrant agent to be mailed (by first class mail, postage
      prepaid) to the Holder at the Holder’s last address as shown on the Warrant
      Register.

    

    15. Registration
      of Warrant Shares.
      The
      Company shall prepare and file with the SEC a “Shelf” Registration Statement on
      Form S-3 covering the resale of all “Registrable Securities” (as that term is
      defined under the Purchase Agreement) for an offering pursuant to the Securities
      Act of 1933, as amended, in accordance with the terms of the Purchase
      Agreement.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    16. Miscellaneous.

    

    (a) Subject
      to
      the restrictions on transfer set forth on the first page hereof, this Warrant
      may be assigned by the Holder. This Warrant may not be assigned by the Company,
      except to a successor in the event of a Fundamental Transaction. This Warrant
      shall be binding on and inure to the benefit of the parties hereto and their
      respective successors and assigns. Subject to the preceding sentence, nothing
      in
      this Warrant shall be construed to give to any Person other than the Company
      and
      the Holder any legal or equitable right, remedy or cause of action under this
      Warrant. 

    

    (b) The
      Company will not, by amendment of its governing documents or through any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or any other voluntary action, seek to call or redeem this
      Warrant or 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 action as may
      be
      necessary or appropriate in order to protect the rights of the Holder against
      dilution or other impairment. Without limiting the generality of the foregoing,
      the Company (i) will not increase the par value of any Warrant Shares above
      the
      amount payable therefor on such exercise, (ii) will take all such action as
      may
      be reasonably necessary or appropriate in order that the Company may validly
      and
      legally issue fully paid and nonassessable Warrant Shares, free from all taxes,
      liens, security interests, encumbrances, preemptive or similar rights and
      charges of stockholders (other than those imposed by the Investors), on the
      exercise of the Warrant, and (iii) will not close its stockholder books or
      records in any manner which interferes with the timely exercise of this
      Warrant.

    

    (c) Remedies;
      Specific Performance.
      The
      Company acknowledges and agrees that there would be no adequate remedy at law
      to
      the Holder of this Warrant in the event of any default or threatened default
      by
      the Company in the performance of or compliance with any of the terms of this
      Warrant and accordingly, the Company agrees that, in addition to any other
      remedy to which the Holder may be entitled at law or in equity, the Holder
      shall
      be entitled to seek to compel specific performance of the obligations of the
      Company under this Warrant, without the posting of any bond, in accordance
      with
      the terms and conditions of this Warrant in any court of the United States
      or
      any State thereof having jurisdiction, and if any action should be brought
      in
      equity to enforce any of the provisions of this Warrant, the Company shall
      not
      raise the defense that there is an adequate remedy at law. Except as otherwise
      provided by law, a delay or omission by the Holder hereof in exercising any
      right or remedy accruing upon any such breach shall not impair the right or
      remedy or constitute a waiver of or acquiescence in any such breach. No remedy
      shall be exclusive of any other remedy. All available remedies shall be
      cumulative.

    

    (d) Amendments
      and Waivers.
      The
      Company may, without the consent of the Holders, by supplemental agreement
      or
      otherwise, (i) make any changes or corrections in this Agreement that are
      required to cure any ambiguity or to correct or supplement any provision herein
      which may be defective or inconsistent with any other provision herein or (ii)
      add to the covenants and agreements of the Company for the benefit of the
      Holders (including, without limitation, reduce the Exercise Price or extend
      the
      Expiration Date), or surrender any rights or power reserved to or conferred
      upon
      the Company in this Agreement; provided that, in the case of (i) or (ii), such
      changes or corrections shall not adversely affect the interests of Holders
      of
      then outstanding Warrants in any material respect. This Warrant may also be
      amended or waived with the consent of the Company and the Holder. Further,
      the
      Company may, with the consent, in writing or at a meeting, of the Holders (the
      “Required
      Holders”)
      of the
      then outstanding Warrants exercisable for two-thirds (2/3) or greater of the
      Common Stock eligible under such Warrants, amend in any way, by supplemental
      agreement or otherwise, this Warrant and/or all of the outstanding Warrants;
      provided, however, that (i) no such amendment by its express terms shall
      adversely affect any Holder differently than it affects all other Holders,
      unless such Holder consents thereto, and (ii) no such amendment concerning
      the
      number of Warrant Shares or Exercise Price shall be made unless any Holder
      who
      will be affected by such amendment consents thereto. If a new Warrant Agent
      is
      appointed by the Company, it shall at the request of the Company, and without
      need of independent inquiry as to whether such supplemental agreement is
      permitted by the terms of this Section
      16(d),
      join
      with the Company in the execution and delivery of any such supplemental
      agreements, but shall not be required to join in such execution and delivery
      for
      such supplemental agreement to become effective. 

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (e) GOVERNING
      LAW; VENUE; WAIVER OF JURY TRIAL.
      THE
      CORPORATE LAWS OF THE STATE OF NEW YORK SHALL GOVERN ALL ISSUES CONCERNING
      THE
      RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL QUESTIONS CONCERNING
      THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT
      SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
      OF
      THE STATE OF NEW YORK. THE COMPANY AND INVESTORS HEREBY IRREVOCABLY SUBMIT
      TO
      THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY
      OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT
      BY
      THE COMPANY OR ANY INVESTOR HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY
      TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY
      WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY
      THE
      COMPANY OR ANY INVESTOR, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
      JURISDICTION OF ANY SUCH COURT, OR THAT 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 VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY
      (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR 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. THE COMPANY AND INVESTORS HEREBY WAIVE ALL RIGHTS TO A TRIAL
      BY JURY.

    

    (f) The
      headings herein are for convenience only, do not constitute a part of this
      Warrant and shall not be deemed to limit or affect any of the provisions
      hereof.

    

    (g) In
      case
      any one or more of the provisions of this Warrant shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Warrant shall not in any way be affected or
      impaired thereby and the parties will attempt in good faith to agree upon a
      valid and enforceable provision which shall be a commercially reasonable
      substitute therefor, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant.

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK,

    SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

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

    
      	 	 	 
	 	
              CAPE
                COASTAL TRADING CORPORATION

            
	 
 	 
 	 
 
	 	By:  	 
	 	 	
              
  
	 	Name: 	 
	 	 	
              
  
	 	Title: 	 
	 	
              
 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    FORM
      OF
      EXERCISE NOTICE

    

    (To
      be
      executed by the Holder to exercise the right to purchase shares of Common Stock
      under the foregoing Warrant)

    

    To:
      [COMPANY NAME]

    

    The
      undersigned is the Holder of Warrant No. _______ (the “Warrant”) issued by Cape
      Coastal Trading Corporation, a Delaware corporation (the “Company”). Capitalized
      terms used herein and not otherwise defined have the respective meanings set
      forth in the Warrant.

    

    
      	 	
              (a)

            	
              The
                Warrant is currently exercisable to purchase a total of ______________
                Warrant Shares.

            

    

    

    (b) The
      undersigned Holder hereby exercises its right to purchase _________________
      Warrant Shares pursuant to the Warrant.

    

    (c) The
      Holder
      intends that payment of the Exercise Price shall be made as (check
      one):

    

    ____ “Cash
      Exercise” under Section 10

    ____ “Cashless
      Exercise” under Section 10

    

    (d) If
      the
      holder has elected a Cash Exercise, the holder shall pay the sum of
      $____________ to the Company in accordance with the terms of the
      Warrant.

    

    (e) Pursuant
      to this exercise, the Company shall deliver to the holder _______________
      Warrant Shares in accordance with the terms of the Warrant.

    

    (f) Following
      this exercise, the Warrant shall be exercisable to purchase a total of
      ______________ Warrant Shares.

    

    (g) Notwithstanding
      anything to the contrary contained herein, this Exercise Notice shall constitute
      a representation by the Holder that, after giving effect to the exercise
      provided for in this Exercise Notice, the Holder (together with its affiliates)
      will not have beneficial ownership (together with the beneficial ownership
      of
      such Person’s affiliates) of a number of shares of Common Stock which exceeds
      the Maximum Percentage of the total outstanding shares of Common Stock as
      determined pursuant to the provisions of Section 11(a) of the
      Warrant.

    
      	 	 	 	 
	Dated:_________________________ ,
              _________ 	 	 	
              Name
                of Holder:

            
	 	 	 	 
	 	 	 	
              (Print)  

            
	
            	 	 	
              
                

              

            
	 	 	 	
              By:

            
	 	 	 	
              
                
  

            
	 	 	 	
              Name: 

            
	 	 	 	
              
                
  

            
	 	 	 	
              Title:

            
	 	 	 	
              
                
  

            
	 	 	 	
              (Signature
                must conform in all respects to name of holder

              as
                specified on the face of the
                Warrant) 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    FORM
      OF
      ASSIGNMENT

    

    [To
      be
      completed and signed only upon transfer of Warrant]

    

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto
      ________________________________ the right represented by the within Warrant
      to
      purchase ____________ shares of Common Stock of Cape Coastal Trading Corporation
      to which the within Warrant relates and appoints ________________ attorney
      to
      transfer said right on the books of Cape Coastal Trading Corporation with full
      power of substitution in the premises.

     

    
      
        	
              	 	 	 
	Dated:_________________________ ,
                _________ 	 	 	
                 

              
	 	 	 	 
	 	 	 	
                 

              
	
              	 	 	
                
                  

                

                (Signature
                  must conform in all respects to name of holder

                as
                  specified on the face of the Warrant)

              
	 	 	 	
                 

              
	 	 	 	
                  

              
	 	 	 	
                
                  

                  Address
                    of Transferee
  

              
	 	 	 	
                 

              
	 	 	 	
                
                  
  

              
	 	 	 	
                
                  
 

              
	 	 	 	 
	
                In
                  the presence of:

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