Document:

zealous_8k-ex1007.htm

    EXHIBIT
      10.7

    CONVERTIBLE
      PROMISSORY NOTE

     August
      __, 2007

    

    
      	 	
              New
                York, New York 

            

    

    
FOR
      VALUE RECEIVED, the undersigned, Zealous Trading Group, Inc., a
      Nevada corporation ("Maker"), promises to pay to ______("Payee") at ______,
      or
      at such other place as Payee may from time to time designate by written notice
      to Maker, in lawful money of the United States of America, the aggregate sum
      of  _________ ($__________).   Maker further agrees as
      follows:

    

    Section
      1.   Interest
      Rate and Fees.

    

     Interest
      shall accrue at a rate of 10% per annum based on a 365 day year.

    

    Section
      2.   Payments.

    

     2.1  Accrued
      interest shall be
      paid __________ (the “Maturity Date”).

    

     2.2  On
      or before August 31,
      2008 all outstanding amounts owing under this Note, including unpaid interest
      and principal, shall be paid; provided, however, that at any time after November
      30, 2007 all of the interest and principal of this Note shall be payable to
      the
      Payee 10 days after receipt by Maker of a written demand for payment by
      Payee.  At the option of the Maker, interest on this Note may be paid
      in shares of the common stock, par value $.001 per share (“Common Stock”), of
      the Maker, at a price per share as determined by: (a) if the Common Stock is
      then listed or quoted on a Trading Market (as defined below), the daily volume
      weighted average price of the Common Stock for the ten (10) trading days prior
      to the date that interest is due (or the nearest preceding date) on the Trading
      Market on which the Common Stock is then listed or quoted as reported by
      Bloomberg L.P. (based on a Trading Day from 9:30 a.m. New York City time to
      4:02
      p.m. New York City time); (b)  if the OTC Bulletin Board is not a
      Trading Market, the volume weighted average price of the Common Stock for the
      ten (10) trading days prior to such date (or the nearest preceding date) on
      the
      OTC Bulletin Board; (c) if the Common Stock is not then listed or quoted on
      the
      OTC Bulletin Board and if prices for the Common Stock are then reported in
      the
“Pink
      Sheets” published by Pink Sheets, LLC (or a similar organization or agency
      succeeding to its functions of reporting prices), the average bid price per
      share of the Common Stock so reported for the twenty (20) trading days prior
      to
      such date; or (d) in all other cases, the fair market value of a share of Common
      Stock as determined by an independent appraiser selected in good faith by the
      Purchaser and reasonably acceptable to the Maker, the fees and expenses of
      which
      shall be paid by the Maker.  “Trading Market” means the following
      markets or exchanges on which the Common Stock is listed or quoted for trading
      on the date in question: the American Stock Exchange, the Nasdaq Capital Market,
      the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
      Exchange or the OTC Bulletin Board.

    

     2.3  Maker
      shall have the
      right to prepay this Note in full or in part at any time, without premium or
      penalty.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    Section
      3.   Conversion.

    

     Upon
      the request of the Holder, at any time prior August 31, 2008, this Note may
      be
      converted, in whole but not in part, into that number of fully-paid and
      nonassessable shares of Common Stock equal to (a) the amount of the then
      outstanding principal and accrued interest under this Note, divided by (b)
      the
      Conversion Price (as defined below).  The “Conversion Price” shall be
      the greater of $.02.  Notwithstanding any provision to the contrary in
      this Note, this Note may not be converted until an amendment to the Articles
      of
      Incorporation of the Company increasing the authorized shares of the Makers’s
      Common Stock to 1,500,000,000 shares is approved by a majority of the Makers’s
      shareholders (the “Authorized Share Amendment”) and is filed with the Secretary
      of State of the State of Nevada and becomes effective (the “Amendment Effective
      Date”).. The Maker agrees to use its reasonable commercial efforts to file a
      Schedule 14 C with the Securities Exchange Commission with respect to the
      Authorized Share Amendment by no later than February 15, 2008.

    

    Section
      4.   Mechanics of
      Conversion.

    

     Before
      the Holder shall be entitled to convert this Note into Common Stock, the Holder
      shall surrender this Note, duly endorsed, at the office of the Maker, and shall
      give written notice to the Maker at its principal corporate office of the
      election to convert and shall state therein the name or names in which the
      certificate or certificates for the Common Stock, are to be issued. The
      Maker
      shall, promptly thereafter, issue and deliver to such person at the address
      specified by the Holder, a certificate or certificates for the Common Stock
      to
      which the Holder is entitled.  Such conversion shall be deemed to have
      been made immediately prior to the close of business on the date of such
      surrender of this Note (the “Conversion Date”), and the persons entitled to
      receive the Common Stock issuable upon such conversion shall be treated for
      all
      purposes as the record holder or holders as of such date.  No
      fractional shares shall be issued upon conversion of this Note and the number
      of
      shares of Common Stock to be issued shall be rounded up to the nearest whole
      share.

    

    Section
      5.   Default.

    

     It
      shall be an event of default ("Event of Default"), and the entire unpaid
      principal of this Note, together with accrued interest, shall become immediately
      due and payable, at the election of Payee, upon the occurrence of any of the
      following events:

    

     5.1  any
      failure on the part
      of Maker to make any payment when due, whether by acceleration or otherwise,
      and
      the continuation of such failure for a period of ten (10) days after written
      notice thereof from Payee;

     

     5.2  Maker
      shall commence (or
      take any action for the purpose of commencing) any proceeding under any
      bankruptcy, reorganization, arrangement, readjustment of debt, moratorium or
      similar law or statute;

     

     5.3  a
      proceeding shall be
      commenced against Maker under any bankruptcy, reorganization, arrangement,
      readjustment of debt, moratorium or similar law or statute and relief is ordered
      against it, or the proceeding is controverted but is not dismissed within sixty
      (60) days after the commencement thereof;

     

    
      
        
        

      

      
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     5.4  Maker
      consents to or
      suffers the appointment of a guardian, receiver, trustee or custodian to any
      substantial part of its assets that is not vacated within thirty (30)
      days;

     

     5.5  the
      dissolution,
      termination of existence, or insolvency of Maker; or

     

     5.6  Maker
      consents to or
      suffers an attachment, garnishment, execution or other legal process against
      any
      of his assets that is not released within thirty (30) days.

     

    Section
      6.   Default Rate.

     

     In
      the event Maker shall fail to make any payment on account of interest,
      principal, charges, or premiums within 10 days after the date the same shall
      become due and payable, Maker shall pay to Payee interest on any overdue
      payment of principal, interest, charges and premiums at the rate of five percent
      (5%) per annum above the rate otherwise payable under the terms of this Note
      (the "Default Rate"), from the date the same shall become
      due and payable until the date paid.

    

    Section
      7.   Waivers.

    

     Maker
      waives demand, presentment, protest, notice of protest, notice of dishonor,
      and
      all other notices or demands of any kind or nature with respect to this
      Note.

    

    Section
      8.          
Securities Act of
      1933.  

     

     Upon
      conversion of this Note, the persons entitled to receive the shares of Common
      Stock may be required to execute and deliver to the Maker an instrument, in
      form
      satisfactory to the Maker, representing that such person is an accredited
      investor as defined in Rule 501(a) of the Securities Act of 1933, as amended
      (the "Act") and the shares of Common Stock are being acquired for
      investment, and not with a view to distribution, within the meaning of the
      Act.

    

    Section
      9.   Shareholder
      Status.  

     

     Nothing
      contained in this Note shall be construed as conferring upon the Holder the
      right to vote or to receive dividends or to consent or to receive notice as
      a
      shareholder in respect of any meeting of shareholders for the election of
      directors of the Maker or of any other matter, or any rights whatsoever as
      a
      shareholder of the Maker prior to conversion hereof.

    

    Section
      10.         Miscellaneous.

    

     10.1  This
      Note may be altered
      only by prior written agreement signed by the party against whom enforcement
      of
      any waiver, change, modification, or discharge is sought.  This Note
      may not be modified by an oral agreement, even if supported by new
      consideration.

     

     10.2  The
      covenants, terms and
      conditions contained in this Note apply to and bind the heirs, successors,
      executors, administrators and assigns of the parties.

     

     10.3  This
      Note constitutes a
      final written expression of all the terms of the agreement between the parties
      regarding the subject matter hereof, are a complete and exclusive statement
      of
      those terms, and supersedes all prior and contemporaneous agreements,
      understandings, and representations between the parties.  If any
      provision or any word, term, clause, or other part of any provision of this
      Note
      shall be invalid for any reason, the same shall be ineffective, but the
      remainder of this Note shall not be affected and shall remain in full force
      and
      effect.

     

    
      
        
        

      

      
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     10.4  This
      Note shall be
      governed by the laws of New York, without giving effect to principals of
      conflicts of laws.

     

     10.5  All
      notices, requests,
      demands and other communications required or permitted hereunder or by law
      shall
      be in writing and given to the parties at the addresses listed below (or to
      such
      other address as shall at any time be designated by any party in writing to
      the
      other parties):  (a) by certified U.S. mail, return receipt requested,
      postage prepaid; (b) by recognized overnight courier service (e.g., Federal
      Express); or (c) by hand-delivery:

    

     To
      Maker :

     

    Zealous
      Trading Group, Inc.

    1800
      Century Park East, Suite 200

    Los
      Angeles, CA  90067

    Att:
      Chief Executive Officer

    

     To
      Payee:                                   

    

     All
      such notices shall be deemed effective  (a) three days after being
      deposited in the United States mail, first class, postage prepaid, or (b) one
      day after being delivered to a reputable overnight delivery
      service.

    

    [Signature
      Page Follows]

    

    
      
        
        

      

      
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    IN
      WITNESS
      WHEREOF, Maker has executed this Note effective as of the date
      first set forth above.

    

    
      	 	
              ZEALOUS
                TRADING GROUP, INC.,

              a
                Nevada Corporation 

            
	 	
               

               

            
	 	By:___________________________________          
               
	 	     
              Name: Milton C. Ault, III
	 	     
              Title: Chief Executive Officer 

    

     

     

    5zealous_8k-ex1008.htm

    EXHIBIT
      10.8

     

    NEITHER
      THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
      BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
      COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
      MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
      OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
      EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
      SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

     

    SERIES
      A COMMON STOCK PURCHASE WARRANT

    

     ZEALOUS
      TRADING GROUP, INC.

     

    AA
      -

     

    
      	Warrant
              Shares: ---__________--- 	
              Initial
                Exercise Date:________ 

            

    

                                                                                                               

    THIS
      SERIES A COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,
      for value received, __________(the “Holder”), is entitled, upon the terms
      and subject to the limitations on exercise and the conditions hereinafter set
      forth, at any time on or after the date hereof (the “Initial Exercise
      Date”) and on or prior to the close of business on the five year anniversary
      of the Initial Exercise Date (the “Termination Date”) but not thereafter,
      to subscribe for and purchase from Zealous Trading Group, Inc., a Nevada
      corporation (the “Company”), _______ shares (the “Warrant Shares”)
      of common stock, par value $.001 per share, of the Company (the “Common
      Stock”).  The purchase price of one share of Common Stock under
      this Warrant shall be equal to the Exercise Price, as defined in Section
      2(b).

     

    Section
      2.    Exercise.

     

    a)    Exercise
      of Warrant.  Exercise of the purchase rights represented by this
      Warrant may be made, in whole or in part, at any time or times on or after
      the
      Initial Exercise Date and on or before the Termination Date by delivery to
      the
      Company of a duly executed facsimile copy of the Notice of Exercise Form
      annexed  hereto (or such other office or agency of the Company as it
      may designate by notice in writing to the registered Holder at the address
      of
      such Holder appearing on the books of the Company); and, within 3 Business
      Days
      (as defined below) of the date said Notice of Exercise is delivered to the
      Company and the Company shall have received payment of the aggregate Exercise
      Price of the shares thereby purchased by wire transfer or cashier’s check drawn
      on a United States bank.  Partial exercises of this Warrant resulting
      in purchases of a portion of the total number of Warrant Shares available
      hereunder shall have the effect of lowering the outstanding number of Warrant
      Shares purchasable hereunder in an amount equal to the applicable number of
      Warrant Shares purchased.  The Company shall maintain records showing
      the number of Warrant Shares purchased and the date of such
      purchases.  For the purposes of this Warrant “Business Day”
means any day, except Saturday, Sunday or any holiday observed by the
      New York
      Stock Exchange.  Notwithstanding any provision to the contrary in this
      Warrant, this Warrant may not be exercised until an amendment to the Articles
      of
      Incorporation of the Company increasing the authorized shares of the Company’s
      Common Stock to 1,500,000,000 shares is approved by a majority of the Company’s
      shareholders (the “Authorized Share Amendment”) and is filed with the Secretary
      of State of the State of Nevada and becomes effective (the “Amendment Effective
      Date”). The Maker agrees to use its reasonable commercial efforts to file a
      Schedule 14 C with the Securities Exchange Commission with respect to the
      Authorized Share Amendment by no later than February 15, 2008.

     

    
      
        
        

      

      
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    b)    Exercise
      Price.  The exercise price per share of the Common Stock under
      this Warrant shall be $0.02, subject to adjustment hereunder
      (the “Exercise Price”).

     

    c)    Cashless
      Exercise.  In lieu of exercising this Warrant by payment of cash,
      this Warrant may also be exercised at such time by means of a “cashless
      exercise” in which the Holder shall be entitled to receive a certificate for the
      number of Warrant Shares equal to the quotient obtained by dividing [(A-B)
      (X)]
      by (A), where:

     

    
      	
              (A)
                =

            	 VWAP
              (as defined below) on the Business Day immediately preceding the date
              of
              such election; 
	 	 
	
              (B)
                = 

            	 the
              Exercise Price of this Warrant, as adjusted; and 
	 	 
	
              (X)
                =

            	
              the
                number of Warrant Shares issuable upon exercise of this Warrant in
                accordance with the terms of this Warrant by means of a cash exercise
                rather than a cashless
                exercise. 

            

    

    

    For
      purposes of this Warrant, “VWAP” means, for any date, the price determined by
      the first of the following clauses that applies: (a) if the Common Stock is
      then
      listed or quoted on a Trading Market (as defined below), the daily volume
      weighted average price of the Common Stock for the ten (10) trading days prior
      to such date (or the nearest preceding date) on the Trading Market on which
      the
      Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
      on a
      Trading Day from 9:30 a.m. New York City time to 4:02 p.m. New York City time);
      (b)  if the OTC Bulletin Board is not a Trading Market, the volume
      weighted average price of the Common Stock for the ten (10) trading days prior
      to such date (or the nearest preceding date) on the OTC Bulletin Board; (c)
      if
      the Common Stock is not then listed or quoted on the OTC Bulletin Board and
      if
      prices for the Common Stock are then reported in the “Pink Sheets” published by
      Pink Sheets, LLC (or a similar organization or agency succeeding to its
      functions of reporting prices), the average bid price per share of the Common
      Stock so reported for the twenty (20) trading days prior to such date; or (d)
      in
      all other cases, the fair market value of a share of Common Stock as determined
      by an independent appraiser selected in good faith by the Purchaser and
      reasonably acceptable to the Company, the fees and expenses of which shall
      be
      paid by the Company. For purposes of this Warrant, “Trading Market” means the
      following markets or exchanges on which the Common Stock is listed or quoted
      for
      trading on the date in question: the American Stock Exchange, the Nasdaq Capital
      Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
      York
      Stock Exchange or the OTC Bulletin Board.

    

    
      
        
        

      

      
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    d)    Mechanics
      of Exercise.

     

    i.  Authorization
      of Warrant Shares.  The Company covenants that all Warrant Shares
      that may be issued upon the exercise of the purchase rights represented by
      this
      Warrant will after the Amendment Effective Date, upon exercise of the purchase
      rights represented by this Warrant, be duly authorized, validly issued, fully
      paid and nonassessable and free from all taxes, liens and charges created by
      the
      Company in respect of the issue thereof (other than taxes in respect of any
      transfer occurring contemporaneously with such issue).

     

    ii.  Delivery
      of Certificates Upon Exercise.  Certificates for shares purchased
      hereunder shall be transmitted by the Company to the Holder by physical delivery
      to the address specified by the Holder in the Notice of Exercise within 10
      Business Days from the delivery to the Company of the Notice of Exercise Form,
      surrender of this Warrant (if required) and payment of the aggregate Exercise
      Price as set forth above (“Warrant Share Delivery
      Date”).   This Warrant shall be deemed to have been exercised
      on the date the Exercise Price is received by the Company.  The
      Warrant Shares shall be deemed to have been issued, and the Holder or any other
      person so designated to be named therein shall be deemed to have become a holder
      of record of such shares for all purposes, as of the date the Warrant has been
      exercised by payment to the Company of the Exercise Price (or by cashless
      exercise) and all taxes required to be paid by the Holder, if any, pursuant
      to
      Section 2(d)(vi) prior to the issuance of such shares, have been
      paid.

     

    iii.  Delivery
      of New Warrants Upon Exercise.  If this Warrant shall have been
      exercised in part, the Company shall, at the request of a Holder and upon
      surrender of this Warrant certificate, at the time of delivery of the
      certificate or certificates representing Warrant Shares, deliver to the Holder
      a
      new Warrant evidencing the rights of the Holder to purchase the unpurchased
      Warrant Shares called for by this Warrant, which new Warrant shall in all other
      respects be identical with this Warrant.

     

    iv.  No
      Fractional Shares or Scrip.  No fractional shares or scrip
      representing fractional shares shall be issued upon the exercise of this
      Warrant.  As to any fraction of a share which Holder would otherwise
      be entitled to purchase upon such exercise, the Company shall at its election,
      either pay a cash adjustment in respect of such final fraction in an amount
      equal to such fraction multiplied by the Exercise Price or round up to the
      next
      whole share.

     

    v.  Charges,
      Taxes and Expenses.  Issuance of certificates for Warrant Shares
      shall be made without charge to the Holder for any issue or transfer tax or
      other incidental expense in respect of the issuance of such certificate, all
      of
      which taxes and expenses shall be paid by the Company, and such certificates
      shall be issued in the name of the Holder or in such name or names as may be
      directed by the Holder; provided, however, that in the event
      certificates for Warrant Shares are to be issued in a name other than the name
      of the Holder, this Warrant when surrendered for exercise shall be accompanied
      by the Assignment Form attached hereto duly executed by the Holder; and the
      Company may require, as a condition thereto, the payment of a sum sufficient
      to
      reimburse it for any transfer tax incidental thereto.

     

    vi.  Closing
      of Books.  The Company will not close its stockholder books or
      records in any manner that prevents the timely exercise of this Warrant,
      pursuant to the terms hereof.

    
       

      
        
          
          

        

        
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    Section
      3.    CertainAdjustments.

     

    a)    Stock
      Dividends and Splits. If the Company, at any time while this Warrant is
      outstanding: (A) pays a stock dividend or otherwise makes a distribution or
      distributions on shares of its Common Stock or any other equity or equity
      equivalent securities payable in shares of Common Stock (which, for avoidance
      of
      doubt, shall not include any shares of Common Stock issued by the Company upon
      exercise of this Warrant), (B) subdivides outstanding shares of Common Stock
      into a larger number of shares, (C) combines (including by way of reverse stock
      split) outstanding shares of Common Stock into a smaller number of shares,
      or
      (D) issues by reclassification of shares of the Common Stock any shares of
      capital stock of the Company, then in each case the Exercise Price shall be
      multiplied by a fraction of which the numerator shall be the number of shares
      of
      Common Stock (excluding treasury shares, if any) outstanding immediately before
      such event and of which the denominator shall be the number of shares of Common
      Stock outstanding immediately after such event and the number of shares issuable
      upon exercise of this Warrant shall be proportionately adjusted.  Any
      adjustment made pursuant to this Section 3(a) shall become effective immediately
      after the record date for the determination of stockholders entitled to receive
      such dividend or distribution and shall become effective immediately after
      the
      effective date in the case of a subdivision, combination or
      re-classification.

     

    b)    Adjustment
      for Reorganization, Consolidation, Merger.

     

    (i)           General.  In
      case at any time or from time to time, the Company shall (i) effect a
      reorganization, (ii) consolidate with or merge into any other person, or (iii)
      transfer all or substantially all of its properties or assets to any other
      person under any plan or arrangement contemplating the dissolution of the
      Company, then, in each such case, the Holder, on the exercise hereof, as
      provided in Section 1, at any time after the consummation of such
      reorganization, consolidation or merger or the effective date of such
      dissolution, as the case may be, shall receive, in lieu of the Warrant Shares
      issuable on such exercise prior to such consummation or such effective date,
      the
      stock and other securities and property (including cash) to which Holder would
      have been entitled upon such consummation or in connection with such
      dissolution, as the case may be, if such holder had so exercised this Warrant
      immediately prior thereto, all subject to further adjustment thereafter as
      provided in Section 3(a) hereof.

     

    (ii)           Dissolution.  In
      the event of any dissolution of the Company following the transfer of all or
      substantially all of its properties or assets, the Company, prior to such
      dissolution, shall at its expense deliver or cause to be delivered the stock
      and
      other securities and property (including cash, where applicable) receivable
      by
      the holders of this Warrant after the effective date of such dissolution
      pursuant to this Section 3 to a bank or trust company, as trustee for the holder
      or holders of this Warrant.

    

    (iii)           Continuation
      of Terms.  Upon any reorganization, consolidation, merger or
      transfer (and any dissolution following any transfer) referred to in this
      Section 3, this Warrant shall continue in full force and effect and the terms
      hereof shall be applicable to the shares of stock and other securities and
      property receivable on the exercise of this Warrant after the consummation
      of
      such reorganization, consolidation or merger or the effective date of
      dissolution following any such transfer, as the case may be, and shall be
      binding upon the issuer of any such stock or other securities, including, in
      the
      case of any such transfer, the person acquiring all or substantially all of
      the
      properties or assets of the Company, whether or not such person shall have
      expressly assumed the terms of this Warrant.

    

    c)    Calculations.
      All calculations under this Section 3 shall be made to the nearest cent or
      the
      nearest 1/100th of a share, as the case may be. For purposes of this Section
      3,
      the number of shares of Common Stock deemed to be issued and outstanding as
      of a
      given date shall be the sum of the number of shares of Common Stock (excluding
      treasury shares, if any) issued and outstanding.

    
      

      
        
          
          

        

        
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    d)    Notice
      to Holder.

     

    i.      
      Adjustment
      to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any
      provision of this Section 3, the Company shall promptly mail to the Holder
      a
      notice setting forth the Exercise Price after such adjustment and setting forth
      a brief statement of the facts requiring such adjustment.

     

    ii.  Notice
      to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or
      any other distribution in whatever form) on the Common Stock; (B) the Company
      shall declare a special nonrecurring cash dividend on or a redemption of the
      Common Stock; (C) the Company shall authorize the granting to all holders of
      the
      Common Stock rights or warrants to subscribe for or purchase any shares of
      capital stock of any class or of any rights; (D) the approval of any
      stockholders of the Company shall be required in connection with any
      reclassification of the Common Stock, any consolidation or merger to which
      the
      Company is a party, any sale or transfer of all or substantially all of the
      assets of the Company, of any compulsory share exchange whereby the Common
      Stock
      is converted into other securities, cash or property; (E) the Company shall
      authorize the voluntary or involuntary dissolution, liquidation or winding
      up of
      the affairs of the Company; then, in each case, the Company shall cause to
      be
      mailed to the Holder at its last address as it shall appear upon the Warrant
      Register of the Company, at least 10 calendar days prior to the applicable
      record or effective date hereinafter specified, a notice stating (x) the date
      on
      which a record is to be taken for the purpose of such dividend, distribution,
      redemption, rights or warrants, or if a record is not to be taken, the date
      as
      of which the holders of the Common Stock of record to be entitled to such
      dividend, distributions, redemption, rights or warrants are to be determined
      or
      (y) the date on which such reclassification, consolidation, merger, sale,
      transfer or share exchange is expected to become effective or close, and the
      date as of which it is expected that holders of the Common Stock of record
      shall
      be entitled to exchange their shares of the Common Stock for securities, cash
      or
      other property deliverable upon such reclassification, consolidation, merger,
      sale, transfer or share exchange; provided that the failure to mail such notice
      or any defect therein or in the mailing thereof shall not affect the validity
      of
      the corporate action required to be specified in such notice.  The
      Holder is entitled to exercise this Warrant during the 10-day period commencing
      on the date of such notice to the effective date of the event triggering such
      notice.

     

    Section
      4.    Transfer of
      Warrant.

     

    a)    Transferability.  Subject
      to compliance with any applicable securities laws, this Warrant and all rights
      hereunder (including, without limitation, any registration rights) are
      transferable, in whole or in part, upon surrender of this Warrant at the
      principal office of the Company or its designated agent, together with a written
      assignment of this Warrant substantially in the form attached hereto duly
      executed by the Holder or its agent or attorney and funds sufficient to pay
      any
      transfer taxes payable upon the making of such transfer.  Upon such
      surrender and, if required, such payment, the Company shall execute and deliver
      a new Warrant or Warrants in the name of the assignee or assignees and in the
      denomination or denominations specified in such instrument of assignment, and
      shall issue to the assignor a new Warrant evidencing the portion of this Warrant
      not so assigned, and this Warrant shall promptly be cancelled.  A
      Warrant, if properly assigned, may be exercised by a new holder for the purchase
      of Warrant Shares without having a new Warrant issued.

     

    b)    New
      Warrants. This Warrant may be divided or combined with other Warrants upon
      presentation hereof at the aforesaid office of the Company, together with a
      written notice specifying the names and denominations in which new Warrants
      are
      to be issued, signed by the Holder or its agent or attorney.  Subject
      to compliance with Section 4(a), as to any transfer which may be involved in
      such division or combination, the Company shall execute and deliver a new
      Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
      combined in accordance with such notice.

    
       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

         

      

    

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

     

    d)    Transfer
      Restrictions. If, at the time of the surrender of this Warrant in connection
      with any transfer of this Warrant, the transfer of this Warrant shall not be
      registered pursuant to an effective registration statement under the Securities
      Act and under applicable state securities or blue sky laws, the Company may
      require, as a condition of allowing such transfer, that (i) the Holder or
      transferee of this Warrant, as the case may be, furnish to the Company a written
      opinion of counsel (which opinion shall be in form, substance and scope
      customary for opinions of counsel in comparable transactions) to the effect
      that
      such transfer may be made without registration under the Securities Act and
      under applicable state securities or blue sky laws, and (ii) the Holder or
      transferee execute and deliver to the Company an investment letter in form
      and
      substance acceptable to the Company, and (iii) the transferee be an “accredited
      investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
      promulgated under the Securities Act or a “qualified institutional buyer” as
      defined in Rule 144A(a) promulgated under the Securities Act.

     

    Section
      5.    Registration
      Rights.

     

    a)    Piggy-Back
      Rights. If the Company shall, at any time, propose to register any of its
      securities under the Securities Act for sale to the public, whether for its
      own
      account or for the account of other security holders or both (except with
      respect to registration statements on Forms S-4 or S-8 or another form not
      available for registering the Warrant Shares for sale to the public),
      each such time it will give written notice to the Holder of its intention so
      to
      do. Upon the written request of the Holder, received by the Company within
      20
      calendar days after the giving of any such notice by the Company, to register
      any of the Warrant Shares, the Company shall cause the Warrant Shares as to
      which registration shall have been so requested to be included in the securities
      to be covered by the registration statement proposed to be filed by the Company,
      all to the extent required to permit the sale or other disposition by the Holder
      of such Warrant Shares so registered.

     

    b)    Limitations.
      In the event that any registration pursuant to Section 5(a) shall be, in whole
      or in part, an underwritten public offering, the number of Warrant Shares to
      be
      included in such an underwriting may be reduced (pro rata among all
      security-holders of the Company with contractual registration rights who are
      requesting to include shares in such underwriting based upon the maximum number
      of shares of Common Stock (on an as-converted basis) that such holders have
      the
      right to request registration of (regardless of whether registration of the
      maximum number of shares is being requested by such holders)) if and to the
      extent that the managing underwriter shall, in good faith, be of the opinion
      that such inclusion would adversely affect the marketing of the securities
      to be
      sold by the Company therein. Moreover, the Company’s obligations pursuant to
      Section 5(a) shall not apply to the first underwritten public offering of the
      Company unless and to the extent that, in the opinion of the managing
      underwriter of such underwritten public offering, the inclusion of the Warrant
      Shares in such underwriting would benefit the marketing of the securities to
      be
      sold by the Company therein. Also, notwithstanding the foregoing provisions,
      the
      Company may withdraw any registration statement referred to in Section 5(a)
      without thereby incurring any liability to the Holder.

     

    Section
      6.    Miscellaneous.

     

    c)    No
      Rights as Shareholder Until Exercise.  This Warrant does not
      entitle the Holder to any voting rights or other rights as a shareholder of
      the
      Company prior to the exercise hereof as set forth in Section
      2(d)(ii).

    
       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

         

      

    

    d)    Loss,
      Theft, Destruction or Mutilation of Warrant. The Company covenants that upon
      receipt by the Company of evidence reasonably satisfactory to it of the loss,
      theft, destruction or mutilation of this Warrant or any stock certificate
      relating to the Warrant Shares, and in case of loss, theft or destruction,
      of
      indemnity or security reasonably satisfactory to it (which, in the case of
      the
      Warrant, shall not include the posting of any bond), and upon surrender and
      cancellation of such Warrant or stock certificate, if mutilated, the Company
      will make and deliver a new Warrant or stock certificate of like tenor and
      dated
      as of such cancellation, in lieu of such Warrant or stock
      certificate.

     

    e)    Saturdays,
      Sundays, Holidays, etc.  If the last or appointed day for the
      taking of any action or the expiration of any right required or granted herein
      shall not be a Business Day, then such action may be taken or such right may
      be
      exercised on the next succeeding Business Day.

     

    f)    Authorized
      Shares.

     

    The
      Company covenants that on the Amendment Effective Date and at all times
      thereafter for the period the Warrant is outstanding, it will reserve from
      its
      authorized and unissued Common Stock a sufficient number of shares to provide
      for the issuance of the Warrant Shares upon the exercise of any purchase rights
      under this Warrant.  The Company further covenants that its issuance
      of this Warrant shall constitute full authority to its officers who are charged
      with the duty of executing stock certificates to execute and issue the necessary
      certificates for the Warrant Shares upon the exercise of the purchase rights
      under this Warrant.  The Company will take all such reasonable action
      as may be necessary to assure that such Warrant Shares may be issued as provided
      herein without violation of any applicable law or regulation, or of any
      requirements of the Trading Market upon which the Common Stock may be
      listed.

     

    Except
      and to the extent as waived or consented to by the Holder, the Company shall
      not
      by any action, including, without limitation, amending its certificate of
      incorporation or through any reorganization, transfer of assets, consolidation,
      merger, dissolution, issue or sale of securities or any other voluntary action,
      avoid or seek to avoid the observance or performance of any of the terms of
      this
      Warrant, but will at all times in good faith assist in the carrying out of
      all
      such terms and in the taking of all such actions as may be necessary or
      appropriate to protect the rights of Holder as set forth in this Warrant against
      impairment.  Without limiting the generality of the foregoing, the
      Company will (a) not increase the par value of any Warrant Shares above the
      amount payable therefor upon such exercise immediately prior to such increase
      in
      par value, (b) take all such action as may be necessary or appropriate in order
      that the Company may validly and legally issue fully paid and nonassessable
      Warrant Shares upon the exercise of this Warrant, and (c) use commercially
      reasonable efforts to obtain all such authorizations, exemptions or consents
      from any public regulatory body having jurisdiction thereof as may be necessary
      to enable the Company to perform its obligations under this
      Warrant.

     

    Before
      taking any action that would result in an adjustment in the number of Warrant
      Shares for which this Warrant is exercisable or in the Exercise Price, the
      Company shall obtain all such authorizations or exemptions thereof, or consents
      thereto, as may be necessary from any public regulatory body or bodies having
      jurisdiction thereof.

    
       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

         

      

    

    g)    Jurisdiction.
      The provisions of this Warrant and the rights of all parties mentioned herein
      shall be governed by the laws of the State of New York and interpreted and
      construed in accordance with such laws, without giving effect to the principles
      of conflicts of laws, and any court of competent jurisdiction of the State
      of
      New York located in New York County shall have exclusive jurisdiction and venue
      in any proceeding instituted hereunder and any objections to such jurisdiction
      or venue are hereby waived by the Holder and the Company.

     

    h)    Restrictions.  The
      Holder acknowledges that the Warrant Shares acquired upon the exercise of this
      Warrant, if not registered, will have restrictions upon resale imposed by state
      and federal securities laws.

     

    i)    Nonwaiver
      and Expenses.  No course of dealing or any delay or failure to
      exercise any right hereunder on the part of the Holder shall operate as a waiver
      of such right or otherwise prejudice Holder’s rights, powers or remedies,
      notwithstanding the fact that all rights hereunder terminate on the Termination
      Date.  If the Company willfully and knowingly fails to comply with any
      provision of this Warrant, which results in any material damages to the Holder,
      the Company shall pay to the Holder such amounts as shall be sufficient to
      cover
      any costs and expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by the Holder in
      collecting any amounts due pursuant hereto or in otherwise enforcing any of
      its
      rights, powers or remedies hereunder.

     

    j)    Notices.  All
      notices, requests, demands and other communications required or permitted
      hereunder or by law shall be in writing and given to the parties at the
      addresses listed below (or to such other address as shall at any time be
      designated by any party in writing to the other parties):  (a) by
      certified U.S. mail, return receipt requested, postage prepaid; (b) by facsimile
      transmission (provided confirmation of the receipt thereof is obtained); (c)
      by
      recognized overnight courier service (e.g., Federal Express); or (d) by
      hand-delivery, to the Company:Zealous Trading Group , Inc., 1800 Century Park
      East, Suite 200 Los Angeles, CA  90067Att: Chief Executive
      Officer, with a copy (which shall not constitute notice) to:Guzov Ofsink, LLC,
      600 Madison Avenue, 14th Floor,
      New York,
      NY 10022, Att: Robert Newman, and to the Holder at such address as may have
      been furnished to the Company in writing by the Holder or, until any the Holder
      furnishes to the Company an address, then to, and at the address of, the last
      holder of this Warrant who has so furnished an address to the Company. All
      such
      notices shall be deemed effective (a) when actually delivered or when sent
      by
      facsimile (upon electronic confirmation of receipt), (b) three days after being
      deposited in the United States mail, first class, postage prepaid, or (c) one
      day after being delivered to a reputable overnight delivery
      service.

     

    k)    Limitation
      of Liability.  No provision hereof, in the absence of any
      affirmative action by Holder to exercise this Warrant to purchase Warrant
      Shares, and no enumeration herein of the rights or privileges of Holder, shall
      give rise to any liability of Holder for the purchase price of any Common Stock
      or as a stockholder of the Company, whether such liability is asserted by the
      Company or by creditors of the Company.

     

    l)    Remedies.  The
      Holder, in addition to being entitled to exercise all rights granted by law,
      including recovery of damages, will be entitled to specific performance of
      its
      rights under this Warrant.  The Company agrees that monetary damages
      would not be adequate compensation for any loss incurred by reason of a breach
      by it of the provisions of this Warrant and hereby agrees to waive and not
      to
      assert the defense in any action for specific performance that a remedy at
      law
      would be adequate.

    
       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

         

      

    

    m)        
      Successors
      and Assigns.  Subject to applicable securities laws, this Warrant
      and the rights and obligations evidenced hereby shall inure to the benefit
      of
      and be binding upon the successors of the Company and the successors and
      permitted assigns of the Holder.  The provisions of this Warrant are
      intended to be for the benefit of all Holders from time to time of this Warrant
      and shall be enforceable by any such Holder or holder of Warrant
      Shares.

     

    n)    Amendment.  This
      Warrant may be modified or amended or the provisions hereof waived with the
      written consent of the Company and the Holder.

     

    o)    Severability.  Wherever
      possible, each provision of this Warrant shall be interpreted in such manner
      as
      to be effective and valid under applicable law, but if any provision of this
      Warrant shall be prohibited by or invalid under applicable law, such provision
      shall be ineffective to the extent of such prohibition or invalidity, without
      invalidating the remainder of such provisions or the remaining provisions of
      this Warrant.

     

    p)    Headings.  The
      headings used in this Warrant are for the convenience of reference only and
      shall not, for any purpose, be deemed a part of this Warrant.

    

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

     

    
      	 	
              ZEALOUS
                TRADING GROUP, INC.

              a
                Nevada Corporation 

            
	 	 
	 	By:_____________________________
	 	     
              Name: Milton C. Ault, III 
	 	     
              Title: Chief Executive Officer 

    

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    NOTICE
      OF EXERCISE

    

    TO:           [_______________________

    

    (1)  The
      undersigned hereby elects to purchase ________ Warrant Shares of the Company
      pursuant to the terms of the attached Warrant (only if exercised in full),
      and
      tenders herewith payment of the exercise price in full, together with all
      applicable transfer taxes, if any.

     

    (2)  Payment
      shall take the form of (check applicable box):

     

    o in
      lawful money of
      the United States; or

     

    o the
      cancellation
      of such number of Warrant Shares as is necessary, in accordance with the formula
      set forth in subsection 2(c), to exercise this Warrant with respect to the
      maximum number of Warrant Shares purchasable pursuant to the cashless exercise
      procedure set forth in subsection 2(c).

     

    (3)  Please
      issue a certificate or certificates representing said Warrant Shares in the
      name
      of the undersigned or in such other name as is specified below:

     

    _______________________________

    

    

    The
      Warrant Shares shall be delivered by physical delivery of a certificate
      to:

    

    _______________________________

    

    _______________________________

    

    _______________________________

    

    (4)  Accredited
      Investor.  The undersigned is an “accredited investor” as defined
      in Regulation D promulgated under the Securities Act of 1933, as
      amended.

    

    [SIGNATURE
      OF HOLDER]

    

    Name
      of
      Investing Entity:
      ________________________________________________________________________________________________________________________

    Signature
      of Authorized Signatory of Investing Entity:
      __________________________________________________________________________________________________
      

    Name
      of
      Authorized Signatory:
      ____________________________________________________________________________________________________________________

    Title
      of
      Authorized Signatory:
      _____________________________________________________________________________________________________________________

    Date:
      ________________________________________________________________________________________________________________________________________

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ASSIGNMENT
      FORM

    

    (To
      assign the foregoing warrant, execute

    this
      form
      and supply required information.

    Do
      not
      use this form to exercise the warrant.)

     

    

    FOR
      VALUE
      RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
      rights evidenced thereby are hereby assigned to

     

    ________________________________________________________________________________
      whose address is

    

    ______________________________________________________________________________________________.

    

    

    

    ______________________________________________________________________________________________

    

    Dated:  ______________,
      _______

    

    

    Holder’s
      Signature:  
______________________________________________

    

    Holder’s
      Address:     ______________________________________________

    

                                    
      ______________________________________________

    

     

    Signature
      Guaranteed:  _____________________________________________________________________________

    

    

    NOTE:  The
      signature to this Assignment Form must correspond with the name as it appears
      on
      the face of the Warrant, without alteration or enlargement or any change
      whatsoever, and must be guaranteed by a bank or trust
      company.  Officers of corporations and those acting in a fiduciary or
      other representative capacity should file proper evidence of authority to assign
      the foregoing Warrant.

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