Document:

f8k042010ex10ii_fund.htm

    Exhibit 10.2

    
      

      

      

      

      

      

      

      

      

      

    

    FIFTH
AMENDED AND RESTATED

    OPERATING
AGREEMENT

    

    OF

    

    WESTON
CAPITAL MANAGEMENT, LLC

    
      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

    

    TABLE
OF CONTENTS

     

    
      
        	 	 	 	Page
	ARTICLE I GENERAL PROVISIONS	 
	 	 	 	 
	 	Section 1.1	Registered Office 	 2
	 	Section 1.2	Other Offices 	 2
	 	Section 1.3	Purpose; Nature of Business Permitted; Powers. 	 2
	 	Section 1.4	Limited Liability of Members 	 2
	 	Section 1.5	Tax Classification; No State Law Partnership 	 3
	 	Section 1.6	Definitions 	 3
	 	Section 1.7	Certificates 	 12
	 	Section 1.8	Term 	 12
	 	 	 	 
	ARTICLE II COMMON PERCENTAGE INTERESTS, CAPITAL
      CONTRIBUTIONS AND CAPITAL ACCOUNTS	 
	 	 	 	 
	 	Section 2.1	Percentage Interests. 	 12
	 	Section 2.2	Capital Contributions. 	 12
	 	Section 2.3	Capital Accounts. 	 13
	 	Section 2.4	Admission of New Members 	 13
	 	Section 2.5	Interest 	 13
	 	Section 2.6	Capital Withdrawal Rights, Interest and Priority 	 13
	 	 	 	 
	ARTICLE III MANAGEMENT	 
	 	 	 	 
	 	Section 3.1	Governance 	 14
	 	Section 3.2	Activities of Members of the Management Board 	 17
	 	Section 3.3	Management Board Certifications 	 17
	 	Section 3.4	Voting Rights of Members. 	 17
	 	Section 3.5	Remedies upon Event of Default 	 18
	 	Section 3.6	Injunctive Relief 	 18
	 	 	 	 
	ARTICLE IV GENERAL GOVERNANCE	 
	 	 	 	 
	 	Section 4.1	Other Ventures. 	 18
	 	Section 4.2	Information 	 19
	 	Section 4.3	Access 	 19
	 	Section 4.4	Standard of Care 	 19
	 	Section 4.5	Insurance 	 19
	 	 	 	 
	ARTICLE V TRANSFERS OF PERCENTAGE INTEREST	 
	 	 	 	 
	 	Section 5.1	Restrictions on Transfer. 	 20
	 	Section 5.2	Non-Permitted Transfers. 	 21
	 	Section 5.3	Fair Market Value Determinations 	 21
	 	Section 5.4	FNDM Registration Rights 	 21
	 	 	 	 
	ARTICLE VI ALLOCATIONS	 
	 	 	 	 
	 	Section 6.1	Allocations of Profits and Losses 	 22
	 	Section 6.2	Adjustments and Special Allocations 	 22
	 	Section 6.3	Curative Allocations 	 24
	 	Section 6.4	Loss Limitation. 	 24
	 	Section 6.5	Other Allocation Rules. 	 24
	 	Section 6.6	Tax Allocations: Code Section 704(c). 	 25
	 	 	 	 
	ARTICLE VII DISTRIBUTIONS AND EXPENSES	 
	 	 	 	 
	 	Section 7.1	Distributions of Net Cash Flow 	 26
	 	Section 7.2	Amounts Withheld 	 26
	 	Section 7.3	Expenses 	 27
	 	Section 7.4	Tax Distributions 	 27
	 	Section 7.5	Special Life Insurance Distributions 	 27
	 	 	 	 
	ARTICLE VIII OTHER TAX MATTERS	 
	 	 	 	 
	 	Section 8.1	Tax Matters Member 	 27
	 	Section 8.2	Furnishing Information to Tax Matters Member 	 27
	 	Section 8.3	Tax Claims and Proceedings 	 28
	 	Section 8.4	Books and Records 	 28
	 	Section 8.5	Survival 	 28
	 	Section 8.6	Activities Outside of the United States 	 28

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          	ARTICLE IX REPRESENTATIONS AND WARRANTIES	 
	 	 	 	 
	 	Section 9.1	Representations and Warranties of Members 	 29
	 	Section 9.2	ERISA Representation 	 30
	 	Section 9.3	Survival 	 30
	 	 	 	 
	ARTICLE X DISSOLUTION AND TERMINATION OF THE
      COMPANY	 
	 	 	 	 
	 	Section 10.1	Dissolution 	 30
	 	Section 10.2	Continuation of Interest of Member’s
    Representative 	 30
	 	Section 10.3	Dissolution, Winding Up and Liquidation. 	 30
	 	Section 10.4	Member Bankruptcy. 	 31
	 	 	 	 
	ARTICLE XI INDEMNIFICATION AND CONTRIBUTION	 
	 	 	 	 
	 	Section 11.1	Indemnity by the Company 	 31
	 	Section 11.2	Exculpation 	 32
	 	Section 11.3	Expenses 	 32
	 	Section 11.4	Advance Payment of Expenses 	 32
	 	Section 11.5	Beneficiaries 	 32
	 	Section 11.6	Indemnification Procedure for Third Party and Other
    Claims 	 32
	 	Section 11.7	Other Claims 	 33
	 	Section 11.8	Limitation on Damages 	 
	 	 	 	 
	ARTICLE XII MISCELLANEOUS PROVISIONS	 
	 	 	 	 
	 	Section 12.1	Entire Agreement 	 33
	 	Section 12.2	Amendments; Waivers 	 33
	 	Section 12.3	Applicable Law; Venue. 	 34
	 	Section 12.4	Enforcement 	 34
	 	Section 12.5	Headings 	 34
	 	Section 12.6	Severability 	 34
	 	Section 12.7	Counterparts 	 34
	 	Section 12.8	Filings 	 34
	 	Section 12.9	Additional Documents 	 35
	 	Section 12.10	Notices 	 35
	 	Section 12.11	Waiver of Right to Partition and Bill of
    Accounting 	 35
	 	Section 12.12	Confidentiality; Press Releases 	 36
	 	Section 12.13	Uniform Commercial Code 	 36
	 	Section 12.14	DISCLOSURES 	 36

        

      

       

      
        Schedule
I                  –     Schedule
of Members

        Exhibit
A                     –     Instrument
of Accession

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

    

    THE
TRANSFER OF THE LIMITED LIABILITY COMPANY INTERESTS DESCRIBED IN THIS AGREEMENT
IS RESTRICTED AS DESCRIBED HEREIN.

     

    FIFTH
AMENDED AND RESTATED OPERATING AGREEMENT

    OF

    WESTON
CAPITAL MANAGEMENT, LLC,

    a
Delaware Limited Liability Company

    

    THIS FIFTH AMENDED AND RESTATED
OPERATING AGREEMENT of WESTON CAPITAL MANAGEMENT, LLC, a Delaware limited
liability company (the “Company”), is made as
of March 26, 2010 (this “Agreement”), by and
among FUND.COM, INC., a Delaware corporation (“FNDM”), and the other
Persons whose names are set forth on Schedule I annexed
hereto, and together with any other Person who becomes a member of the Company
from time to time in accordance with the provisions hereof, the “Members”).

     

    RECITALS:

     

    1. A
Certificate of Formation of the Company was filed with the Secretary of State of
the State of Delaware on ___________, [2006].

     

    2. On
October 1, 2006, certain of the Former Members entered into that certain Fourth
Amended and Restated Operating Agreement of the Company (the “Fourth Operating
Agreement”), which governs the capital, management and operation of the
Company prior to the date hereof.

     

    3. Concurrently
herewith, the Company and the Former Members have entered into that certain
Securities Purchase and Restructuring Agreement, dated as of March 26, 2010 (the
“Purchase
Agreement”), pursuant to which (a) FNDM has acquired from the Company,
from PBC-Weston Holdings, LLC and from the Former Members (as defined below) an
aggregate of One Hundred (100%) Percent of the Percentage Interests (as defined
below) in the Company, and (b) the Hallac Group (as defined below) has been
issued the Reset Note (as defined below).

     

    4. In
accordance with the Act (as defined in Section 1.6) and Section 11.2 of the
Fourth Operating Agreement, the FNDM as the sole current Member of the Company
desires to amend and restate in its entirety the Fourth Operating Agreement to
(i) set forth the respective rights, powers and interests of the Members with
respect to the Company; (ii) establish the terms for the issuance of interests
therein; and (iii) provide for the management of the business and operations of
the Company.

     

    NOW,
THEREFORE, in consideration of the mutual promises and agreements herein made
and intending to be legally bound hereby, the parties hereto agree as
follows:

     

    
      
         

      

      
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    ARTICLE
I

     

    GENERAL
PROVISIONS

     

    Section
1.1 Registered
Office.  The
registered agent and office of the Company in the State of Delaware shall be
Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New
Castle, Delaware 19720.  The Management Board may change said
registered office from one location to another in the State of
Delaware.

     

    Section
1.2 Other
Offices.  The
Company may have one or more offices as may be established from time to time by
the Management Board.

     

    Section
1.3 Purpose; Nature of Business
Permitted; Powers.

     

    (a) The
purpose to be conducted or promoted by the Company is to engage in the following
activities:

     

    (i) to cause
the Company’s subsidiaries to acquire, own, hold, manage, lease, sell, transfer,
service, convey, safekeep, dispose of, pledge, assign, borrow money against,
finance, refinance or otherwise deal with, certain real property assets of the
Company’s subsidiaries, and whether with unrelated third parties or with
affiliated entities;

     

    (ii) to
acquire, own, hold, sell, transfer, service, convey, safekeep, dispose of,
pledge, assign, borrow money against, finance, refinance or otherwise deal with,
equity interests in other limited liability companies, partnerships or other
entities who are direct or indirect subsidiaries of the Company and whose
purposes are restricted to those set forth in clause (i) above; and

     

    (iii) to engage
in any lawful act or activity and to exercise any powers permitted to limited
liability companies organized under the laws of the State of Delaware that are
related or incidental to and necessary, convenient or advisable for the
accomplishment of the above-mentioned purposes (including the entering into of
interest rate or basis swap, cap, floor or collar agreements, currency exchange
agreements or similar hedging transactions and referral, management, servicing
and administration agreements).

     

    (b) The
Company, and the Members, or any Officer on behalf of the Company, may enter
into and perform the Purchase Agreement and all documents, agreements or
certificates contemplated thereby or related thereto, all without any further
act, vote or approval of any Member, Officer or other Person notwithstanding any
other provision of this Agreement, the Act or applicable law, rule or
regulation.  The foregoing authorization shall not be deemed a
restriction on the powers of the Members or any Officer to enter into other
agreements on behalf of the Company.

     

    Section
1.4 Limited Liability of
Members

     

    .  No
Member or any of its Affiliates or Affiliated Individuals shall have any
liability for the debts, obligations or liabilities of the Company or of any
other Member.  Except as provided in Section 11.8, subject to the
provisions of this Agreement, including, without limitation, Article XI hereof,
any liability of any Member or any of its Affiliates or Affiliated Individuals
to another Member or to the Company hereunder shall be limited to the percentage
interests of such Member or its Affiliates.

     

    
      
         

      

      
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    Section
1.5 Tax Classification; No State
Law Partnership.  The
Members intend that the Company shall be treated as a partnership for federal,
state and local tax purposes.  Each Member and the Company agree to
file all tax returns and otherwise take all tax and financial reporting
positions in a manner consistent with such treatment.  No provision of
this Agreement shall be deemed or construed to constitute the Company (including
its subsidiaries) as a partnership (including a limited partnership) or joint
venture, or any Member as a partner of or with any other Member for any purposes
other than tax purposes.

     

    Section
1.6 Definitions.  Unless
the context otherwise requires, the terms defined in this Section 1.6 shall, for
the purposes of this Agreement, have the meanings herein specified (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined).

     

    “1933 Act” has the
meaning set forth in Section 12.13.

     

    “1940 Act” means the
Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.

     

    “Act” means the
Delaware Limited Liability Company Act (as it may be amended from time to time
and any successor to such Act).

     

    “Active Employee”
means a Person who devotes substantially all of his business time, energy and
skill as may be reasonably necessary for the performance of his duties,
responsibilities and obligations as an employee of the Company.

     

    “Active Three Year
Call/Exchange Rights” has the meaning set forth in Section
5.4.

     

    “Active Three Year Exchange
Shares” has the meaning set forth in Section 5.4.

     

    “Adjusted Capital Account
Deficit” means, with respect to any Member the deficit balance, if any,
in such Member’s Capital Account as of the end of the relevant Fiscal Period,
after giving effect to the following adjustments:  (a) credit to such
Capital Account any amounts that such Member is obligated to restore pursuant to
this Agreement or deemed obligated to restore pursuant to the penultimate
sentences of  Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
and (b) debit to such Capital Account the items described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).  This definition of
Adjusted Capital Account Deficit is intended to comply with the provisions of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.

     

    “Affiliate” means,
with respect to a Person, another Person that directly or indirectly controls,
is controlled by, or is under common control with, such first Person; provided, however, that for
purposes only of the term “Permitted Transferee”, the term “Affiliate” shall
have the meaning ascribed to it therein.

     

    “Affiliated
Individual” means, with respect to a Person, any individual who is an
officer, director, shareholder, employee, partner or member of such Person or an
individual who is related by blood, marriage or adoption to any of the
foregoing.

     

    “Agreement” has the
meaning set forth in the Preamble.

     

    “Asset” means the
assets owned by the Company and its subsidiaries.

     

    
      
         

      

      
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    “Bankruptcy” means,
with respect to any Person, a “Voluntary Bankruptcy”
or an “Involuntary
Bankruptcy”.  A “Voluntary Bankruptcy”
shall mean, with respect to any Person, (a) an admission in writing by such
Person of its inability to pay its debts generally or a general assignment by
such Person for the benefit of creditors, (b) the filing of any petition or
answer by such Person seeking to adjudicate it bankrupt or insolvent or seeking
for itself any liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of such Person or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking, consenting to or acquiescing in the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for such
Person or for any substantial part of its property, or (c) corporate action
taken by such Person to authorize any of the actions set forth
above.  An “Involuntary
Bankruptcy” shall mean, with respect to any Person, without the consent
or acquiescence of such Person, the entering of an order for relief or approving
a petition for relief or reorganization or any other petition seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or other similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation or the filing of any such petition against
such Person which order or petition shall not be dismissed within 90 days or,
without the consent or acquiescence of such Person, the entering of an order
appointing a trustee, custodian, receiver or liquidator of such Person or of all
or any substantial part of the property of such Person which order shall not be
dismissed within 90 days.

     

    “Broker Subsidiary”
shall have the meaning as set forth in the Purchase Agreement.

     

    “Business” means the
business of the Company and its subsidiaries.

     

    “Business Day” means
any day other than a Saturday, Sunday or any other day on which banks in New
York City are required or permitted by law to be closed.

     

    “Capital Account” has
the meaning set forth in Section 2.3(a).

     

    “Capital Contribution”
means, with respect to any Member, the amount of money contributed to the
Company in exchange for a percentage interest in the Company, including Initial
Capital Contributions and the Capital Contributions.

     

    “Certificate of
Formation” means the Certificate of Formation referred to in Recital A
and any and all amendments thereto and restatements thereof filed on behalf of
the Company with the office of the Secretary of State of the State of Delaware
pursuant to the Act.

     

    “Closing Date” shall
have the meaning as set forth in the Purchase Agreement.

     

    “Code” means the
Internal Revenue Code of 1986, as amended from time to time.

     

    “Capital Contribution”
means as to each Member, the dollar amount that is set forth opposite such
Member’s name on Schedule I with respect to the Members and labeled such
Member’s “Capital Contribution”, as such schedule may be amended from time to
time in accordance with this Agreement.

     

     “Company” has the
meaning set forth in the Preamble.

     

    “control” means, with
respect to any Person, the power of another Person, through ownership of equity,
contract rights or otherwise, to direct the management and policies of such
Person, and “controlled” and
“controlling”
have correlative meanings.

     

    “Former Members” means
the collective reference to PBC-Weston Holdings, LLC, Albert Hallac, Mitzi
Hallac Liotta, Joanna Hallac, Jeffrey Hallac, Russell Hallac and Victor
Elmaleh.

     

     

    
      
         

      

      
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    “Depreciation” means,
for each Fiscal Period, an amount equal to the depreciation, amortization or
other cost recovery deduction allowable with respect to an asset for such Fiscal
Period, except that if the Gross Asset Value of such asset differs from its
adjusted basis for federal income tax purposes at the beginning of such Fiscal
Period, Depreciation shall be an amount that bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation,
amortization, or other cost recovery deduction for such Fiscal Period bears to
such beginning adjusted tax basis; provided, however, that if the adjusted basis
for federal income tax purposes of an asset at the beginning of such Fiscal
Period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the
Management Board.

     

    “Disputing Member” has
the meaning set forth in Section 5.8.

     

    “DTC” has the meaning
set forth in Section 5.4.

     

    “Election Notice” has
the meaning set forth in Section 3.5.

     

    “Event of Default” has
the meaning as defined in the Reset Note.

     

    “Exchange Warrant” has
the meaning set forth in the Purchase Agreement.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to
time.

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.

     

    “Fair Market Value”
has the meaning set forth in the Reset Note.

     

    “Family Member” means,
with respect to any specified natural person, (a) any parent, child, descendant
or sibling of such natural person (including relationships resulting from
adoption) or (b) the spouse of such natural person or of any person covered by
clause (a).

     

    “Fiscal Period” means
(a) the period commencing on the date hereof and ending on March 31, 2010, (b)
any subsequent three month period commencing on January 1, April 1, July 1 and
October 1, and (c) any portion of the period described in clauses (a) and (b) of
this clause (x) (i) for which the Company is required to allocate Profits,
Losses and other items of Company income, gain, loss or deduction pursuant to
Article VI and (ii) ending on the date of an adjustment to the Gross Asset Value
of any Asset of the Company pursuant to clause (b) of the definition of “Gross Asset
Value”.

     

    “Fiscal Year” means
(a) the period commencing on the date hereof and ending on December 31, 2010 and
any subsequent 12 month period commencing on January 1 and ending on December 31
(or such other 12 month period as determined by the Tax Matters Member
consistent with this Agreement or as required by accounting or tax authorities)
and (b) the period commencing on the immediately preceding January 1 (or other
first day of a Fiscal Year as determined under clause (a)) and ending on the
date on which all property of the Company is distributed to the Members pursuant
to Article X.

     

    
      
         

      

      
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    “FNDM” has the meaning
as set forth in the Preamble.

     

    “FNDM Common Stock”
means the Class A Common Stock, $0.001 par value of FNDM.

     

    “Gross Asset Value”
means, with respect to any asset, the asset’s adjusted basis for federal income
tax purposes, except as follows:

     

    (a)           the
initial Gross Asset Value of any asset contributed by a Member to the Company
shall be the fair market value of such asset at the time it is accepted by the
Company, unreduced by any liability secured by such asset, as reasonably
determined by the Management Board, as applicable;

     

    (b)           the
Gross Asset Values of all Assets shall be adjusted to equal their respective
fair market values, unreduced by any liabilities secured by such assets, as
reasonably determined by the Management Board as of the following
times:  (i) the acquisition of an additional interest in the Company
by any new or existing Member in exchange for more than a de minimis Capital
Contribution; (ii) the distribution by the Company to a Member of more than a de
minimis amount of property as consideration for an interest in the Company; and
(iii) the liquidation of the Company within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), provided that an adjustment described in clauses (i) and
(ii) of this paragraph shall be made only if the Management Board reasonably
determines that such an adjustment is necessary to reflect the relative economic
interests of the Members of the Company;

     

    (c)           the
Gross Asset Value of any Asset distributed to any Member shall be adjusted to
equal the fair market value of such asset on the date of distribution, unreduced
by any liability secured by such asset, as reasonably determined by the
Management Board; and

     

    (d)           the
Gross Asset Value of all Assets shall be increased (or decreased) to reflect any
adjustments to the adjusted basis of such assets pursuant to Code Section 734(b)
or Code Section 743(b); but only to the extent that such adjustments are taken
into account in determining Capital Accounts pursuant to Regulations Section
1.704-1(b)(2)(iv)(m) and paragraph (f) of the definition of “Profits” and “Losses” or Section
6.2(g); provided, however, that Gross Asset Value shall not be adjusted pursuant
to this paragraph (d) to the extent that an adjustment pursuant to paragraph (b)
is required in connection with a transaction that would otherwise result in an
adjustment pursuant to this paragraph (d).

     

    If  the
Gross Asset Value of an asset has been determined or adjusted pursuant to
paragraphs (a), (b) or (d) of this definition, such Gross Asset Value shall
thereafter be adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Profits and Losses.

     

    “Hallac” means Albert
Hallac, a natural person.

     

    
      
         

      

      
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    “Hallac Group” means
the collective reference to Hallac, Mitzi Hallac Liotta, Joanna Hallac, Jeffrey
Hallac and Russell Hallac and Victor Elmaleh; provided, however, in the event
of the death or incapacity of Hallac, Hallac Group shall mean the remaining
members of the Hallac Group and Keith Wellner, or such other Person as shall be
designated by members of those members of the Hallac Group who shall hold a
majority in interest in the Reset Note.

     

    “Indebtedness” means
(a) the principal, premium (if any), interest and related fees and expenses (if
any) in respect of (i) indebtedness for money borrowed and (ii) indebtedness
evidenced by notes, debentures, bonds or other similar instruments, (b) all
obligations in respect of outstanding letters of credit, acceptances and similar
obligations, (c) that portion of obligations with respect to capital leases not
entered into in the ordinary course of business and properly accounted for as a
liability, (d) any obligation owed for all or any part of the deferred purchase
price of property or services except  for trade liabilities incurred
in the ordinary course of business in accordance with customary practices, and
(e) a guaranty of any of the obligations described in clause (a) or (b) of this
definition.

     

    “Indemnifiable Losses”
has the meaning set forth in Section 11.1.

     

    “Indemnified Party”
has the meaning set forth in Section 11.6.

     

    “Indemnifying Party”
has the meaning set forth in Section 11.6.

     

    “Initial Capital
Contribution” means as to each Initial Member, the amount initially
contributed to the Company at the time of such Initial’s Member’s admission to
the Company.  Such amount is set forth opposite such Member’s name on
Schedule I and
labeled such Member’s “Initial Capital Contribution”, as such schedule may be
amended from time to time in accordance with this Agreement.

     

    “Initial Member” means
each of the Member and any
Permitted Transferee thereof.

     

    “Installment Payment”
has the meaning set forth in the Purchase Agreement.

     

    “Involuntary
Bankruptcy” has the meaning set forth in the definition of
Bankruptcy.

     

    “Major Actions” shall
have the meanings as defined in the Reset Note.

     

    “Management Board” has
the meaning set forth in Section 3.1(b).

     

    “Member” means FNDM
for so long as it holds a Percentage Interest, any of (a) FNDM, and (b) any
other Members who, in accordance with the provisions of this Agreement or the
Pledge Agreement, directly holds a Percentage Interest.

     

     “Member Nonrecourse
Debt” has the meaning of “partner nonrecourse
debt” as set forth in Regulations Section 1.704-2(b)(4).

     

    “Member Nonrecourse Debt
Minimum Gain” means an amount, with respect to any Member Nonrecourse
Debt, equal to the Minimum Gain that would result if such Member Nonrecourse
Debt were treated as a Nonrecourse Liability, determined in accordance with
Regulations Section 1.704-2(i)(3).

     

    
      
         

      

      
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    “Member Nonrecourse
Deductions” has the meaning of “partner nonrecourse
deductions” set forth in Regulations Sections 1.704-2(i)(1) and
1.704-2(i)(2).

     

    “Minimum Gain” means
“partnership minimum
gain” as set forth and defined in Regulations Sections 1.704-2(b)(2) and
1.704-2(d).

     

    “Net Cash Flow” means,
during the applicable period, the gross cash proceeds derived by the Company
during such period from any source (including financings or refinancings) less
the portion thereof used to pay or establish reserves for all Company operating
expenses, debt payments, capital improvements, replacements and contingencies,
all as determined by the Management Board in its reasonable discretion subject
to the provisions of this Agreement (including Section 3.1); provided, however,
that Net Cash Flow shall not be reduced by depreciation, amortization, cost
recovery deductions or similar allowances, but shall be increased by any
reductions of previously established reserves.

     

    “Nonrecourse
Deductions” has the meaning set forth in Regulations Sections
1.704-2(b)(1) and 1.704-2(c).

     

    “Nonrecourse
Liability” has the meaning set forth in Regulations Section
1.704-2(b)(3).

     

    “non-Notifying Member”
has the meaning set forth in Section 3.5.

     

    “Note Shares” has the
meaning set forth in the Purchase Agreement.

     

    “Notifying Member” has
the meaning set forth in Section 3.5.

     

    “Officer” means any
officer of the Company appointed by the Management Board.

     

    “Other Members” has
the meaning set forth in Section 5.3.

     

     “Percentage Interest”
means, with respect to any Member, the percentage that is set forth opposite
such Member’s name on Schedule I and labeled such Member’s “Percentage
Interest,” as such schedule may be amended from time to time to reflect changes
in such percentage made pursuant to and in accordance with this
Agreement.  The Percentage Interest of a Member represents (i) the
Capital Contributions of such Member divided by the aggregate amount of Capital
Contributions of all Members and (ii) such Member’s share of the Profits and
Losses allocable to the Members and such Member’s rights to receive
distributions of the assets of the Company as a Member in accordance with the
provisions of this Agreement.

     

     “Person” means any
individual, corporation, association, partnership (general or limited), joint
venture, trust, joint-stock company, estate, limited liability company, series,
unincorporated organization or other legal entity or organization.

     

    “Permitted
Transferee”  means (i) the Company, (ii) with respect to any
Member who is not a natural person, any Affiliate of such Member (provided that for
purposes of this clause (ii),
“Affiliate” shall mean, with respect to the Member in question, that such Member
controls such Affiliate and owns, directly or indirectly, more than 50% of the
economic interests of such Affiliate) and provided further that
notwithstanding the immediately preceding proviso, Affiliates as further defined
in the second sentence of the definition of Affiliate are affiliates for this
subsection
(ii); (iii) with respect to any Member who is a natural person, (x) upon
the death of such natural person, any Person in accordance with such natural
person’s will or the laws of intestacy; (y) one or more trusts for the sole
benefit of such natural person or one or more of the Family Members of such
natural person provided that such
natural person shall not be released from his obligations under this Agreement
as a Member; and (iv) in the event of the dissolution, liquidation or winding up
of any such Person that is a corporation, partnership or limited liability
company, the stockholders of a corporation that is such Person, the partners of
a partnership that is such Person, the members of a limited liability company
that is such Person or a successor corporation all of the stockholders of which
or a successor partnership all of the partners of which or a limited liability
company all of the members of which are the Persons who were the stockholders of
such corporation or the partners of such partnership or the members of such
limited liability company immediately prior to the dissolution, liquidation or
winding up of such Person; provided, however, in the case
of any such Person that is a Member only to the extent that such Transferee
complies with the foregoing clauses (i) through
(iv); provided further, however, that no such
Transfer under any one or more of the forgoing clauses (i) through
(iv) to any
such Person shall be permitted where such Transfer (x) fails to comply with
the terms of Section
2(a), including, without limitation, by reason of a failure to comply in
any respect with any federal or state securities laws, including, without
limitation, the 1940 Act, or (y) would result in the Company becoming subject to
the Exchange Act.

     

    
      
         

      

      
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    “Pledge Agreement”
means that certain pledge agreement, dated as of March ___, 2010, among FNDM,
members of the Hallac Group and Zukerman Gore Brandeis & Crossman, LLP, as
collateral agent, pursuant to which, inter alia, FNDM has pledged to the
collateral agent on behalf of the Hallac Group, the Pledged
Collateral.

     

    “Pledged Collateral”
has the meaning set forth in the Pledge Agreement.

     

    “Principal Amount”
shall have the meaning as is defined in the Reset Note.

     

    “Profits” or “Losses” means, in
respect of the Company, for each Fiscal Period, an amount equal to the taxable
income or loss of the Company for such Fiscal Period.  Such amount
shall be determined in accordance with Code Section 703(a) (for this purpose,
all items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments (without duplication):

     

    (a)           any
income of the Company that is exempt from federal income tax and not otherwise
taken into account in computing Profits or Losses pursuant to this definition
shall be added to such taxable income or loss;

     

    (b)           any
expenditures of the Company described in Code Section 705(a)(2)(B) or treated as
Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section
1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits
or Losses pursuant to this definition shall be subtracted from such taxable
income or loss;

     

    (c)           in
the event the Gross Asset Value of any Asset is adjusted pursuant to paragraphs
(b) and (c) of the definition of Gross Asset Value, the amount of such
adjustment shall be taken into account as an item of gain (if the adjustment
increases the Gross Asset Value of the asset) or an item of loss (if the
adjustment decreases the Gross Asset Value of the asset) from the disposition of
such asset and shall be taken into account for purposes of computing Profits or
Losses;

     

    (d)           gain
or loss resulting from any disposition of property with respect to which gain or
loss is recognized for federal income tax purposes shall be computed by
reference to the Gross Asset Value of property disposed of, notwithstanding that
the adjusted tax basis of such property differs from its Gross Asset
Value;

     

    
      
         

      

      
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    (e)           in
lieu of depreciation, amortization, and other cost recovery deductions taken
into account in computing such taxable income or loss there shall be taken into
account Depreciation for such Fiscal Period, computed in accordance with the
definition of Depreciation;

     

    (f)           to
the extent an adjustment to the adjusted tax basis of any Asset pursuant to Code
Section 734(b) is required pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts
as a result of a distribution other than in liquidation of a Member’s interest
in the Company, the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases the basis of the asset) from the disposition of the asset
and shall be taken into account for purposes of computing Profits or Losses;
and

     

    (g)           notwithstanding
any other provision of this definition, any items that are specially allocated
pursuant to Section 6.2 or Section 6.3 shall not be taken into account in
computing Profits or Losses.

     

    The
amounts of the items of Company income, gain, loss or deduction available to be
specially allocated with respect to the Company pursuant to Sections 6.2 and 6.3
shall be determined by applying rules analogous to those set forth in paragraphs
(a) through (g) above.

     

    “Proportionate
Percentage” shall mean, with respect to any group of Members, the ratio
of the Percentage Interest then owned by any member of such group to the
aggregate Percentage Interests then owned by all members of such
group.

     

    “Prospective
Purchaser” has the meaning set forth in Section 5.3.

     

    “Purchase Agreement”
has the meaning set forth in the Preamble.

     

    “QIB” means a “qualified institutional
buyer” within the meaning of Rule 144A under the 1933 Act.

     

    “Regulations” means
the federal income tax regulations promulgated by the Treasury Department under
the Code, as such regulations may be amended from time to time.  All
references herein to a specific section of the Regulations shall be deemed also
to refer to any corresponding provisions of succeeding Regulations.

     

    “Regulatory
Allocations” has the meaning set forth in Section 6.3.

     

    “Representative” has
the meaning set forth in Section 10.2.

     

    “Reset Note” shall
mean that certain $5,000,000 original principal amount promissory note (subject
to adjustment and reset as provided therein) dated as of March ___, 2010 and due
March 31, 2015, that was issued by FNDM to the members of the Hallac Group in
partial consideration for the purchase of the Existing Hallac Interests (as
defined in the Purchase Agreement) of the Hallac Group pursuant to the Purchase
Agreement.

     

    “SEC” has the meaning
set forth in Section 5.9.

     

    
      
         

      

      
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    “Secured Party” has
the meaning set forth in the Pledge Agreement.

     

    “Standard of Care” has
the meaning set forth in Section 4.5.

     

    “Tax Matters Member”
has the meaning set forth in Section 8.1.

     

    “Third Party Claim”
has the meaning set forth in Section 11.6.

     

    “Trading Day” means
any day on which the FNDM Common Stock are traded on the principal securities
exchange or securities market on which the shares of Common Stock are then
traded; provided that “Trading Day” shall not include any day on which the
shares of Common Stock are scheduled to trade on any such exchange or market for
less than 4.5 hours or any day that the shares of FNDM Common Stock are
suspended from trading during the final hour of trading on such exchange or
market (or if such exchange or market does not designate in advance the closing
time of trading on any such exchange or market, then during the hour ending at
4:00:00 p.m., New York Time).

     

    “Transfer” has the
meaning set forth in Section 5.1(a).

     

    “Valuation Event” has
the meaning set forth in Section 5.8.

     

    “Voluntary Bankruptcy”
has the meaning set forth in the definition of Bankruptcy.

     

    “Voting Member” means
a Member entitled to voting rights with respect to the Company in accordance
with Schedule I
attached hereto.

     

    “Voting
Representative” has the meaning set forth in Section 10.2.

     

    “Weighted Average
Price” means, for any security as of any date, the dollar volume-weighted
average price for such security on the principal securities exchange or
securities market in which such security is traded during the period beginning
at 9:30:01 a.m., New York Time (or such other time as such market or exchange
publicly announces is the official open of trading), and ending at 4:00:00 p.m.,
New York Time (or such other time as the Principal Market publicly announces is
the official close of trading) as reported by Bloomberg through its “Volume at
Price” functions, or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at
9:30:01 a.m., New York Time (or such other time as such market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
Time (or such other time as such market publicly announces is the official close
of trading) as reported by Bloomberg, or, if no dollar volume-weighted average
price is reported for such security by Bloomberg for such hours, the average of
the highest closing bid price and the lowest closing ask price of any of the
market makers for such security as reported in the “pink sheets” by Pink Sheets
LLC (formerly the National Quotation Bureau, Inc.).  If the Weighted
Average Price cannot be calculated for a security on a particular date on any of
the foregoing bases, the Weighted Average Price of such security on such date
shall be the fair market value (as determined in accordance with Section 5.8
below)

     

    Any
capitalized term not defined herein shall have the meaning ascribed to such term
in the Act.

     

    
      
         

      

      
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    Section
1.7 Certificates.  Each
Officer is an authorized Person within the meaning of the Act to execute,
deliver and file any certificates (and any amendments and/or restatements
thereof) necessary for the Company to qualify to do business in a jurisdiction
within the United States in which the Company may wish to conduct
business.  Each member of the Management Board is hereby designated as
an “authorized person” within the meaning of the Act, and has executed,
delivered and filed the Certificate of Formation of the company with the
Secretary of State of  the State of Delaware.

     

    Section
1.8 Term.  The
term of the Company shall begin on the date the Certificate of Formation was
filed with the Secretary of State of the State of Delaware and shall continue
for so long as the Company holds any Assets, unless terminated prior thereto in
accordance with the provisions hereof or pursuant to the Act.

     

    ARTICLE
II

     

    COMMON
PERCENTAGE INTERESTS, CAPITAL

    CONTRIBUTIONS
AND CAPITAL ACCOUNTS

     

    Section
2.1 Percentage
Interests.

     

    (a) The
Percentage Interests of each Member are set forth on Schedule I attached
hereto, as such may be amended from time to time.

     

    (b) Title to
Assets, whether real, personal or mixed, tangible or intangible, shall be deemed
to be owned by the Company, and no Member, individually or collectively, shall
have any ownership interest in such Assets or any portion
thereof.  Title to any or all of the Assets shall be recorded as
property of the Company on the books and records of the Company, irrespective of
the name in which legal title to such Assets is held.

     

    Section
2.2 Capital
Contributions.

     

    (a) Upon
execution of this Agreement, each Initial Member shall have contributed (or be
deemed to have contributed, as applicable) its entire Initial Capital
Contribution in exchange for a Percentage Interest of the Company as set forth
on Schedule I
hereof.

     

    (b) Capital
Contributions by the Members shall be made in U.S. dollars by wire transfer of
federal funds to an account or accounts of the Company specified by the Company
or the Management Board.  No Member shall be entitled to any
compensation by reason of its Capital Contribution or by reason of serving as a
Member.  No Member shall be required to lend any funds to the
Company.

     

    Section
2.3 Capital
Accounts.

     

    (a) A capital
account (“Capital
Account”) shall be maintained for each Member, in accordance with the
capital account maintenance rules set forth in Regulations Section
1.704-1(b)(2)(iv).  Without limiting the generality of the foregoing,
a Member’s Capital Account shall be increased by (i) the amount of money
contributed by the Member to such Class, (ii) the initial Gross Asset Value
of property contributed by the Member as determined by the contributing Member
and the Management Board (net of liabilities that the Company is considered to
assume or take subject to pursuant to Code Section 752), and (iii) allocations
to the Member of Profits pursuant to Article VI.  A Member’s Capital
Account shall be decreased by (x) the amount of money distributed to the Member,
(y) the Gross Asset Value of any property so distributed to the Member as
determined by the distributee Member and the Management Board (net of any
liabilities that such Member is considered to assume or take subject to pursuant
to Code Section 752), and (z) allocations to the Member of Losses pursuant to
Article VI.  The Members’ Capital Accounts shall be appropriately
adjusted for income, gain, loss and deduction as required by Regulations Section
1.704-1(b)(2)(iv)(g) (relating to allocations and adjustments resulting from the
reflection of property on the books of the Company at book value, or a
revaluation thereof, rather than at adjusted tax basis).

     

    (b) Compliance with Treasury
Regulations.  The foregoing provisions and the other provisions
of this Agreement relating to the maintenance of Capital Accounts are intended
to comply with Regulations Section 1.704-1(b), and shall be interpreted and
applied in a manner consistent with such Regulations.  In the event
the Management Board shall reasonably determine that it is prudent to modify the
manner in which the Capital Accounts, or any debits or credits thereto, are
computed in order to comply with such Regulations, the Management Board may make
such modification, provided, however, that it shall not have an adverse effect
on the amounts distributable to any Member.

     

    
      
         

      

      
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    (c) Negative Capital
Account.  No Member shall be required to make up an Adjusted
Capital Account Deficit or to pay to any Member the amount of any such deficit
in any such account.

     

    (d) Credit of Capital
Contribution.  For purposes of computing the balance in a
Member’s Capital Account, no credit shall be given for any Capital Contribution
which such Member is to make until such Capital Contribution is actually
made.

     

    Section
2.4 Admission of New
Members.  Unless
otherwise permitted under Article VII, new Members may only be admitted to
membership in the Company with the approval of the Management
Board.  A new Member must agree in writing to be bound by the terms
and provisions of the Certificate of Formation and this Agreement, each as may
be amended from time to time, and must execute a counterpart of, or an agreement
adopting, this Agreement or other related agreements as the Management Board may
require.  Upon admission, the new Member shall have all rights and
duties of a Member of the Company who holds such same Class; provided that such
new Member shall only be entitled to such voting rights as are provided pursuant
to this Agreement.

     

    Section
2.5 Interest.  No
interest shall be paid or credited to the Members on their Capital Accounts or
upon any undistributed profits left on deposit with the Company.

     

    Section
2.6 Capital Withdrawal Rights,
Interest and Priority.  Except
as expressly provided in this Agreement, no Member shall be entitled to withdraw
or reduce such Member’s Capital Accounts in whole or in part until the
dissolution, liquidation and winding-up of the Company, except as distributions
pursuant to Article VII may represent returns of capital.  A Member
who withdraws or purports to withdraw as a Member of the Company without the
consent of the other Voting Members or as otherwise allowed by this Agreement
shall be liable to the Company thereof for any damages suffered by the Company
thereof on account of the breach and shall not be entitled to receive any
payment in respect of its percentage interest in the Company or a return of its
Capital Contribution until the time otherwise provided herein for distributions
to Members.

     

    
      
         

      

      
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    ARTICLE
III

     

    MANAGEMENT

     

    Section
3.1 Governance.  Each
Member and the Company hereby agree that the Business shall be governed by the
provisions of this Article III and that, accordingly, the Company shall cause
its subsidiaries to act in accordance with the determinations of the Company
made pursuant to this Article III.

     

    (a) Management
Board.  Subject to Section 3.5, for so long as it shall own any
Percentage Interests in the Company, a majority of the members of the Board of
Managers of the Company shall consist of Persons designated by FNDM (the “FNDM Designees”);
provided, that one of the FNDM Designees shall be a Person who shall be
reasonably acceptable to Hallac.  For so long as any Principal Amount
of the Reset Note shall be issued and outstanding, or any member of the Hallac
Group shall beneficially own any Note Shares, the remaining members of the Board
of Managers shall be persons acceptable to the Hallac Group (the “Hallac
Designees”).  Following Closing Date (as defined in the
Purchase Agreement), the initial members of the Company Board of Managers shall
be five (5) Persons, consisting of (A) Hallac, (B) Keith Wellner, (C) Joseph J.
Bianco, (D) Gregory Webster and (E) Michael Hlavsa.  Hallac and Keith
Wellner are Hallac Designees and Messrs. Bianco, Webster and Hlavsa are the FNDM
Designees. By signing this Agreement, each Voting Member shall be deemed to have
voted for the election of each of the foregoing persons to serve as an initial
Management Board member.  The names and mailing addresses of the
members of the Management Board shall be set forth in the books and records of
the Company.  Subject to Section 3.1(d) below, the number of members
of the Management Board shall be fixed at five.  The members of the
Management Board need not be a Member or a representative of a
Member.  Each member of the Management Board shall serve an initial
three (3) year term, subject to any provisions set forth in such member’s
employment agreement with the Company.

     

    (b) Duties and Authority of the
Management Board.  Subject at all times to the provisions of
Section 3.1(c) below, the Management Board shall have the overall responsibility
for overseeing the day-to-day management, operation, control and administration
of the Business except as otherwise provided in this Agreement and shall
exercise all powers necessary and convenient for the purposes of the Company as
enumerated in Section 1.3, on behalf and in the name of the Company, including
the authority to cause the Company or any of its subsidiaries to file for a
Voluntary Bankruptcy or to take any action in furtherance of a Voluntary
Bankruptcy of the Company or any of its subsidiaries.  The Management
Board is, to the extent of its rights and powers set forth in this Agreement, an
agent of the Company for the purpose of its determinations and the actions of
the Company by and through the Management Board taken in accordance with such
rights and powers shall bind the Company.

     

    (c) Major
Actions.  (i)  Notwithstanding
anything to the contrary, express or implied, contained in Section 3.1(b) above,
or elsewhere in this Article III (including Section 3.4 hereof), for so long as
any Principal Amount of the Reset Note shall be issued and outstanding, or any
member of the Hallac Group shall beneficially own any Note Shares, actions by
the Management Board that would constitute a Major Action shall only be
implemented in compliance with the provisions of the Reset Note.

     

    (ii) Any
violation by the Management Board or FNDM of the provisions of clause (i) of
this Section 3.1(c) shall constitute an Event of Default under the Reset Note
and shall be void ab
initio and shall not be
given any force and effect unless and until there has been full compliance with
the provisions hereof.

     

    (iii) Notwithstanding
anything to the contrary herein, Hallac shall have the right to hire senior
level executives of the Company, subject to the consent of FNDM.

     

    (d) Composition of the
Management Board.    Each of the Voting Members will
agree to vote and otherwise use its reasonable best efforts to cause the
Management Board to include two members appointed by the Hallac
Group.  Subject to the provisions of Section 3.5 below, the remaining
members of the Management Board shall be appointed by FNDM.  Any
vacancies on the Management Board will be filled by the Member who originally
appointed such member of the Management Board.

     

    
      
         

      

      
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    (e) Status of Management Board
Members.    The status of a member of the Management
Board shall terminate if the Management Board member: (1) shall die;
(2) shall be adjudicated incompetent; (3) shall voluntarily resign as
a Management Board member (which shall require not less than 10 days’ prior
written notice to the Company); (4) shall be removed by the written request of
the Member that appointed such member of the Management Board pursuant to
Section 3.1(b); (5) shall be certified by a physician to be mentally or
physically unable to perform his or her duties; (6) shall be declared
bankrupt by a court with appropriate jurisdiction, file a petition commencing a
voluntary case under any bankruptcy law or make an assignment for the benefit of
creditors; (7) shall have a receiver appointed to administer the property
or affairs of such Management Board member; or (8) shall otherwise cease to
be a Management Board member of the Company under the Act. Upon such
termination, the Voting Members will agree to vote and otherwise use its
reasonable best efforts to cause a replacement appointee to be elected to the
Management Board in compliance with Section 3.1(b)(ii) or 3.1(b)(iii) hereof, as
applicable.

     

    (f) Meetings.  Meetings
of the Management Board may be called by a majority of the members of the
Management Board on at least two Business Days’ prior written notice to each
member of the Management Board, which notice shall contain the time and place of
such meeting.  Provided that at least two members of the Management
Board appointed by FNDM and at least one member of the Management Board
appointed by the Hallac Group are present, a majority of the members of the
Management Board shall constitute a quorum for the transaction of business by
the Management Board.  All actions of the Management Board shall
require the affirmative vote of a majority of the members of the Management
Board, other than any Major Action, which will require approval pursuant to the
terms of the Reset Note.  Decisions made by the Management Board at
any meeting, however convened, shall be as valid as though held after due notice
if, either before or after the meeting, each and every voting member of the
Management Board signs a written waiver of notice or a consent to the holding of
such meeting or written approval of the minutes
thereof.  Notwithstanding anything in this Agreement to the contrary,
this Section 3.1(d) shall not be amended without the unanimous consent of the
Voting Members.

     

    (g) Telephone Conference;
Unanimous Written Consent.  Meetings of the Management Board
may be held by telephone conference or similar communications equipment by means
of which all persons participating in the meeting can hear each other and
participate in the conversation.  Any action required or permitted to
be taken by the Management Board may be taken without a meeting and without
prior notice if all of the Members of the Management Boards shall consent in
writing to such action.  Such consent or consents shall be filed with
the minutes of the proceedings of the Management Board and shall have the same
force and effect as a unanimous vote of the Management Board.

     

    (h) Chairman.  The
Management Board may, if it so determines, elect from among its members a
Chairman of the Board and/or a Vice Chairman of the Board.  The
Chairman of the Board, if any, shall preside at all meetings of the Management
Board and of the Members at which he or she shall be present and shall have and
may exercise such powers as may, from time to time, be assigned to him or her by
the Management Board or as may be provided by Applicable Law.  In the
absence of the Chairman of the Board, the Vice Chairman of the Board, if any,
shall preside at all meetings of the Management Board and of the Members at
which he or she shall be present and shall have and may exercise such powers as
may, from time to time, be assigned to him or her by the Management Board or as
may be provided by Applicable Law.

     

    
      
         

      

      
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    (i) Limitation on Liability of
Member of the Management Boards.  Members of the Management
Board shall not, solely by reason of being a member of the Management Board, be
personally liable for the expenses, liabilities or obligations of the Company or
the Company whether arising in contract, tort or otherwise.

     

    (j) Compensation and
Reimbursement.  Members of the Management Board shall not
receive compensation for their services performed on behalf of the Company or
other benefits they provide to the Company.  Members of the Management
Board shall be entitled to reimbursement for reasonable, documented
out-of-pocket expenses incurred by them in connection with attendance at
meetings of the Management Board or any committee thereof conducting the
business and affairs of the Company.

     

    (k) Committees of the
Board.

     

    (i) The
Management Board may designate an executive committee and other committees, each
consisting of one or more members of the Management Board; provided, however
that each committee must have proportional representation of each of the Initial
Members to the same extent that such Initial Member has on the Management Board
unless any such Initial Member waives membership in such committee in
writing.  Each committee (including the members thereof) shall serve
at the pleasure of the Management Board and shall keep minutes of its meetings
and report the same to such Board.  The Management Board may designate
one or more members of the Management Board as alternate members of any
committee, who may replace any absent or disqualified member or members at any
meeting of the committee.  In addition, in the absence or
disqualification of a member of a committee, if no alternate member has been
designated by the Management Board, the member or members present at any meeting
and not disqualified from voting, whether or not they constitute a quorum, may
unanimously appoint another member of the Management Board to act at the meeting
in the place of the absent or disqualified member.  Except as limited
by applicable law, each committee, to the extent provided in the resolution of
the Management Board establishing it, shall have and may exercise all the powers
and authority of the Board in the management of the business and affairs of the
Company; provided that no committee of the Management Board shall be entitled to
approve any Major Decision.

     

    (ii) A
majority of all the voting members of a committee shall constitute a quorum for
the transaction of business, and the vote of a majority of all the voting
members of a committee shall be the act of the committee.  In other
respects each committee shall conduct its business in the same manner as the
Management Board conducts its business pursuant to this Section
3.1(k).  Each committee shall adopt whatever other rules of procedure
it determines for the conduct of its activities.

     

    (iii) The
members of the executive committee shall initially be Joseph Bianco, Hallac and
Keith Wellner.

     

    (l) Chairman.  The
Management Board may, if it so determines, elect from among its members a
Chairman of the Board and/or a Vice Chairman of the Board.  The
Chairman of the Board, if any, shall preside at all meetings of the Management
Board and of the Members at which he or she shall be present and shall have and
may exercise such powers as may, from time to time, be assigned to him or her by
the Management Board or as may be provided by Applicable Law.  In the
absence of the Chairman of the Board, the Vice Chairman of the Board, if any,
shall preside at all meetings of the Management Board and of the Members at
which he or she shall be present and shall have and may exercise such powers as
may, from time to time, be assigned to him or her by the Management Board or as
may be provided by Applicable Law.

     

    
      
         

      

      
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    (m) Special Management
Fee.  On the first business day of each of the twelve months
following the date hereof, the Company shall pay to FNDM (or any Affiliate
designated in writing by FNDM) a management fee equal to $8333.33 per month,
payable in arrears in U.S. dollars and immediately available funds, in
connection with certain management services provided by FNDM during such twelve
month period to the Company.

     

    Section
3.2 Activities of Members of the
Management Board

     

    .  The
members of the Management Board shall devote as much of their time to the
affairs of the Management Board as in the judgment of the members of the
Management Board the conduct of the such affairs shall reasonably require, and
the members of the Management Board shall not be obligated to do or perform any
act or thing in connection with the Business not expressly set forth
herein.  Nothing herein contained in this Agreement shall be deemed to
preclude the members of the Management Board from engaging directly or
indirectly in any other business or from directly or indirectly purchasing,
selling, holding or otherwise dealing with any securities for the account of any
such other business, for its own accounts or for other clients.  No
Member shall, by reason of being a Member, have any right to participate in any
manner in any profits or income earned, derived by or accruing to the members of
the Management Board or any of their Affiliates from the conduct of any business
other than Business (to the extent provided herein) or from any transaction in
securities effected by the members of the Management Board or any of their
Affiliates for any account other than that of the Business.

     

    Section
3.3 Management Board
Certifications.   Any
Person dealing with the Company may rely (without duty of further inquiry) upon
a certificate issued by the Company that is signed by any member of the
Management Board or any of the Officers as to any of the following:

     

    (a) the
identity of any Member or other agent of the Company;

     

    (b) the
existence or nonexistence of any fact or facts which constitute(s) a condition
precedent to acts by the Management Board or the Members;

     

    (c) the
Person or Persons authorized to execute and deliver any instrument or document
of the Company; or

     

    (d) any act
or failure to act by the Company or any other matter whatsoever involving the
Company.

     

    Section
3.4 Voting Rights of
Members.

     

    (a) Percentage
Interests.   Members holding Percentage Interests shall
have no right or authority to vote on matters other than the election of any
members of the Management Board or explicitly requiring such vote in the
Act.  On such matters or in the Act explicitly requiring a vote of the
Voting Members, each Initial Member shall initially have the votes representing
its Percentage Interest as set forth on Schedule I attached
hereto.  In the event FNDM or other Member (other than in connection
with the foreclosure of the Pledged Collateral pursuant to the Pledge Agreement)
shall transfer less than all its Percentage Interest to an unaffiliated third
party or any other Member in a transaction or in a Company of transactions then
the portion of such Member’s votes that is equal to the portion of such Member’s
Percentage Interest transferred shall be deemed cancelled and the transferee in
such transfer shall not be a Voting Member.  In the event any Member
shall transfer all of its Percentage Interests held on the date of such transfer
to an unaffiliated third party or any other Member in a transaction or in a
Company of transactions, or upon the acquisition of the Pledged Collateral
pursuant to the Pledge Agreement, then all of the votes of its Percentage
Interests on the date of such transfer shall be deemed to have been transferred
to such transferee upon the satisfaction of the conditions contained in Article
V.

     

    
      
         

      

      
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    (b) Required
Vote.  Except as otherwise provided herein, any action by the
Voting Members shall require the affirmative vote or written consent of a
majority of the voting power of the Company entitled to vote, voting together as
one class.  Notwithstanding anything in this Agreement to the
contrary, this Section 3.4(b), subject to the provisions of Section 12.2,
shall not be amended without the Voting Members owning 90% or more of all
Percentage Interests.

     

    Section
3.5 Remedies upon Event of
Default.  Notwithstanding
anything to the contrary contained in this Agreement, in the event that an Event
of Default shall occur and be continuing under the Reset Note after the
expiration of all applicable cure or grace periods, if any (it being expressly
understood and agreed that there are no cure or grace periods with respect to
the Installment Payment), in addition to any rights at law or in equity then
available to them under the Pledge Agreement, the Reset Note or otherwise, the
holder(s) of such Reset Note shall have the right to designate, by the vote of
those Persons holding a majority-in-interest of the foreclosed Pledged
Collateral, a majority of all of the members of the Management Board of the
Company, irrespective of the Percentage Interests then owned by FNDM after
giving effect to foreclosure under the Pledge Agreement and the FNDM Designees
shall automatically be deemed to have resigned upon the foreclosure of the
Pledged Collateral by the Secured Party.

     

    Section
3.6 Injunctive
Relief.  The
Companies and the Members hereby declare that it is impossible to measure in
money the damages which will accrue to the parties hereto by reason of the
failure of any Member to perform any of its obligations set forth in Section
3.5.  Therefore, the Companies and the Members shall have the
right to specific performance of such obligations, and if any party hereto shall
institute any action or proceeding to enforce the provisions hereof, each of the
Companies and the Members hereby waives the claim or defense that the party
instituting such action or proceeding has an adequate remedy at
law.

     

    ARTICLE
IV

     

    GENERAL
GOVERNANCE

     

    Section
4.1 Other
Ventures.

     

    (a) It is
expressly agreed that each Member, and any Affiliates, officers, directors,
managers, stockholders, members, partners or employees of such Member, may
engage in other business ventures of every nature and description, whether or
not in competition with the Company, independently or with others, and neither
the Company nor the other Members shall have any rights in and to any
independent venture or activity or the income or profits derived therefrom; the
pursuit of other ventures and activities by any such Person is hereby consented
to by each Member and shall not be deemed wrongful or improper.

     

    (b) Nothing
in this Agreement shall be construed so as to prohibit any Member or its
respective Affiliates, officers, directors, managers, stockholders, members,
partners or employees from owning, operating or investing in any business of any
nature and description, independently or with others, and no Member need
disclose its intention to make any such investment to the other, nor advise the
Company of the opportunity presented by any such prospective
investment.

     

    
      
         

      

      
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    Section
4.2 Information.  The
Company covenants and agrees to deliver to each Member (a) consolidated
financial reports of the Company audited by Jewett, Schwartz, Wolfe &
Associates or such other independent accounting firm of national reputation for
the Company and each of the Subsidiaries of the Company of which such Member
owns a percentage interest, within 105 days after the end of the Fiscal Year of
the Company; (b) consolidated quarterly unaudited financial reports for the
Company and its Subsidiaries within 60 days after the end of each fiscal quarter
of the Company; (c) consolidated monthly financial reports of the Company within
30 days after the end of the each month; (d) an annual budget and business plan
for each Fiscal Year within 60 days after the beginning of such Fiscal Year; and
(e) such other information and data (including such information and reports made
available to any lender of the Company or any of its subsidiaries under any
credit agreement or otherwise and each of its Material Subsidiaries as from time
to time may be reasonably requested by any Member without creating an undue
burden on the Company.

     

    Section
4.3 Access.  The
Company shall, and shall cause its subsidiaries, officers, directors, employees,
auditors and other agents to (a) afford the officers, employees, auditors and
other agents of the Members, during normal business hours and upon reasonable
notice reasonable access at all reasonable times to its officers, employees,
auditors, legal counsel, properties, offices, plants and other facilities and to
all books and records and (b) afford each Member the opportunity to discuss the
Company’s affairs, finances and accounts with the Officers or Management Board
from time to time as each such Member may reasonably request without creating an
undue burden on the Company, including, without limitation, but in particular,
upon notice that a vote is required with respect to a Major
Decision.

     

    Section
4.4 Standard of
Care.  Each
Member expressly acknowledges that an investment is highly speculative in
nature.  The Management Board shall exercise all of its powers and
duties under this Agreement in accordance with the terms of this Agreement and
with a degree of skill, diligence, prudence and care which, and in a manner
which a director of a Delaware corporation must use in the proper discharge of
such a director’s fiduciary duties (the standard set forth in this sentence
being referred to herein as the “Standard of
Care”).

     

    Section
4.5 Insurance

     

    (a) .  The
Company presently maintains a term life insurance policy on Hallac in the amount
of Six Million ($6,000,000) Dollars (the “Insurance Benefit”)
for the benefit of Hallac’s estate (the “Current
Policy”).  The Company will keep the Current Policy in full
force and effect for the remainder of its term (which is approximately an
additional 18 months after the date first set forth above.  In
addition, the Company will use its best efforts to extend the Current Policy or
obtain a substitute life insurance policy for the same Insurance Benefit on or
prior to the expiration of the Current Policy so that there is no gap in
coverage, and such extended Current Policy or substitute therefor is
co-terminous with Hallac’s employment by the Company; provided, that (i) Hallac
shall submit to all necessary insurance physical examinations, (ii) Hallac shall
be insurable, and (iii) such insurance can be purchased by the Company at then
prevailing prices and on commercially reasonable terms (the proceeds of all such
insurance currently existing and hereafter obtained, the “Hallac Trust Life Insurance
Proceeds”).

     

    
      
         

      

      
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    ARTICLE
V 

     

    TRANSFERS
OF PERCENTAGE INTEREST

     

    Section
5.1 Restrictions on
Transfer.

     

    (a) Except as
otherwise provided pursuant to the terms of the Reset Note and Pledge Agreement,
no Member, including any assignee or successor in interest of any such Member,
shall (voluntarily or involuntarily) Transfer all or any portion of any
Percentage Interests (including a Transfer pursuant to a foreclosure sale of all
or any part of the assets of a Member) without the prior written consent of all
the voting members of the Management Board (not to be unreasonably withheld),
except in each case subject to the next sentence and to Section 5.1(b) below,
(i) a Transfer to a Permitted Transferee, (ii) a Transfer in accordance with
Sections 5.3 below, and (iii) a pledge by a Member of its Percentage Interests
or of its rights to any cash distributions or other distributions made in
respect of such Member’s Percentage Interests or of the rights to the proceeds
to such Member resulting from the disposition by such Member of such Percentage
Interests in accordance with the provisions of this Agreement, the Reset Note or
the Pledge Agreement.  No Transfer, other than in the case of a
Transfer from a Member to a Permitted Transferee under clauses (i) or (ii) of
the definition thereof, shall be effected until 5 Business Days after and
excluding the day upon which written notice of such proposed Transfer has been
given to each of the Members.  Any direct or indirect Transfer,
assignment or other disposition of any securities or other interests of a Member
or of any securities or other interests of any Person or Persons having a direct
or indirect ownership interest in a Member shall be deemed a Transfer of the
Percentage Interests of such Member for purposes of this Section
5.1(a).

     

    (b) Any
transferee of Percentage Interests permitted under Section 5.1(a) shall
become a substitute Member under this Agreement and of the Company
upon:  (u) the execution and delivery by the transferee to the Company
of an Instrument of Accession in the form of Exhibit A hereto, (v)
the transferee agreeing in writing (1) to be bound by all the terms and
conditions of this Agreement as then in effect and (2) that such transferee is
not in violation of the “Patriot Act” or any law regulating the identity of
investors or the source of funds used to make an investment; (w) compliance
with applicable federal and state securities laws; (x) receipt of any regulatory
approvals required under applicable law; (y) the Management Board being
reasonably satisfied that such Transfer would not result in (1) any violation of
or failure to comply with applicable federal and state securities law and (2) in
the Company becoming a “publicly traded partnership” within the meaning of
Section 7704(b) of the Code, and the regulations issued thereunder; and (z) the
Management Board being reasonably satisfied that such Transfer would not result
in any violation or failure to comply with the “Patriot Act” or any law
regulating the identity of investors or the source of funds used to make an
investment; provided, however, that the
foregoing shall not apply to any transfer of the Pledged Collateral pursuant to
the Pledge Agreement, which transfer shall be fully effective and automatic upon
delivery of the Pledged Collateral pursuant to the Pledge
Agreement.  Unless and until a transferee is admitted as an additional
or substitute Member under this Agreement and under the applicable formation and
governing documents of the Company, the transferee shall have no right to
exercise any of the powers, rights and privileges of a Member hereunder or under
the applicable formation and governing documents of the Company.  A
Member who has transferred its Percentage Interests shall cease to be a Member
upon Transfer of all of the Member’s Percentage Interests and thereafter shall
have no powers, rights and privileges as a Member hereunder.

     

    (c) The
Company, any Member, the Management Board, the Officers, and any other Person or
Persons having business with the Company need only deal with Members who are
admitted as Members or as additional or substitute Members of the Company, and
they shall not be required to deal with any other Person by reason of a Transfer
by a Member, except as may be otherwise expressly provided in this
Agreement.  In the absence of a transferee of a transferring Member’s
Percentage Interests being admitted as a Member as provided herein, any payment
to a Member shall release the Company, the Management Board and the other
parties hereto of all liability to any other Persons who may be interested in
such payment by reason of an assignment by such Member.

     

    
      
         

      

      
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    Section
5.2 Non-Permitted
Transfers.

     

    (a) Any
purported Transfer of all or any portion of Percentage Interests of any Company
or any economic benefit or other interest therein not in compliance with Section 5.1 shall be
null and void ab initio, regardless of
any notice provided to any of the parties hereto, and shall not create any
obligation or liability of any of the parties hereto to the purported
transferee, and any Person purportedly acquiring all or any portion of any
Percentage Interests or any economic benefit or other interest therein
transferred not in compliance with Section 5.1 shall not
be entitled to admission to the Company as a substitute Member.

     

    (b) In the
case of an attempted Transfer of all or any portion of any Percentage Interests
of the Company or any economic benefit or other interest therein that is not in
compliance with Section 5.1, the
parties engaging or attempting to engage in such Transfer shall indemnify and
hold harmless the other parties hereto and their respective officers, directors,
affiliates, members, partners and employees from all cost, liability and damage
that any of such indemnified persons may incur (including, without limitation,
incremental tax liability and attorneys’ fees and expenses) as a result of such
Transfer or attempted Transfer and the enforcement of this
indemnity.

     

    (c) No
Member, including any assignee or successor in interest of any Member, shall
Transfer all or any portion of its Percentage Interests of the Company or any
economic benefit or other interest therein if such Transfer would cause the
Company to be treated as a “publicly traded partnership” within the meaning of
Code Section 7704 and the Regulations promulgated thereunder.

     

    Section
5.3 Fair Market Value
Determinations

     

    (a) .  The
Company shall use its reasonably best efforts to obtain and cause to be
delivered to the holders of the Reset Note and Fund.com an appraisal of the Fair
Market Value of 100% of the Percentage Interests by Kidron Corporate Advisors or
such other appraiser jointly selected by the Company and the
majority-in-interest of holders of the Reset Note, no earlier than the tenth
Trading Day (as that term is defined in the Reset Note) and no later than the
fifth Trading Day prior to each Reset Date.  The Fair Market Value
shall be determined by the appraiser in accordance with such definition set
forth in the Reset Note.

     

    Section
5.4 FNDM Registration
Rights.  FNDM
covenants and agrees with each other Member to use its reasonable best efforts
to (i) (x) prepare and file with the Securities and Exchange Commission (the
“SEC”) a
registration statement covering the resale of all the Note Shares issuable under
the Reset Note for an offering to be made on a continuous basis pursuant to Rule
415 under the Securities Act and (y) to cause such registration statement to be
declared effective by the SEC, in each case, on or prior to the third
anniversary of the Closing Date and (ii) at any time the Reset Note remains
outstanding, or any Note Shares issuable upon conversion of the Reset Note are
beneficially owned by any member of the Hallac Group, cause such registration
statement to remain effective.  If at any time such other Member holds
Note Shares there is not an effective Registration Statement covering all of the
Note Shares then outstanding and FNDM shall determine to prepare and file with
the Securities and Exchange Commission a registration statement relating to an
offering for its own account or the account of others under the Securities Act
of 1933, as amended, of any of its equity securities, other than on Form S-4 or
Form S-8 (each as promulgated under the Securities Act of 1933, as amended) or
their then equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity securities
issuable in connection with stock option or other employee benefit plans, then
the Company shall send to each such other Member written notice of such
determination and if, within fifteen days after receipt of such notice, any such
other Member shall so request in writing, the Company shall include in such
registration statement all of such Note Shares such other Member requests to be
registered.

     

    
      
         

      

      
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    ARTICLE
VI

     

    ALLOCATIONS

     

    

     

    Section
6.1 Allocations of Profits and
Losses

     

    (a) This
Section 6.1 sets forth the general rules for both the book allocations to
reflect the economic arrangements of the Members and for the tax allocations for
U.S. federal income tax purposes pursuant to Code Section 704(b) and the
Regulations promulgated thereunder with respect to the Company.  The
Profits and Losses of the Company shall be allocated with respect to each Fiscal
Period as of the end of such Fiscal Period as follows:

     

    (i) Profits.  Profits
for any Fiscal Period shall be allocated among the Members in amounts
proportionate to their respective Percentage Interests.

     

    (ii) Losses.  Losses
for any Fiscal Period shall be allocated among the Members according to their
Percentage Interests, subject to Section 6.4(b).

     

    (b) Allocations
Override.  Notwithstanding Section 6.1(a) or
Section 6.1(b), Profits and Losses (or individual items of any of the
foregoing) for any Fiscal Period shall be allocated, to the greatest extent
possible, among the Members such that the positive balances of the Capital
Account of each Member after such allocation will be equal to the amounts that
would have been distributed to such Member if the Company liquidated at the end
of such Fiscal Period and made liquidating distributions pursuant to Section
7.1.  Notwithstanding the preceding sentence, (i) no allocation
will be made pursuant to this Section 6.1(b) to a Qualified Organization
Member (as such term is defined below) that would result in such Qualified
Organization Member’s share of Profits for any Fiscal Period exceeding its
“fractions rule percentage” as defined in Regulations Section 1.514(c)-2(c)(2),
and (ii) no allocation will be made pursuant to this Section 6.1(b)
that would cause the Company’s allocations to fail to meet the “substantial
economic effect” requirement of Code Section 704(b)(2).  For purposes
of this Section 6.1(b), the term “Qualified Organization Member” means a
Member that is a “qualified organization” (as such term is defined in Code
Section 514(c)(9)(C)) or a Member with respect to which a qualified organization
directly or indirectly holds an economic interest (other than through an entity
treated as a corporation for federal income tax purposes).

     

    Section
6.2 Adjustments and Special
Allocations.  Any
allocation pursuant to Section 6.1 will, however, be subject to any adjustment
required to comply with Regulations Sections 1.704-1 and 1.704-2, including,
without limitation, the following adjustments and special allocations which
shall be made in the following order of priority and prior to any allocation
under Section 6.1:

     

    (a) Minimum Gain
Chargeback.  Except as otherwise provided in Regulations
Section 1.704-2(f), notwithstanding any other provision of this Article VI, if
there is a net decrease in Minimum Gain during any Fiscal Period, each Member
shall be specially allocated items of income and gain of the Company for such
Fiscal Period (and, if necessary, subsequent Fiscal Periods) in an amount equal
to such Member’s share of the net decrease in Minimum Gain, determined in
accordance with Regulations Section 1.704-2(g).  Allocations pursuant
to the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Member pursuant thereto.  The items
to be so allocated shall be determined in accordance with Regulations Sections
1.704-2(f)(6) and 1.704-2(j)(2).  This Section 6.2(a) is intended to
comply with the minimum gain chargeback requirements in Regulations Section
1.704-2(f) and shall be interpreted consistently therewith.

     

    (b) Member Minimum Gain
Chargeback.  Except as otherwise provided in Regulations
Section 1.704-2(i)(4), notwithstanding any other provision of this Article VI,
if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable
to a Member Nonrecourse Debt during any Fiscal Period, each Member who has a
share of the Member Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of income and gain of the
Company for such Fiscal Period (and, if necessary, subsequent Fiscal Periods) in
an amount equal to such Member’s share of the net decrease in Member Nonrecourse
Debt, determined in accordance with Regulations Section
1.704-2(i)(4).  Allocations pursuant to the previous sentence shall be
made in proportion to the respective amounts required to be allocated to each
Member pursuant thereto.  The items to be allocated shall be
determined in accordance with Regulations Sections 1.704-2(i)(4) and
1.704-2(j)(2).  This Section 6.2(b) is intended to comply with the
minimum gain chargeback requirement in Regulations Section 1.704-2(i)(4) and
shall be interpreted consistently therewith.

     

    
      
         

      

      
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    (c) Qualified Income
Offset.  If any Member unexpectedly receives any adjustment,
allocation or distribution described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of income and gain of the Company
shall be specially allocated to such Member in an amount and manner sufficient
to eliminate, to the extent required by the Regulations, the Adjusted Capital
Account Deficit of such Member as quickly as possible, provided that an
allocation pursuant to this Section 6.2(c) shall be made only if and to the
extent that such Member would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Article VI have been tentatively made as
if this Section 6.2(c) were not in this Agreement.

     

    (d) Gross Income
Allocation.  If any Member has a deficit Capital Account at the
end of any Fiscal Period or portion thereof in excess of the amount such Member
is deemed obligated to restore pursuant to the penultimate sentences of
Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be
specially allocated items of income and gain in the amount of such deficit as
quickly as possible, provided that an allocation pursuant to this Section 6.2(d)
shall be made only if and to the extent that such Member would have a deficit
Capital Account after all other allocations provided for in this Article VI have
been made as if Section 6.2(c) and this Section 6.2(d) were not in this
Agreement.

     

    (e) Nonrecourse
Deductions.  Nonrecourse Deductions for any Fiscal Period shall
be specially allocated among the Members in accordance with their respective
percentage interests.

     

    (f) Member Nonrecourse
Deductions.  In accordance with the principles set forth in
Regulations Section 1.704-2(i), any Member Nonrecourse Deductions of the Company
for any Fiscal Period shall be specially allocated to the Members in accordance
with the ratios in which they potentially bear the economic risk of loss with
respect to such Member Nonrecourse Debt to which such Member Nonrecourse
Deductions are attributable in accordance with the Regulations Section
1.704-2(i).

     

    (g) Section 754
Adjustments.  To the extent an adjustment to the adjusted tax
basis of any Asset, pursuant to Code Section 734(b) or Code Section 743(b), upon
an election pursuant to Code Section 754, is required, pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital
Accounts, the amount of such adjustment to Capital Accounts shall be treated as
an item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis) and such gain or loss shall be specially
allocated to the Members in accordance with the manner in which their Capital
Accounts are required to be adjusted under Regulations Section
1.704-1(b)(2)(iv)(m).

     

    
      
         

      

      
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    Section
6.3 Curative
Allocations.  The
allocations set forth in Sections 6.2(a), 6.2(b), 6.2(c), 6.2(d), 6.2(e),
6.2(f), 6.2(g) and 6.4 (collectively, the “Regulatory
Allocations”) are intended to comply with certain requirements of the
Regulations.  It is the intent of the parties to this Agreement that,
to the extent possible, all Regulatory Allocations may be offset either with
other Regulatory Allocations or with special allocations of other items of
income, gain, loss or deduction pursuant to this Section
6.3.  Notwithstanding any other provision of this Article VI (other
than the Regulatory Allocations) to the contrary, the Management Board may in
its sole discretion make such offsetting special allocations of income, gain,
loss or deduction in whatever manner it determines appropriate so that, after
such offsetting allocations are made, each Member’s Capital Account balance is,
to the extent possible, equal to the Capital Account balance such Member would
have had the Regulatory Allocations not been part of this Agreement and all
Company items were allocated pursuant to Section 6.1.

     

    Section
6.4 Loss
Limitation.

     

    (a) Notwithstanding
the foregoing provisions of Section 6.1, the Losses allocated pursuant to
Section 6.1 shall not exceed the maximum amount of Losses that can be so
allocated without causing any Member to have an Adjusted Capital Account Deficit
at the end of any Fiscal Period.  Subject to section 6.4(b) in the
event some but not all of the Members would have Adjusted Capital Account
Deficits as a consequence of an allocation of Losses pursuant to Section 6.1,
the limitation set forth in this Section 6.4 shall be applied on a Member by
Member basis in accordance with the positive balances in their Capital Accounts
so as to allocate the maximum permissible Losses to each Member under
Regulations Section 1.704-1(b)(2)(ii)(d).

     

    (b) In the
event that any Member would have an Adjusted Capital Account Deficit as a
consequence of an allocation of Losses pursuant to Section 6.1(b), the
amount of losses that would be allocated to such Member but for the application
of this Section 6.4(b) shall be allocated to the other Members (in
proportion to their Percentage Interests) to the extent that such allocations
would not cause such other Members to have an Adjusted Capital Account
Deficit.  Any allocation of items of loss pursuant to this
Section 6.4(b) shall be taken into account in computing subsequent
allocations pursuant to Section 6.1(a) and Section 6.1(b), and prior
to any allocation of items in such Sections so that the net amount of any items
allocated to each Member pursuant to Section 6.1(a), Section 6.1(b)
and this Section 6.4(b) shall, to the maximum extent permissible under
Regulations Section 1.704-1(b)(2)(ii)(d), be equal to the net amount that would
have been allocated to each Member pursuant to the provisions of
Sections 6.1(a), 6.1(b) and this Section 6.4(b) if such allocation
under this Section 6.4(b) had not occurred.

     

    Section
6.5 Other Allocation
Rules.

     

    (a) For
purposes of determining the Profits, Losses or other items allocable to any
Fiscal Period, Profits, Losses and such other items shall be determined on a
daily, monthly or other basis as determined by the Management Board in its
reasonable discretion using any permissible method under Code Section 706 and
the Regulations thereunder.  The Management Board, in its reasonable
discretion, shall determine which Profits, Losses and such other items are
attributable of the Business.

     

    (b) The
Members are aware of the United States federal income tax consequences of the
allocations made by this Article VI and hereby agree to be bound by the
provisions of this Article VI in reporting their shares of Company income and
loss for income tax purposes.

     

    
      
         

      

      
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    (c) Solely
for purposes of determining a Member’s proportionate share of the “excess nonrecourse
liabilities” of the Company within the meaning of Regulations Section
1.752-3(a)(3), the Members’ interests in the Profits are in proportion to their
percentage interests in the Company.

     

    (d) All items
of income, gain, loss, deduction or credit and any other allocations not
otherwise provided for shall be allocated among the Members as determined by the
Management Board in its reasonable discretion.

     

    (e) If a
Member transfers all or a portion of its interest in the Company during any
Fiscal Period, then Profits, Losses, each item thereof and all other items
attributable to the transferred interest in the Company for such Fiscal Period
shall be divided and allocated between the transferor and the transferee by
taking into account their varying interests in the Company during the Fiscal
Period in accordance with Section 706(d) of the Code, using any conventions
permitted by law and selected by the Management Board.

     

    (f) These
allocations are intended to comply with the requirements of Section 514(c)(9)(E)
of the Code and shall be interpreted and applied consistently
therewith.  Tax returns for the Company shall be provided to the
Management Board for review before submission, and any reasonable requests by
the Management Board for changes in order to ensure compliance with such
requirements shall be made, provided that such changes shall not result in the
amount of cash or other distributions to any Member being affected or cause a
material adverse tax or other effect for any Member.

     

    Section
6.6 Tax Allocations: Code
Section 704(c).

     

    (a) For each
Fiscal Year, items of income, deduction, gain, loss and credit shall be
allocated for tax purposes among the Members to reflect equitably the amounts
which have been credited or debited to the Capital Account of each such Member
(for such Fiscal Year and prior Fiscal Years).

     

    (b) In
accordance with Code Section 704(c) and the Regulations thereunder, items of
income, gain, loss and deduction with respect to any property contributed to the
capital of the Company shall, solely for tax purposes, be allocated among the
Members so as to take account of any variation between the adjusted tax basis of
such property at the time of contribution to the Company for federal income tax
purposes and its initial Gross Asset Value at the time of contribution using a
method permitted by applicable Regulations under Code Section 704(c), as
determined by the Management Board in its reasonable discretion.

     

    (c) In the
event the Gross Asset Value of any Asset is adjusted in accordance with
paragraph (b) of the definition of Gross Asset Value hereof, subsequent
allocations of items of income, gain, loss, deduction or credit with respect to
such asset shall take into account any variation between the adjusted tax basis
of such asset for federal income tax purposes and its Gross Asset Value in the
same manner as under Code Section 704(c) and the Regulations
thereunder.

     

    (d) Any
elections or other decisions relating to allocations for tax purposes, basis
adjustments or other tax matters shall be made by the Management Board in its
reasonable discretion.  Allocations pursuant to this Section 6.6 are
solely for purposes of federal, state and local taxes and shall not affect, or
in any way be taken into account in computing, any Member’s Capital Account,
share of Profits or Losses, or other items or distributions pursuant to any
provision of this Agreement.

     

    
      
         

      

      
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    ARTICLE
VII     

     

    DISTRIBUTIONS
AND EXPENSES

     

     

    Section
7.1 Distributions of Net Cash
Flow

     

    (a)           Distributions
of Net Cash Flow shall be reasonably determined by the Management Board; provided,
however, that, until such time as the Reset Note shall be paid in full or
converted into shares of Fund.com Common Stock as provided in the Reset Note,
distributions of Net Cash Flow shall (subject only to Section 7.4) be
distributed as follows:

     

    (i)           fifty
and nine/tenths percent (50.9%) of Net Cash Flow shall be distributed on a
pro-rata basis to the Hallac Group as additional sales proceeds, unless
otherwise determined by A. Hallac; and

     

    (ii)           the
remaining forty-nine and one/tenths percent (49.1%) of Net Cash Flow shall be
distributed to the Member.

     

    (b)           In
the event that during the course of any Fiscal Year, the Reset Note shall have
been paid or converted, as provided in Section 7.1(a) above, then and in such
event, distributions shall be appropriately pro-rated based upon the number of
days in such Fiscal Year that have elapsed prior to the date of such payment or
conversion of the Reset Note.

     

    (c)           From
and after such time as the Reset Note is no longer outstanding, distributions of
Net Cash Flow shall be made as determined by the Management Board to the Members
in amounts proportionate to their respective Percentage Interests.

     

    (d)           Unless
otherwise determined by the Management Board and A. Hallac, Ninety Percent (90%)
of annual Net Cash Flow shall be distributed as provided in Section 7.1(a)
within forty-five (45) days after the end of each Fiscal Year of the Company,
and the remaining Ten Percent (10%) balance of Net Cash Flow shall be
distributed within ten (10) days following delivery of the audit report of the
Company for such Fiscal Year.

     

    (e)           Each
Member, A. Hallac and each other member of the Hallac Group shall be responsible
to pay their own federal, tax and local income and other taxes on all bonus
payments or other distributions of Net Cash Flow made to them under this Section
7.1 or the Reset Note.

     

    Section
7.2 Amounts
Withheld.  All
amounts withheld or paid pursuant to the Code or any provisions of state, local
or foreign tax law with respect to any payment, distribution, allocation or
other consideration paid to the Members, including in connection with a
contribution of assets to the Company by a Member, shall be treated as amounts
paid or distributed, as the case may be, to the Members with respect to which
such amount was withheld or paid pursuant to this Section 7.2 for all
purposes under this Agreement.  The Company is authorized to withhold
or pay, when required under applicable law, from payments, distributions, or
other consideration paid to Members, and with respect to allocations to the
Members, and to pay over to any federal, state, local or foreign government any
amounts required to be so withheld or paid pursuant to the Code or any
provisions of any federal, state, local or foreign law, and shall allocate any
such amounts to the Members with respect to which such amounts were withheld or
paid.

     

    
      
         

      

      
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    Section
7.3 Expenses.  Except
as otherwise provided in this Agreement, the Company will be responsible for all
of its third-party expenses.  The Company shall reimburse the Members
in accordance with Section 3.6 above.  Each Member shall otherwise be
responsible for all costs and expenses incurred by such Member in the
performance of its obligations under this Agreement.

     

    Section
7.4 Tax
Distributions.  If
the Management Board unanimously agrees, then the Management Board may cause the
Company to make distributions to each Member (to the extent that cash is
available for such distributions after necessary expenses and reserves in
accordance with this Agreement and as otherwise determined by the Management
Board) so that each such Member may pay its taxes with respect to its share of
the taxable income of the Company for a Fiscal Year or other taxable
period.  If the Management Board determines that enough cash is
available for such distributions, then the Management Board shall calculate the
amount of any such distributions by applying the highest marginal effective tax
rate applicable to a corporation doing business in New York, New York to each
Member and may make such distributions to the extent that cash is
available.  Any distribution made to a Member pursuant to this Section
7.4 shall be made as soon as practicable after the end of the Fiscal Year or
other taxable period for which such distribution is being made.

     

    Section
7.5 Special Life Insurance
Distributions.  No
later than the second business day after the Company’s receipt of the Hallac
Trust Life Insurance Proceeds, the Company shall make a special distribution to
the Hallac’s Estate of 100% of such Hallac Trust Life Insurance Proceeds, which
shall not be credited against or deducted from any other proceeds that the
Hallac Estate may receive with respect to its Percentage Interests.

     

    ARTICLE
VIII

     

    OTHER TAX
MATTERS

     

    Section
8.1 Tax Matters
Member.  The
Company and each Member hereby designate FNDM as the “tax matters partner”
in respect of the Company for purposes of Code Section 6231(a)(7) (“Tax Matters
Member”).  In the event there is an Event of Default under the
Reset Note, FNDM will no longer be the Tax Matters Member and Hallac shall be
the Tax Matters Member.  The Tax Matters Member of the Company
shall:  (a) cause to be prepared and timely filed by the Company all
United States federal, state and local income tax returns of the Company for
each year for which such returns are required to be filed, and (b) determine the
appropriate treatment of each item of income, gain, loss, deduction and credit
of the Company and the accounting methods and conventions under the tax laws of
the United States, the several states and other relevant jurisdictions as to the
treatment of any such item or any other method or procedure related to the
preparation of such tax returns.  Subject to the express provisions of
this Agreement, the Management Board may in its reasonable discretion cause the
Company to make or refrain from making any and all elections permitted by such
tax laws.

     

    Section
8.2 Furnishing Information to
Tax Matters Member.  Each
Member shall furnish to the Tax Matters Member such information (including
information specified in Code Section 6230(e)) as such Tax Matters Member may,
at its reasonable discretion, request to permit it to provide the Internal
Revenue Service with sufficient information to allow proper notice to the
Members in accordance with Code Section 6223 or any other provisions of the
Code or the published regulations thereunder which require the Tax Matters
Member to obtain information from the Members.

     

    
      
         

      

      
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    Section
8.3 Tax Claims and
Proceedings.  In
respect of any income tax audit of any tax return of the Company, the filing of
any amended return or claim for refund in connection with any item of income,
gain, loss, deduction or credit reflected on any income tax return of the
Company, or any administrative or judicial proceedings arising out of or in
connection with any such audit, amended return, claim for refund or denial of
such claim, (a) all expenses reasonably incurred by the Tax Matters Member in
connection therewith shall be expenses of the Company, (b) in any material
proceeding the Tax Matters Member shall promptly take such action as may be
necessary to cause each of the other Members to become a “notice partner”
within the meaning of Code Section 6231(a)(8), (c) in any material
proceeding the Tax Matters Member shall furnish to the other Members a copy of
all material notices or other written communications received by the Tax Matters
Member from the Internal Revenue Service (except such notices or communications
as are sent directly to the Members), and (d) in any material proceeding the Tax
Matters Member shall notify the other Members of all material conversations it
has with the relevant taxing authority and shall keep the other Members
reasonably informed of all material matters which may come to its attention in
its capacity as Tax Matters Member.

     

    Section
8.4 Books and
Records.  In
accordance with Section 18-215 of the Act, the Management Board shall keep
separate and distinct records for the Company.  The books and records
of the Company shall reflect all Company transactions and shall be appropriate
and adequate for the Company’s business.  The books and records of the
Company shall include a record of each transfer of Percentage
Interests.  Financial and tax reporting shall be done on a Fiscal Year
basis, unless otherwise determined by the Tax Matters Member in accordance with
this Agreement.  All books and records of the Company shall be
maintained at any office of the Company or at the Company’s principal place of
business in the United States, and each Member, and any duly authorized
representative, shall have access to them at such office of the Company and the
right to inspect and copy them at reasonable times.  The Company’s
books of account shall be kept on an accrual basis or as otherwise provided by
the Management Board and otherwise in accordance with generally accepted
accounting principles, consistently applied, except that for income tax purposes
such books shall be kept in accordance with applicable tax accounting principles
(including the Regulations).

     

    Section
8.5 Survival.  The
provisions of this Article VIII shall survive the termination of the Company (as
well as any termination, purchase or redemption of any Member’s Interest in the
Company for any reason whatsoever), and shall remain binding on the Members and
all former Members for a period of time necessary to resolve with the
appropriate taxing authorities any and all material matters regarding the
taxation of the Company and its Members by reason of their percentage
interests.

     

    Section
8.6 Activities Outside of the
United States.  The
provisions of this Article VIII shall be applicable, to the maximum extent
possible, with respect to tax matters involving the Company’s activities outside
of the United States.

     

    
      
         

      

      
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    ARTICLE
IX 

     

    REPRESENTATIONS
AND WARRANTIES

     

    Section
9.1 Representations and
Warranties of Members.  Each
of the Members hereby represents to the Company and to each of the other Members
as of the date of the Instrument of Accession of such Member, that:

     

    (a) (i)      If
it is a corporation, a limited liability company or limited partnership, it is
duly incorporated or otherwise duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, and if it is a partnership, it is validly constituted and not
dissolved, and, in each case, has the power and lawful authority to own its
assets and properties and to carry on its business as now
conducted.

     

    (ii) If it is
an individual, it has all requisite legal capacity, power and legal right to
acquire and hold the Percentage Interests.

     

    (b) It has
the full right, power and authority to enter into, execute and deliver this
Agreement and to perform fully its obligations hereunder.  This
Agreement has been fully executed and delivered by such Member and, assuming the
due execution and delivery by the other parties, constitutes the valid and
binding obligation of such Member, enforceable in accordance with its terms,
except as (i) such enforceability may be limited by bankruptcy, reorganization
or moratorium or other similar laws affecting the enforcement of creditors’
rights generally and (ii) the availability of equitable remedies may be limited
by equitable principles of general applicability.

     

    (c) No
approval or consent of any governmental authority or of any other Person is
required in connection with the execution and delivery by it of this Agreement
and the consummation and performance by such member of the transactions
contemplated hereunder, except such as have been obtained and are in full force
and effect.

     

    (d) The
execution and delivery of this Agreement by each Member, the consummation of the
transactions contemplated hereunder and the performance by such Member of its
obligations under this Agreement, in accordance with the terms and conditions
hereof, will not conflict with or result in the breach or violation of any of
the terms or conditions of, or constitute (or with notice or lapse of time or
both would constitute) a default under, (i) the certificate of incorporation,
by-laws, certificate of formation, limited liability company agreement or other
constitutive documents of such Member; (ii) any instrument or contract to which
such Member is a party or by or to which it or its assets or properties are
bound or subject; or (iii) any statute or any regulation, order, judgment or
decree of any governmental authority, except, in each case, for such breaches
violations or defaults that would not, individually or in the aggregate,
materially impair the ability of such Member to perform its obligations
hereunder.

     

    (e) It
understands that there are substantial risks to an investment in the Company and
it has both the sophistication to be able to fully evaluate the risk of an
investment in the Company and the capacity to protect its own interests in
making such investment.  Such Member fully understands and agrees that
the investment in the Company is an illiquid investment.

     

    (f) It is
acquiring its percentage interests for investment solely for such Member’s own
account and not for distribution, transfer or sale to others in connection with
any distribution or public offering.  It understands that,
irrespective of whether or not the Percentage Interests might be deemed “securities” under
applicable laws, the Company is not obligated to register any percentage
interests for resale under the 1933 Act or any applicable state securities
laws.

     

    
      
         

      

      
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    (g) It
specifically understands and agrees that no other Member, has made nor will make
any representation or warranty with respect to the worthiness, terms, value or
any other aspect of the Company, any percentage interests or the Assets and it
explicitly disclaims any warranty, express or implied, with respect to such
matters.  In addition, such Member specifically acknowledges,
represents and warrants that (i) it is not relying on any other Member, for its
own due diligence concerning, or evaluation of, the Company or any related
transaction and (ii) that it is not relying on any other Member with respect to
tax and other economic considerations involved in an investment in the
Company.

     

    (h) No
broker, investment banker, financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the Company based upon arrangements made by or on behalf of such
Member.

     

    Section
9.2 ERISA
Representation.  Each
of the Members represents, warrants and covenants to each other Members and to
the Company that no portion of the assets being used by it to purchase and hold
its percentage interests constitute assets of a plan within the meaning of
Section 3(32) of ERISA.

     

    Section
9.3 Survival.  The
representations and warranties of the Members contained in this Agreement shall
survive the Effective Date solely for purposes of Article XI.

     

    ARTICLE
X 

     

    DISSOLUTION
AND TERMINATION OF THE COMPANY

     

    Section
10.1 Dissolution.  The
Company shall be dissolved and its affairs shall be wound up
upon:  (a) the unanimous vote of all the Voting Members of the Company
or (b) the entry of a decree of judicial dissolution pursuant to
Section 18-802 of the Act.

     

    Section
10.2 Continuation of Interest of
Member’s Representative.  Notwithstanding
anything contained herein, upon the expulsion, receivership, dissolution or
Bankruptcy of a Member, the personal representative, trustee-in-bankruptcy,
debtor-in-possession, receiver, other representative, successor, heir or legatee
(each a “Representative”) of
such Member shall, subject to the provisions of 5.1, immediately succeed to the
percentage interest of such Member.  Such Representative shall appoint
an individual (which may be such Representative) who will represent the
Representative’s voting interest, if any, in the Company (the “Voting
Representative”).

     

    Section
10.3 Dissolution, Winding Up and
Liquidation.

     

    (a) Upon a
dissolution of the Company, the Company shall continue solely for purposes of
winding up its affairs in an orderly manner, liquidating its assets, and
satisfying claims of its creditors.  The liquidator of the Company
shall take full account of the Company’s liabilities and property and shall
cause the property or the proceeds from the sale thereof, to the extent
sufficient therefor, to be applied and distributed, to the maximum extent
permitted by law, in the following order:

     

    
      
         

      

      
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    (i) first, to
creditors (including Members who are creditors) in satisfaction of all of the
Company debts and other liabilities, including the expenses of the winding-up,
liquidation and dissolution of the Company (whether by payment or the making of
reasonable reserves to provide for payment thereof); and

     

    (ii) second,
to the Members of the Company in accordance with their positive Capital Account
balances and after crediting each Member’s Capital Account with its share of Net
Profits and Net Loss through the date of dissolution, including gain or loss
from dissolving events.

     

    (b) Distributions
pursuant to this Section 10.3 shall be made no later than the end of the Fiscal
Year during which the Company is liquidated (or, if later, 90 days after the
date on which the Company is liquidated).

     

    Section
10.4 Member
Bankruptcy.

     

    (a) Notwithstanding
any other provision of this Agreement, the Bankruptcy of the Member r shall not
cause the Member to cease to be a member of the Company and upon the occurrence
of such an event, the Company shall continue without dissolution.

     

    (b) Notwithstanding
any other provision of this Agreement, each of the Member waives any right it
might have to agree in writing to dissolve the Company upon the Bankruptcy of
the Member, or the occurrence of an event that causes the Member to cease to be
a member of the Company.

     

    ARTICLE
XI

     

    INDEMNIFICATION
AND CONTRIBUTION

     

    Section
11.1 Indemnity by the
Company. Subject
to the provisions of Section 11.4, the Company shall indemnify any Person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative by reason of the fact that such Person is or was a Member,
Officer, director, controlling person, employee, legal representative or agent
of the Company, or is or was serving at the request of the Company as manager,
director, officer, partner, member, shareholder, controlling person, employee,
legal representative or agent of another limited liability company, partnership,
corporation, joint venture, trust or other enterprise (a “Indemnified Person”),
from and against any and all claims, actions, suits, proceedings, liabilities,
obligations, losses, damages, judgments, fines, penalties, amounts paid in
settlement, interest, costs and expenses (including reasonable attorney’s and
accountant’s fees, court costs and other out-of-pocket expenses actually and
reasonably incurred in investigating, preparing or defending the foregoing)
(including any such brought by or in the right of the Company) suffered or
incurred by such Indemnified Person while serving in such capacity or that
otherwise in any way relate to or arise out of any action or inaction by such
Indemnified Person or the Company (collectively, “Indemnifiable
Losses”), if such Indemnified Person acted in good faith and in a manner
that such Indemnified Person reasonably believed to be in or not opposed to the
best interests of the Company and not in violation of this Agreement, and, with
respect to a criminal action or proceeding, had no reasonable cause to believe
such Person’s conduct was unlawful; provided, that shall have no obligation to
indemnify or defend hereunder to the extent such action, suit or proceeding
arises from fraud, willful misconduct or gross negligence on the part of such
Indemnified Person. Indemnifiable Losses will be reasonably allocated by the
Management Board.

     

    
      
         

      

      
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    Section
11.2 Exculpation.  No
Indemnified Person shall be liable to any Member or the Company for any act or
failure to act on behalf of the Company, unless such act or failure to act
resulted from fraud, willful misconduct or gross negligence of the Indemnified
Person.  Each Indemnified Person may consult with legal counsel and
accountants in respect of Company affairs and shall be fully protected and
justified in any action or inaction which is taken in accordance with the advice
or opinion of such counsel or accountants.

     

    Section
11.3 Expenses.  Any
indemnification under Section 11.1, as well as the advance payment of expenses
permitted under Section 11.4 shall be made by the Company to the fullest extent
permitted under the Act.

     

    Section
11.4 Advance Payment of
Expenses.  The
expenses of any Member incurred in defending a civil or criminal action, suit or
proceeding may be paid by as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or on behalf of such Member (in form and substance, from an indemnitor,
reasonably satisfactory to all of the Voting Members), to repay the amount if it
is ultimately determined by a court of competent jurisdiction that such Member
is not entitled to be indemnified by the Company.  The provisions of
this Section 11.4 do not affect and shall not be deemed exclusive of any other
rights, including, without, limitation, any rights to indemnification or
advancement of expenses to which any such Indemnified Person other than the
Members may be entitled under any contract, pursuant to approval of the Members,
or otherwise by law.

     

    Section
11.5 Beneficiaries.  The
indemnification and advancement of expenses authorized in or ordered by a court
pursuant to this Article XI continues for a Person who has ceased to be a
Member, officer, employee or agent and inures to the benefit of the heirs,
executors and administrators of such Person.

     

    Section
11.6 Indemnification Procedure
for Third Party and Other Claims.  A
party against whom indemnification is sought under this Agreement (the “Indemnifying Party”)
shall have the right, but not the obligation, exercisable by written notice to
the Person seeking such indemnification hereunder (the “Indemnified Party”)
within 30 days after receipt of  written notice from the Indemnified
Party of the commencement of or assertion of any claim, action, suit or
proceeding by a third party in respect of which indemnity may be sought
hereunder (a “Third
Party Claim”), to assume the defense and control the settlement of such
Third Party Claim that (a) involves (and continues to involve) solely money
damages or (b) involves (and continues to involve) claims for both money damages
and equitable relief against the Indemnified Party that cannot be severed, where
the claims for money damages are the primary claims asserted by the third party
and the claims for equitable relief are incidental to the claims for money
damages. The Indemnified Party shall have the right to assume the defense and
control the settlement of any Third Party Claim (i) not described in clauses (a)
or (b) of the preceding sentence or (ii) described in clauses (a) or (b) of the
preceding sentence whose defense and control of settlement has not been assumed
by the Indemnifying Party.  The Indemnifying Person or the Indemnified
Party, as the case may be, shall have the right to participate in (but not
control), at its own expense, the defense of any Third Party Claim that the
other is defending, as provided in this Agreement.  The Indemnifying
Party, if it has assumed the defense of any Third Party Claim as provided in
this Agreement, shall not consent to a settlement of, or the entry of any
judgment arising from, any such Third Party Claim without the Indemnified
Party’s prior written consent (which consent shall not be unreasonably
withheld).  The Indemnifying Party shall not, without the Indemnified
Party’s prior written consent, enter into any compromise or settlement which (A)
commits the Indemnified Party to take, or to forbear to take, any action or (B)
does not provide for a complete release by such Third Party of the Indemnified
Party. The Indemnified Party shall have the sole and exclusive right to settle
any Third Party Claim, on such terms and conditions as it deems reasonably
appropriate, to the extent such Third Party Claim involves equitable or other
non-monetary relief against the Indemnified Party, and shall have the right to
settle any Third Party Claim involving money damages for which the Indemnifying
Party has not assumed the defense pursuant to this Section 11.6 with the written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed.

     

    
      
         

      

      
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    Section
11.7 Other
Claims.  In
the event an Indemnified Party shall claim a right to payment pursuant to this
Agreement for other than a Third Party Claim, such Indemnified Party shall send
written notice of such claim to the Indemnifying Party.  Such notice
shall specify the basis for such claim.  As promptly as possible after
the Indemnified Party has given such notice, the Indemnified Party and the
Indemnifying Party shall attempt to resolve such claim by mutual agreement
before resorting to other legal means to resolve such claim.

     

    Section
11.8 Limitation on
Damages.  Notwithstanding
anything contained in this Agreement to the contrary, no party shall be liable
to the other party for any indirect, special, punitive, exemplary or
consequential loss or damage (including any loss of revenue or profit) arising
out of this Agreement including, without limitation, in respect of any breach by
any Member of this Agreement; provided, that the foregoing shall not be
construed to preclude recovery by the Indemnified Party in respect of
Indemnifiable Losses directly incurred from Third Party Claims.  Any
Indemnified Person shall take commercially reasonable actions to mitigate his,
her, its or their damages.  The obligation of the Company to indemnify
any Indemnified Person with respect to any Indemnifiable Losses hereunder
resulting from any action, suit or proceeding shall not exceed the value of the
Assets.  The obligation of any Member to indemnify any Person(s)
pursuant to this Agreement is limited, in the aggregate for all claims, to such
Member’s percentage interests, and no Person claiming indemnification or
otherwise making any claim against a Member shall have recourse against such
Member for any deficiency; provided, however, that in the event that a Member’s
percentage interests are less than such Member’s Initial Capital Contribution
(as a result of distributions made in respect of such percentage interests in
accordance with Article XI of this Agreement), the indemnifying Member shall be
obligated to pay any such deficiency to the extent of the difference between its
Initial Capital Contribution and its percentage interests.

     

    ARTICLE
XII

     

    MISCELLANEOUS
PROVISIONS

     

    Section
12.1 Entire
Agreement.  This
Agreement, the Certificate of Formation and the Purchase Agreement constitute
the complete and exclusive statement of the agreement among the Members with
respect to the subject matter contained herein and therein.  This
Agreement, the Certificate of Formation and the Purchase Agreement replace and
supersede all prior agreements by and among the Members with respect to the
subject matter contained herein and therein.

     

    Section
12.2 Amendments; Waivers.  Except
as otherwise provided in this Agreement and as otherwise set forth in this
Section 12.2, this Agreement may be amended or waived by the vote of 66 2/3% of
the members of the Management Board; provided however that this
Agreement shall not be amended or waived in the event that such amendment or
waiver would adversely affect a Member’s Percentage Interest or any other rights
under this Agreement in a disproportionate manner from the effect of such
amendment or waiver on the other holders of such Percentage Interests without
the consent of such Member.

     

    
      
         

      

      
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    Section
12.3 Applicable Law;
Venue.

     

    (a) The
Certificate of Formation and this Agreement shall be governed exclusively by
their respective terms and the laws of the State of Delaware, without regard to
the conflicts of laws principles thereof.

     

    (b) Any legal
action or proceeding with respect to this Agreement and any action for
enforcement of any judgment in respect thereof may be brought in the courts of
the State of New York or of the United States of America for the Southern
District of New York,  and, by execution and delivery of this
Agreement, each Member hereby accepts for itself and in respect of its property,
generally and unconditionally, the non-exclusive jurisdiction of the aforesaid
courts and the appellate courts thereof.  Each Member irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such party at the address for notices set
forth herein.  Each Member hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement brought in the courts referred to above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum.

     

    Section
12.4 Enforcement.  In
the event of an action, suit or proceeding initiated by one Member against
another Member involving the enforcement of its rights hereunder, the prevailing
party shall be entitled to indemnification from the other party of reasonable
attorneys’ fees and expenses incurred in enforcing its rights in such action,
suit or proceeding.

     

    Section
12.5 Headings.  The
headings in this Agreement are inserted for convenience only and are in no way
intended to describe, interpret, define, or limit the scope, extent or intent of
this Agreement or any provisions contained herein.

     

    Section
12.6 Severability.  If
any provision of this Agreement or the application thereof to any Person or
circumstance shall be deemed invalid, illegal or unenforceable to any extent,
the remainder of this Agreement and the application thereof shall not be
affected and shall be enforceable to the fullest extent permitted by
law.

     

    Section
12.7 Counterparts.  This
Agreement may be executed in several counterparts with the same effect as if the
parties executing the several counterparts had all executed one
counterpart.

     

    Section
12.8 Filings.
Following the execution and delivery of this Agreement, representatives of the
Company, shall promptly prepare any documents required to be filed and recorded
under the Act, and such representatives shall promptly cause each such document
to be filed and recorded in accordance with the Act and, to the extent required
by local law, to be filed and recorded or notice thereof to be published in the
appropriate place in each jurisdiction in which the Company may hereafter
establish a place of business. Such representatives, under shall also promptly
cause to be filed, recorded and published such statements of fictitious business
name and any other notices, certificates, statements or other instruments
required by any provision of any applicable law of the United States or any
state or other jurisdiction which governs the conduct of its business from time
to time.

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

     

    Section
12.9 Additional
Documents.  Each
Member agrees to perform all further acts and to execute, acknowledge and
deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement.

     

    Section
12.10 Notices.  All
notices, requests and other communications to any party hereunder shall be in
writing (including facsimile) and shall be effective and deemed delivered or
given, as the case may be, (a) if given by facsimile, when transmitted and the
appropriate confirmation is received from the machine transmitting such
facsimile, and followed by hard copy via overnight mail or reputable overnight
courier for receipt the next Business Day, (b) if given by reputable overnight
courier, on the next Business Day, (c) by hand delivery, when delivered or (d)
if mailed, on the second Business following the day on which sent by first class
mail:

     

    If to
Hallac, addressed as follows:

     

    Albert
Hallac

    274
Monterey Road

    Palm
Beach, FL 33480

     

    with a
copy to:

     

    Zukerman
Gore Brandeis & Crossman, LLP

    875 Third
Avenue

    New York
NY 10022

    Attention:
Clifford A. Brandeis

    Tel:
212-223-6700

    Fax:
212-223-6433

     

    If to
FNDM, addressed as follows:

     

    FNDM

    14 Wall
Street, 20th
Floor

    New York,
NY 10005

    Attention:
Gregory Webster

    Tel:  (212)
618-1633

    Fax:

     

    with a
copy to:

    

    Hodgson
Russ LLP

    1540
Broadway, 24th
Floor

    New York,
NY 10036

    Attention:
Stephen A. Weiss

    Tel:
(212) 751-4300

    Fax:
(212) 751-0928

     

    If to the
other Members, at the addresses or facsimile numbers set forth in a schedule
filed with the records of the Company or such other addresses or facsimile
numbers as such Members may hereafter specify to the Management Board, who shall
so notify the other Members.

     

    Section
12.11 Waiver of Right to Partition
and Bill of Accounting.  To
the fullest extent permitted by applicable law, each Member covenants that it
will not, and hereby waives any right to, file a bill for partnership
accounting.  Each Member irrevocably waives any right that it may have
to maintain any action for dissolution of the Company (unless the Company is
dissolved pursuant to Section 10.1) or partition with respect to any of the
Assets.

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

     

    Section
12.12 Confidentiality; Press
Releases.  Each
Member shall keep confidential all information of a confidential nature obtained
pursuant to this Agreement, except that a Member shall be entitled to disclose
such confidential information to (a) its lawyers, accountants and other service
providers as reasonably necessary in the furtherance of such Member’s bona fide
interests, as otherwise required by law or judicial process and to comply with
reporting requirements, and to potential transferees of its percentage interests
provided that such potential transferees enter into customary confidentiality
agreements, with the Company expressly stated therein to be a third party
beneficiary thereof and (b) its investors provided that such investors are
subject to confidentiality obligations.  Notwithstanding anything in
this Agreement to the contrary, to comply with Treas. Reg. Section
1.6011-4(b)(3)(i), each Member (and any employee, representative or other agent
of such Member) may disclose to any and all persons, without limitation of any
kind, the U.S. federal income tax treatment and tax structure of the Company or
any transactions undertaken by the Company, it being understood and agreed, for
this purpose, (a) the name of, or any other identifying information regarding
(i) the Company or any existing or future Member (or any affiliate thereof) in
the Company, or (ii) any investment or transaction entered into by the Company;
and (b) any performance information relating to the Company, does not constitute
such tax treatment or tax structure information.  No Member shall
publicly make any public announcements regarding this Agreement or the Company
or its business; provided, however, each Initial Member may consult with and
obtain the approval of the other Initial Member before issuing a press release
or other public announcement with respect to this Agreement and may issue a
press release or make a public announcement following such consultation and
approval.

     

    Section
12.13 Uniform Commercial
Code.  Each
limited liability company interest in the Company shall constitute a “security”
within the meaning of, and governed by, (i) Article 8 of the Uniform Commercial
Code (including Section 8 102(a)(15) thereof) as in effect from time to time in
the State of Delaware, and (ii) Article 8 of the Uniform Commercial Code of any
other applicable jurisdiction that now or hereafter substantially includes the
1994 revisions to Article 8 thereof as adopted by the American Law Institute and
the National Conference of Commissioners on Uniform State Laws and approved by
the American Bar Association on February 14, 1995.

     

    SECTION
12.14 DISCLOSURES.  THE
INTERESTS OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “1933 ACT”), OR THE
SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND SUCH
LAWS.  THE INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
1933 ACT AND SUCH LAWS PURSUANT TO EXEMPTION FROM REGISTRATION
THEREUNDER.  THERE WILL NOT BE ANY PUBLIC MARKET FOR THE
INTERESTS.  IN ADDITION, THE TERMS OF THIS AGREEMENT RESTRICT THE
TRANSFERABILITY OF INTERESTS.

     

    [The
remainder of the page is intentionally left blank]

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement, effective as
of the date first above written.

     

     

    
      	 	 	
              MEMBERS:

            
	 	 	 
	 	 	 
	 	 	FUND.COM,
      INC.
	 	 	 
	 	 	 
	 	By: 	
              /s/
      Gregory Webster________________

            
	 	 	
              Name:  Gregory
      Webster

            
	 	 	
              Title:Chief
      Executive Officer

            
	 	 	 
	 	 	 
	 	 	
              Approved
      on Behalf of the Hallac Group:

            
	 	 	 
	 	 	 
	 	 	
              /s/
      Albert Hallac______________________

            
	 	 	
              ALBERT
      HALLAC

            

    

     

     

     

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

     

    SCHEDULE
I

    Schedule
of Members

    

     

    MEMBERS

     

    
      	
              NAME
      AND ADDRESS

            	
              INITIAL

              CAPITAL

              CONTRIBUTION

            	
               

              CAPITAL

              CONTRIBUTIONS

              (AS
      OF 2/__/10)

            	
               

              COMMON

              VOTES

            	
              PERCENTAGE
      INTEREST

            
	
               

              FNDM,
      Inc.

              14
      Wall Street,

              20th
      Floor

              New
      York, NY 10005

               

            	
               

              $11,000,000

            	
               

              $11,000,000
      (2)

            	
               

              100%

            	
               

              100%

            
	
              Total

               

            	 
      	 
      	
              100%

            	
              100%

            

    

     

    
      	
               
      

            	
              (1)

            	
              These
      amounts are not the actual capital contributions of such Member, but
      rather represent such Member’s proportional interest in the net asset
      value of the Company’s Assets as of the Closing
  Date.

            

    

     

    
      	
               
      

            	
              (2)

            	
              Represents
      $3,800,000 paid in cash and the balanced paid by delivery of the Reset
      Note.

            

    

     

    

     

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

     

    Exhibit
A

    

    INSTRUMENT
OF ACCESSION

     

    The
undersigned, ___________________________, as a condition precedent to becoming
the owner or holder of record of __________ Percentage Interests of Weston
Capital Management, LLC, a Delaware limited liability company (the “Company”), hereby
agrees to become a Member under, party to and bound by that certain Fifth
Amended and Restated Operating Agreement dated as of
[       , 2009] (the “Operating Agreement”)
by and among the Company and the Members of the Company.  This
Instrument of Accession shall take effect and shall become an integral part of
the said Operating Agreement immediately upon execution and delivery to the
Company of this Instrument.

     

    IN
WITNESS WHEREOF, the undersigned has caused this INSTRUMENT OF ACCESSION to be
signed as of the date below written.

     

     

    
      	 	 	Signature: ____________________________
      
	 	 	 
	 	 	Address: 
      ____________________________
	 	 	                 
      ____________________________
	 	 	                  ____________________________
	 	 	Date:        
      ____________________________ 
	 	 	 
	Accepted:	 	 
	 	 	 
	By:       _________________________	 	 
	 	 	 
	Date:   _________________________	 	 
	 	 	 

    

     

     

    
      
         

      

      
        39f8k042010ex10iii_fund.htm

    Exhibit 10.3

    WARRANT
TO PURCHASE

    SHARES
OF CLASS A COMMON STOCK

    

    of

    

    FUND.COM,
INC.

     

    Expires
September 30, 2014

     

     

    
      	No.:
      ______ 	Original Issue Date:
      March 29, 2010

    

     

     

    FOR VALUE RECEIVED, the
undersigned, Fund.com,
Inc., a Delaware corporation (together with its successors and assigns,
the “Corporation”), hereby certifies that
PBC-WESTON HOLDINGS,
LLC, a Delaware limited liability company (“PBC”)
and/or its registered assigns (together with PBC, the “Holder”)
is entitled to subscribe for and purchase, during the Exercise Period (as
hereinafter defined), that number of the duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock (as defined) of the Corporation,
as shall be determined by dividing (a) One Million Five Hundred Thousand Dollars
($1,500,000), by (b) the Warrant VWAP (as hereinafter defined) in effect
immediately prior to the Six Month Anniversary Date (as hereinafter defined), at
an exercise price per share equal to the Exercise Price (as hereinafter defined)
then in effect, subject, however, to the provisions and upon the terms and
conditions hereinafter set forth.

    

    The
initial Exercise Price of this Warrant shall be equal to the Warrant
VWAP.  The number of shares of Class A Common Stock of the Corporation
issuable upon exercise of this Warrant (the “Warrant
Stock”) and the Exercise Price shall be subject to adjustment as provided
herein.

    

    Capitalized
terms used in this Warrant and not otherwise defined herein shall have the
respective meanings specified in Section
6 hereof.

     

    1.   Term. The term of
this Warrant (the “Term”) shall commence on the above
Original Issue Date and shall expire at 6:00 p.m., Eastern Time, on September
30, 2014 (the “Expiration
Date”), when this
Warrant, to the extent not exercised, shall expire.

     

    2.   Method of Exercise; Payment;
Issuance of New Warrant; Transfer and Exchange.

     

    (a)           Time of Exercise. The
purchase rights represented by this Warrant may be exercised in whole or in part
during the Exercise Period.  As used herein, the term “Exercise
Period” shall mean a period which shall commence on a date which shall be
the day immediately following the Six Month Anniversary Date and shall expire on
the Expiration Date.

     

    (b)           Method of Exercise.
The Holder hereof may exercise this Warrant, in whole or in part, at any time
during the Exercise Period by the surrender of this Warrant (with the exercise
form attached hereto duly executed) at the principal office of the Corporation,
and at the option of the Holder, either (a) by the payment to the Corporation of
an amount of consideration therefor equal to the Exercise Price in effect on the
date of such exercise multiplied by the number of shares of Warrant Stock with
respect to which this Warrant is then being exercised, payable at such Holder's
option by certified or official bank check or by wire transfer to an account
designated by the Corporation or (b) by electing to receive from the Corporation
the number of Warrant Stock equal to (i) the number of Warrant Stock as to which
this Warrant is being exercised minus (ii) the number of Warrant Stock having a
value, based on the Warrant VWAP on the Trading Day immediately prior to the
date of such exercise, equal to the product of (x) the Exercise Price times (y)
the number of Warrant Stock as to which this Warrant is being
exercised.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    (c)           Issuance of Stock
Certificates. In the event of any exercise of this Warrant in accordance
with and subject to the terms and conditions hereof, certificates for the shares
of Warrant Stock so purchased shall be dated the date of such exercise and
delivered to the Holder’s Prime Broker as specified in the Holder’s exercise
form within a reasonable time, not exceeding five (5) Trading Days after such
exercise (the “Delivery
Date”) or, at the request of the Holder, issued and delivered to the
Depository Trust Company (“DTC”)
account on the Holder’s behalf via the Deposit Withdrawal Agent Commission
System (“DWAC”)
when available, within a reasonable time, not exceeding five (5) Trading Days
after such exercise, and the Holder hereof shall be deemed for all purposes to
be the holder of the shares of Warrant Stock so purchased as of the date of such
exercise. Notwithstanding the foregoing to the contrary, the Corporation or its
transfer agent shall only be obligated to issue and deliver the shares to the
DTC on a holder’s behalf via DWAC if such exercise is in connection with a sale
or other exemption from registration by which the shares may be issued without a
restrictive legend and the Corporation and its transfer agent are participating
in DTC through the DWAC system. The Holder shall deliver this original Warrant,
or an indemnification reasonably acceptable to the Corporation undertaking with
respect to such Warrant in the case of its loss, theft or destruction, at such
time that this Warrant is fully exercised. With respect to partial exercises of
this Warrant, the Corporation shall keep written records for the Holder of the
number of shares of Warrant Stock exercised as of each date of
exercise.

     

    (d)           Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise. In addition to any
other rights available to the Holder, if the Corporation fails to instruct its
transfer agent to transmit to the Holder a certificate or certificates
representing the Warrant Stock pursuant to an exercise on or before the fifth
(5th)
Trading Day following the Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Stock which the Holder anticipated receiving upon such exercise (a
“Buy-In”),
then the Corporation shall (1) pay in cash to the Holder the amount by which (x)
the Holder’s total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (A) the number of shares of Warrant Stock that the Corporation was
required to deliver to the Holder in connection with the exercise at issue times
(B) the price at which the sell order giving rise to such purchase obligation
was executed, and (2) at the option of the Holder, either reinstate the portion
of the Warrant and equivalent number of shares of Warrant Stock for which such
exercise was not honored or deliver to the Holder the number of shares of Common
Stock that would have been issued had the Corporation timely complied with its
exercise and delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation of $10,000, under
clause (1) of the immediately preceding sentence the Corporation shall be
required to pay the Holder $1,000. The Holder shall provide the Corporation
written notice indicating the amounts payable to the Holder in respect of the
Buy-In, together with applicable confirmations and other evidence reasonably
requested by the Corporation. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Corporation’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of this Warrant
as required pursuant to the terms hereof.

     

    (e)           Transferability
of Warrant.This Warrant may be transferred by a
Holder, in whole or in part, without the consent of the Corporation. If
transferred pursuant to this paragraph, this Warrant may be transferred on the
books of the Corporation by the Holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant at the principal office of the
Corporation, properly endorsed (by the Holder executing an assignment in the
form attached hereto) and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. This Warrant is exchangeable at
the principal office of the Corporation for Warrants to purchase the same
aggregate number of shares of Warrant Stock, each new Warrant to represent the
right to purchase such number of shares of Warrant Stock as the Holder hereof
shall designate at the time of such exchange. All Warrants issued on transfers
or exchanges shall be dated the Original Issue Date and shall be identical with
this Warrant except as to the number of shares of Warrant Stock issuable
pursuant thereto.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (f)           Continuing Rights of
Holder. The Corporation will, at the time of or at any time after each
exercise of this Warrant, upon the request of the Holder hereof, acknowledge in
writing the extent, if any, of its continuing obligation to afford to such
Holder all rights to which such Holder shall continue to be entitled after such
exercise in accordance with the terms of this Warrant, provided
that if any such Holder shall fail to make any such request, the failure shall
not affect the continuing obligation of the Corporation to afford such rights to
such Holder.

     

    3.           Adjustment of Exercise
Price. For so long as this warrant shall be outstanding (the “Anti-Dilution Period”), the
Exercise Price shall be subject to adjustment from time to time as set forth in
this Section
3. The Corporation shall give the Holder written notice of any event
described below which requires an adjustment pursuant to this Section
3 in accordance with the notice provisions set forth in Section
11.

     

    a)           Adjustments for Stock
Splits, Combinations, Certain Dividends and Distributions.  If
the Corporation shall, at any time or from time to time after the Original Issue
Date, effect a split of the outstanding Common Stock (or any other subdivision
of its shares of Common Stock into a larger number of shares of Common Stock),
combine the outstanding shares of Common Stock into a smaller number of shares
of Common Stock, or make or issue or set a record date for the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in shares of Common Stock, then, in each event (i) the number of shares
of Common Stock for which this Warrant shall be exercisable immediately after
the occurrence of any such event shall be adjusted to equal the number of shares
of Common Stock that a record holder of the same number of shares of Common
Stock for which this Warrant is exercisable immediately prior to the occurrence
of such event would own or be entitled to receive after the happening of such
event, and (ii) the Exercise Price then in effect shall be adjusted to equal (A)
the Exercise Price then in effect multiplied by the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to the adjustment
divided by (B) the number of shares of Common Stock for which this Warrant is
exercisable immediately after such adjustment.

     

    (b)           Adjustments for Other
Dividends and Distributions. If the Corporation shall, at any time or
from time to time after the Original Issue Date, make or issue or set a record
date for the determination of holders of Common Stock entitled to receive a
dividend or other distribution payable in (i) cash, (ii) any evidences of
indebtedness, or any other securities of the Company or any property of any
nature whatsoever, other than, in each case, shares of Common Stock; or (iii)
any warrants or other rights to subscribe for or purchase any evidences of
indebtedness, or any other securities of the Company or any property of any
nature whatsoever, other than, in each case, shares of Common Stock, then, and
in each event, (A) the number of shares of Common Stock for which this Warrant
shall be exercisable shall be adjusted to equal the product of the number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to such adjustment multiplied by a fraction (1) the numerator of which shall be
the Per Share Market Value of Common Stock at the date of taking such record and
(2) the denominator of which shall be such Per Share Market Value minus the
amount allocable to one share of Common Stock of any such cash so distributable
and of the fair value (as determined in good faith by the Board and supported by
an opinion from an investment banking firm mutually agreed upon by the
Corporation and the Holder) of any and all such evidences of indebtedness,
shares of stock, other securities or property or warrants or other subscription
or purchase rights so distributable, and (B) the Exercise Price then in effect
shall be adjusted to equal (1) the Exercise Price then in effect multiplied by
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment divided by (2) the number of shares of
Common Stock for which this Warrant is exercisable immediately after such
adjustment. A reclassification of the Common Stock (other than a change in par
value, or from par value to no par value or from no par value to par value) into
shares of Common Stock and shares of any other class of stock shall be deemed a
distribution by the Corporation to the holders of its Common Stock of such
shares of such other class of stock within the meaning of this Section
3(b) and, if the outstanding shares of Common Stock shall be changed into
a larger or smaller number of shares of Common Stock as a part of such
reclassification, such change shall be deemed a subdivision or combination, as
the case may be, of the outstanding shares of Common Stock within the meaning of
Section
3(a).

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (c)           Adjustments for
Reclassification, Exchange or Substitution. If the Common Stock for which
this Warrant is exercisable at any time or from time to time after the Original
Issue Date shall be changed to the same or different number of shares of any
class or classes of stock, whether by reclassification, exchange, substitution
or otherwise (other than by way of a stock split or combination of shares or
stock dividends provided for in Section
3(a), Section
3(b), or a reorganization, merger, consolidation, or sale of assets
provided for in Section
3(d)), then, and in each event, an appropriate revision to the Exercise
Price shall be made and provisions shall be made (by adjustments of the Exercise
Price or otherwise) so that, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, in lieu of Warrant Stock, the kind and
amount of shares of stock and other securities receivable upon reclassification,
exchange, substitution or other change, by holders of the number of shares of
Common Stock for which this Warrant was exercisable immediately prior to such
reclassification, exchange, substitution or other change, all subject to further
adjustment as provided herein.

     

    (d)           Adjustments for
Reorganization, Merger, Consolidation or Sales of Assets. If at any time
or from time to time after the Original Issue Date there shall be a capital
reorganization of the Corporation (other than by way of a stock split or
combination of shares or stock dividends or distributions provided for in Section
3(a), and Section
3(b), or a reclassification, exchange or substitution of shares provided
for in Section
3(c)), or a merger or consolidation of the Corporation with or into
another corporation where the holders of the Corporation’s outstanding voting
securities prior to such merger or consolidation do not own over 50% of the
outstanding voting securities of the merged or consolidated entity, immediately
after such merger or consolidation, or the sale of all or substantially all of
the Corporation's properties or assets to any other person (an “Organic
Change”), then as a part of such Organic Change an appropriate revision
to the Exercise Price shall be made if necessary and provision shall be made if
necessary (by adjustments of the Exercise Price or otherwise) so that, upon any
subsequent exercise of this Warrant, the Holder shall have the right to receive,
in lieu of Warrant Stock, the kind and amount of shares of stock and other
securities or property of the Corporation or any successor corporation resulting
from the Organic Change. In any such case, appropriate adjustment shall be made
in the application of the provisions of this Section
3(d) with respect to the rights of the Holder after the Organic Change to
the end that the provisions of this Section
3(d) (including any adjustment in the Exercise Price then in effect and
the number of shares of stock or other securities deliverable upon exercise of
this Warrant) shall be applied after that event in as nearly an equivalent
manner as may be practicable.  In any such case, the resulting or
surviving corporation (if not the Corporation) shall expressly assume the
obligations to deliver, upon the exercise of this Warrant, such securities or
property as the Holder shall be entitled to receive pursuant to the provisions
hereof, and to make provisions for the protection of the rights of the Holder as
provided above.

     

    (e)           Adjustments for Issuance of
Additional Shares of Common Stock. In the event that during the
Anti-Dilution Period, the Corporation shall issue or sell any additional shares
of Common Stock (otherwise than as provided in the foregoing subsections (a)
through (d) of this Section
3 or pursuant to (X) Common Stock Equivalents (as hereafter defined)
granted or issued prior to the Six Month Anniversary Date or (Y) subsection (f)
below) (“Additional
Shares of Common Stock”) at a price per share less than the
then-applicable Exercise Price or without consideration, then the Exercise Price
upon each such issuance shall be reduced to that price (rounded to the nearest
cent) determined by multiplying the Exercise Price by a fraction: 

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (1) the
numerator of which shall be equal to the sum of (A) the number of
shares of Outstanding Common Stock immediately prior to the issuance of such
Additional Shares of Common Stock plus (B) the number of shares
of Common Stock (rounded to the nearest whole share) which the aggregate
consideration for the total number of such Additional Shares of Common Stock so
issued would purchase at a price per share equal to the outstanding Exercise
Price in effect immediately prior to such issuance; and (2) the denominator of
which shall be equal to the number of shares of Outstanding Common Stock
immediately after the issuance of such Additional Shares of Common Stock. No
adjustment of the Exercise Price shall be made upon the issuance of any
Additional Shares of Common Stock which are issued pursuant to the exercise of
any warrants or other subscription or purchase rights or pursuant to the
exercise of any conversion or exchange rights in any Common Stock Equivalents,
if any such adjustment shall previously have been made upon the issuance of such
warrants or other rights or upon the issuance of such Common Stock Equivalents
(or upon the issuance of any warrant or other rights therefore).

     

    (f)           Issuance of Common Stock
Equivalents. The provisions of this Section
3(f) shall apply if the Corporation during the Anti-Dilution Period,
shall (a) issue any securities convertible into or exchangeable for, directly or
indirectly, Common Stock (“Convertible
Securities”), or (b) issue or sell any rights or warrants or options to
purchase any such Common Stock or Convertible Securities (collectively, the
“Common
Stock Equivalents”).  If the price per share for which
Additional Shares of Common Stock may be issuable pursuant to any such
Convertible Securities or Common Stock Equivalent shall be less than the
applicable Exercise Price then in effect, or if, after any such issuance of
Common Stock Equivalents, the price per share for which Additional Shares of
Common Stock may be issuable thereafter is amended or adjusted, and such price
as so amended shall be less than the applicable Exercise Price in effect at the
time of such amendment or adjustment, then the applicable Exercise Price upon
each such issuance or amendment shall be adjusted as provided in Section
3(e). No adjustment shall be made to the Exercise Price upon the issuance
of any Common Stock pursuant to the exercise, conversion or exchange of any
Convertible Security or Common Stock Equivalent where an adjustment to the
Conversion Price was made as a result of the issuance or purchase of such
Convertible Security or Common Stock Equivalent.

     

    (g)           Superseding
Adjustment. If, at any time after any adjustment of the Exercise Price
then in effect shall have been made pursuant to Section
3(e) or Section
3(f) as the result of any issuance of Common Stock Equivalents, and such
Common Stock Equivalents, or the right of conversion or exchange in such Common
Stock Equivalents, shall expire, and all of such or the right of conversion or
exchange with respect to all of such Common Stock Equivalents shall not have
been converted or exercised, then such previous adjustment shall be rescinded
and annulled and the Exercise Price then in effect shall be adjusted to the
Exercise Price in effect immediately prior to the issuance of such Common Stock
Equivalents, subject to any further adjustments pursuant to this Section
3.

     

    (h)           Consideration for
Stock. In case any shares of Common Stock or Convertible Securities, or
any rights or warrants or options to purchase any such Common Stock or
Convertible Securities, shall be issued or sold:

     

    (i)           in
connection with any merger or consolidation in which the Corporation is the
surviving corporation (other than any consolidation or merger in which the
previously outstanding shares of Common Stock of the Corporation shall be
changed to or exchanged for the stock or other securities of another
corporation), the amount of consideration therefore shall be deemed to be the
fair value, as determined reasonably and in good faith by the Board, of such
portion of the assets and business of the non-surviving corporation as the Board
may determine to be attributable to such shares of Common Stock, Convertible
Securities, rights or warrants or options, as the case may be; or

     

    
      
         

      

      
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    (ii)           in
the event of any consolidation or merger of the Corporation in which the
Corporation is not the surviving corporation or in which the previously
outstanding shares of Common Stock of the Corporation shall be changed into or
exchanged for the stock or other securities of another corporation, or in the
event of any sale of all or substantially all of the assets of the Corporation
for stock or other securities of any corporation, the Corporation shall be
deemed to have issued a number of shares of its Common Stock for stock or
securities or other property of the other corporation computed on the basis of
the actual exchange ratio on which the transaction was predicated, and for a
consideration equal to the fair market value on the date of such transaction of
all such stock or securities or other property of the other corporation. If any
such calculation results in adjustment of the applicable Exercise Price, or the
number of shares of Common Stock for which this Warrant is exercisable, the
determination of the applicable Exercise Price or the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to such merger,
consolidation or sale, shall be made after giving effect to such adjustment of
the number of shares of Common Stock for which this Warrant is exercisable. In
the event any consideration received by the Corporation for any securities
consists of property other than cash, the fair market value thereof at the time
of issuance or as otherwise applicable shall be as determined in good faith by
the Board. In the event Common Stock is issued with other shares or securities
or other assets of the Corporation for consideration which covers both, the
consideration computed as provided in this Section
3(h) shall be allocated among such securities and assets as determined in
good faith by the Board.

     

    (i)           Record Date. In case
the Corporation shall take record of the holders of its Common Stock or any
other preferred stock for the purpose of entitling them to subscribe for or
purchase Common Stock or Convertible Securities, then the date of the issue or
sale of the shares of Common Stock shall be deemed to be such record
date.

     

    (j)           Certain Issues
Excepted. Anything herein to the contrary notwithstanding, the
Corporation shall not be required to make any adjustment to the Exercise Price
upon or in connection with the issuance of any shares of Common Stock or other
securities issued pursuant to Common Stock Equivalents that are: (i) issued
pursuant to a bona fide acquisition of another business entity or business
segment of any such entity by the Corporation pursuant to a merger, purchase of
substantially all the assets or any type of reorganization (each an “Acquisition”)
provided that (A) the Corporation will own more than twenty-five percent (25%)
of the voting power of such business entity or business segment of such entity
and (B) such Acquisition is approved by the Board; (ii) issued in connection
with bona fide strategic license agreements or other partnering arrangements so
long as such issuances are not solely for the purpose of raising capital; (iii)
issued under grants of options to purchase Common Stock pursuant to equity
incentive plans that are adopted by the Board; (iv) issued to any underwriter,
placement agent and their respective designees for the transactions contemplated
by a private placement or public offering of securities of the Corporation; (v)
issued to financial institutions or lessors in connection with reasonable
commercial credit arrangements, equipment financings or similar transactions,
provided that any such issue is approved by the Board; and (vi) issued to
vendors or customers or to other persons in similar commercial situations as the
Company, provided that any such issue is approved by the Board; in each case,
with the exception of clause (iii) above, that such issuance is not to an
affiliate of the Corporation, whether directly or indirectly.

     

    (k)           No Impairment. The
Corporation shall not, by amendment of its Articles of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder, but will at all times in good faith assist in the carrying
out of all the provisions of this Section
3 and in the taking of all such action as may be necessary or appropriate
in order to protect against impairment the right of the Holder to exercise this
Warrant. In the event the Holder shall elect to exercise this Warrant, in whole
or in part, as provided herein, the Corporation cannot refuse exercise based on
any claim that the Holder or anyone associated or affiliated with such holder
has been engaged in any violation of law, unless (i) the Corporation receives an
order from the Securities and Exchange Commission prohibiting such exercise or
(ii) an injunction from a court, on notice, restraining and/or adjoining
exercise of this Warrant.

     

    
      
         

      

      
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    (l)           Certificates as to
Adjustments. Upon occurrence of each adjustment or readjustment of the
Exercise Price or number of shares of Common Stock for which this Warrant is
exercisable pursuant to this Section
3, the Corporation at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and furnish to the Holder a
certificate setting forth such adjustment and readjustment, showing in detail
the facts upon which such adjustment or readjustment is based. The Corporation
shall, upon written request of the Holder, at any time, furnish or cause to be
furnished to the Holder a like certificate setting forth such adjustments and
readjustments, the Exercise Price in effect at the time, and the number of
shares of Common Stock and the amount, if any, of other securities or property
which at the time would be received upon the exercise of this Warrant.
Notwithstanding the foregoing, the Corporation shall not be obligated to deliver
a certificate unless such certificate would reflect an increase or decrease of
at least one percent of such adjusted amount; if the Corporation so postpones
delivering a certificate, such prior adjustment shall be carried forward and
made as soon as such adjustment, together with other adjustments required by
this Section
3 and not previously made, would result in an adjustment of one percent
or more.

     

    (m)           Issue Taxes. The
Corporation shall pay any and all issue and other taxes, excluding federal,
state or local income taxes, that may be payable in respect of any issue or
delivery of shares of Common Stock on exercise of this Warrant; provided, however, that the
Corporation shall not be obligated to pay any transfer taxes resulting from any
transfer requested by any holder in connection with any such
conversion.

     

    (n)           Fractional Shares. No
fractional shares of Common Stock shall be issued upon exercise of this
Warrant.  In lieu of any fractional shares to which the Holder would
otherwise be entitled, the Holder shall round the number of shares to be issued
upon exercise (including a cashless exercise) up to the nearest whole number of
shares.

     

    (o)           Reservation of Common
Stock. The Corporation shall, during the period within which this Warrant
may be exercised, reserve and keep available out of its authorized and unissued
Common Stock, solely for the purpose of effecting the exercise of this Warrant,
such number of shares of Common Stock equal to at least one hundred ten percent
(110%) of the aggregate number of shares of Common Stock as shall from time to
time be sufficient to effect the exercise of this Warrant.

     

    (p)           Retirement of this
Warrant. Exercise of this Warrant shall be deemed to have been effected
on the date of exercise hereof. Upon exercise of this Warrant only in part, the
Corporation shall issue and deliver to the Holder, at the expense of the
Corporation, a new Warrant covering the unexercised balance of the Warrant
Stock.

     

    (q)           Regulatory
Compliance. If any shares of Common Stock to be reserved for the purpose
of exercise of this Warrant require registration or listing with or approval of
any governmental authority, stock exchange or other regulatory body under any
federal or state law or regulation or otherwise before such shares may be
validly issued or delivered upon conversion, the Corporation shall, at its sole
cost and expense, in good faith and as expeditiously as possible, endeavor to
secure such registration, listing or approval, as the case may be.

     

    
      
         

      

      
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    4.           No Preemptive Rights.
The Holder shall not be entitled to rights to subscribe for, purchase or receive
any part of any new or additional shares of any class, whether now or
hereinafter authorized, or of bonds or debentures, or other evidences of
indebtedness convertible into or exchangeable for shares of any class, but all
such new or additional shares of any class, or any bond, debentures or other
evidences of indebtedness convertible into or exchangeable for shares, may be
issued and disposed of by the Board on such terms and for such consideration (to
the extent permitted by law), and to such person or persons as the Board in its
absolute discretion may deem advisable.

     

    5.           Exercise Restriction.
Notwithstanding anything to the contrary set forth in this Warrant, at no time
may the Holder exercise this Warrant, in whole or in part, if the number of
shares of Common Stock to be issued pursuant to such exercise would cause the
number of shares of Common Stock beneficially owned by the Holder and its
affiliates at such time, when aggregated with all other shares of Common Stock
beneficially owned by the Holder and its affiliates at such time, result in the
Holder beneficially owning (as determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended, and the rules thereunder) in
excess of 9.99% of the then issued and outstanding shares of Common Stock
outstanding at such time; provided, however, that upon
the Holder providing the Corporation with sixty-one (61) days notice (pursuant
to Section
11 hereof) (the “Waiver
Notice”) that the Holder would like to waive Section
5 of this Warrant with regard to any or all shares of Common Stock for
which this Warrant is exercisable, this Section
5 shall be of no force or effect with regard to those shares referenced
in the Waiver Notice.

     

    6.           Definitions. For the
purposes of this Warrant, the following terms have the following
meanings:

    

    “Articles
of Incorporation” means the Amended and Restated Certificate of
Incorporation of the Corporation as in effect on the Original Issue Date, and as
hereafter from time to time amended, modified, supplemented or restated in
accordance with the terms hereof and thereof and pursuant to applicable
law.

    

    “Board”
shall mean the Board of Directors of the Corporation.

    

    “Capital
Stock” means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or limited) in
any Person which is a partnership, (iii) all membership interests or limited
liability company interests in any limited liability company, and (iv) all
equity or ownership interests in any Person of any other type.

    

     “Common
Stock” means the shares of Class A Common Stock, $0.001 par value per
share, of the Corporation and any other Capital Stock into which such stock may
hereafter be changed.

    

    “Convertible
Security” means one of the Convertible Securities.

    

    “Exercise
Period” has the meaning specified in Section
1 hereof.

    

    “Exercise
Price” initially means the Warrant VWAP, as such price may be adjusted
from time to time as shall result from the adjustments specified in this
Warrant, including Section
3 hereto.

     

    
      
         

      

      
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    “Governmental
Authority” means any governmental, regulatory or self-regulatory entity,
department, body, official, authority, commission, board, agency or
instrumentality, whether federal, state or local, and whether domestic or
foreign.

    

    “Holders”
mean the Persons who shall from time to time own the Warrant. The term “Holder”
means one of the Holders.

     

    “National
Securities Exchange” means the collective reference to the FINRA OTC
Bulletin Board, the New York Stock Exchange, Inc., the New York Stock Exchange:
AMEX Exchange, or any other recognized national securities exchange in the
United States on which the Common Stock of the Corporation is then
listed.

    

    “Original
Issue Date” means March 29, 2010.

    

    “Other
Common” means any other Capital Stock of the Corporation of any class
which shall be authorized at any time after the date of this Warrant (other than
Common Stock) and which shall have the right to participate in the distribution
of earnings and assets of the Corporation without limitation as to
amount.

    

    “Outstanding
Common Stock” means, at any given time, the aggregate amount of
outstanding shares of Common Stock, assuming full exercise, conversion or
exchange (as applicable) of all Common Stock Equivalents that are outstanding at
such time.

    

    “Person”
means an individual, corporation, limited liability company, partnership, joint
stock company, trust, unincorporated organization, joint venture, Governmental
Authority or other entity of whatever nature.

    

    “Per Share
Market Value” means on any particular date (a) the last closing bid price
per share of the Common Stock on such date on the National Securities Exchange,
or if there is no such price on such date, then the closing bid price on such
exchange or quotation system on the date nearest preceding such date, or (b) if
the Common Stock is not listed then on a National Securities Exchange, the last
closing bid price for a share of Common Stock in the market, as reported by the
National Quotation Bureau Incorporated or similar organization or agency
succeeding to its functions of reporting prices) at the close of business on
such date, or (c) if the Common Stock is not then reported by the National
Quotation Bureau Incorporated (or similar organization or agency succeeding to
its functions of reporting prices), then the average of the "Pink Sheet" quotes
for the five (5) Trading Days preceding such date of determination, or (d) if
the Common Stock is not then publicly traded the fair market value of a share of
Common Stock as determined by the Board.

    

     “Securities”
means any debt or equity securities of the Corporation, whether now or hereafter
authorized, any instrument convertible into or exchangeable for Securities or a
Security, and any option, warrant or other right to purchase or acquire any
Security. "Security" means one of the Securities.

    

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

    

    “Six Month
Anniversary Date” shall mean September 29, 2010, being that date which is
six (6) months following the Original Issue Date.

    

    “Subsidiary”
means any corporation at least 50% of whose outstanding Voting Stock shall at
the time be owned directly or indirectly by the Corporation or by one or more of
its Subsidiaries, or by the Corporation and one or more of its
Subsidiaries.

     

    
      
         

      

      
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    “Term”
has the meaning specified in Section
1 hereof.

    

    “Trading
Day” means (a) a day on which the Common Stock is traded on a National
Securities Exchange, or (b) if the Common Stock is not traded on a National
Securities Exchange, a day on which the Common Stock is quoted in the
over-the-counter market as reported by National Quotation Bureau Incorporated
(or any similar organization or agency succeeding its functions of reporting
prices); provided,
however,
that in the event that the Common Stock is not listed or quoted as set forth in
(a) or (b) hereof, then Trading Day shall mean any day except Saturday, Sunday
and any day which shall be a legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.

    

    “Voting
Stock” means, as applied to the Capital Stock of any corporation, Capital
Stock of any class or classes (however designated) having ordinary voting power
for the election of a majority of the members of the Board of Directors (or
other governing body) of such corporation, other than Capital Stock having such
power only by reason of the happening of a contingency.

    

    “Warrant”
means this Series A Warrant, and any other warrants of like tenor issued in
substitution or exchange for any thereof.

    

    “Warrant
Stock Number” means at any time the aggregate number of shares of Warrant
Stock which may at such time be purchased upon exercise of a Warrant, after
giving effect to all prior adjustments and increases to such number made or
required to be made under the terms hereof.

    

    “Warrant
VWAP” means the volume weighted average price of the Common Stock of the
Corporation, as traded on any National Securities Exchange for the twenty (20)
Trading Days immediately prior to the Six Month Anniversary Date; provided,
however, in the event the Corporation’s Common Stock is not traded on a National
Securities Exchange, the Warrant VWAP shall be equal to the fair market value of
the Common Stock on the date immediately following the date on which the Common
Stock is no longer traded on a National Securities Exchange.  Such
fair market value shall be determined by an independent valuation firm mutually
agreed to by the Corporation and PBC, the cost of such independent valuation
shall be paid by the Corporation.

    

    “Warrant
Stock” means the shares of Common Stock of the Corporation issuable upon
exercise of this Warrant.

     

    7.           Other Notices. In
case at any time:

    

    (i) the
Corporation shall make any distributions to the holders of Common Stock;
or

    

    (ii) the
Corporation shall authorize the granting to all holders of its Common Stock of
rights to subscribe for or purchase any shares of Capital Stock of any class or
other rights; or

    

    (iii) there
shall be any reclassification of the Capital Stock of the Corporation;
or

    

    (iv) there
shall be any capital reorganization by the Corporation; or

     

    
      
         

      

      
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    (v) there
shall be any (i) consolidation or merger involving the Corporation or (ii) sale,
transfer or other disposition of all or substantially all of the Corporation's
property, assets or business (except a merger or other reorganization in which
the Corporation shall be the surviving corporation and its shares of Capital
Stock shall continue to be outstanding and unchanged and except a consolidation,
merger, sale, transfer or other disposition involving a wholly-owned
Subsidiary); or

    

    (vi) there
shall be a voluntary or involuntary dissolution, liquidation or winding-up of
the Corporation or any partial liquidation of the Corporation or distribution to
holders of Common Stock;

    

    then, in
each of such cases, the Corporation shall give written notice to the Holder of
the date on which (i) the books of the Corporation shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the action in question and not less than ten (10) days prior
to the record date or the date on which the Corporation's transfer books are
closed in respect thereto. This Warrant entitles the Holder to receive copies of
all financial and other information distributed or required to be distributed to
the holders of the Common Stock.

    

    8.           Registration
Rights.

     

    (i) The
Corporation shall notify the Holder in writing at least thirty (30) days prior
to the filing of any registration statement under the Securities Act for
purposes of a public offering of securities of the Corporation (other than on
Form S-4 or S-8 promulgated under the Securities Act, or any successor forms
thereto) and will afford the Holder an opportunity to include in such
registration statement all or part of its Warrant Stock.  The Holder
shall, within twenty (20) days after the above-described notice from the
Corporation, notify the Corporation in writing whether the Holder desires to
include in such registration statement all or part of its Warrant Stock. If the
Holder decides not to include Warrant Stock in any registration statement
thereafter filed by the Corporation, the Holder shall nevertheless continue to
have the right to include any Warrant Stock in any subsequent registration
statement or registration statements as may be filed by the Corporation with
respect to offerings of its securities, all upon the terms and conditions set
forth herein.  If the underwriter determines in good faith that
marketing factors require a limitation on the number of securities to be
underwritten hereunder, the number of securities that may be included in the
underwriting shall be allocated, first, to the Corporation, second, to the
Holder, to the maximum extent of its desired participation without limiting the
securities to be registered by the Corporation, and third, to any other party
with registration rights without limiting the securities to be registered by the
Corporation or the Holder.  All fees and expenses of the registration
shall be paid by the Corporation, including without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, underwriting discounts, fees and expenses, printing expenses, messenger
and delivery expenses, and reasonable fees and expenses of counsel for the
Corporation and a single counsel for the Holder and all independent certified
public accountants and other persons retained by the Corporation.

     

    (ii) In the
event that the Holder shall not be able to avail itself of SEC Rule 144, the
Holder shall have the ability to request that the Corporation effect a
registration statement under the Securities Act covering the registration of no
less than all of the Warrant Stock in accordance with the terms and procedures,
as applicable, set forth in Section
8(i) above.

     

    
      
         

      

      
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    9.           Amendment and Waiver.
Any term, covenant, agreement or condition in this Warrant may be amended, or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), by a written instrument or written
instruments executed by (a) the Corporation and (b) the Initial Holder (assuming
the Initial Holder still owns all or part of this Warrant), and (c) the Holders
of twenty-five percent (25%) of the Warrants, the calculation of which shall
include the Initial Holder’s percentage of ownership of the Warrants; provided,
however,
that no such amendment or waiver shall reduce the Warrant Stock Number, increase
the Exercise Price, shorten the period during which this Warrant may be
exercised or modify any provision of this Section
9 without the consent of the Holder of this Warrant. No consideration
shall be offered or paid to any person to amend or consent to a waiver or
modification of any provision of this Warrant unless the same consideration is
also offered to all holders of the Warrants.

    

    10.           Governing Law;
Jurisdiction. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This Warrant shall
not be interpreted or construed with any presumption against the party causing
this Warrant to be drafted. The Corporation and the Holder agree that venue for
any dispute arising under this Warrant will lie exclusively in the state or
federal courts located in New York County, New York, and the parties irrevocably
waive any right to raise forum
non conveniens or any other argument that New York is not the proper
venue. The Corporation and the Holder irrevocably consent to personal
jurisdiction in the state and federal courts of the state of New York. The
Corporation and the Holder consent to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address in
effect for notices to it under this Warrant and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing in
this Section
10 shall affect or limit any right to serve process in any other manner
permitted by law. The Corporation and the Holder hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
this Warrant shall be entitled to reimbursement for reasonable legal fees from
the non-prevailing party. The parties hereby waive all rights to a trial by
jury.

    

    11.           Notices. All notices
and other communications hereunder shall be in writing and shall be deemed given
if delivered personally or by facsimile or by electronic transmission or three
(3) business days following being mailed by certified or registered mail,
postage prepaid, return-receipt requested, addressed to the holder of record at
its address appearing on the books of the Corporation. The Corporation will give
written notice to the Holder at least twenty (20) calendar days prior to the
date on which the Corporation closes its books or takes a record (a) with
respect to any dividend or distribution upon the Common Stock, (b) with respect
to any pro rata subscription offer to holders of Common Stock or (c) for
determining rights to vote with respect to any Organic Change, dissolution,
liquidation or winding-up and in no event shall such notice be provided to such
holder prior to such information being made known to the public. The Corporation
will also give written notice to the Holder at least twenty (20) days prior to
the date on which any Organic Change, dissolution, liquidation or winding-up
will take place and in no event shall such notice be provided to such holder
prior to such information being made known to the public. The addresses for such
communications shall be:

     

    Fund.com,
Inc.

    14 Wall
Street

    20th
floor

    New York,
New York 10005

     

    
      
         

      

      
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    12.           Warrant Agent. The
Corporation may, by written notice to each Holder of this Warrant, appoint an
agent having an office in New York, New York for the purpose of issuing shares
of Warrant Stock on the exercise of this Warrant pursuant to subsection (b) of
Section
2 hereof, exchanging this Warrant pursuant to subsection (d) of Section
2 hereof or replacing this Warrant pursuant to Section
13 hereof, or any of the foregoing, and thereafter any such issuance,
exchange or replacement, as the case may be, shall be made at such office by
such agent.

    

    13.           Lost or Stolen
Warrant. Upon receipt by the Company of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and, in
the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company and, in the case of mutilation, upon surrender and
cancellation of this Warrant, the Company shall execute and deliver new Warrant
of like tenor and date; provided, however, that the
Company shall not be obligated to re-issue warrant(s) if the Holder
contemporaneously exercise this Warrant to purchase shares of Common
Stock.

    

    14.           Remedies, Characterizations,
Other Obligations, Breaches and Injunctive Relief. The remedies provided
in this Warrant shall be cumulative and in addition to all other remedies
available under this Warrant, at law or in equity (including a decree of
specific performance and/or other injunctive relief), no remedy contained herein
shall be deemed a waiver of compliance with the provisions giving rise to such
remedy and nothing herein shall limit a Holder's right to pursue actual damages
for any failure by the Company to comply with the terms of this Warrant. Amounts
set forth or provided for herein with respect to payments, conversion and the
like (and the computation thereof) shall be the amounts to be received by the
Holder thereof and shall not, except as expressly provided herein, be subject to
any other obligation of the Company (or the performance thereof). The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach
may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the Holder shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.

    

    15.           Specific Shall Not Limit
General; Construction. No specific provision contained in this Warrant
shall limit or modify any more general provision contained herein. This Warrant
shall be deemed to be jointly drafted by the Company and all initial purchasers
of the Warrant and shall not be construed against any person as the drafter
hereof.

    

    16.           Successors and
Assigns. This Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors and assigns of the Corporation,
the Holder hereof and (to the extent provided herein) the Holders of Warrant
Stock issued pursuant hereto, and shall be enforceable by any such Holder or
Holder of Warrant Stock.

    

    17.           Modification and
Severability. If, in any action before any court or agency legally
empowered to enforce any provision contained herein, any provision hereof is
found to be unenforceable, then such provision shall be deemed modified to the
extent necessary to make it enforceable by such court or agency. If any such
provision is not enforceable as set forth in the preceding sentence, the
unenforceability of such provision shall not affect the other provisions of this
Warrant, but this Warrant shall be construed as if such unenforceable provision
had never been contained herein.

    

    18.           Headings. The
headings of the Sections of this Warrant are for convenience of reference only
and shall not, for any purpose, be deemed a part of this Warrant.

    

    REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Corporation has executed this Warrant as of the day and
year first above written.

     

    
      
        	 	FUND.COM, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	 /s/ Gregory
      Webster       	 
	 	 	Name:
      Gregory
      Webster	 
	 	 	Title:    Chief
      Executive Officer	 
	 	 	 	 

      

    

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    EXERCISE
FORM

     

    FUND.COM,
INC.

    

    The
undersigned __________, pursuant to the provisions of the accompanying Warrant,
hereby elects to purchase _____ shares of Common Stock of FUND.COM, INC. covered
by the accompanying Warrant.

     

    
      	Dated:
      _________________  	
              Signature     ___________________________

               

              Address       ___________________________

                                                    
      

            

    

    
       

    

    Number of
shares of Common Stock beneficially owned or deemed beneficially owned by the
Holder on the date of Exercise: _________________________

    

    The
undersigned is an “accredited investor” as defined in Regulation D under the
Securities Act of 1933, as amended oYesoNo

     

    the
Holder shall pay the sum of $________ by certified or official bank check (or
via wire transfer) to the Corporation in accordance with the terms of the
Warrant.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    ASSIGNMENT

    

    FOR VALUE
RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the accompanying Warrant and all rights evidenced thereby and
does irrevocably constitute and appoint _____________, attorney, to transfer
said Warrant on the books of the corporation named therein.

     

    
      	Dated:
      _________________  	
              Signature     ___________________________

               

              Address       ___________________________

                                                    
      

            

    

    

    PARTIAL
ASSIGNMENT

    

    FOR VALUE
RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the accompanying Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of said Warrant on the books of the corporation named
therein.

    

    
      	Dated:
      _________________  	
              Signature     ___________________________

               

              Address       ___________________________

                                                    
      

            

    

     

    FOR USE
BY THE ISSUER ONLY:

    

    This
Warrant No. ________ canceled (or transferred or exchanged) this _____ day of
___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. ________ issued for ____ shares of Common Stock in
the name of _______________.

     

    
      
         

      

      
        16

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