Document:

Exhibit 10.2  

SPECIAL TERMINATION
AGREEMENT  

        THIS
SPECIAL TERMINATION AGREEMENT (“Agreement”) is made and entered into as of this
11th day of April , 2005, by and between LINCOLN BANK, a federally chartered
savings bank whose address is 905 Southfield Drive, Plainfield, Indiana 46168 (which,
together with any successor thereto which executes and delivers the assumption agreement
provided for in Section 12(a) hereof or which otherwise becomes bound by the terms and
provisions of this Agreement by operation of law, is hereinafter referred to as the
“Bank”), and Brad Davis  whose residence address is  928 Peregrine
Dr., Columbus, IN 47203 (the “Employee”). 

        WHEREAS,
the Employee is currently serving as Vice President, Director of Finance and Reporting of
the Bank; and 

        WHEREAS,
the Bank is a wholly-owned subsidiary of Lincoln Bancorp, a publicly traded corporation
organized under Indiana law (the “Holding Company”); and 

        WHEREAS,
the Board of Directors of the Bank recognizes that, as is the case with publicly held
corporations generally, the possibility of a change in control of the Holding Company may
exist and that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of key management personnel
to the detriment of the Bank, the Holding Company and its shareholders; and 

        WHEREAS,
the Board of Directors of the Bank believes it is in the best interests of the Bank to
enter into this Agreement with the Employee in order to assure continuity of management of
the Bank and to reinforce and encourage the continued attention and dedication of the
Employee to his or her assigned duties without distraction in the face of potentially
disruptive circumstances arising from the possibility of a change in control of the
Holding Company, although no such change is now contemplated; and 

        WHEREAS,
the Board of Directors of the Bank has approved and authorized the execution of this
Agreement with the Employee to take effect as stated in Section 1 hereof; 

        NOW,
THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements of the parties herein contained, it is agreed as follows: 

         1.       
          TERM OF AGREEMENT. The term of this Agreement shall be deemed to have
          commenced as of the date hereof (the “Effective Date”) and shall
          continue until the anniversary of the Effective Date. Prior to that anniversary
          date and at each anniversary date thereafter, the Board of Directors may review
          this Agreement and, in its discretion, authorize extension thereof for an
          additional one-year period. 

         2.       
          PAYMENTS TO THE EMPLOYEE UPON CHANGE IN CONTROL. 

         (a)       
          Upon the occurrence of a change in control of the Bank or the Holding Company
          (as herein defined) at any time during the term of this Agreement followed
          within 12 months by the involuntary termination of the Employee’s
          employment with the Bank, other than for cause (as defined in Section 2(d)
          hereof) whether or not such termination occurs during the term of this
          Agreement, the provisions of Section 3 shall apply. 

         (b)       
          A “change in control” of the Bank or the Holding Company shall mean an
          acquisition of “control” of the Holding Company or of the Bank within
          the meaning of 12 C.F.R. §574.4(a) (other than a change of control
          resulting from a trustee or other fiduciary holding shares of capital stock of
          the Holding Company under an employee benefit plan of the Holding Company or any
          of its subsidiaries). 

         (c)       
          The Employee’s employment under this Agreement may be terminated at any
          time by the Board of Directors of the Bank. The terms “involuntary
          termination” or “involuntarily terminated” in this Agreement
          shall refer to the termination of the employment of Employee without his or her
          express written consent. In addition, a material diminution of or interference
          with the Employee’s duties, responsibilities and benefits shall be deemed
          and shall constitute an involuntary termination of employment to the same extent
          as express notice of such involuntary termination. By way of example and not by
          way of limitation, any of the following actions, if unreasonable and materially
          adverse to the Employee, shall constitute such diminution or interference unless
          consented to in writing by the Employee: (1) the requirement that the Employee
          perform his or her principal employment duties more than thirty-five (35) miles
          from his or her primary office as of the date of the change in control; (2) a
          material reduction in the Employee’s salary, perquisites, contingent
          benefits or vacation time as in effect on the date of the change in control as
          the same may be changed by mutual agreement from time to time, unless part of an
          institution-wide reduction; (3) the assignment to the Employee of duties and
          responsibilities materially different from those normally associated with his or
          her position as referenced in this Agreement; or (4) a material diminution or
          reduction in the Employee’s responsibilities or authority (including
          reporting responsibilities) in connection with his or her employment with the
          Bank. 

    (d)                        The
Employee shall not have the right to receive termination benefits pursuant           to
Section 3 hereof upon termination for cause. For purposes of this Agreement,
          termination for “cause” shall include termination because of, in the
          good faith determination of the Board of Directors of the Bank, the
          Employee’s personal dishonesty, incompetence, willful misconduct, breach
of           a fiduciary duty involving personal profit, intentional failure to perform
          stated duties, willful violation of any law, rule, or regulation (other than a
          law, rule or regulation relating to traffic violations or similar offenses) or
          final cease-and-desist order, or material breach of any provision of this
          Agreement. Notwithstanding the foregoing, the Employee shall not be deemed to
          have been terminated for cause unless and until there shall have been delivered
          to the Employee a copy of a resolution, duly adopted by the affirmative vote of
          not less than a majority of the entire membership of the Board of Directors of
          the Bank at a meeting of the Board called and held for such purpose (after
          reasonable notice to the Employee and an opportunity for the Employee, together
          with the Employee’s counsel, to be heard before the Board), such meeting
          and the opportunity to be heard to be held prior to, or as soon as reasonably
          practicable following, termination, but in no event later than 60 days
following           such termination, finding that in the good faith opinion of the Board
the           Employee was guilty of conduct constituting “cause” 

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as set
forth above           and specifying the particulars thereof in detail. If, following
such meeting,           the Employee is reinstated, he or she shall be entitled to
receive back pay for           the period following termination and continuing through
reinstatement.  

         3.       
          TERMINATION BENEFITS. 

         (a)       
          If during the term of this Agreement there is a change in control of the Bank or
          the Holding Company, and within 12 months following such change in control there
          is an involuntary termination of the Employee’s employment with the Bank,
          other than for cause, whether or not such termination occurs during the term of
          this Agreement, the Bank shall pay to the Employee in a lump sum in cash within
          25 business days after the date of severance of employment an amount equal to
          100 percent of the Employee’s “base amount” of compensation, as
          defined in Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended
          (“Code”). 

         (b)       
          If during the term of this Agreement there is a change in control, and within 12
          months following such change in control there is an involuntary termination of
          the Employee’s employment, other than for cause, whether or not such
          termination occurs during the term of this Agreement, the Bank shall cause to be
          continued life, health and disability coverage substantially identical to the
          coverage maintained by the Bank for the Employee prior to his or her severance.
          Subject to applicable federal and state laws, such coverage shall cease upon the
          earlier of the Employee’s obtaining similar coverage by another employer or
          twelve (12) months from the date of the Employee’s termination. In the
          event the Employee obtains new employment and receives less coverage for life,
          health or disability, the Bank shall provide coverage substantially identical to
          the coverage maintained by the Bank for the Employee prior to termination for
          the balance of the twelve (12) month period. 

         4.       
          CERTAIN REDUCTION OF PAYMENTS BY THE BANK. 

         (a)       
          Anything in this Agreement to the contrary notwithstanding, in the event it
          shall be determined that any payment or distribution by the Bank to or for the
          benefit of the Employee (whether paid or payable or distributed or distributable
          pursuant to the terms of this Agreement or otherwise) (a “Payment”)
          would be nondeductible (in whole or part) by the Bank for Federal income tax
          purposes because of Section 280G of the Code, then the aggregate present value
          of amounts payable or distributable to or for the benefit of the Employee
          pursuant to this Agreement (such amounts payable or distributable pursuant to
          this Agreement are hereinafter referred to as “Agreement Payments”)
          shall be reduced to the Reduced Amount. The “Reduced Amount” shall be
          an amount, not less than zero, expressed in present value which maximizes the
          aggregate present value of Agreement Payments without causing any Payment to be
          nondeductible by the Bank because of Section 280G of the Code. For purposes of
          this Section 4, present value shall be determined in accordance with Section
          280G(d)(4) of the Code. 

    (b)                        All
determinations required to be made under this Section 4 shall be made by the
          Bank’s independent auditors, or at the election of such auditors by such
          other firm or individuals of recognized expertise as such auditors may select
          (such auditors or, if applicable, such other firm or individual, are
hereinafter           referred to as the “Advisory Firm”). The Advisory Firm
shall within           ten business days of the date of termination of the Employee’s
employment           by the Bank or the Holding Company resulting in benefit payments
hereunder (the           “Date of Termination”), or at such earlier time as is
requested by the           Bank, provide to both the Bank and the Employee an opinion
(and detailed           supporting calculations) that the Bank has substantial authority
to deduct  

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for           federal income tax
purposes the full amount of the Agreement Payments and that           the Employee has
substantial authority not to report on his or her federal           income tax return any
excise tax imposed by Section 4999 of the Code with           respect to the Agreement
Payments. Any such determination and opinion by the           Advisory Firm shall be
binding upon the Bank and the Employee. The Employee           shall determine which and
how much, if any, of the Agreement Payments shall be           eliminated or reduced
consistent with the requirements of this Section 4,           provided that, if the
Employee does not make such determination within ten           business days of the
receipt of the calculations made by the Advisory Firm, the           Bank shall elect
which and how much, if any, of the Agreement Payments shall be           eliminated or
reduced consistent with the requirements of this Section 4 and           shall notify the
Employee promptly of such election. Within five business days           of the earlier of
(i) the Bank’s receipt of the Employee’s           determination pursuant to
the immediately preceding sentence of this Agreement           or (ii) the Bank’s
election in lieu of such determination, the Bank shall           pay to or distribute to
or for the benefit of the Employee such amounts as are           then due the Employee
under this Agreement. The Bank and the Employee shall           cooperate fully with the
Advisory Firm, including without limitation providing           to the Advisory Firm all
information and materials reasonably requested by it,           in connection with the
making of the determinations required under this Section           4.  

         (c)       
          As a result of uncertainty in application of Section 280G of the Code at the
          time of the initial determination by the Advisory Firm hereunder, it is possible
          that Agreement Payments will have been made by the Bank which should not have
          been made (“Overpayment”) or that additional Agreement Payments will
          not have been made by the Bank which should have been made
          (“Underpayment”), in each case, consistent with the calculations
          required to be made hereunder. In the event that the Advisory Firm, based upon
          the assertion by the Internal Revenue Service against the Employee of a
          deficiency which the Advisory Firm believes has a high probability of success,
          determines that an Overpayment has been made, any such Overpayment paid or
          distributed by the Bank to or for the benefit of Employee shall be treated for
          all purposes as a loan ab initio which
          the Employee shall repay to the Bank together with interest at the applicable
          federal rate provided for in Section 7872(f)(2) of the Code; provided, however,
          that no such loan shall be deemed to have been made and no amount shall be
          payable by the Employee to the Bank if and to the extent such deemed loan and
          payment would not either reduce the amount on which the Employee is subject to
          tax under Section 1 and Section 4999 of the Code or generate a refund of such
          taxes. In the event that the Advisory Firm, based upon controlling precedent or
          other substantial authority, determines that an Underpayment has occurred, any
          such Underpayment shall be promptly paid by the Bank to or for the benefit of
          the Employee together with interest at the applicable federal rate provided for
          in Section 7872(f)(2) of the Code. 

         5.       
          REQUIRED REGULATORY PROVISIONS. 

         (a)       
          The Bank may terminate the Employee’s employment at any time, but any
          termination by the Bank, other than a termination for cause, shall not prejudice
          the Employee’s right to compensation or other benefits under this
          Agreement. The Employee shall not have the right to receive compensation or
          other benefits for any period after a termination for cause as defined in
          Section 2(d) hereinabove. 

    (b)                        If
the Employee is suspended and/or temporarily prohibited from participating in
          the conduct of the Bank’s affairs by a notice served under Section 8(e)(3)
          or (g)(1) of the Federal Deposit Insurance Act, 12 U.S. C. §1818 (e)(3)
and           (g)(1), the Bank’s obligations under this Agreement shall be suspended
as           of the date of service, unless stayed by appropriate proceedings.  

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If the charges           in the
notice are dismissed, the Bank may in its discretion (i) pay the Employee           all
or part of the compensation withheld while its obligations under this           Agreement
were suspended, and (ii) reinstate (in whole or in part) any of the           obligations
which were suspended.  

         (c)       
          If the Employee is removed from office and/or permanently prohibited from
          participating in the conduct of the Bank’s affairs by an order issued under
          Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §
          1818(e)(4) or (g)(1), all obligations of the Bank under this Agreement shall
          terminate, as of the effective date of the order, but vested rights of the
          parties shall not be affected. 

         (d)       
          If the Bank is in default (as defined in Section 3(x)(1) of the Federal Deposit
          Insurance Act), all obligations under this Agreement shall terminate as of the
          date of default, but this provision (d) shall not affect any vested rights of
          the parties. 

         (e)       
          All obligations under this Agreement may be terminated, except to the extent
          determined that continuation of this Agreement is necessary for the continued
          operation of the Bank: (i) by the Director of the Office of Thrift Supervision
          (the “Director”), or his or her designee, at the time the Federal
          Deposit Insurance Corporation enters into an agreement to provide assistance to
          or on behalf of the Bank under the authority contained in Section 13(c) of the
          Federal Deposit Insurance Act, 12 U.S.C. §1823(c), or (ii) by the Director,
          or his or her designee, at the time the Director or his or her designee approves
          a supervisory merger to resolve problems related to operation of the Bank or
          when the Bank is determined by the Director to be in an unsafe or unsound
          condition. Any rights of the parties that have already vested, however, shall
          not be affected by any such action. 

         6.       
          REINSTATEMENT OF BENEFITS UNDER SECTION 3. In the event the Employee is
          suspended and/or temporarily prohibited from participating in the conduct of the
          Bank’s affairs by a notice described in Section 6(b) hereof (the
          “Notice”) during the term of this Agreement and a change in control
          occurs, the Bank will assume its obligation to pay and the Employee will be
          entitled to receive all of the termination benefits provided for under Section 3
          of this Agreement upon the Bank’s receipt of a dismissal of charges in the
          Notice. 

         7.       
          EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS. This Agreement
          contains the entire understanding between the parties hereto and supersedes any
          prior agreement between the Bank and the Employee. 

         8.       
          NO ATTACHMENT. 

         (a)       
          Except as required by law, no right to receive payments under this Agreement
          shall be subject to anticipation, commutation, alienation, sale, assignment,
          encumbrance, charge, pledge, or hypothecation, or to execution, attachment,
          levy, or similar process or assignment by operation of law, and any attempt,
          voluntary or involuntary, to affect any such action shall be null, void, and of
          no effect. 

         (b)       
          This Agreement shall be binding upon, and inure to the benefit of, the Employee,
          the Bank and their respective successors and assigns. 

5

         9.       
          MODIFICATION AND WAIVER. 

         (a)       
          This Agreement may not be modified or amended except by an instrument in writing
          signed by the parties hereto. 

         (b)       
          No term or condition of this Agreement shall be deemed to have been waived, nor
          shall there be any estoppel against the enforcement of any provision of this
          Agreement, except by written instrument of the party charged with such waiver or
          estoppel. No such written waiver shall be deemed a continuing waiver unless
          specifically stated therein, and each such waiver shall operate only as to the
          specific term or condition waived and shall not constitute a waiver of such term
          or condition for the future or as to any act other than that specifically
          waived. 

         10.       
          NO MITIGATION. Except as expressly provided herein, the amount of any
          payment or benefit provided for in this Agreement shall not be reduced by any
          compensation earned by the Employee as the result of employment by another
          employer, by retirement benefits after the date of termination or otherwise. 

         11.       
          NO ASSIGNMENTS. 

         (a)       
          This Agreement is personal to each of the parties hereto, and neither party may
          assign or delegate any of its rights or obligations hereunder without first
          obtaining the written consent of the other party; provided, however, that the
          Bank will require any successor or assign (whether direct or indirect, by
          purchase, merger, consolidation or otherwise) to all or substantially all of the
          business and/or assets of the Bank, by an assumption agreement in form and
          substance satisfactory to the Employee, to expressly assume and agree to perform
          this Agreement in the same manner and to the same extent that the Bank would be
          required to perform it if no such succession or assignment had taken place.
          Failure of the Bank to obtain such an assumption agreement prior to the
          effectiveness of any such succession or assignment shall be a breach of this
          Agreement and shall entitle the Employee to compensation from the Bank in the
          same amount and on the same terms as the compensation pursuant to Section 3
          hereof. For purposes of implementing the provisions of this Section 11(a), the
          date on which any such succession becomes effective shall be deemed the Date of
          Termination. 

         (b)       
          This Agreement and all rights of the Employee hereunder shall inure to the
          benefit of and be enforceable by the Employee’s personal and legal
          representatives, executors, administrators, successors, heirs, distributees,
          devisees and legatees. If the Employee should die while any amounts would still
          be payable to the Employee hereunder if the Employee had continued to live, all
          such amounts, unless otherwise provided herein, shall be paid in accordance with
          the terms of this Agreement to the Employee’s devisee, legatee or other
          designee or if there is no such designee, to the Employee’s estate. 

         12.       
          NOTICE. For the purposes of this Agreement, notices and all other
          communications provided for in the Agreement shall be in writing and shall be
          deemed to have been duly given when personally delivered or sent by certified
          mail, return receipt requested, postage prepaid, addressed to the respective
          addresses set forth on the first page of this Agreement (provided that all
          notices to the Bank shall be directed to the attention of the Board of Directors
          of the Bank with a copy to the Secretary of the Bank), or to such other address
          as either party may have furnished to the other in writing in accordance
          herewith. 

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         13.       
          AMENDMENTS. No amendments or additions to this Agreement shall be binding
          unless in writing and signed by both parties, except as herein otherwise
          provided. 

         14.       
          PARAGRAPH HEADINGS. The paragraph headings used in this Agreement are
          included solely for convenience and shall not affect, or be used in connection
          with, the interpretation of this Agreement. 

         15.       
          SEVERABILITY. The provisions of this Agreement shall be deemed severable
          and the invalidity or unenforceability of any provision shall not affect the
          validity or enforceability of the other provisions hereof. 

         16.       
          GOVERNING LAW. This Agreement shall be governed by the laws of the United
          States to the extent applicable and otherwise by the laws of the State of
          Indiana. 

         17.       
          ARBITRATION. Any dispute or controversy arising under or in connection
          with this Agreement shall be settled exclusively by arbitration in accordance
          with the rules of the American Arbitration Association then in effect. Judgment
          may be entered an the arbitrator’s award in any court having jurisdiction. 

         18.       
          REIMBURSEMENT. In the event the Bank purports to terminate the Employee
          for cause, but it is determined by a court of competent jurisdiction or by an
          arbitrator pursuant to Section 18 that cause did not exist for such termination,
          or if in any event it is determined by any such court or arbitrator that the
          Bank has failed to make timely payment of any amounts owed to the Employee under
          this Agreement, the Employee shall be entitled to reimbursement for all
          reasonable costs, including attorneys’ fees, incurred in challenging such
          termination or collecting such amounts. Such reimbursement shall be in addition
          to all rights to which the Employee is otherwise entitled under this Agreement. 

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

        THIS
AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES. 

			LINCOLN BANK

By:  /s/ Jerry R. Engle
       ——————————

               "BANK"

/s/ Brad R. Davis
————————————

              "Employee"

	

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        The
undersigned, Lincoln Bancorp, sole shareholder of Bank, agrees that if it shall be
determined for any reason that any obligation on the part of Bank to continue to make any
payments due under this Agreement to Employee is unenforceable for any reason, Lincoln
Bancorp agrees to honor the terms of this Agreement and continue to make any such payments
due hereunder to Employee or to satisfy any such obligation pursuant to the terms of this
Agreement, as though it were the Bank hereunder. 

LINCOLN BANCORP 

By: /s/ Jerry R. Engle
       ——————————————

8EXHIBIT 4.3

                        DOBI MEDICAL INTERNATIONAL, INC.

NO.                                                                       Share
    --------------                                          --------------

                    FORM OF WARRANT TO PURCHASE COMMON STOCK
                    ----------------------------------------

                   VOID AFTER 5:30 P.M., EASTERN STANDARD TIME
                             ON THE EXPIRATION DATE

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE
WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND
STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

                  FOR VALUE RECEIVED, DOBI MEDICAL INTERNATIONAL, INC., a
Delaware corporation (the "Company"), hereby agrees to sell upon the terms and
on the conditions hereinafter set forth, but no later than 5:30 p.m., Eastern
Standard Time, on the Expiration Date (as hereinafter defined) to
__________________, or registered assigns (the "Holder"), under the terms as
hereinafter set forth, _____________ (_______) fully-paid and non-assessable
shares of the Company's Common Stock, par value $.0001 per share (the "Warrant
Stock"), at a purchase price per share of Three Dollars ($3.00) (the "Warrant
Price"), pursuant to this warrant (this "Warrant"). The number of shares of
Warrant Stock to be so issued and the Warrant Price are subject to adjustment in
certain events as hereinafter set forth. The term "Common Stock" shall mean,
when used herein, unless the context otherwise requires, the stock and other
securities and property at the time receivable upon the exercise of this
Warrant.

                  This Warrant is one of a series of the Company's Warrants to
purchase Common Stock (collectively, the "Warrants"), issued pursuant to that
certain Confidential Private Placement Memorandum, dated March 8, 2004 (the
"Memorandum"). Capitalized terms used and not otherwise defined herein shall
have the respective meanings attributed thereto in Section 12.

                  1.       Exercise of Warrant.

                           (a) The Holder may exercise this Warrant according to
its terms by surrendering this Warrant to the Company at the address set forth
in Section 13, the subscription form attached hereto having then been duly
executed by the Holder, accompanied by cash, certified check or bank draft in
payment of the purchase price, in lawful money of the United States of America,
for the number of shares of the Warrant Stock specified in the subscription
form, or as otherwise provided in this Warrant prior to 5:30 p.m., Eastern
Standard Time, on July 30, 2008 (the "Expiration Date").

                           (b) This Warrant may be exercised in whole or in part
so long as any exercise in part hereof would not involve the issuance of
fractional shares of Warrant Stock. If exercised in part, the Company shall
deliver to the Holder a new Warrant, identical in form, in the name of the
Holder, evidencing the right to purchase the number of shares of Warrant Stock
as to which this Warrant has not been exercised, which new Warrant shall be
signed by the Chief Executive Officer or President and the Secretary or
Assistant Secretary of the Company. The term Warrant as used herein shall
include any subsequent Warrant issued as provided herein.

                           (c) No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. The Company
shall pay cash in lieu of fractions with respect to the Warrants based upon

                                       1
<PAGE>

the fair market value of such fractional shares of Common Stock (which shall be
the closing price of such shares on the exchange or market on which the Common
Stock is then traded) at the time of exercise of this Warrant.

                           (d) In the event of any exercise of the rights
represented by this Warrant, a certificate or certificates for the Warrant Stock
so purchased, registered in the name of the Holder, shall be delivered to the
Holder within a reasonable time after such rights shall have been so exercised.
The person or entity in whose name any certificate for the Warrant Stock is
issued upon exercise of the rights represented by this Warrant shall for all
purposes be deemed to have become the holder of record of such shares
immediately prior to the close of business on the date on which the Warrant was
surrendered and payment of the Warrant Price and any applicable taxes was made,
irrespective of the date of delivery of such certificate, except that, if the
date of such surrender and payment is a date when the stock transfer books of
the Company are closed, such person shall be deemed to have become the holder of
such shares at the opening of business on the next succeeding date on which the
stock transfer books are open. Except as provided in Section 4 hereof, the
Company shall pay any and all documentary stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of shares of Common Stock on
exercise of this Warrant.

                  2.       Disposition of Warrant Stock and Warrant.

                           (a) The Holder hereby acknowledges that this Warrant
and any Warrant Stock purchased pursuant hereto are not being registered (i)
under the Securities Act of 1933, as amended (the "Act") on the ground that the
issuance of this Warrant is exempt from registration under Section 4(2) of the
Act as not involving any public offering or (ii) under any applicable state
securities law because the issuance of this Warrant does not involve any public
offering; and that the Company's reliance on the Section 4(2) exemption of the
Act and under applicable state securities laws is predicated in part on the
representations hereby made to the Company by the Holder that it is acquiring
this Warrant and will acquire the Warrant Stock for investment for its own
account, with no present intention of dividing its participation with others or
reselling or otherwise distributing the same, subject, nevertheless, to any
requirement of law that the disposition of its property shall at all times be
within its control.

                  The Holder hereby agrees that it will not sell or transfer all
or any part of this Warrant and/or Warrant Stock unless and until it shall first
have given notice to the Company describing such sale or transfer and furnished
to the Company either (i) an opinion, reasonably satisfactory to counsel for the
Company, of counsel (skilled in securities matters, selected by the Holder and
reasonably satisfactory to the Company) to the effect that the proposed sale or
transfer may be made without registration under the Act and without registration
or qualification under any state law, or (ii) an interpretative letter from the
U.S. Securities and Exchange Commission to the effect that no enforcement action
will be recommended if the proposed sale or transfer is made without
registration under the Act.

                           (b) If, at the time of issuance of the shares
issuable upon exercise of this Warrant, no registration statement is in effect
with respect to such shares under applicable provisions of the Act, the Company
may at its election require that the Holder provide the Company with written
reconfirmation of the Holder's investment intent and that any stock certificate
delivered to the Holder of a surrendered Warrant shall bear legends reading
substantially as follows:

                  "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE
                  SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
                  ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
                  SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY
                  TO THE ISSUER OF THIS CERTIFICATE THAT REGISTRATION IS NOT
                  REQUIRED UNDER SAID ACT."

In addition, so long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate "stop transfer"
orders with respect to such certificates and the shares

                                       2
<PAGE>

represented thereby on its books and records and with those to whom it may
delegate registrar and transfer functions.

                  3.       Reservation of Shares. The Company hereby agrees that
at all times there shall be reserved for issuance upon the exercise of this
Warrant such number of shares of its Common Stock as shall be required for
issuance upon exercise of this Warrant. The Company further agrees that all
shares which may be issued upon the exercise of the rights represented by this
Warrant will be duly authorized and will, upon issuance and against payment of
the exercise price, be validly issued, fully paid and non-assessable, free from
all taxes, liens, charges and preemptive rights with respect to the issuance
thereof, other than taxes, if any, in respect of any transfer occurring
contemporaneously with such issuance and other than transfer restrictions
imposed by federal and state securities laws.

                  4.       Exchange, Transfer or Assignment of Warrant. This
Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other Warrants of different denominations, entitling
the Holder or Holders thereof to purchase in the aggregate the same number of
shares of Common Stock purchasable hereunder. Upon surrender of this Warrant to
the Company or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants that carry the same rights upon presentation hereof at the
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof.

                  5.       Capital Adjustments. This Warrant is subject to the
following further provisions:

                           (a) Recapitalization, Reclassification and
Succession. If any recapitalization of the Company or reclassification of its
Common Stock or any merger or consolidation of the Company into or with a
corporation or other business entity, or the sale or transfer of all or
substantially all of the Company's assets or of any successor corporation's
assets to any other corporation or business entity (any such corporation or
other business entity being included within the meaning of the term "successor
corporation") shall be effected, at any time while this Warrant remains
outstanding and unexpired, then, as a condition of such recapitalization,
reclassification, merger, consolidation, sale or transfer, lawful and adequate
provision shall be made whereby the Holder of this Warrant thereafter shall have
the right to receive upon the exercise hereof as provided in Section 1 and in
lieu of the shares of Common Stock immediately theretofore issuable upon the
exercise of this Warrant, such shares of capital stock, securities or other
property as may be issued or payable with respect to or in exchange for a number
of outstanding shares of Common Stock equal to the number of shares of Common
Stock immediately theretofore issuable upon the exercise of this Warrant had
such recapitalization, reclassification, merger, consolidation, sale or transfer
not taken place, and in each such case, the terms of this Warrant shall be
applicable to the shares of stock or other securities or property receivable
upon the exercise of this Warrant after such consummation.

                           (b) Subdivision or Combination of Shares. If the
Company at any time while this Warrant
remains outstanding and unexpired shall subdivide or combine its Common Stock,
the number of shares of Warrant Stock purchasable upon exercise of this Warrant
and the Warrant Price shall be proportionately adjusted.

                           (c) Stock Dividends and Distributions. If the Company
at any time while this Warrant is outstanding and unexpired shall issue or pay
the holders of its Common Stock, or take a record of the holders of its Common
Stock for the purpose of entitling them to receive, a dividend payable in, or
other distribution of, Common Stock, then (i) the Warrant Price shall be
adjusted in accordance with Section 5(e) and (ii) the number of shares of
Warrant Stock purchasable upon exercise of this Warrant shall be adjusted to the
number of shares of Common Stock that Holder would have owned immediately
following such action had this Warrant been exercised immediately prior thereto.

                                       3
<PAGE>

                           (d) Warrant Price Adjustment. Whenever the number of
shares of Warrant Stock purchasable upon exercise of this Warrant is adjusted,
as herein provided, the Warrant Price payable upon the exercise of this Warrant
shall be adjusted to that price determined by multiplying the Warrant Price
immediately prior to such adjustment by a fraction (i) the numerator of which
shall be the number of shares of Warrant Stock purchasable upon exercise of this
Warrant immediately prior to such adjustment, and (ii) the denominator of which
shall be the number of shares of Warrant Stock purchasable upon exercise of this
Warrant immediately thereafter.

                           (e) Certain Shares Excluded. The number of shares of
Common Stock outstanding at any given time for purposes of the adjustments set
forth in this Section 5 shall exclude any shares then directly or indirectly
held in the treasury of the Company.

                           (f) Deferral and Cumulation of De Minimis
Adjustments. The Company shall not be required to make any adjustment pursuant
to this Section 5 if the amount of such adjustment would be less than one
percent (1%) of the Warrant Price in effect immediately before the event that
would otherwise have given rise to such adjustment. In such case, however, any
adjustment that would otherwise have been required to be made shall be made at
the time of and together with the next subsequent adjustment which, together
with any adjustment or adjustments so carried forward, shall amount to not less
than one percent (1%) of the Warrant Price in effect immediately before the
event giving rise to such next subsequent adjustment.

                           (g) Duration of Adjustment. Following each
computation or readjustment as provided in this Section 5, the new adjusted
Warrant Price and number of shares of Warrant Stock purchasable upon exercise of
this Warrant shall remain in effect until a further computation or readjustment
thereof is required.

                  6.       Notice to Holders.

                           (a) Notice of Record Date. In case:

                                    (i) 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 this Warrant) for the
                  purpose of entitling them to receive any dividend (other than
                  a cash dividend payable out of earned surplus of the Company)
                  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;

                                    (ii) of any capital reorganization of the
                  Company, any reclassification of the capital stock of the
                  Company, any consolidation with or merger of the Company into
                  another corporation, or any conveyance of all or substantially
                  all of the assets of the Company to another corporation; or

                                    (iii) 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 the
Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) 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 (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is 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 this Warrant) 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 or winding-up. Such notice shall
be mailed at least thirty (30) days prior to the record date therein specified,
or if no record date shall have been specified therein, at least thirty (30)
days prior to such specified date.

                           (b) Certificate of Adjustment. Whenever any
adjustment shall be made pursuant to Section 5 hereof, the Company shall
promptly make a certificate signed by its Chief Executive Officer, President or
Vice President and by its Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary, setting forth in reasonable

                                       4
<PAGE>

detail the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated and the Warrant Price and number
of shares of Warrant Stock purchasable upon exercise of this Warrant after
giving effect to such adjustment, and shall promptly cause copies of such
certificates to be mailed (by first class mail, postage prepaid) to the Holder
of this Warrant.

                  7.       Loss, Theft, Destruction or Mutilation. Upon receipt
by the Company of evidence satisfactory to it, in the exercise of its reasonable
discretion, of the ownership and the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to the Company and, in the case of mutilation, upon
surrender and cancellation thereof, the Company will execute and deliver in lieu
thereof, without expense to the Holder, a new Warrant of like tenor dated the
date hereof.

                  8.       Modifications and Waivers. The terms of the Warrants
may be amended, modified or waived by written agreement of the Company and the
holders of the Warrants issued pursuant to the Memorandum representing a
majority of the Common Stock represented by all such Warrants then outstanding.

                  9.       Warrant Holder Not a Stockholder. The Holder of this
Warrant, as such, shall not be entitled by reason of this Warrant to any rights
whatsoever as a stockholder of the Company, including any right to vote or to
consent to or receive notice as a stockholder of the Company.

                  10.      Redemption of Warrants. The Warrants are redeemable
by the Company at any time after 18 months from the date of the final closing of
the offering contemplated by the Memorandum and prior to the Expiration Date on
not less than 60 days prior written notice, at a redemption price of $.01 per
Warrant, provided that prior to the redemption the market price for the Common
Stock issuable upon exercise of a Warrant shall exceed $6.00 per share and a
registration statement covering the shares underlying the Warrants has been
declared and remains effective or the shares are not otherwise subject to any
sale restrictions. Market price for the purpose of this Section 10 shall mean
the closing price of the Common Stock, as reported by the OTC Bulletin Board,
the American Stock Exchange or other primary trading market for the Common
Stock, as the case may be, for a period of 20 consecutive trading days ending
within 15 days prior to the date on which notice of redemption is given. If the
Company shall elect to redeem Warrants as permitted by this Section 10, notice
of redemption shall be given to the holders of all outstanding Warrants to whom
the redemption shall apply mailing by first-class mail a notice of such
redemption, not less than 60 nor more than 90 days prior to the date fixed for
redemption, to their last addresses as they shall appear upon the registry
books, but failure to give such notice by mailing to the holder of any Warrant,
or any defect therein, shall not affect the legality or validity of the
proceedings for the redemption of any other Warrants. The notice of redemption
to each holder of Warrants shall specify the date fixed for redemption and the
redemption price at which Warrants are to be redeemed, and shall state that
payment of the redemption price of the Warrants will be made at the office of
the Company upon presentation and surrender of such Warrants, and shall also
state that the right to exercise the Warrants so redeemed will terminate as
provided in this Warrant (stating the date of such termination) and shall state
the then current exercise price. If the giving of notice of redemption shall
have been completed as above provided, the right to exercise the Warrants shall
terminate at the close of business on the business day preceding the date fixed
for redemption, and the holder of each Warrant shall thereafter be entitled upon
surrender of his or its Warrant only to receive the redemption price thereof,
without interest.

                  11.      Registration Rights. This Warrant and the shares of
Common Stock issuable upon exercise of this Warrant will be accorded the
registration rights under the Act set forth in that certain Subscription
Agreement between the Company and the Holder, a form of which agreement is being
furnished concurrently herewith.

                  12.      Definitions. As used herein, unless the context
otherwise requires, the following terms have the respective meanings:

                           (a) "Affiliate": with respect to any Person, the
following: (i) any other Person that at such time directly or indirectly through
one or more intermediaries controls, or is controlled by or is under common
control with such first Person or (ii) any Person beneficially owning or
holding, directly or indirectly, 10% or more of any class of voting or equity
interests of the Company or any Subsidiary or any corporation of which the

                                       5
<PAGE>

Company and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% of more of any class of voting or equity interests.
As used in such definition, "controls," "controlled by" and "under common
control," as used with respect to an Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise.

                           (b) "Person": any natural person, corporation,
division of a corporation, partnership, limited
liability company, trust, joint venture, association, company, estate,
unincorporated organization or government or any agency or political subdivision
thereof.

                           (c) "Subsidiaries": with respect to any Person, any
corporation, association or other business
entity (whether now existing or hereafter organized) of which at least a
majority of the securities or other ownership interests having ordinary voting
power for the election of directors is, at the time as of which any
determination is being made, owned or controlled by such Person or one or more
subsidiaries of such Person.

                  13.      Notices. Any notice required or contemplated by this
Warrant shall be deemed to have been duly given if transmitted by registered or
certified mail, return receipt requested, to the Company at 1200 MacArthur
Boulevard, Mahwah, New Jersey 07430, Attention: Mr. Phillip C. Thomas, Chief
Executive Officer, or to the Holder at the name and address set forth in the
Warrant Register maintained by the Company.

                  14.      Books and Records. The Company shall maintain, at the
office or agency of the Company maintained by the Company, books for the
registration and transfer of the Warrant.

                  15.      Choice of Law. THIS WARRANT IS ISSUED UNDER AND SHALL
FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW RULES.

                  IN WITNESS WHEREOF, the Company has duly caused this Warrant
to be signed on its behalf, in its corporate name and by its duly authorized
officers, as of this 30th day of July, 2004.

                              DOBI MEDICAL INTERNATIONAL, INC.

                              By: /s/
                                  ----------------------------------------------
                                  Phillip C. Thomas, Chief Executive Officer

                                       6
<PAGE>

                              WARRANT EXERCISE FORM
                              ---------------------

                  The undersigned, the Holder of the attached Warrant, hereby
irrevocably elects to exercise purchase rights represented by such Warrant for,
and to purchase thereunder, the following number of shares of Common Stock of
DOBI MEDICAL INTERNATIONAL, INC.:

                  Number of Shares            Purchase Price Per Share
                  ----------------            ------------------------

                                                      $3.00

                  The undersigned herewith makes payment of $_________ therefor,
and requests that certificates for such shares (and any warrants or other
property issuable upon such exercise) be issued in the name of and delivered to
__________________________ whose address is _______________________________
(social security or taxpayer identification number ___________) and, if such
shares shall not include all of the shares issuable under such warrant, that a
new warrant of like tenor and date for the balance of the shares issuable
thereunder be delivered to the undersigned.

                                     HOLDER:

                                     -------------------------------------------
                                     Signature

                                     -------------------------------------------
                                     Signature, if jointly held

                                     -------------------------------------------
                                     Date

<PAGE>

                                 ASSIGNMENT FORM
                                 ---------------

FOR VALUE RECEIVED,
                   -------------------------------------------------------------
hereby sells, assigns and transfers unto

Name:
     ---------------------------------------------------------------------------
         (Please typewrite or print in block letters)

Address:
         -----------------------------------------------------------------------

Social Security or Taxpayer Identification Number:
                                                  ------------------------------

the right to purchase Common Stock of DOBI MEDICAL INTERNATINONAL, INC., a
Delaware corporation, represented by this Warrant to the extent of shares as to
which such right is exercisable and does hereby irrevocably constitute and
appoint _________________, Attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.

DATED:
      ------------

                                     -------------------------------------------
                                     Signature

                                     -------------------------------------------
                                     Signature, if jointly held

Witness:

----------------------------

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