Document:

Warrant with Sands Brothers Venture Capital LLC ($0.30 initial exercise price)
      (June 22, 2007)

    Exhibit
      10.7

    
 

    THIS
      WARRANT AND ANY SHARES OF COMMON STOCK ISSUED UPON EXERCISE HEREOF HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED
      FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
      DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT AN
      EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL THAT
      SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED.

     

    

     

    XA,
      INC.

     

    WARRANT
      TO PURCHASE

     

    4,000
      SHARES

     

    OF
      COMMON STOCK

     

    (SUBJECT
      TO ADJUSTMENT)

     

    (Void
      after June 22, 2012)

     

     

     

    
      	
              Bridge
                Warrant No: 1 

               

            	
              June
                22, 2007

               

            

    

    

     

    This
      certifies that for value, Sands Brothers Venture Capital LLC, or registered
      assigns (the ”Holder”),
      is
      entitled, subject to the terms set forth below, at any time from and after
      June
      22, 2007 (the “Original Issuance
      Date”)
      and
      before 5:00 p.m., Eastern Time, on June 22, 2012 (the “Expiration
      Date”),
      to
      purchase from XA,
      Inc.,
      a
      Nevada corporation (the “Company”),
      Four
      Thousand
      (4,000) shares
      (subject to adjustment as described herein), of common stock, par value $0.001
      per share, of the Company (the “Common
      Stock”),
      upon
      surrender hereof, at the principal office of the Company referred to below,
      with
      a duly executed subscription form in the form attached hereto as Exhibit A
      and
      simultaneous payment therefor in lawful, immediately available money of the
      United States or otherwise as hereinafter provided, at an initial exercise
      price
      per share of $0.30 (the “Purchase
      Price”).
      The
      Purchase Price is subject to further adjustment as provided in Section
      4
      below.
      The term “Common
      Stock”
shall
      include, unless the context otherwise requires, the stock and other securities
      and property at the time receivable upon the exercise of this Warrant. The
      term
“Warrant,”
as
      used herein, shall mean this Warrant and any other Warrants delivered in
      substitution or exchange therefor as provided herein. 

    

    This
      Warrant is being issued by the Company together with an 11% Senior Secured
      Convertible Promissory Note in the amount of $4,000 (the “Note”)
      pursuant to the terms and conditions set forth in the Securities Purchase
      Agreement dated the date hereof by and between the Holder and the Company (the
      “SPA”),
      in
      connection with the sale by the Company of $500,000 aggregate principal amount
      of Notes (the “Follow
      On Notes”).
      

    
      
        
        

      

      
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    1. Exercise.
      This
      Warrant may be exercised at any time or from time to time from and after the
      Original Issuance Date and before 5:00 p.m., Eastern Time, on June 22,
      2012, unless such Warrant is terminated pursuant to Section
      6,
      below,
      on any business day, for the full number of shares of Common Stock called for
      hereby, by surrendering it at the principal office of the Company, at 875 North
      Michigan Avenue, Suite 2626, Chicago, IL 60611, with the subscription form
      duly
      executed, together with payment in an amount equal to (a) the number of
      shares of Common Stock called for on the face of this Warrant, multiplied
      (b) by the Purchase Price. Payment of the Purchase Price may be made at
      Holder’s choosing either: (1) by payment in immediately available funds; or (2)
      in lieu of any cash payment, if this Warrant is exercised on a date when a
      Registration Statement (as defined in the Registration Rights Agreement),
      covering the resale of the shares of Common Stock issuable upon exercise of
      this
      Warrant has not been declared effective by the Securities and Exchange
      Commission (the “Commission”),
      or is
      no longer in effect, and the Fair Market Value (as defined below) is equal
      to or
      greater than the Purchase Price, in exchange for the number of shares of Common
      Stock equal to the product of (x) the number of shares to which the Warrants
      are
      being exercised multiplied by (y) a fraction, the numerator of which is the
      Purchase Price and the denominator of which is the Fair Market Value (as defined
      below). This Warrant may be exercised for less than the full number of shares
      of
      Common Stock at the time called for hereby, except that the number of shares
      receivable upon the exercise of this Warrant as a whole, and the sum payable
      upon the exercise of this Warrant as a whole, shall be proportionately reduced.
      Upon a partial exercise of this Warrant in accordance with the terms hereof,
      this Warrant shall be surrendered, and a new Warrant of the same tenor and
      for
      the purchase of the number of such shares not purchased upon such exercise
      shall
      be issued by the Company to Holder without any charge therefor. A Warrant shall
      be deemed to have been exercised immediately prior to the close of business
      on
      the date of its surrender for exercise as provided above, and the person
      entitled to receive the shares of Common Stock issuable upon such exercise
      shall
      be treated for all purposes as the holder of such shares of record as of the
      close of business on such date. Within two (2) business days after such date,
      the Company shall issue and deliver to the person or persons entitled to receive
      the same a certificate or certificates for the number of full shares of Common
      Stock issuable upon such exercise, together with cash, in lieu of any fraction
      of a share, equal to such fraction of the then Fair Market Value on the date
      of
      exercise of one full share of Common Stock.  

     

    “Fair
      Market Value”
shall
      mean, as of any date: (i) if shares of the Common Stock are listed on a
      national securities exchange, the average of the closing prices as reported
      for
      composite transactions during the ten (10) consecutive trading days preceding
      the trading day immediately prior to such date or, if no sale occurred on a
      trading day, then the mean between the closing bid and asked prices on such
      exchange on such trading day; (ii) if shares of the Common Stock are not so
      listed but are traded on the NASDAQ National Market (“NNM”),
      the
      average of the closing prices as reported on the NNM during the ten (10)
      consecutive trading days preceding the trading day immediately prior to such
      date or, if no sale occurred on a trading day, then the mean between the highest
      bid and lowest asked prices as of the close of business on such trading day,
      as
      reported on the NNM; or if applicable, the Nasdaq Capital Market (“NCM”),
      (iii)
      if not then included for quotation on the NNM or the NCM, the average of the
      highest reported bid and lowest reported asked prices as reported by the OTC
      Bulletin Board of the National Quotation Bureau, as the case may be; or
      (iv) if the shares of the Common Stock are not then publicly traded, the
      fair market price of the Common Stock as determined in good faith by
      the
      independent members of the Board of Directors of the Company and the Holders
      of
      all Warrants.

     

    
      
        
        

      

      
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    2. Shares
      Fully Paid; Payment of Taxes.
      All
      shares of Common Stock issued upon the exercise of this Warrant shall be validly
      issued, fully paid and non-assessable, and the Company shall pay all taxes
      and
      other governmental charges (other than income taxes to the holder) that may
      be
      imposed in respect of the issue or delivery thereof.

     

    3. Transfer
      and Exchange.
      (a)
      Neither this Warrant nor the Common Stock to be issued upon exercise hereof
      (the
“Warrant
      Shares”)
      have
      been registered under the Act or any state securities laws (“Blue
      Sky Laws”).
      This
      Warrant has been acquired for investment purposes and not with a view to
      distribution or resale and may not be sold or otherwise transferred without:
      (i)
      an effective registration statement for such Warrant under the Act and such
      applicable Blue Sky Laws; or (ii) an opinion of counsel reasonably satisfactory
      to the Company that registration is not required under the Act or under any
      applicable Blue Sky Laws. 

     

    (b) Upon
      compliance with applicable federal and state securities laws as set forth in
      Section
      3(a),
      above,
      this Warrant and all rights hereunder are transferable, in whole or in part,
      on
      the books of the Company maintained for such purpose at its Principal Office
      by
      the Holder in person or by duly authorized attorney, upon surrender of this
      Warrant together with a completed and executed assignment form in the form
      attached hereto as Exhibit B,
      and
      payment of any necessary transfer tax or other governmental charge imposed
      upon
      such transfer. Upon any partial transfer, the Company will issue and deliver
      to
      the assignee a new Warrant with respect to the shares of Common Stock for which
      it is exercisable that have been transferred, and will deliver to the Holder
      a
      new Warrant or Warrants with respect to the shares of Common Stock not so
      transferred. A Warrant may be transferred only by the procedure set forth
      herein. No transfer shall be effective until such transfer is recorded on the
      books of the Company, provided that such transfer is recorded promptly by the
      Company, and until such transfer on such books, the Company shall treat the
      registered Holder hereof as the owner of the Warrant for all
      purposes.

     

    (c) This
      Warrant is exchangeable at the Principal Office for two or more new Warrants,
      each in the form of this Warrant, to purchase the same aggregate number of
      shares of Common Stock, each new Warrant to represent the right to purchase
      such
      number of shares as the Holder shall designate at the time of such exchange,
      but
      which shall not exceed the total number of shares for which this Warrant may
      be
      from time to time exercisable.

     

    (d) Transfer
      of the Warrant Shares issued upon the exercise of this Warrant shall be
      restricted in the same manner and to the same extent as the Warrant, and the
      certificates representing such Warrant Shares shall bear substantially the
      following legend, until such Warrant Shares have been registered under the
      Act
      or may be removed as otherwise permitted under the Act:

     

    “THE
      SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE
      STATE SECURITIES LAW
      AND
      MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE ACT OR
      SUCH
      APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD
      THERETO, OR (ii) IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY,
      REGISTRATION UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS IS NOT
      REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER.”

     

    
      
        
        

      

      
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    (e) The
      Holder and the Company agree to execute such other documents and instruments
      as
      counsel to the Company deems necessary to effect the compliance of the issuance
      of this Warrant and any Warrant Shares issued upon exercise hereof with
      applicable federal and state securities laws, including compliance with
      applicable exemptions from the registration requirements of such
      laws.

     

    4. Anti-Dilution
      Provisions.
      The
      Purchase Price in effect at any time and the number and kind of securities
      issuable upon conversion of this Warrant shall be subject to adjustment from
      time to time upon the happening of certain events as follows:

     

    A.  Adjustment
      for Stock Splits and Combinations.
      If the
      Company at any time or from time to time on or after the date of Warrant
      issuance (the “Original
      Issuance Date”)
      effects a subdivision of the outstanding Common Stock, the Purchase Price then
      in effect immediately before that subdivision shall be proportionately
      decreased, and conversely, if the Company at any time or from time to time
      on or
      after the Original Issuance Date combines the outstanding shares of Common
      Stock
      into a smaller number of shares, the Purchase Price then in effect immediately
      before the combination shall be proportionately increased. Any adjustment under
      this Section
      4(A) shall
      become effective at the close of business on the date the subdivision or
      combination becomes effective.

     

    B.  Adjustment
      for Certain Dividends and Distributions.
      If the
      Company at any time or from time to time on or after the Original Issuance
      Date
      makes or fixes a record date for the determination of holders of Common Stock
      entitled to receive, a dividend or other distribution payable in additional
      shares of Common Stock, then and in each such event the Purchase Price then
      in
      effect shall be decreased as of the time of such issuance or, in the event
      such
      record date is fixed, as of the close of business on such record date, by
      multiplying the Purchase Price then in effect by a fraction (1) the numerator
      of
      which is the total number of shares of Common Stock issued and outstanding
      immediately prior to the time of such issuance or the close of business on
      such
      record date and (2) the denominator of which shall be the total number of shares
      of Common Stock issued and outstanding immediately prior to the time of such
      issuance or the close of business on such record date plus the number of shares
      of Common Stock issuable in payment of such dividend or distribution;
provided,
      however,
      that if
      such record date is fixed and such dividend is not fully paid or if such
      distribution is not fully made on the date fixed therefor, the Purchase Price
      shall be recomputed accordingly as of the close of business on such record
      date
      and thereafter the Purchase Price shall be adjusted pursuant to this
Section 4(B)
      as of
      the time of actual payment of such dividends or distributions.

     

    
      
        
        

      

      
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    C.  Adjustments
      for Other Dividends and Distributions.
      In the
      event the Company at any time or from time to time on or after the Original
      Issuance Date makes, or fixes a record date for the determination of holders
      of
      Common Stock entitled to receive, a dividend or other distribution payable
      in
      securities of the Company other than shares of Common Stock, then and in each
      such event provision shall be made so that the Holders of Warrants shall receive
      upon exercise thereof, in addition to the number of shares of Common Stock
      receivable thereupon, the amount of securities of the Company which they would
      have received had their Warrants been exercised into Common Stock on the date
      of
      such event and had they thereafter, during the period from the date of such
      event to and including the conversion date, retained such securities receivable
      by them as aforesaid during such period, subject to all other adjustments called
      for during such period under this Section
      4
      with
      respect to the rights of the Holders of the Warrants.

     

    D.  Adjustment
      for Reclassification, Exchange and Substitution.
      In the
      event that at any time or from time to time on or after the Original Issuance
      Date, the Common Stock issuable upon the exercise of the Warrants is changed
      into the same or a different number of shares of any class or classes of stock,
      whether by recapitalization, reclassification or otherwise (other than a
      subdivision or combination of shares or stock dividend or a reorganization,
      merger, consolidation or sale of assets, provided for elsewhere in this
Section 4),
      then
      and in any such event each Holder of Warrants shall have the right thereafter
      to
      exercise such Warrant to receive the kind and amount of stock and other
      securities and property receivable upon such recapitalization, reclassification
      or other change, by holders of the maximum number of shares of Common Stock
      for
      which such Warrants could have been exercised immediately prior to such
      recapitalization, reclassification or change, all subject to further adjustment
      as provided herein.

     

    E. 
      Recapitalization, Reorganization, Reclassification, Consolidation, Merger or
      Sale. 

     

    (i)
      In
      case the Company after the Original Issuance Date shall do any of the following
      (each, a "Triggering
      Event"):
      (a)
      consolidate or merge with or into any other individual or entity (“Person”)and
      the
      Company shall not be the continuing or surviving corporation of such
      consolidation or merger, or (b) permit any other Person to consolidate with
      or
      merge into the Company and the Company shall be the continuing or surviving
      Person but, in connection with such consolidation or merger, any common or
      preferred stock (“Capital
      Stock”)
      of the
      Company shall be changed into or exchanged for Securities of any other Person
      or
      cash or any other property, or (c) transfer all or substantially all of its
      properties or assets to any other Person, or (d) effect a capital reorganization
      or reclassification of its Capital Stock, then, and in the case of each such
      Triggering Event, proper provision shall be made to the Exercise Price and
      the
      number of shares of Warrant Shares that may be purchased upon exercise of this
      Warrant so that, upon the basis and the terms and in the manner provided in
      this
      Warrant, the Holder of this Warrant shall be entitled upon the exercise hereof
      at any time after the consummation of such Triggering Event, to the extent
      this
      Warrant is not exercised prior to such Triggering Event, to receive at the
      Exercise Price as adjusted to take into account the consummation of such
      Triggering Event, in lieu of the Common Stock issuable upon such exercise of
      this Warrant prior to such Triggering Event, the Securities, cash and property
      to which such Holder would have been entitled upon the consummation of such
      Triggering Event if such Holder had exercised the rights represented by this
      Warrant immediately prior thereto (including the right of a shareholder to
      elect
      the type of consideration it will receive upon a Triggering Event), subject
      to
      adjustments (subsequent to such corporate action) as nearly equivalent as
      possible to the adjustments provided
      for elsewhere in this Section
      4,
      and the
      Exercise Price shall be adjusted to equal the product of (A) the closing price
      of the common stock of the continuing or surviving corporation as a result
      of
      such Triggering Event as of the date immediately preceding the date of the
      consummation of such Triggering Event multiplied by (B) the quotient of (i)
      the
      Exercise Price divided by (ii) the per share Fair Market Value of the Common
      Stock as of the date immediately preceding the Original Issuance Date;
provided,
      however,
      the
      Holder at its option may elect to receive an amount in cash equal to the lesser
      of (a) the value of this Warrant calculated in accordance with the Black-Scholes
      formula; and (b) $1.00 (subject to adjustment in the event the Company affects
      a
      stock split) per Warrant Share. Immediately upon the occurrence of a Triggering
      Event, the Company shall notify the Holder in writing of such Triggering Event
      and provide the calculations in determining the number of shares of Warrant
      Shares issuable upon exercise of the new warrant and the adjusted Exercise
      Price. Upon the Holder’s request, the continuing or surviving corporation as a
      result of such Triggering Event shall issue to the Holder a new warrant of
      like
      tenor evidencing the right to purchase the adjusted number of shares of Warrant
      Shares and the adjusted Exercise Price pursuant to the terms and provisions
      of
      this Section
      4(E)(i).
      Notwithstanding the foregoing to the contrary, this Section
      4(E)(i)
      shall
      only apply if the surviving entity pursuant to any such Triggering Event is
      a
      company that has a class of equity securities registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board. In the event that the
      surviving entity pursuant to any such Triggering Event is not a public company
      that is
      registered pursuant to the Securities Exchange Act of 1934, as amended, or
      its
      common stock is not listed or quoted on a national securities exchange, national
      automated quotation system or the OTC Bulletin Board, then the Holder shall
      have
      the right to demand that the Company pay to the Holder an amount in cash equal
      to the value of this Warrant calculated in accordance with the Black-Scholes
      formula.

    
      
        
        

      

      
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    (ii) In
      the
      event that the Holder has elected not to exercise this Warrant prior to the
      consummation of a Triggering Event and has also elected not to receive an amount
      in cash equal to the value of this Warrant calculated in accordance with the
      Black-Scholes formula pursuant to the provisions of Section
      4(E)(i)
      above
      (and subject to the limit described in Section
      4(E)(i),
      above),
      so long as the surviving entity pursuant to any Triggering Event is a company
      that has a class of equity securities registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board,
      the
      surviving entity and/or each Person (other than the Company) which may be
      required to deliver any Securities, cash or property upon the exercise of this
      Warrant as provided herein shall assume, by written instrument delivered to,
      and
      reasonably satisfactory to, the Holder of this Warrant, (A) the obligations
      of
      the Company under this Warrant (and if the Company shall survive the
      consummation of such Triggering Event, such assumption shall be in addition
      to,
      and shall not release the Company from, any continuing obligations of the
      Company under this Warrant) and (B) the obligation to deliver to such Holder
      such Securities, cash or property as, in accordance with the foregoing
      provisions of this subsection
      (ii),
      such
      Holder shall be entitled to receive, and the surviving entity and/or each such
      Person shall have similarly delivered to such Holder an opinion of counsel
      for
      the surviving entity and/or each such Person, which counsel shall be reasonably
      satisfactory to such Holder, or in the alternative, a written acknowledgement
      executed by the President or Chief Financial Officer of the Company, stating
      that this Warrant shall thereafter continue in full force and effect and
      the
      terms hereof (including, without limitation, all of the provisions of this
      subsection
      (ii))
      shall
      be applicable to the Securities, cash or property which the surviving entity
      and/or each such Person may be required to deliver upon any exercise of this
      Warrant or the exercise of any rights pursuant hereto.

    
      
        
        

      

      
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    F.  Sale
      of Shares Below Purchase Price:

     

    (1) 
      If at
      any time or from time to time following the Original Issuance Date, the Company
      issues or sells, or is deemed by the express provisions of this Section 4(F)
      to have
      issued or sold, Additional Shares of Common Stock (as hereinafter defined),
      other than as a dividend or other distribution on any class of stock and other
      than upon a subdivision or combination of shares of Common Stock, in either
      case
      as provided in Section 4(A)
      above,
      for an Effective Price (as hereinafter defined) less than the then existing
      Purchase Price, then and in each such case the then existing Purchase Price
      shall be reduced, as of the opening of business on the date of such issue or
      sale, to a price equal to the Effective Price for such Additional Shares of
      Common Stock.

     

    (2) For
      the
      purpose of making any adjustment required under Section 4(F),
      the
      consideration received by the Company for any issue or sale of securities shall
      (I) to the extent it consists of cash be computed at the amount of cash
      received by the Company, (II) to the extent it consists of property other
      than cash, be computed at the fair value of that property as determined in
      good
      faith by the board of directors of the Company (the “Board”),
      (III) if Additional Shares of Common Stock, Convertible Securities (as
      hereinafter defined) or rights or options to purchase either Additional Shares
      of Common Stock or Convertible Securities are issued or sold together with
      other
      stock or securities or other assets of the Company for a consideration which
      covers both, be computed as the portion of the consideration so received that
      may be reasonably determined in good faith by the Board to be allocable to
      such
      Additional Shares of Common Stock, Convertible Securities or rights or options,
      and (IV) be computed after reduction for all expenses payable by the
      Company in connection with such issue or sale.

     

    (3) For
      the
      purpose of the adjustment required under Section 4(F),
      if the
      Company issues or sells any rights, warrants or options for the purchase of,
      or
      stock or other securities convertible into or exchangeable for, Additional
      Shares of Common Stock (such convertible or exchangeable stock or securities
      being hereinafter referred to as “Convertible
      Securities”)
      and if
      the Effective Price of such Additional Shares of Common Stock is less than
      the
      Purchase Price then in effect, then in each case the Company shall be deemed
      to
      have issued at the time of the issuance of such rights, warrants, options or
      Convertible Securities the maximum number of Additional Shares of Common Stock
      issuable upon exercise, conversion or exchange thereof and to have received
      as
      consideration for the issuance of such shares an amount equal to the total
      amount of the consideration, if any, received by the Company for the issuance
      of
      such rights, warrants, options or Convertible Securities, plus, in the case
      of
      such rights, warrants or options, the minimum amounts of consideration, if
      any,
      payable to the Company upon the exercise of such rights, warrants or options,
      plus, in the case of Convertible Securities, the minimum amounts of
      consideration, if any, payable to the Company (other than by cancellation of
      liabilities or obligations evidenced by such Convertible Securities) upon the
      conversion or exchange thereof. No further adjustment of the Purchase Price,
      adjusted upon the issuance of such rights, warrants, options or Convertible
      Securities, shall be made as a result of the
      actual issuance of Additional Shares of Common Stock on the exercise of any
      such
      rights, warrants or options or the conversion or exchange of any such
      Convertible Securities. If any such rights or options or the conversion or
      exchange privilege represented by any such Convertible Securities shall expire
      without having been exercised, the Purchase Price adjusted upon the issuance
      of
      such rights, warrants, options or Convertible Securities shall be readjusted
      to
      the Purchase Price which would have been in effect had an adjustment been made
      on the basis that the only Additional Shares of Common Stock so issued were
      the
      Additional Shares of Common Stock, if any, actually issued or sold on the
      exercise of such rights, warrants, or options or rights of conversion or
      exchange of such Convertible Securities, and such Additional Shares of Common
      Stock, if any, were issued or sold for the consideration actually received
      by
      the Company upon such exercise, plus the consideration, if any, actually
      received by the Company for the granting of all such rights, warrants, or
      options, whether or not exercised, plus the consideration received for issuing
      or selling the Convertible Securities actually converted or exchanged, plus
      the
      consideration, if any, actually received by the Company (other than by
      cancellation of liabilities or obligations evidenced by such Convertible
      Securities) on the conversion or exchange of such Convertible
      Securities.

     

    
      
        
        

      

      
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    (4) For
      the
      purpose of the adjustment required under Section 4(F),
      if the
      Company issues or sells, or is deemed by the express provisions of this
Section 4 to
      have issued or sold, any rights or options for the purchase of Convertible
      Securities and if the Effective Price of the Additional Shares of Common Stock
      underlying such Convertible Securities is less than the Purchase Price then
      in
      effect, then in each such case the Company shall be deemed to have issued at
      the
      time of the issuance of such rights or options the maximum number of Additional
      Shares of Common Stock issuable upon conversion or exchange of the total amount
      of Convertible Securities covered by such rights or options and to have received
      as consideration for the issuance of such Additional Shares of Common Stock
      an
      amount equal to the amount of consideration, if any, received by the Company
      for
      the issuance of such rights, warrants or options, plus the minimum amounts
      of
      consideration, if any, payable to the Company upon the exercise of such rights,
      warrants or options, plus the minimum amount of consideration, if any, payable
      to the Company (other than by cancellation of liabilities or obligations
      evidenced by such Convertible Securities) upon the conversion or exchange of
      such Convertible Securities. No further adjustment of the Purchase Price,
      adjusted upon the issuance of such rights, warrants or options, shall be made as
      a result of the actual issuance of the Convertible Securities upon the exercise
      of such rights, warrants or options or upon the actual issuance of Additional
      Shares of Common Stock upon the conversion or exchange of such Convertible
      Securities. The provisions of paragraph (3) above for the readjustment of
      the Purchase Price upon the expiration of rights, warrants or options or the
      rights of conversion or exchange of Convertible Securities shall apply
mutatis mutandis
      to the
      rights, warrants options and Convertible Securities referred to in this
      paragraph (4).

     

    (5) “Additional
      Shares of Common Stock”
shall
      mean all shares of Common Stock (or any debt or equity securities convertible
      or
      exercisable into Common Stock) issued by the Company on or after the Original
      Issuance Date, whether or not subsequently reacquired or retired by the Company,
      other than (I) the Warrant Shares, (II) the shares of Common Stock issuable
      upon conversion of the Note, (III) shares of Common Stock issuable upon
      exercise of warrants, options and convertible securities outstanding as of
      the
      Original Issuance Date (provided that the terms of such warrants, options and
      convertible securities are not
      modified after the Original Issuance Date to adjust the exercise price),
      (IV) shares of Common Stock issued pursuant to any event for which
      adjustment is made to the Purchase Price under Section 4
      hereof
      or to the exercise price under the anti-dilution provisions of any securities
      outstanding as of the Original Issuance Date (including the Notes), and
      (V) 25,000 shares of common stock which the Company has previously agreed
      to issue to its legal counsel, David M. Loev (as disclosed in its SEC filings,
      which shares have not been issued to date). The “Effective
      Price”
of
      Additional Shares of Common Stock shall mean the quotient determined by dividing
      the total number of Additional Shares of Common Stock issued or sold, or deemed
      to have been issued or sold by the Company under this Section 4F,
      into
      the aggregate consideration received, or deemed to have been received, by the
      Company for such issue under this Section 4F,
      for
      such Additional Shares of Common Stock.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (6) Other
      than a reduction pursuant to its applicable anti-dilution provisions, any
      reduction in the conversion price of any Convertible Security, whether
      outstanding on the Original Issuance Date or thereafter, or the price of any
      option, warrant or right to purchase Common Stock or any Convertible Security
      (whether such option, warrant or right is outstanding on the Original Issuance
      Date or thereafter), to an Effective Price less than the current Purchase Price,
      shall be deemed to be an issuance of such Convertible Security and all such
      options, warrants or rights at such Effective Price, and the provisions of
      Sections 4(F)(3),
      (4)
      and
(5)
      shall
      apply thereto mutatis mutandis.

     

    (7) Any
      time
      an adjustment is made to the Purchase Price pursuant to Section
      4(F),
      a
      corresponding proportionate change shall be made to the number of shares of
      Common Stock issuable upon conversion of this Warrant.

     

    G.  No
      Adjustments in Certain Circumstances.
      No
      adjustment in the Purchase Price shall be required unless such adjustment would
      require an increase or decrease of at least one ($0.01) cent in such price;
      provided,
      however,
      that
      any adjustments which by reason of this Section 4(G)
      are not
      required to be made shall be carried forward and taken into account in any
      subsequent adjustment required to be made hereunder. All calculations under
      this
Section 4(G)
      shall be
      made to the nearest cent or to the nearest one-hundredth of a share, as the
      case
      may be.

     

    5. Notices
      of Record Date.
      In
      case:

     

    A. the
      Company shall take a record of the holders of its Common Stock (or other stock
      or securities at the time receivable upon the exercise of the Warrants) for
      the
      purpose of entitling them to receive any dividend or other distribution, or
      any
      right to subscribe for or purchase any shares of stock of any class or any
      other
      securities, or to receive any other right, or

     

    B. of
      any
      capital reorganization of the Company, any reclassification of the capital
      stock
      of the Company, any consolidation or merger of the Company with or into another
      corporation, or any conveyance of all or substantially all of the assets of
      the
      Company to another corporation, or

     

    C. of
      any
      voluntary dissolution, liquidation or winding-up of the Company; then, and
      in
      each such case, the Company will mail or cause to be mailed to each holder
      of a
      Warrant at the time outstanding a notice specifying, as the case may be,
      (a) the date on which a record is to be
      taken
      for the purpose of such dividend, distribution or right, and stating the amount
      and character of such dividend, distribution or right, or (b) the date on
      which such reorganization, reclassification, consolidation, merger, conveyance,
      dissolution, liquidation or winding-up is expected to take place, and the time,
      if any is to be fixed, as of which the holders of record of Common Stock (or
      such stock or securities at the time receivable upon the exercise of the
      Warrants) shall be entitled to exchange their shares of Common Stock (or such
      other stock or securities) for securities or other property deliverable upon
      such reorganization, reclassification, consolidation, merger, conveyance,
      dissolution, liquidation or winding-up, such notice shall be mailed at least
      ten
      (10) days prior to the date therein specified.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    6. [Intentionally
      removed.]

     

    7. Loss
      or Mutilation.
      Upon
      receipt by the Company of evidence satisfactory to it (in the exercise of
      reasonable discretion) of the ownership of and the loss, theft, destruction
      or
      mutilation of any Warrant and (in the case of loss, theft or destruction) of
      indemnity satisfactory to it (in the exercise of reasonable discretion), and
      (in
      the case of mutilation) upon surrender and cancellation thereof, the Company
      will execute and deliver in lieu thereof a new Warrant of like
      tenor.

     

    8. Reservation
      of Common Stock.
      The
      Company shall at all times reserve and keep available for issue upon the
      exercise of Warrants such number of its authorized but unissued shares of Common
      Stock as will be sufficient to permit the exercise in full of all outstanding
      Warrants. All of the shares of Commons Stock issuable upon the exercise of
      the
      rights represented by this Warrant will, upon issuance and receipt of the
      Purchase Price therefor, be fully paid and nonassessable, and free from all
      preemptive rights, rights of first refusal or first offer, taxes, liens and
      charges of whatever nature, with respect to the issuance thereof.

     

    9. Registration
      Rights Agreement.
      The
      Holder of this Warrant is entitled to have a portion of the Warrant Shares
      registered for resale under the Act, pursuant to and in accordance with the
      Registration Rights Agreement dated as of the date hereof by and between the
      Holder and the Company.

     

    10. No
      Rights as Stockholder Conferred by Warrants.
      The
      Warrant shall not entitle the Holder hereof to any of the rights, either at
      law
      or in equity, of a stockholder of the Company. The Holder shall, upon the
      exercise thereof, not be entitled to any dividend that may have accrued or
      which
      may previously have been paid with respect to shares of stock issuable upon
      the
      exercise of the Warrant, except as may otherwise be provided in Section
      4
      hereof.

     

    11. Notices.
      All
      notices and other communications from the Company to the Holder of this Warrant
      shall be mailed by first class, registered or certified mail, postage prepaid,
      and/or a nationally recognized overnight courier service to the address
      furnished to the Company in writing by the Holder.

     

    12. Change;
      Modifications; Waiver.
      No
      terms of this Warrant may be amended, waived or modified except by the express
      written consent of the Company and the holders of not less than 50.1% of the
      shares of Common Stock then issuable under outstanding Warrants issued in
      connection with the Company’s August, September, and October 2006 warrants, and
      June 2007 warrants;
      provided,
      however,
      that no
      such amendment or waiver shall reduce the Warrant Share Number, increase the
      Purchase Price, shorten the period during which this Warrant may be exercised
      or
      modify any provision of this Section
      12
      without
      the consent of the Holder of this Warrant. Notwithstanding the foregoing
      sentence, the Purchase Price will be subject to adjustment in the event of
      a
      forward or reverse stock split. No consideration shall be offered or paid to
      any
      person to amend or consent to a waiver or modification of any provision of
      this
      Warrant unless the same consideration is also offered to all holders of the
      Warrants.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    13. Endorsement
      of Warrants.
      The
      Warrant when presented or surrendered for exchange, transfer or registration
      shall be accompanied (if so required by the Company) by an assignment in the
      form attached hereto as Exhibit
      B
      or such
      other written instrument of transfer, in form satisfactory to the Company,
      duly
      executed by the registered Holder or by his duly authorized
      attorney.

     

    14. Agreement
      of Warrant Holders.
      The
      Holder, and to the extent that portions of this Warrant are assigned and there
      is more than one Holder of warrants exercisable for the Warrant Shares, every
      holder of a Warrant, by accepting the same, consents and agrees with the Company
      and with all other Warrant holders that: (a) the Warrants are transferable
      only
      as permitted by Section
      3
      above;
      (b) the Warrants are transferable only on the registry books of the Company
      as
      herein provided; and (c) the Company may deem and treat the person in whose
      name
      the Warrant certificate is registered as the absolute owner thereof and of
      the
      Warrants evidenced thereby for all purposes whatsoever, and the Company shall
      not be affected by any notice to the contrary.

     

    15. Payment
      of Taxes.
      The
      Company will pay all stamp, transfer and other similar taxes payable in
      connection with the original issuance of this Warrant and the shares of Common
      Stock issuable upon exercise thereof, provided, however, that the Company shall
      not be required to (i) pay any such tax which may be payable in respect of
      any
      transfer involving the transfer and delivery of this Warrant or the issuance
      or
      delivery of certificates for shares of Common Stock issuable upon exercise
      thereof in a name other than that of the registered Holder of this Warrant
      or
      (ii) issue or deliver any certificate for shares of Common Stock upon the
      exercise of this Warrant until any such tax required to be paid under clause
      (i)
      shall have been paid, all such tax being payable by the holder of this Warrant
      at the time of surrender.

     

    16. Ownership
      Cap and Exercise Restriction.
      Notwithstanding anything to the contrary set forth in this Warrant, at no time
      may a Holder of this Warrant exercise this Warrant if the number of shares
      of
      Common Stock to be issued pursuant to such exercise would exceed, when
      aggregated with all other shares of Common Stock owned by such Holder at such
      time, the number of shares of Common Stock which would result in such Holder
      beneficially owning (as determined in accordance with Section 13(d) of the
      Exchange Act and the rules thereunder) in excess of 9.9% of the then issued
      and
      outstanding shares of Common Stock; provided,
      however,
      that
      upon a holder of this Warrant providing the Company with sixty-one (61) days
      notice (pursuant to Section
      13
      hereof)
      (the "Waiver
      Notice")
      that
      such Holder would like to waive this Section
      7
      with
      regard to any or all shares of Common Stock issuable upon exercise of this
      Warrant, this Section
      7
      will be
      of no force or effect with regard to all or a portion of the Warrant referenced
      in the Waiver Notice; provided,
      further,
      that
      this provision shall be of no further force or effect during the sixty-one
      (61)
      days immediately preceding the expiration of the term of this
      Warrant.

    

    17. Fractional
      Interest.
      The
      Company shall not be required to issue fractional shares of Common Stock on
      the
      exercise of this Warrant. If more than one Warrant shall be presented for
      exercise at the same time by the Holder, the number of full shares of Common
      Stock which shall be issuable upon such exercise shall be computed on the basis
      of the aggregate number of shares of Common Stock acquirable on exercise of
      the
      Warrants so presented. If any fraction of a share of Common Stock would, except
      for the provisions of this Section
      17,
      be
      issuable on the exercise of any Warrant (or specified portion thereof), the
      Company shall pay an amount in cash calculated by it to be equal to the Purchase
      Price per share multiplied by such fraction computed to the nearest whole cent.
      The Holder by his acceptance of this Warrant expressly waives any and all rights
      to receive any fraction of a share of Common Stock or a stock certificate
      representing a fraction of a share of Common Stock.

     

    18. Entire
      Agreement.
      This
      Warrant constitutes the full and entire understanding and agreement among the
      parties with regard to the subject matter hereof and no party shall be liable
      or
      bound to any other party in any manner by any representations, warranties,
      covenants or agreements except as specifically set forth herein.

     

    19. Successors
      and Assigns.
      All
      covenants and provisions of this Warrant by or for the benefit of the Company
      or
      the Holder of this Warrant shall bind and inure to the benefit of their
      respective successors, permitted assigns, heirs and personal
      representatives.

     

    20. Termination.
      This
      Warrant shall terminate at 5:00 p.m., Eastern Time, on the Expiration Date
      or
      upon such earlier date on which all of this Warrant has been exercised (the
      “Termination
      Date”).

     

    21. Headings.
      The
      headings in this Warrant are for purposes of convenience in reference only,
      and
      shall not be deemed to constitute a part hereof.

     

    22. Governing
      Law, Etc.
      This
      Agreement shall be governed by and construed exclusively in accordance with
      the
      internal laws of the State of New York without regard to the conflicts of laws
      principles thereof. The parties hereto hereby irrevocably agree that any suit
      or
      proceeding arising directly and/or indirectly pursuant to or under this
      Agreement, shall be brought solely in a federal or state court located in the
      City, County and State of New York. By its execution hereof, the parties hereby
      covenant and irrevocably submit to the in personam
      jurisdiction of the federal and state courts located in the City, County and
      State of New York and agree that any process in any such action may be served
      upon any of them personally, or by certified mail or registered mail upon them
      or their agent, return receipt requested, with the same full force and effect
      as
      if personally served upon them in New York City. The parties hereto waive any
      claim that any such jurisdiction is not a convenient forum for any such suit
      or
      proceeding and any defense or lack of in personam
      jurisdiction with respect thereto. In the event of any such action or
      proceeding, the party prevailing therein shall be entitled to payment from
      the
      other party hereto of all of its reasonable legal fees and
      expenses.

     

    Remainder
      of Page Intentionally Left Blank

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    WARRANT
      SIGNATURE PAGE

     

    

     

    

     

    Dated:
      June 22, 2007

     

    
      	 	 
	 	
              XA,
                INC.

            
	 	 
	 	 
	 	
              By:
                /s/ Joseph Wagner

            
	 	
              Name:
                Joseph Wagner

            
	 	
              Title:
                President & CEO

            

    

    

     

    

     

    

     

    

     

    
 

     

    4,000
      Shares

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    

     

    EXHIBIT
      A

     

    SUBSCRIPTION
      FORM

     

    (To
      be
      executed only upon exercise of Warrant)

     

    

     

    The
      undersigned registered owner of this Warrant irrevocably exercises this Warrant
      and purchases _______ shares of the Common Stock of XA, Inc., purchasable with
      this Warrant, and herewith makes payment therefor (either in cash or pursuant
      to
      the cashless exercise provisions set forth in Section
      1
      of the
      Warrant), all at the price and on the terms and conditions specified in this
      Warrant.

     

    Dated:     

    

    

    

    
      	 	
              (Signature
                of Registered Owner)

            
	 	 
	 	 
	 	
              (Street
                Address)

            
	 	 
	 	 
	 	
              (City
                / State / Zip Code)

            

    

    

    

    

     

    
      
        
           

        

        
        

      

      
        13

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      B

     

    FORM
      OF ASSIGNMENT

     

    

     

    FOR
      VALUE RECEIVED
      the
      undersigned registered owner of this Warrant hereby sells, assigns and transfers
      unto the Assignee named below all of the rights of the undersigned under the
      within Warrant, with respect to the number of shares of Common Stock set forth
      below:

     

    
      	
              Name
                of Assignee

            	
              Address

            	
              Number
                of Shares

            
	 	 	 
	 	 	 
	 	 	 

    

    

    and
      does
      hereby irrevocably constitute and appoint __________________________ Attorney
      to
      make such transfer on the books of XA, Inc., maintained for the purpose, with
      full power of substitution in the premises.

     

    Dated:     

     

    

     

    
      	 	 
	 	
              (Signature)

            
	 	 
	 	 
	 	
              (Witness)

            

    

    

    

    The
      undersigned Assignee of the Warrant hereby makes to XA, Inc., as of the date
      hereof, with respect to the Assignee, all of the representations and warranties
      made by the Holder, and the undersigned Assignee agrees to be bound by all
      the
      terms and conditions of the Warrant and the XA, Inc. Registration Rights
      Agreement, dated as of ______ __, 2006, by and between XA, Inc. and the
      Holder.

    

    

    Dated:     

    

    

    

    
      	 	 
	 	
              (Signature)

            

    

    

    

    
      
        
        

      

      
        14Warrant with Sands Brothers Venture Capital II LLC ($0.30 initial exercise
      price) (June 22, 2007)

    Exhibit
      10.8

    
 

    THIS
      WARRANT AND ANY SHARES OF COMMON STOCK ISSUED UPON EXERCISE HEREOF HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED
      FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
      DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT AN
      EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL THAT
      SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED.

     

    

     

    XA,
      INC.

     

    WARRANT
      TO PURCHASE

     

    16,000
      SHARES

     

    OF
      COMMON STOCK

     

    (SUBJECT
      TO ADJUSTMENT)

     

    (Void
      after June 22, 2012)

     

     

     

    
      	
              Bridge
                Warrant No: 2

               

            	
              June
                22, 2007

               

            

    

    

     

    This
      certifies that for value, Sands Brothers Venture Capital II LLC, or registered
      assigns (the ”Holder”),
      is
      entitled, subject to the terms set forth below, at any time from and after
      June
      22, 2007 (the “Original Issuance
      Date”)
      and
      before 5:00 p.m., Eastern Time, on June 22, 2012 (the “Expiration
      Date”),
      to
      purchase from XA,
      Inc.,
      a
      Nevada corporation (the “Company”),
      Sixteen Thousand
      (16,000) shares
      (subject to adjustment as described herein), of common stock, par value $0.001
      per share, of the Company (the “Common
      Stock”),
      upon
      surrender hereof, at the principal office of the Company referred to below,
      with
      a duly executed subscription form in the form attached hereto as Exhibit A
      and
      simultaneous payment therefor in lawful, immediately available money of the
      United States or otherwise as hereinafter provided, at an initial exercise
      price
      per share of $0.30 (the “Purchase
      Price”).
      The
      Purchase Price is subject to further adjustment as provided in Section
      4
      below.
      The term “Common
      Stock”
shall
      include, unless the context otherwise requires, the stock and other securities
      and property at the time receivable upon the exercise of this Warrant. The
      term
“Warrant,”
as
      used herein, shall mean this Warrant and any other Warrants delivered in
      substitution or exchange therefor as provided herein. 

    

    This
      Warrant is being issued by the Company together with an 11% Senior Secured
      Convertible Promissory Note in the amount of $16,000 (the “Note”)
      pursuant to the terms and conditions set forth in the Securities Purchase
      Agreement dated the date hereof by and between the Holder and the Company (the
      “SPA”),
      in
      connection with the sale by the Company of $500,000 aggregate principal amount
      of Notes (the “Follow
      On Notes”).
      

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    1. Exercise.
      This
      Warrant may be exercised at any time or from time to time from and after the
      Original Issuance Date and before 5:00 p.m., Eastern Time, on June 22,
      2012, unless such Warrant is terminated pursuant to Section
      6,
      below,
      on any business day, for the full number of shares of Common Stock called for
      hereby, by surrendering it at the principal office of the Company, at 875 North
      Michigan Avenue, Suite 2626, Chicago, IL 60611, with the subscription form
      duly
      executed, together with payment in an amount equal to (a) the number of
      shares of Common Stock called for on the face of this Warrant, multiplied
      (b) by the Purchase Price. Payment of the Purchase Price may be made at
      Holder’s choosing either: (1) by payment in immediately available funds; or (2)
      in lieu of any cash payment, if this Warrant is exercised on a date when a
      Registration Statement (as defined in the Registration Rights Agreement),
      covering the resale of the shares of Common Stock issuable upon exercise of
      this
      Warrant has not been declared effective by the Securities and Exchange
      Commission (the “Commission”),
      or is
      no longer in effect, and the Fair Market Value (as defined below) is equal
      to or
      greater than the Purchase Price, in exchange for the number of shares of Common
      Stock equal to the product of (x) the number of shares to which the Warrants
      are
      being exercised multiplied by (y) a fraction, the numerator of which is the
      Purchase Price and the denominator of which is the Fair Market Value (as defined
      below). This Warrant may be exercised for less than the full number of shares
      of
      Common Stock at the time called for hereby, except that the number of shares
      receivable upon the exercise of this Warrant as a whole, and the sum payable
      upon the exercise of this Warrant as a whole, shall be proportionately reduced.
      Upon a partial exercise of this Warrant in accordance with the terms hereof,
      this Warrant shall be surrendered, and a new Warrant of the same tenor and
      for
      the purchase of the number of such shares not purchased upon such exercise
      shall
      be issued by the Company to Holder without any charge therefor. A Warrant shall
      be deemed to have been exercised immediately prior to the close of business
      on
      the date of its surrender for exercise as provided above, and the person
      entitled to receive the shares of Common Stock issuable upon such exercise
      shall
      be treated for all purposes as the holder of such shares of record as of the
      close of business on such date. Within two (2) business days after such date,
      the Company shall issue and deliver to the person or persons entitled to receive
      the same a certificate or certificates for the number of full shares of Common
      Stock issuable upon such exercise, together with cash, in lieu of any fraction
      of a share, equal to such fraction of the then Fair Market Value on the date
      of
      exercise of one full share of Common Stock.  

     

    “Fair
      Market Value”
shall
      mean, as of any date: (i) if shares of the Common Stock are listed on a
      national securities exchange, the average of the closing prices as reported
      for
      composite transactions during the ten (10) consecutive trading days preceding
      the trading day immediately prior to such date or, if no sale occurred on a
      trading day, then the mean between the closing bid and asked prices on such
      exchange on such trading day; (ii) if shares of the Common Stock are not so
      listed but are traded on the NASDAQ National Market (“NNM”),
      the
      average of the closing prices as reported on the NNM during the ten (10)
      consecutive trading days preceding the trading day immediately prior to such
      date or, if no sale occurred on a trading day, then the mean between the highest
      bid and lowest asked prices as of the close of business on such trading day,
      as
      reported on the NNM; or if applicable, the Nasdaq Capital Market (“NCM”),
      (iii)
      if not then included for quotation on the NNM or the NCM, the average of the
      highest reported bid and lowest reported asked prices as reported by the OTC
      Bulletin Board of the National Quotation Bureau, as the case may be; or
      (iv) if the shares of the Common Stock are not then publicly traded, the
      fair market price of the Common Stock as determined in good faith by
      the
      independent members of the Board of Directors of the Company and the Holders
      of
      all Warrants.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2. Shares
      Fully Paid; Payment of Taxes.
      All
      shares of Common Stock issued upon the exercise of this Warrant shall be validly
      issued, fully paid and non-assessable, and the Company shall pay all taxes
      and
      other governmental charges (other than income taxes to the holder) that may
      be
      imposed in respect of the issue or delivery thereof.

     

    3. Transfer
      and Exchange.
      (a)
      Neither this Warrant nor the Common Stock to be issued upon exercise hereof
      (the
“Warrant
      Shares”)
      have
      been registered under the Act or any state securities laws (“Blue
      Sky Laws”).
      This
      Warrant has been acquired for investment purposes and not with a view to
      distribution or resale and may not be sold or otherwise transferred without:
      (i)
      an effective registration statement for such Warrant under the Act and such
      applicable Blue Sky Laws; or (ii) an opinion of counsel reasonably satisfactory
      to the Company that registration is not required under the Act or under any
      applicable Blue Sky Laws. 

     

    (b) Upon
      compliance with applicable federal and state securities laws as set forth in
      Section
      3(a),
      above,
      this Warrant and all rights hereunder are transferable, in whole or in part,
      on
      the books of the Company maintained for such purpose at its Principal Office
      by
      the Holder in person or by duly authorized attorney, upon surrender of this
      Warrant together with a completed and executed assignment form in the form
      attached hereto as Exhibit B,
      and
      payment of any necessary transfer tax or other governmental charge imposed
      upon
      such transfer. Upon any partial transfer, the Company will issue and deliver
      to
      the assignee a new Warrant with respect to the shares of Common Stock for which
      it is exercisable that have been transferred, and will deliver to the Holder
      a
      new Warrant or Warrants with respect to the shares of Common Stock not so
      transferred. A Warrant may be transferred only by the procedure set forth
      herein. No transfer shall be effective until such transfer is recorded on the
      books of the Company, provided that such transfer is recorded promptly by the
      Company, and until such transfer on such books, the Company shall treat the
      registered Holder hereof as the owner of the Warrant for all
      purposes.

     

    (c) This
      Warrant is exchangeable at the Principal Office for two or more new Warrants,
      each in the form of this Warrant, to purchase the same aggregate number of
      shares of Common Stock, each new Warrant to represent the right to purchase
      such
      number of shares as the Holder shall designate at the time of such exchange,
      but
      which shall not exceed the total number of shares for which this Warrant may
      be
      from time to time exercisable.

     

    (d) Transfer
      of the Warrant Shares issued upon the exercise of this Warrant shall be
      restricted in the same manner and to the same extent as the Warrant, and the
      certificates representing such Warrant Shares shall bear substantially the
      following legend, until such Warrant Shares have been registered under the
      Act
      or may be removed as otherwise permitted under the Act:

     

    “THE
      SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE
      STATE SECURITIES LAW
      AND
      MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE ACT OR
      SUCH
      APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD
      THERETO, OR (ii) IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY,
      REGISTRATION UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS IS NOT
      REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER.”

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (e) The
      Holder and the Company agree to execute such other documents and instruments
      as
      counsel to the Company deems necessary to effect the compliance of the issuance
      of this Warrant and any Warrant Shares issued upon exercise hereof with
      applicable federal and state securities laws, including compliance with
      applicable exemptions from the registration requirements of such
      laws.

     

    4. Anti-Dilution
      Provisions.
      The
      Purchase Price in effect at any time and the number and kind of securities
      issuable upon conversion of this Warrant shall be subject to adjustment from
      time to time upon the happening of certain events as follows:

     

    A.  Adjustment
      for Stock Splits and Combinations.
      If the
      Company at any time or from time to time on or after the date of Warrant
      issuance (the “Original
      Issuance Date”)
      effects a subdivision of the outstanding Common Stock, the Purchase Price then
      in effect immediately before that subdivision shall be proportionately
      decreased, and conversely, if the Company at any time or from time to time
      on or
      after the Original Issuance Date combines the outstanding shares of Common
      Stock
      into a smaller number of shares, the Purchase Price then in effect immediately
      before the combination shall be proportionately increased. Any adjustment under
      this Section
      4(A) shall
      become effective at the close of business on the date the subdivision or
      combination becomes effective.

     

    B.  Adjustment
      for Certain Dividends and Distributions.
      If the
      Company at any time or from time to time on or after the Original Issuance
      Date
      makes or fixes a record date for the determination of holders of Common Stock
      entitled to receive, a dividend or other distribution payable in additional
      shares of Common Stock, then and in each such event the Purchase Price then
      in
      effect shall be decreased as of the time of such issuance or, in the event
      such
      record date is fixed, as of the close of business on such record date, by
      multiplying the Purchase Price then in effect by a fraction (1) the numerator
      of
      which is the total number of shares of Common Stock issued and outstanding
      immediately prior to the time of such issuance or the close of business on
      such
      record date and (2) the denominator of which shall be the total number of shares
      of Common Stock issued and outstanding immediately prior to the time of such
      issuance or the close of business on such record date plus the number of shares
      of Common Stock issuable in payment of such dividend or distribution;
provided,
      however,
      that if
      such record date is fixed and such dividend is not fully paid or if such
      distribution is not fully made on the date fixed therefor, the Purchase Price
      shall be recomputed accordingly as of the close of business on such record
      date
      and thereafter the Purchase Price shall be adjusted pursuant to this
Section 4(B)
      as of
      the time of actual payment of such dividends or distributions.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    C.  Adjustments
      for Other Dividends and Distributions.
      In the
      event the Company at any time or from time to time on or after the Original
      Issuance Date makes, or fixes a record date for the determination of holders
      of
      Common Stock entitled to receive, a dividend or other distribution payable
      in
      securities of the Company other than shares of Common Stock, then and in each
      such event provision shall be made so that the Holders of Warrants shall receive
      upon exercise thereof, in addition to the number of shares of Common Stock
      receivable thereupon, the amount of securities of the Company which they would
      have received had their Warrants been exercised into Common Stock on the date
      of
      such event and had they thereafter, during the period from the date of such
      event to and including the conversion date, retained such securities receivable
      by them as aforesaid during such period, subject to all other adjustments called
      for during such period under this Section
      4
      with
      respect to the rights of the Holders of the Warrants.

     

    D.  Adjustment
      for Reclassification, Exchange and Substitution.
      In the
      event that at any time or from time to time on or after the Original Issuance
      Date, the Common Stock issuable upon the exercise of the Warrants is changed
      into the same or a different number of shares of any class or classes of stock,
      whether by recapitalization, reclassification or otherwise (other than a
      subdivision or combination of shares or stock dividend or a reorganization,
      merger, consolidation or sale of assets, provided for elsewhere in this
Section 4),
      then
      and in any such event each Holder of Warrants shall have the right thereafter
      to
      exercise such Warrant to receive the kind and amount of stock and other
      securities and property receivable upon such recapitalization, reclassification
      or other change, by holders of the maximum number of shares of Common Stock
      for
      which such Warrants could have been exercised immediately prior to such
      recapitalization, reclassification or change, all subject to further adjustment
      as provided herein.

     

    E. 
      Recapitalization, Reorganization, Reclassification, Consolidation, Merger or
      Sale. 

     

    (i)
      In
      case the Company after the Original Issuance Date shall do any of the following
      (each, a "Triggering
      Event"):
      (a)
      consolidate or merge with or into any other individual or entity (“Person”)and
      the
      Company shall not be the continuing or surviving corporation of such
      consolidation or merger, or (b) permit any other Person to consolidate with
      or
      merge into the Company and the Company shall be the continuing or surviving
      Person but, in connection with such consolidation or merger, any common or
      preferred stock (“Capital
      Stock”)
      of the
      Company shall be changed into or exchanged for Securities of any other Person
      or
      cash or any other property, or (c) transfer all or substantially all of its
      properties or assets to any other Person, or (d) effect a capital reorganization
      or reclassification of its Capital Stock, then, and in the case of each such
      Triggering Event, proper provision shall be made to the Exercise Price and
      the
      number of shares of Warrant Shares that may be purchased upon exercise of this
      Warrant so that, upon the basis and the terms and in the manner provided in
      this
      Warrant, the Holder of this Warrant shall be entitled upon the exercise hereof
      at any time after the consummation of such Triggering Event, to the extent
      this
      Warrant is not exercised prior to such Triggering Event, to receive at the
      Exercise Price as adjusted to take into account the consummation of such
      Triggering Event, in lieu of the Common Stock issuable upon such exercise of
      this Warrant prior to such Triggering Event, the Securities, cash and property
      to which such Holder would have been entitled upon the consummation of such
      Triggering Event if such Holder had exercised the rights represented by this
      Warrant immediately prior thereto (including the right of a shareholder to
      elect
      the type of consideration it will receive upon a Triggering Event), subject
      to
      adjustments (subsequent to such corporate action) as nearly equivalent as
      possible to the adjustments provided
      for elsewhere in this Section
      4,
      and the
      Exercise Price shall be adjusted to equal the product of (A) the closing price
      of the common stock of the continuing or surviving corporation as a result
      of
      such Triggering Event as of the date immediately preceding the date of the
      consummation of such Triggering Event multiplied by (B) the quotient of (i)
      the
      Exercise Price divided by (ii) the per share Fair Market Value of the Common
      Stock as of the date immediately preceding the Original Issuance Date;
provided,
      however,
      the
      Holder at its option may elect to receive an amount in cash equal to the lesser
      of (a) the value of this Warrant calculated in accordance with the Black-Scholes
      formula; and (b) $1.00 (subject to adjustment in the event the Company affects
      a
      stock split) per Warrant Share. Immediately upon the occurrence of a Triggering
      Event, the Company shall notify the Holder in writing of such Triggering Event
      and provide the calculations in determining the number of shares of Warrant
      Shares issuable upon exercise of the new warrant and the adjusted Exercise
      Price. Upon the Holder’s request, the continuing or surviving corporation as a
      result of such Triggering Event shall issue to the Holder a new warrant of
      like
      tenor evidencing the right to purchase the adjusted number of shares of Warrant
      Shares and the adjusted Exercise Price pursuant to the terms and provisions
      of
      this Section
      4(E)(i).
      Notwithstanding the foregoing to the contrary, this Section
      4(E)(i)
      shall
      only apply if the surviving entity pursuant to any such Triggering Event is
      a
      company that has a class of equity securities registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board. In the event that the
      surviving entity pursuant to any such Triggering Event is not a public company
      that is
      registered pursuant to the Securities Exchange Act of 1934, as amended, or
      its
      common stock is not listed or quoted on a national securities exchange, national
      automated quotation system or the OTC Bulletin Board, then the Holder shall
      have
      the right to demand that the Company pay to the Holder an amount in cash equal
      to the value of this Warrant calculated in accordance with the Black-Scholes
      formula.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    (ii) In
      the
      event that the Holder has elected not to exercise this Warrant prior to the
      consummation of a Triggering Event and has also elected not to receive an amount
      in cash equal to the value of this Warrant calculated in accordance with the
      Black-Scholes formula pursuant to the provisions of Section
      4(E)(i)
      above
      (and subject to the limit described in Section
      4(E)(i),
      above),
      so long as the surviving entity pursuant to any Triggering Event is a company
      that has a class of equity securities registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board,
      the
      surviving entity and/or each Person (other than the Company) which may be
      required to deliver any Securities, cash or property upon the exercise of this
      Warrant as provided herein shall assume, by written instrument delivered to,
      and
      reasonably satisfactory to, the Holder of this Warrant, (A) the obligations
      of
      the Company under this Warrant (and if the Company shall survive the
      consummation of such Triggering Event, such assumption shall be in addition
      to,
      and shall not release the Company from, any continuing obligations of the
      Company under this Warrant) and (B) the obligation to deliver to such Holder
      such Securities, cash or property as, in accordance with the foregoing
      provisions of this subsection
      (ii),
      such
      Holder shall be entitled to receive, and the surviving entity and/or each such
      Person shall have similarly delivered to such Holder an opinion of counsel
      for
      the surviving entity and/or each such Person, which counsel shall be reasonably
      satisfactory to such Holder, or in the alternative, a written acknowledgement
      executed by the President or Chief Financial Officer of the Company, stating
      that this Warrant shall thereafter continue in full force and effect and
      the
      terms hereof (including, without limitation, all of the provisions of this
      subsection
      (ii))
      shall
      be applicable to the Securities, cash or property which the surviving entity
      and/or each such Person may be required to deliver upon any exercise of this
      Warrant or the exercise of any rights pursuant hereto.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    F.  Sale
      of Shares Below Purchase Price:

     

    (1) 
      If at
      any time or from time to time following the Original Issuance Date, the Company
      issues or sells, or is deemed by the express provisions of this Section 4(F)
      to have
      issued or sold, Additional Shares of Common Stock (as hereinafter defined),
      other than as a dividend or other distribution on any class of stock and other
      than upon a subdivision or combination of shares of Common Stock, in either
      case
      as provided in Section 4(A)
      above,
      for an Effective Price (as hereinafter defined) less than the then existing
      Purchase Price, then and in each such case the then existing Purchase Price
      shall be reduced, as of the opening of business on the date of such issue or
      sale, to a price equal to the Effective Price for such Additional Shares of
      Common Stock.

     

    (2) For
      the
      purpose of making any adjustment required under Section 4(F),
      the
      consideration received by the Company for any issue or sale of securities shall
      (I) to the extent it consists of cash be computed at the amount of cash
      received by the Company, (II) to the extent it consists of property other
      than cash, be computed at the fair value of that property as determined in
      good
      faith by the board of directors of the Company (the “Board”),
      (III) if Additional Shares of Common Stock, Convertible Securities (as
      hereinafter defined) or rights or options to purchase either Additional Shares
      of Common Stock or Convertible Securities are issued or sold together with
      other
      stock or securities or other assets of the Company for a consideration which
      covers both, be computed as the portion of the consideration so received that
      may be reasonably determined in good faith by the Board to be allocable to
      such
      Additional Shares of Common Stock, Convertible Securities or rights or options,
      and (IV) be computed after reduction for all expenses payable by the
      Company in connection with such issue or sale.

     

    (3) For
      the
      purpose of the adjustment required under Section 4(F),
      if the
      Company issues or sells any rights, warrants or options for the purchase of,
      or
      stock or other securities convertible into or exchangeable for, Additional
      Shares of Common Stock (such convertible or exchangeable stock or securities
      being hereinafter referred to as “Convertible
      Securities”)
      and if
      the Effective Price of such Additional Shares of Common Stock is less than
      the
      Purchase Price then in effect, then in each case the Company shall be deemed
      to
      have issued at the time of the issuance of such rights, warrants, options or
      Convertible Securities the maximum number of Additional Shares of Common Stock
      issuable upon exercise, conversion or exchange thereof and to have received
      as
      consideration for the issuance of such shares an amount equal to the total
      amount of the consideration, if any, received by the Company for the issuance
      of
      such rights, warrants, options or Convertible Securities, plus, in the case
      of
      such rights, warrants or options, the minimum amounts of consideration, if
      any,
      payable to the Company upon the exercise of such rights, warrants or options,
      plus, in the case of Convertible Securities, the minimum amounts of
      consideration, if any, payable to the Company (other than by cancellation of
      liabilities or obligations evidenced by such Convertible Securities) upon the
      conversion or exchange thereof. No further adjustment of the Purchase Price,
      adjusted upon the issuance of such rights, warrants, options or Convertible
      Securities, shall be made as a result of the
      actual issuance of Additional Shares of Common Stock on the exercise of any
      such
      rights, warrants or options or the conversion or exchange of any such
      Convertible Securities. If any such rights or options or the conversion or
      exchange privilege represented by any such Convertible Securities shall expire
      without having been exercised, the Purchase Price adjusted upon the issuance
      of
      such rights, warrants, options or Convertible Securities shall be readjusted
      to
      the Purchase Price which would have been in effect had an adjustment been made
      on the basis that the only Additional Shares of Common Stock so issued were
      the
      Additional Shares of Common Stock, if any, actually issued or sold on the
      exercise of such rights, warrants, or options or rights of conversion or
      exchange of such Convertible Securities, and such Additional Shares of Common
      Stock, if any, were issued or sold for the consideration actually received
      by
      the Company upon such exercise, plus the consideration, if any, actually
      received by the Company for the granting of all such rights, warrants, or
      options, whether or not exercised, plus the consideration received for issuing
      or selling the Convertible Securities actually converted or exchanged, plus
      the
      consideration, if any, actually received by the Company (other than by
      cancellation of liabilities or obligations evidenced by such Convertible
      Securities) on the conversion or exchange of such Convertible
      Securities.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (4) For
      the
      purpose of the adjustment required under Section 4(F),
      if the
      Company issues or sells, or is deemed by the express provisions of this
Section 4 to
      have issued or sold, any rights or options for the purchase of Convertible
      Securities and if the Effective Price of the Additional Shares of Common Stock
      underlying such Convertible Securities is less than the Purchase Price then
      in
      effect, then in each such case the Company shall be deemed to have issued at
      the
      time of the issuance of such rights or options the maximum number of Additional
      Shares of Common Stock issuable upon conversion or exchange of the total amount
      of Convertible Securities covered by such rights or options and to have received
      as consideration for the issuance of such Additional Shares of Common Stock
      an
      amount equal to the amount of consideration, if any, received by the Company
      for
      the issuance of such rights, warrants or options, plus the minimum amounts
      of
      consideration, if any, payable to the Company upon the exercise of such rights,
      warrants or options, plus the minimum amount of consideration, if any, payable
      to the Company (other than by cancellation of liabilities or obligations
      evidenced by such Convertible Securities) upon the conversion or exchange of
      such Convertible Securities. No further adjustment of the Purchase Price,
      adjusted upon the issuance of such rights, warrants or options, shall be made
      as
      a result of the actual issuance of the Convertible Securities upon the exercise
      of such rights, warrants or options or upon the actual issuance of Additional
      Shares of Common Stock upon the conversion or exchange of such Convertible
      Securities. The provisions of paragraph (3) above for the readjustment of
      the Purchase Price upon the expiration of rights, warrants or options or the
      rights of conversion or exchange of Convertible Securities shall apply
mutatis mutandis
      to the
      rights, warrants options and Convertible Securities referred to in this
      paragraph (4).

     

    (5) “Additional
      Shares of Common Stock”
shall
      mean all shares of Common Stock (or any debt or equity securities convertible
      or
      exercisable into Common Stock) issued by the Company on or after the Original
      Issuance Date, whether or not subsequently reacquired or retired by the Company,
      other than (I) the Warrant Shares, (II) the shares of Common Stock issuable
      upon conversion of the Note, (III) shares of Common Stock issuable upon
      exercise of warrants, options and convertible securities outstanding as of
      the
      Original Issuance Date (provided that the terms of such warrants, options and
      convertible securities are not
      modified after the Original Issuance Date to adjust the exercise price),
      (IV) shares of Common Stock issued pursuant to any event for which
      adjustment is made to the Purchase Price under Section 4
      hereof
      or to the exercise price under the anti-dilution provisions of any securities
      outstanding as of the Original Issuance Date (including the Notes), and
      (V) 25,000 shares of common stock which the Company has previously agreed
      to issue to its legal counsel, David M. Loev (as disclosed in its SEC filings,
      which shares have not been issued to date). The “Effective
      Price”
of
      Additional Shares of Common Stock shall mean the quotient determined by dividing
      the total number of Additional Shares of Common Stock issued or sold, or deemed
      to have been issued or sold by the Company under this Section 4F,
      into
      the aggregate consideration received, or deemed to have been received, by the
      Company for such issue under this Section 4F,
      for
      such Additional Shares of Common Stock.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (6) Other
      than a reduction pursuant to its applicable anti-dilution provisions, any
      reduction in the conversion price of any Convertible Security, whether
      outstanding on the Original Issuance Date or thereafter, or the price of any
      option, warrant or right to purchase Common Stock or any Convertible Security
      (whether such option, warrant or right is outstanding on the Original Issuance
      Date or thereafter), to an Effective Price less than the current Purchase Price,
      shall be deemed to be an issuance of such Convertible Security and all such
      options, warrants or rights at such Effective Price, and the provisions of
      Sections 4(F)(3),
      (4)
      and
(5)
      shall
      apply thereto mutatis mutandis.

     

    (7) Any
      time
      an adjustment is made to the Purchase Price pursuant to Section
      4(F),
      a
      corresponding proportionate change shall be made to the number of shares of
      Common Stock issuable upon conversion of this Warrant.

     

    G.  No
      Adjustments in Certain Circumstances.
      No
      adjustment in the Purchase Price shall be required unless such adjustment would
      require an increase or decrease of at least one ($0.01) cent in such price;
      provided,
      however,
      that
      any adjustments which by reason of this Section 4(G)
      are not
      required to be made shall be carried forward and taken into account in any
      subsequent adjustment required to be made hereunder. All calculations under
      this
Section 4(G)
      shall be
      made to the nearest cent or to the nearest one-hundredth of a share, as the
      case
      may be.

     

    5. Notices
      of Record Date.
      In
      case:

     

    A. the
      Company shall take a record of the holders of its Common Stock (or other stock
      or securities at the time receivable upon the exercise of the Warrants) for
      the
      purpose of entitling them to receive any dividend or other distribution, or
      any
      right to subscribe for or purchase any shares of stock of any class or any
      other
      securities, or to receive any other right, or

     

    B. of
      any
      capital reorganization of the Company, any reclassification of the capital
      stock
      of the Company, any consolidation or merger of the Company with or into another
      corporation, or any conveyance of all or substantially all of the assets of
      the
      Company to another corporation, or

     

    C. of
      any
      voluntary dissolution, liquidation or winding-up of the Company; then, and
      in
      each such case, the Company will mail or cause to be mailed to each holder
      of a
      Warrant at the time outstanding a notice specifying, as the case may be,
      (a) the date on which a record is to be
      taken
      for the purpose of such dividend, distribution or right, and stating the amount
      and character of such dividend, distribution or right, or (b) the date on
      which such reorganization, reclassification, consolidation, merger, conveyance,
      dissolution, liquidation or winding-up is expected to take place, and the time,
      if any is to be fixed, as of which the holders of record of Common Stock (or
      such stock or securities at the time receivable upon the exercise of the
      Warrants) shall be entitled to exchange their shares of Common Stock (or such
      other stock or securities) for securities or other property deliverable upon
      such reorganization, reclassification, consolidation, merger, conveyance,
      dissolution, liquidation or winding-up, such notice shall be mailed at least
      ten
      (10) days prior to the date therein specified.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    6. [Intentionally
      removed.]

     

    7. Loss
      or Mutilation.
      Upon
      receipt by the Company of evidence satisfactory to it (in the exercise of
      reasonable discretion) of the ownership of and the loss, theft, destruction
      or
      mutilation of any Warrant and (in the case of loss, theft or destruction) of
      indemnity satisfactory to it (in the exercise of reasonable discretion), and
      (in
      the case of mutilation) upon surrender and cancellation thereof, the Company
      will execute and deliver in lieu thereof a new Warrant of like
      tenor.

     

    8. Reservation
      of Common Stock.
      The
      Company shall at all times reserve and keep available for issue upon the
      exercise of Warrants such number of its authorized but unissued shares of Common
      Stock as will be sufficient to permit the exercise in full of all outstanding
      Warrants. All of the shares of Commons Stock issuable upon the exercise of
      the
      rights represented by this Warrant will, upon issuance and receipt of the
      Purchase Price therefor, be fully paid and nonassessable, and free from all
      preemptive rights, rights of first refusal or first offer, taxes, liens and
      charges of whatever nature, with respect to the issuance thereof.

     

    9. Registration
      Rights Agreement.
      The
      Holder of this Warrant is entitled to have a portion of the Warrant Shares
      registered for resale under the Act, pursuant to and in accordance with the
      Registration Rights Agreement dated as of the date hereof by and between the
      Holder and the Company.

     

    10. No
      Rights as Stockholder Conferred by Warrants.
      The
      Warrant shall not entitle the Holder hereof to any of the rights, either at
      law
      or in equity, of a stockholder of the Company. The Holder shall, upon the
      exercise thereof, not be entitled to any dividend that may have accrued or
      which
      may previously have been paid with respect to shares of stock issuable upon
      the
      exercise of the Warrant, except as may otherwise be provided in Section
      4
      hereof.

     

    11. Notices.
      All
      notices and other communications from the Company to the Holder of this Warrant
      shall be mailed by first class, registered or certified mail, postage prepaid,
      and/or a nationally recognized overnight courier service to the address
      furnished to the Company in writing by the Holder.

     

    12. Change;
      Modifications; Waiver.
      No
      terms of this Warrant may be amended, waived or modified except by the express
      written consent of the Company and the holders of not less than 50.1% of the
      shares of Common Stock then issuable under outstanding Warrants issued in
      connection with the Company’s August, September, and October 2006 warrants, and
      June 2007 warrants;
      provided,
      however,
      that no
      such amendment or waiver shall reduce the Warrant Share Number, increase the
      Purchase Price, shorten the period during which this Warrant may be exercised
      or
      modify any provision of this Section
      12
      without
      the consent of the Holder of this Warrant. Notwithstanding the foregoing
      sentence, the Purchase Price will be subject to adjustment in the event of
      a
      forward or reverse stock split. No consideration shall be offered or paid to
      any
      person to amend or consent to a waiver or modification of any provision of
      this
      Warrant unless the same consideration is also offered to all holders of the
      Warrants.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    13. Endorsement
      of Warrants.
      The
      Warrant when presented or surrendered for exchange, transfer or registration
      shall be accompanied (if so required by the Company) by an assignment in the
      form attached hereto as Exhibit
      B
      or such
      other written instrument of transfer, in form satisfactory to the Company,
      duly
      executed by the registered Holder or by his duly authorized
      attorney.

     

    14. Agreement
      of Warrant Holders.
      The
      Holder, and to the extent that portions of this Warrant are assigned and there
      is more than one Holder of warrants exercisable for the Warrant Shares, every
      holder of a Warrant, by accepting the same, consents and agrees with the Company
      and with all other Warrant holders that: (a) the Warrants are transferable
      only
      as permitted by Section
      3
      above;
      (b) the Warrants are transferable only on the registry books of the Company
      as
      herein provided; and (c) the Company may deem and treat the person in whose
      name
      the Warrant certificate is registered as the absolute owner thereof and of
      the
      Warrants evidenced thereby for all purposes whatsoever, and the Company shall
      not be affected by any notice to the contrary.

     

    15. Payment
      of Taxes.
      The
      Company will pay all stamp, transfer and other similar taxes payable in
      connection with the original issuance of this Warrant and the shares of Common
      Stock issuable upon exercise thereof, provided, however, that the Company shall
      not be required to (i) pay any such tax which may be payable in respect of
      any
      transfer involving the transfer and delivery of this Warrant or the issuance
      or
      delivery of certificates for shares of Common Stock issuable upon exercise
      thereof in a name other than that of the registered Holder of this Warrant
      or
      (ii) issue or deliver any certificate for shares of Common Stock upon the
      exercise of this Warrant until any such tax required to be paid under clause
      (i)
      shall have been paid, all such tax being payable by the holder of this Warrant
      at the time of surrender.

     

    16. Ownership
      Cap and Exercise Restriction.
      Notwithstanding anything to the contrary set forth in this Warrant, at no time
      may a Holder of this Warrant exercise this Warrant if the number of shares
      of
      Common Stock to be issued pursuant to such exercise would exceed, when
      aggregated with all other shares of Common Stock owned by such Holder at such
      time, the number of shares of Common Stock which would result in such Holder
      beneficially owning (as determined in accordance with Section 13(d) of the
      Exchange Act and the rules thereunder) in excess of 9.9% of the then issued
      and
      outstanding shares of Common Stock; provided,
      however,
      that
      upon a holder of this Warrant providing the Company with sixty-one (61) days
      notice (pursuant to Section
      13
      hereof)
      (the "Waiver
      Notice")
      that
      such Holder would like to waive this Section
      7
      with
      regard to any or all shares of Common Stock issuable upon exercise of this
      Warrant, this Section
      7
      will be
      of no force or effect with regard to all or a portion of the Warrant referenced
      in the Waiver Notice; provided,
      further,
      that
      this provision shall be of no further force or effect during the sixty-one
      (61)
      days immediately preceding the expiration of the term of this
      Warrant.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    17. Fractional
      Interest.
      The
      Company shall not be required to issue fractional shares of Common Stock on
      the
      exercise of this Warrant. If more than one Warrant shall be presented for
      exercise at the same time by the Holder, the number of full shares of Common
      Stock which shall be issuable upon such exercise shall be computed on the basis
      of the aggregate number of shares of Common Stock acquirable on exercise of
      the
      Warrants so presented. If any fraction of a share of Common Stock would, except
      for the provisions of this Section
      17,
      be
      issuable on the exercise of any Warrant (or specified portion thereof), the
      Company shall pay an amount in cash calculated by it to be equal to the Purchase
      Price per share multiplied by such fraction computed to the nearest whole cent.
      The Holder by his acceptance of this Warrant expressly waives any and all rights
      to receive any fraction of a share of Common Stock or a stock certificate
      representing a fraction of a share of Common Stock.

     

    18. Entire
      Agreement.
      This
      Warrant constitutes the full and entire understanding and agreement among the
      parties with regard to the subject matter hereof and no party shall be liable
      or
      bound to any other party in any manner by any representations, warranties,
      covenants or agreements except as specifically set forth herein.

     

    19. Successors
      and Assigns.
      All
      covenants and provisions of this Warrant by or for the benefit of the Company
      or
      the Holder of this Warrant shall bind and inure to the benefit of their
      respective successors, permitted assigns, heirs and personal
      representatives.

     

    20. Termination.
      This
      Warrant shall terminate at 5:00 p.m., Eastern Time, on the Expiration Date
      or
      upon such earlier date on which all of this Warrant has been exercised (the
      “Termination
      Date”).

     

    21. Headings.
      The
      headings in this Warrant are for purposes of convenience in reference only,
      and
      shall not be deemed to constitute a part hereof.

     

    22. Governing
      Law, Etc.
      This
      Agreement shall be governed by and construed exclusively in accordance with
      the
      internal laws of the State of New York without regard to the conflicts of laws
      principles thereof. The parties hereto hereby irrevocably agree that any suit
      or
      proceeding arising directly and/or indirectly pursuant to or under this
      Agreement, shall be brought solely in a federal or state court located in the
      City, County and State of New York. By its execution hereof, the parties hereby
      covenant and irrevocably submit to the in personam
      jurisdiction of the federal and state courts located in the City, County and
      State of New York and agree that any process in any such action may be served
      upon any of them personally, or by certified mail or registered mail upon them
      or their agent, return receipt requested, with the same full force and effect
      as
      if personally served upon them in New York City. The parties hereto waive any
      claim that any such jurisdiction is not a convenient forum for any such suit
      or
      proceeding and any defense or lack of in personam
      jurisdiction with respect thereto. In the event of any such action or
      proceeding, the party prevailing therein shall be entitled to payment from
      the
      other party hereto of all of its reasonable legal fees and
      expenses.

     

    Remainder
      of Page Intentionally Left Blank

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    WARRANT
      SIGNATURE PAGE

     

    

     

    

     

    Dated:
      June 22, 2007

     

    

    
      	 	
              XA,
                INC.

            
	 	 
	 	 
	 	
              By:
                /s/ Joseph Wagner

            
	 	
              Name:
                Joseph Wagner

            
	 	
              Title:
                President & CEO

            

    

    

     

    

     

    

     

    

     

    
 

     

    16,000
      Shares

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    

     

    EXHIBIT
      A

     

    SUBSCRIPTION
      FORM

     

    (To
      be
      executed only upon exercise of Warrant)

     

    

     

    The
      undersigned registered owner of this Warrant irrevocably exercises this Warrant
      and purchases _______ shares of the Common Stock of XA, Inc., purchasable with
      this Warrant, and herewith makes payment therefor (either in cash or pursuant
      to
      the cashless exercise provisions set forth in Section
      1
      of the
      Warrant), all at the price and on the terms and conditions specified in this
      Warrant.

     

    Dated:      

    

    

    

    
      	 	 
	 	
              (Signature
                of Registered Owner)

            
	 	 
	 	 
	 	 
	 	
              (Street
                Address)

            
	 	 
	 	 
	 	 
	 	
              (City
                / State / Zip Code)

            

    

    

    

    

     

    
      
        
           

        

        
        

      

      
        14

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      B

     

    FORM
      OF ASSIGNMENT

     

    

     

    FOR
      VALUE RECEIVED
      the
      undersigned registered owner of this Warrant hereby sells, assigns and transfers
      unto the Assignee named below all of the rights of the undersigned under the
      within Warrant, with respect to the number of shares of Common Stock set forth
      below:

     

    
      	
              Name
                of Assignee

            	
              Address

            	
              Number
                of Shares

            
	
               

            	
               

            	
               

            
	 	
               

            	 
	 	
               

            	 

    

    

    and
      does
      hereby irrevocably constitute and appoint __________________________ Attorney
      to
      make such transfer on the books of XA, Inc., maintained for the purpose, with
      full power of substitution in the premises.

     

    Dated:     

     

    

     

    
      	 	 
	 	
              (Signature)

            
	 	 
	 	 
	 	 
	 	
              (Witness)

            

    

    

    

    The
      undersigned Assignee of the Warrant hereby makes to XA, Inc., as of the date
      hereof, with respect to the Assignee, all of the representations and warranties
      made by the Holder, and the undersigned Assignee agrees to be bound by all
      the
      terms and conditions of the Warrant and the XA, Inc. Registration Rights
      Agreement, dated as of ______ __, 2006, by and between XA, Inc. and the
      Holder.

    

    

    Dated:     

    

    

    

    
      	 	 
	 	
              (Signature)

            

    

     

    
 

    
      
        
        

      

      
        15

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