Document:

Exhibit 4.8

AMENDED AND RESTATED 

CERTIFICATE OF DESIGNATIONS, 

PREFERENCES AND RIGHTS OF 

SERIES B CONVERTIBLE PREFERRED STOCK 

OF FRIENDFINDER NETWORKS INC.

          1. Number and Designation.
200,000,000 shares of the Preferred Stock of the Corporation shall be designated
as Series B Convertible Preferred Stock (the “Series B Preferred Stock”). 

          2. Priority.
The Series B Preferred Stock shall, with respect to rights on liquidation,
dissolution or winding up, rank: 

          (a)
senior to the Corporation’s common stock, par value $0.01 per share (the “Common Stock”), including Common Stock
designated as voting Common Stock (“Voting
Common Stock”) and Common Stock designated as Series B non-voting
Common Stock, and to any other class or series of the capital stock of the
Corporation (unless such other class or series of capital stock constitutes
“Parity Stock” or “Senior Stock,” as defined below) (collectively including the
Common Stock, “Junior Stock”); 

          (b)
on a parity with the Corporation’s Series A Preferred Stock and with any other
class or series of the capital stock of the Corporation if the terms of such
class or series of capital stock specifically provide that the holders thereof
and the holders of Series B Preferred Stock shall be entitled to the receipt of
amounts distributable upon liquidation, dissolution or winding up, as the case
may be, in proportion to their respective amounts of accrued and unpaid
dividends per share or liquidation preferences, as the case may be, without one
having preference or priority over the other (“Parity Stock”); and  

          (c)
junior to any class or series of capital stock of the Corporation, if the terms
of such class or series of capital stock specifically provide that the holders
thereof shall be entitled to the receipt of amounts distributable on
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Series B Preferred Stock (“Senior Stock”).  

          3. Dividends.
The Corporation shall not declare, pay or set aside any dividends on shares of
Common Stock unless the holders of the Series B Preferred Stock then
outstanding shall first receive, or simultaneously receive, a dividend on each
outstanding share of Series B Preferred Stock equal to the product of (a) the
per share dividend to be declared, paid or set aside for the Common Stock,
multiplied by (b) the number of shares of Common Stock into which such share of
Series B Preferred Stock is then convertible. 

          4.
Voting Rights. 

          (a)
On any matter presented to the stockholders of the Corporation for their action
or consideration at any meeting of stockholders of the Corporation (or by
written action of stockholders in lieu of meeting), each holder of outstanding
shares of Series B Preferred Stock shall be entitled to the number of votes
equal to the number of whole shares of Voting Common Stock into which the
shares of Series B Preferred Stock held by such holder are convertible as of
the record date for determining stockholders entitled to vote on such matter.
Except as provided by law, the provisions of the Articles of Incorporation or
by the provisions establishing any other series of Preferred Stock, holders of
Series B Preferred Stock and of any other outstanding series of Preferred Stock
shall vote together with the holders of Voting Common Stock as a single class. 

          (b)
The rights of holders of shares of Series B Preferred Stock to vote with
respect to any matters as provided in this Section 4 may be exercised in person
or by proxy at any annual meeting of stockholders or at a special meeting of
stockholders held for such purpose as hereinafter provided or at any
adjournment thereof, or by written consent, delivered to the Secretary of the
Corporation, of the holders of the minimum number of shares of Series B
Preferred Stock required to take such action at a meeting at which all of the
holders of Series B Preferred Stock were present and voted. 

          5. Conversion Rights. At the option
of the holder thereof, each share of Series B Preferred Stock shall be
convertible, at any time or from time to time, into fully paid and
nonassessable shares of Voting Common Stock as provided herein. 

          (a)
Conversion Mechanics. Each holder of shares of Series B Preferred Stock
who elects to convert any shares of Series B Preferred Stock into shares of
Voting Common Stock shall surrender the certificate or certificates for such
shares of Series B Preferred Stock, duly endorsed, at the office of the
Corporation or any transfer agent for the Series B Preferred Stock or Common
Stock, and shall give written notice to the Corporation at such office that
such holder elects to convert the same and shall state therein the number of
shares of Series B Preferred Stock being converted. Thereupon the Corporation
shall promptly issue and deliver at such office to such holder a certificate or
certificates for the number of shares of Voting Common Stock that such holder
is entitled to receive upon such conversion. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of the certificate or certificates representing the shares of Series
B Preferred Stock to be converted, and the person entitled to receive the
shares of Voting Common Stock issuable upon such conversion shall be treated
for all purposes as the record holder of such shares of Voting Common Stock on
such date. If the conversion is in connection with an underwritten public
offering 

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of securities
registered pursuant to the Securities Act of 1933, as amended (the “Securities Act”), the conversion may, at
the option of any holder tendering Series B Preferred Stock for conversion, be
conditioned upon the closing with the underwriters of the sale of securities
pursuant to such offering, in which event the persons entitled to receive the
Voting Common Stock upon conversion of the Series B Preferred Stock shall not
be deemed to have converted such Series B Preferred Stock until immediately
prior to the closing of such sale of securities. 

          (b)  Conversion Price. Each share of
Series B Preferred Stock shall be convertible in accordance with this Section 5
into the number of shares of Voting Common Stock that results from dividing the
Original Issue Price (as defined in, and subject to adjustment from time to
time pursuant to, Section 8(i)) for such Series B Preferred Stock by the
conversion price for such Series B Preferred Stock that is in effect at the
time of conversion (the “Conversion Price”).
The Conversion Price as of the Original Issue Date for the Series B Preferred
Stock shall be the Original Issue Price on such date. The Conversion Price of
the Series B Preferred Stock shall be subject to adjustment from time to time
as provided below. 

          (c)
Adjustment Upon Common Stock Event. Upon the record date for a Common
Stock Event (as defined in this Section 5(c)) or upon the happening of a Common
Stock Event (if there is no record date), whichever is earlier, the Conversion
Price of the Series B Preferred Stock shall, simultaneously with the happening
of such Common Stock Event, be automatically adjusted by multiplying the
Conversion Price of the Series B Preferred Stock in effect immediately prior to
such Common Stock Event by a fraction (i) the numerator of which shall be the
number of shares of Common Stock that are issued and outstanding immediately
prior to such Common Stock Event and (ii) the denominator of which shall be the
number of shares of Common Stock that are issued and outstanding immediately
after such Common Stock Event, and the product so obtained shall thereafter be
the Conversion Price for the Series B Preferred Stock. The Conversion Price for
the Series B Preferred Stock shall be readjusted in the same manner upon the
happening of each subsequent Common Stock Event. As used herein, the term “Common Stock Event” shall mean (i) the
issuance by the Corporation of additional shares of Common Stock as a dividend
or other distribution, without consideration, to one or more of its
stockholders payable in additional shares of Common Stock or other securities
or rights convertible into, or entitling the holder thereof to receive,
directly or indirectly, additional shares of Common Stock, (ii) a subdivision
(i.e., a stock split) of the outstanding shares of Common Stock into a greater
number of shares of Common Stock or (iii) a combination (i.e., a reverse stock
split) of the outstanding shares of Common Stock into a smaller number of
shares of Common Stock. 

          (d)
Adjustment for Recapitalization, etc. If at any time or from time to
time after the Original Issue Date the Voting Common Stock issuable upon the
conversion of the Series B Preferred Stock is changed into the same or a
different number of shares of any class or classes of stock, whether by
recapitalization, reclassification, reorganization, merger, consolidation, sale
of assets or otherwise (other than by a Common Stock Event or a stock dividend
or distribution provided 

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for elsewhere
in this Section 5), then in any such event each holder of Series B Preferred
Stock shall have the right thereafter to convert such stock into the kind and
amount of stock and other securities and property receivable upon such
recapitalization, reclassification or other change by a holder of the number of
shares of Voting Common Stock into which such shares of Series B Preferred
Stock could have been converted immediately prior to such recapitalization,
reclassification, reorganization, merger, consolidation, sale of assets or
other change, all subject to further adjustment as provided herein or with
respect to such other securities or property by the terms thereof. 

          (e)
Sale of Share Below Conversion Price. 

	
   

  	
   

  
	
   

  	
            (i)
  Adjustment Formula. Subject to the provisions of this Section 5(e), if at any
  time or from time to time after the Original Issue Date the Corporation
  issues or sells, or is deemed by the provisions of this Section 5(e) to have
  issued or sold, Additional Shares of Common Stock (as defined in Section 8),
  otherwise than in connection with a Common Stock Event as provided in Section
  5(c), or a recapitalization, reclassification, reorganization, merger,
  consolidation, sale of assets or other change as provided in 5(d), for an
  Effective Price (as defined in Section 8) that is less than the Conversion
  Price for the Series B Preferred Stock in effect immediately prior to such
  issue or sale (or deemed issue or sale), then, and in each such case, the
  Conversion Price for the Series B Preferred Stock shall be adjusted, as of
  the close of business on the date of such issue or sale, to the amount
  obtained by multiplying such Conversion Price by a fraction: 

  

	
   

  	
   

  
	
   

  	
            (A)
  the numerator of which shall be the sum of (x) the number of Common Stock
  Equivalents Outstanding (as defined in Section 8) immediately prior to such
  issue or sale of Additional Shares of Common Stock plus (y) the quotient
  obtained by dividing the Aggregate Consideration Received (as defined in
  Section 8) by the Corporation for the total number of Additional Shares of
  Common Stock so issued and/or sold (and/or deemed so issued and sold) by the
  Conversion Price for the of Series B Preferred Stock in effect immediately
  prior to such issue or sale; and 

  
	
   

  	
   

  
	
   

  	
            (B)
  the denominator of which shall be the sum of (x) the number of Common Stock
  Equivalents Outstanding immediately prior to such issue or sale (or deemed
  issue or sale) plus (y) the number of Additional Shares of Common Stock so
  issued or sold (and/or deemed so issued and sold). 

  

	
   

  	
   

  
	
   

  	
            (ii)
  Deemed Issuances. For the purpose of making any adjustment to the
  Conversion Price of the Series B Preferred Stock required under this Section
  5(e), if the Corporation issues or sells any Rights or Options or Convertible
  Securities and if the Effective Price of the shares of Common Stock issuable
  upon exercise of such Rights or Options and/or the conversion 

  

4

	
   

  	
   

  
	
   

  	
  or exchange
  of Convertible Securities (computed without reference to any additional or
  similar protective or antidilution clauses and assuming the satisfaction of
  any conditions to convertibility or exchangeability including, without
  limitation, the passage of time) is less than the Conversion Price then in
  effect for the Series B Preferred Stock, then the Corporation shall be deemed
  to have issued, at the time of the issuance of such Rights or Options or
  Convertible Securities, that number of Additional Shares of Common Stock that
  is equal to the maximum number of shares of Common Stock issuable upon
  exercise or conversion of such Rights or Options or Convertible Securities
  upon their issuance and to have received, as the Aggregate Consideration
  Received for the issuance of such shares, an amount equal to the total amount
  of the consideration, if any, received by the Corporation for the issuance of
  such Rights or Options or Convertible Securities, plus, in the case of such
  Rights or Options, the minimum amounts of consideration, if any, payable to
  the Corporation upon the exercise in full of such Rights or Options, plus, in
  the case of Convertible Securities, the minimum amounts of consideration, if
  any, payable to the Corporation (other than by cancellation of liabilities or
  obligations evidenced by such Convertible Securities) upon the conversion or
  exchange thereof; provided that:

  

	
   

  	
   

  
	
   

  	
            (A) if the
  minimum amounts of such consideration cannot be ascertained, but are a
  function of antidilution or similar protective clauses, then the Corporation
  shall be deemed to have received the minimum amounts of consideration without
  reference to such clauses; 

  
	
   

  	
   

  
	
   

  	
            (B) if the
  minimum amount of consideration payable to the Corporation upon the exercise
  of Rights or Options or the conversion or exchange of Convertible Securities
  is reduced over time or upon the occurrence or non-occurrence of specified
  events other than by reason of antidilution or similar protective
  adjustments, then the Effective Price shall be recalculated using the figure
  to which such minimum amount of consideration is reduced; and 

  
	
   

  	
   

  
	
   

  	
            (C) if the
  minimum amount of consideration payable to the Corporation upon the exercise
  of such Rights or Options or the conversion or exchange of Convertible
  Securities is subsequently increased, then the Effective Price shall again be
  recalculated using the increased minimum amount of consideration payable to the
  Corporation upon the exercise of such Rights or Options or the conversion or
  exchange of such Convertible Securities. 

  

No further
adjustment of the Conversion Price, as adjusted upon the issuance of such
Rights or Options or Convertible Securities, shall be made as a result of the
actual issuance of shares of Common Stock upon the exercise of any such Rights
or Options or the conversion or exchange of any such Convertible Securities. If
any such Rights or Options or the conversion rights represented by any such
Convertible Securities shall expire without having been fully exercised, then
the Conversion Price as adjusted upon the issuance of such Rights or Options or
Convertible 

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Securities
shall be readjusted to the Conversion Price which would have been in effect had
an adjustment been made on the basis that the only shares of Common Stock so
issued were the shares of Common Stock, if any, that were actually issued or
sold on the exercise of such Rights or Options or rights of conversion or
exchange of such Convertible Securities, and such shares of Common Stock, if
any, were issued or sold for the consideration actually received by the
Corporation upon such exercise, plus the consideration, if any, actually
received by the Corporation for the granting of all such Rights or Options,
whether or not exercised, plus the consideration received for issuing or
selling all such Convertible Securities actually converted or exchanged, plus
the consideration, if any, actually received by the Corporation (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) upon the conversion or exchange of such Convertible Securities,
provided that such readjustment shall not apply to prior conversions of
Preferred Stock.

          (f)
[Reserved.] 

          (g)
Certificate of Adjustment. In each case of an adjustment or readjustment
of the Conversion Price for the Series B Preferred Stock, the Corporation, at
its expense, shall cause its Chief Financial Officer or Secretary to compute
such adjustment or readjustment in accordance with the provisions hereof and
prepare a certificate showing such adjustment or readjustment, and shall mail
such certificate, by first class mail, postage prepaid, to each registered
holder of the Series B Preferred Stock at the holder’s address as shown in the
Corporation’s books. 

          (h)
Fractional Shares. No fractional shares of Voting Common Stock or other
securities shall be issued upon any conversion of Series B Preferred Stock. In
determining the number of fractional shares of Voting Common Stock or other
securities that would otherwise have been issuable upon such conversion of
Series A Preferred Stock, all shares of Voting Common Stock or other securities
issuable upon all shares of Series B Preferred Stock being converted by a
single holder of such Series B Preferred Stock (whether by optional or
automatic conversion) shall be aggregated. In lieu of any fractional share of
Voting Common Stock or other securities to which the holder otherwise would be
entitled, the Corporation shall pay the holder cash equal to the product of
such fraction multiplied by the Voting Common Stock’s (or other security’s)
fair market value as determined in good faith by the Board of Directors as of
the date of conversion. 

          (i)
Reservation of Common Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but
unissued shares of Voting Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series B Preferred Stock, such number of shares
of Voting Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Series B Preferred Stock; and if at
any  

6

time the
number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of the
Series B Preferred Stock, the Corporation will take such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Voting Common Stock to such number of shares as shall be
sufficient for such purpose.

          (j)
Notices. Any notice required by the provisions of this Section 5 to be
given to the holders of shares of the Series B Preferred Stock shall be deemed
given upon the earlier of actual receipt thereof or deposit thereof in the
United States mail, by certified or registered mail, return receipt requested,
postage prepaid, addressed to each holder of record at the address of such
holder appearing on the books of the Corporation. 

          (k)
No Dividends Upon Conversion. Upon any conversion pursuant to this
Section 5, no adjustment to the Conversion Price for the Series B Preferred
Stock shall be made for any declared and/or accrued but unpaid dividends on the
Series B Preferred Stock surrendered for conversion or on the Voting Common
Stock delivered upon conversion. 

          6. Reacquired Shares. Any shares of Series
B Preferred Stock redeemed, purchased or otherwise acquired by the Corporation
in any manner whatsoever shall not be issued as shares of such series and shall
be retired promptly after the acquisition thereof. All of such shares of Series
B Preferred Stock shall, in accordance with Section 78.283 of the Nevada
Revised Statutes, be returned to the status of authorized but unissued shares
of Preferred Stock of the Corporation, and may be reissued as part of another
class or series of Preferred Stock of the Corporation. 

          7. Liquidation, Dissolution or Winding Up.

          (a)
Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the holders of
shares of Series B Preferred Stock then outstanding shall be entitled to be
paid out of the assets of the Corporation available for distribution to its
stockholders, before any payment shall be made to the holders of shares of
Junior Stock, by reason of their ownership thereof, an amount per share of
Series B Preferred Stock equal to the greater of (x) the Original Issue Price,
plus any dividends declared and/or accrued but unpaid thereon, or (y) such
amount as would have been payable had such share been converted into Voting
Common Stock pursuant to Section 5 immediately prior to such liquidation,
dissolution or winding up. For the avoidance of doubt, for the purposes of this
Section 7, a Qualified IPO or any issuance of shares of Common Stock in a
public offering registered under the Securities Act will not be deemed a
“liquidation, dissolution or winding up of the Corporation.”  

7

          (b)
Insufficiency of Assets. If upon any such liquidation, dissolution or
winding up of the Corporation, the remaining assets of the Corporation
available for distribution to its stockholders shall be insufficient to pay the
holders of shares of Series B Preferred Stock the full amount to which they
shall be entitled, the holders of Series B Preferred Stock and any Parity Stock
shall share ratably in any distribution of the remaining assets and funds of
the Corporation in proportion to the respective amounts which would otherwise
be payable in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full. 

          8. Definitions. For purposes of this
Certificate of Designations, the following terms shall have the meanings
indicated: 

          (a)
“Additional Shares of Common Stock” shall
mean all shares of Common Stock issued or issuable by the Corporation or deemed
issued pursuant to Section 5(e)(ii), whether or not subsequently reacquired or
retired by the Corporation, other than: (A) shares of Common Stock issued or
issuable upon the conversion of shares of Series A Preferred Stock or Series B
Preferred Stock; (B) shares of Common Stock (or options, warrants or rights
therefor) issued or issuable to employees, officers or directors of, or
contractors, consultants or advisers to, the Corporation pursuant to the
Corporation’s equity incentive or benefits plans, any successor plan or other
arrangements approved by the Board of Directors (such number of shares to be
calculated net of any repurchases of such shares by the Corporation and net of
any such expired or terminated options, warrants or rights and to be
proportionally adjusted to reflect any subsequent Common Stock Event); and (C)
shares of Common Stock issued or issuable in a public offering registered under
the Securities Act in which all outstanding shares of Series A Preferred Stock
and Series B Preferred Stock will be converted into Common Stock or shares of
Common Stock issued or issuable upon exercise of options, warrants or rights
granted to underwriters in connection with such a public offering. 

          (b)
“Affiliate” of a Person shall mean
a Person directly or indirectly controlled by, controlling or under common
control with such Person, including, without limitation, managed accounts. 

          (c)
The “Aggregate Consideration Received” by
the Corporation for any issuance or sale (or deemed issue or sale) of
securities shall (A) to the extent it consists of cash, be computed as the
gross amount of cash received by the Corporation before deduction of any
underwriting or similar commissions, compensation or concessions paid or
allowed by the Corporation in connection with such issuance or sale and without
deduction of any expenses payable by the Corporation, (B) to the extent it
consists of property other than cash, be computed at the fair value of that
property as determined in good faith by the Board of Directors and (C) if
Additional Shares of Common Stock, Convertible Securities (as defined in this
Section 8) or Rights or Options (as defined in this Section 8) to purchase
either Additional Shares of Common Stock or Convertible Securities are issued
or sold together with other stock or securities or other assets of the
Corporation for a consideration that covers both, be computed as the portion of
the consideration so received that may reasonably be determined in good faith
by the Board of Directors to be allocable to such Additional Shares of Common
Stock, Convertible Securities or Rights or Options.

8

          (d)
“Common Stock Equivalents Outstanding” shall
mean the number of shares of Common Stock that is equal to the sum of (A) all
shares of Common Stock that are outstanding at the time in question; plus (B)
all shares of Common Stock that are issuable upon conversion or exercise of all
shares of Series A Preferred Stock; plus (C) all shares of Common Stock that
are issuable upon conversion or exercise of all shares of Series B Preferred
Stock or other Convertible Securities or Rights or Options that are outstanding
at the time in question. 

          (e)
“Convertible Securities” shall
mean stock or other securities convertible into or exchangeable for shares of
Common Stock. 

          (f)
The “Effective Price” of
Additional Shares of Common Stock shall mean the quotient determined by
dividing the total number of Additional Shares of Common Stock issued or sold
by the Corporation, and/or deemed to have been issued or sold by the
Corporation under Section 5(e)(ii), into the Aggregate Consideration Received
by the Corporation, or deemed to have been received by the Corporation under
Section 5(e)(ii), for the issue of such Additional Shares of Common Stock. 

          (g)
[Reserved]. 

          (h)
“Original Issue Date” shall mean
December 6, 2007. 

          (i)
“Original Issue Price” shall mean
$0.029604 per share for the Series B Preferred Stock (subject to appropriate
adjustment resulting from, or in the event of, any stock dividend, stock split,
reverse stock split, combination or other similar recapitalization affecting
the number of outstanding shares of Series B Preferred Stock, in each case
occurring after the Original Issue Date). 

          (j)
“Original Purchaser” shall mean
each of Marc H. Bell, Staton Family Perpetual Trust, Florescue Family
Corporation, Absolute Return Europe Fund and Russell H. Frye, and their
respective designees. 

          (k)
“Person” shall mean an individual,
corporation, limited liability company, partnership, joint venture, trust,
unincorporated organization, government (or any department or agency thereof)
or other entity. 

          (l)
“Qualified IPO” shall mean an
underwritten initial public offering of shares of Common Stock pursuant to a
registration statement under the Securities Act with either (i) aggregate gross
proceeds to the Corporation of at least $25,000,000 or (ii) an implied equity
value of the Corporation of at least $100,000,000. 

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          (m)
“Rights or Options” shall mean
warrants, options or other rights to purchase or acquire shares of Common Stock
or Convertible Securities. 

          9. Adoption. The foregoing Amended and
Restated Certificate of Designations has been duly
adopted, in accordance with the provisions of Section 78.1955 of the Nevada
Revised Statutes, by resolution of the Board of Directors of the Corporation a
majority of the voting power of the Series B Convertible Preferred Stock. 

10Exhibit 4.12

Exhibit 4.12

					
	No. of Stock Units:

	 
	 
	Warrant No.

	 

WARRANT

to Purchase Securities of

Penthouse Media Group Inc.

THIS WARRANT AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS.

THIS IS TO CERTIFY THAT [                                   ] (the “Initial Holder”), or any registered assign, is entitled to purchase from Penthouse Media Group Inc., a Nevada corporation (the “Company”), at any time and from time to time on or after December 6, 2007 (the “Commencement Date”) and on or before December 6, 2017 (the “Expiration Date”), [                                                                                                                     ( _______)] Warrant Shares, in whole or in part, at a purchase price per Warrant Share equal to $0.00001 (subject to adjustment as provided in Section 4 hereof, the “Exercise Price”), all on the terms and conditions provided in this Warrant (this “Warrant”), provided, that this Warrant must be exercised in full concurrently with the consummation of a Qualified IPO.  This Warrant is being issued in connection with the engagement letter dated November 24, 2004, by and between the Company and                               , as amended.

Section 1.

Certain Definitions.  As used in this Warrant, unless the context otherwise requires:

(a)

“Additional Shares of Common Stock” shall mean all shares of Common Stock issued or issuable by the Company or deemed issued pursuant to Section 4(f)(ii), whether or not subsequently reacquired or retired by the Company, other than:  (i) shares of Common Stock issued or issuable upon the exercise of this Warrant; (B) shares of Common Stock (or options, warrants or rights therefor) issued or issuable to employees, officers or directors of, or contractors, consultants or advisers to, the Company pursuant to the Company’s equity incentive or benefits plans, any successor plan or other arrangements approved by the Board of Directors (such number of shares to be calculated net of any repurchases of such shares by the Company and net of any such expired or terminated options, warrants or rights and to be proportionally adjusted to reflect any subsequent Common Stock Event); and (C) shares of Common Stock issued or issuable in a Qualified IPO.

(b)

“Affiliate” of a Person shall mean a Person directly or indirectly controlled by, controlling or under common control with such Person.

(c)

The “Aggregate Consideration Received” by the Company for any issuance or sale (or deemed issue or sale) of securities shall (A) to the extent it consists of cash, be computed as the gross amount of cash received by the Company before deduction of any underwriting or similar commissions, compensation or concessions paid or allowed by the Company in connection with such issuance or sale and without deduction of any expenses payable by the Company, (B) to the extent it consists of property other than cash, be computed at the Fair Market Value of that property and (C) if Additional Shares of Common Stock, Convertible Securities or Rights or Options to purchase either Additional Shares of Common Stock or Convertible Securities are issued or sold together with other stock or securities or other assets of the Company for a consideration that covers both, be computed as the portion of the consideration so received that may reasonably be determined in good faith by the Board of Directors to be allocable to such Additional Shares of Common Stock, Convertible Securities or Rights or Options.

(d)

“Assignment Form” shall have the meaning given in Section 3(a).

(e)

“Board of Directors” shall mean either the board of directors of the Company or any duly authorized committee of that board.

(f)

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required to close.

(g)

“Commencement Date” shall have the meaning given in the first paragraph of this Warrant.

(h)

“Commission” shall mean the Securities and Exchange Commission and any other similar or successor agency of the federal government administering the Securities Act.

(i)

“Common Stock” shall mean the Company’s authorized Common Stock, $0.01 par value per share, and any stock into which such Common Stock may thereafter be changed, and shall also include stock of the Company of any other class, which is not preferred as to dividends or assets over any other class of stock of the Company issued to the holders of shares of Common Stock upon any reclassification thereof.

(j)

“Common Stock Equivalents Outstanding” shall mean the number of shares of Common Stock that is equal to the sum of (A) all shares of Common Stock that are outstanding at the time in question plus (B) all shares of Common Stock that are issuable upon conversion or exercise of all Convertible Securities or Rights or Options that are outstanding at the time in question.

(k)

“Common Stock Event” shall have the meaning given in Section 4(a).

(l)

“Company” shall have the meaning given in the first paragraph of this Warrant.

(m)

“Conversion Stock” shall have the meaning set forth in Section 4(c).

(n)

“Convertible Securities” shall mean stock or other securities convertible into or exchangeable for shares of Common Stock.

(o)

The “Effective Price” of Additional Shares of Common Stock shall mean the quotient determined by dividing the total number of Additional Shares of Common Stock issued or sold by the Company, and/or deemed to have been issued or sold by the Company under Section 4(f)(ii), into the Aggregate Consideration Received by the Company, or deemed to have been received by the Company under Section 4(f)(ii), for the issue of such Additional Shares of Common Stock.

(p)

“Exercise Price” shall have the meaning given in the first paragraph of this Warrant.

(q)

“Expiration Date” shall have the meaning given in the first paragraph of this Warrant.

(r)

“Fair Market Value” of stock, a security or other property shall be determined as follows:

(i)

If such stock, security or other property is listed on any established stock exchange or a national market system, the Fair Market Value of such stock, security or other property will be (A) the closing sales price for such stock, security or other property (or the closing bid, if no sales are reported) as quoted on that system or exchange (or the system or exchange with the greatest volume of trading in such stock, security or other property) on the last market trading day prior to the day of determination, or (B) any sales price for such stock, security or other property (or the closing bid, if no sales are reported) as quoted on that system or exchange (or the system or exchange with the greatest volume of trading in such stock, security or other property) on the day of determination, as the Board of Directors may select, as reported in the Wall Street Journal or any other source the Board of Directors considers reliable.

(ii)

If such stock, security or other property is regularly quoted by recognized securities dealers but selling prices are not reported, the Fair Market Value of such stock, security or other property will be the mean

- 2 -

between the high bid and low asked prices for such stock, security or other property on (A) the last market trading day prior to the day of determination, or (B) the day of determination, as the Board of Directors may select, as reported in the Wall Street Journal or any other source the Board of Directors considers reliable.

(iii)

If such stock, security or other property is not traded as set forth above, the Fair Market Value of such stock, security or other property will be determined in good faith by the Board of Directors; provided, that if such determination is objected to by the Holder of this Warrant, such determination shall be made by an independent appraiser selected by such Board of Directors and not objected to by such Holder.  In the event the Fair Market Value determination of such appraiser (A) does not exceed the Fair Market Value as determined by the Board of Directors by at least 10%, then the fees and expenses of such appraiser shall be paid by the objecting Holder; (B) exceeds the Fair Market Value as determined by the Board of Directors by at least than 10%, then the fees and expenses of such appraiser shall be paid by the Company.

(s)

“Holder” shall mean, initially, the Initial Holder and thereafter any Person that is or Persons that are the registered holder(s) of this Warrant or the Warrant Stock as registered on the books of the Company.

(t)

“Initial Holder” shall have the meaning given in the first paragraph of this Warrant.

(u)

“Notice of Exercise” shall have the meaning given in Section 2(a).

(v)

“Person” shall mean an individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, government (or any department or agency thereof) or other entity.

(w)

“Qualified IPO” shall mean an underwritten initial public offering of shares of Common Stock pursuant to a registration statement under the Securities Act with either (A) aggregate gross proceeds to the Company of at least $25,000,000 or (B) an implied equity value of the Company of at least $100,000,000.

(x)

“Rights or Options” shall mean warrants, options or other rights to purchase or acquire shares of Common Stock or Convertible Securities.

(y)

“Securities Act” shall mean the Securities Act of 1933, as amended, and any similar or successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at any applicable time.

(z)

“Voting Common Stock” shall mean shares of Common Stock designated as voting Common Stock under the Company’s Certificate of Incorporation, as amended.

(aa)

A “Warrant Share” shall constitute initially one (1) share of the Company’s Voting Common Stock and thereafter shall constitute such number of shares (including any fractional shares) of Voting Common Stock or other securities as shall result from the adjustments specified in Section 4.

Section 2.

Exercise of Warrant.

(a)

Method of Exercise.  The Holder of this Warrant may, at any time and from time to time on or after the Commencement Date and on or before the Expiration Date, exercise this Warrant in whole or in part for any number of Warrant Shares that such Holder is entitled to purchase hereunder.  The Holder may exercise this Warrant by delivering to the Company a duly executed Notice of Exercise in substantially the form attached as Exhibit A hereto (the “Notice of Exercise”) at the Company’s office maintained pursuant to Section 15 for such purpose.  The Notice of Exercise shall be accompanied by this Warrant and the Holder shall pay the aggregate Exercise Price for the Warrant Shares then being purchased.  The Exercise Price may be paid at the Holder’s election either by check or wire transfer.

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(b)

Delivery of Certificate and New Warrant.  Promptly after delivery of this Warrant, the Notice of Exercise and Exercise Price for the Warrant Shares being purchased, the Company shall cause to be executed and delivered to the Holder a certificate or certificates representing the aggregate number of fully-paid and nonassessable Warrant Shares issuable upon such exercise.  The stock certificate or certificates for the Warrant Shares so delivered shall be in such denominations as may be specified in the Notice of Exercise and shall be registered in the name of the Holder or, subject to Section 10, such other name or names as shall be designated in the Notice of Exercise.  Such certificates shall be deemed to have been issued and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares, including to the extent permitted by law the right to vote such Warrant Shares or to consent or to receive notice as a stockholder of the Company, as of the time the Notice of Exercise is delivered to the Company as aforesaid.   If this Warrant shall have been exercised only in part, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares then purchased, deliver to such Holder a new Warrant evidencing the rights of such Holder to purchase the remaining Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

(c)

Validity of Warrant Shares.  All Warrant Shares issuable upon the exercise of this Warrant shall be validly issued, fully paid and nonassessable, and free from all liens and other encumbrances thereon.  The Company will from time to time take all such action as may be necessary to assure that the par value per share of the unissued Warrant Shares acquirable upon exercise of this Warrant is at all times equal to or less than the Exercise Price then in effect.

(d)

No Fractional Shares.  The Company shall not issue certificates for fractional shares of stock upon any exercise of this Warrant whenever, in order to implement the provisions of this Warrant, the issuance of such fractional shares is required.  Upon such exercise, in lieu of any fractional share, the Company shall pay cash equal to the Fair Market Value of one share multiplied by such fraction.

Section 3.

Transfer.

(a)

Method of Transfer.  Subject to Section 10, this Warrant and all rights hereunder are transferable on the books of the Company to be maintained for such purpose, upon surrender of this Warrant at the office of the Company maintained for such purpose pursuant to Section 15, together with (a) a duly executed written assignment in substantially the form attached as Exhibit B hereto (the “Assignment Form”), and (b) payment of funds sufficient to pay any stock transfer taxes payable upon the making of such transfer.  Upon such surrender, execution and payment, the Company shall, subject to Section 10, execute and deliver a new Warrant in the name of the assignee and this Warrant shall promptly be canceled.  This Warrant, if properly assigned in compliance with this Section 3 and Section 10, may be exercised by an assignee for the purchase of Warrant Shares without having a new Warrant issued.

(b)

Compliance with Securities Laws.  This Warrant may not be transferred or assigned without compliance with Section 10 hereof and all applicable federal and state securities laws by the transferor and the transferee.  Subject to the provisions of this Warrant with respect to compliance with the Securities Act, title to this Warrant may be transferred by endorsement (by the Holder executing the Assignment Form) and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery.

(c)

Warrant Register.  The Company agrees to maintain books for the registration and transfer of this Warrant at the office of the Company maintained for such purpose pursuant to Section 15.  The Company may, by written notice to the Holder, appoint an agent for the purpose of maintaining the Warrant register, issuing the securities then issuable upon the exercise of this Warrant, exchanging this Warrant, replacing this Warrant, or any or all of the foregoing.  Thereafter, any such registration, issuance, exchange, or replacement, as the case may be, shall be made at the office of such agent.

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Section 4.

Adjustment of Warrant Shares or Exercise Price.  The number of Warrant Shares, and the Exercise Price per Warrant Share, shall be subject to adjustment from time to time as set forth in this Section 4.

(a)

Stock Dividends, Subdivisions and Combinations.  In case at any time or from time to time the Company shall:

(i)

take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, Common Stock, or

(ii)

subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or

(iii)

combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock,

then the number of Warrant Shares immediately after the happening of any event described in clauses (i) through (iii) above (a “Common Stock Event”) shall be adjusted so as to consist of the number of shares of Common Stock that the Holder would have been entitled to receive had the Holder owned the Warrant Shares of record immediately prior to the happening of such Common Stock Event.

(b)

Merger, Consolidation or Disposition of Assets.  In case the Company shall merge or consolidate into another corporation, or shall sell, transfer or otherwise dispose of all or substantially all of its property, assets or business to another corporation, the successor or acquiring corporation shall expressly assume this Warrant and the due and punctual observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Company and all of the obligations and liabilities hereunder and thereunder, subject to such modification as shall be necessary to provide for adjustments of Warrant Shares which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 4.  If, pursuant to the terms of such merger, consolidation or disposition, shares of common stock of the successor or acquiring corporation are to be received by or distributed to the holders of Common Stock of the Company, then the Holder of this Warrant shall have the right thereafter to receive, upon exercise of this Warrant, the number of shares of common stock of the successor or acquiring corporation that the Holder would have been entitled to receive had the Holder owned the Warrant Shares of record immediately prior to such merger, consolidation or disposition of assets.  If, pursuant to the terms of such merger, consolidation or disposition of assets, any cash, shares of stock or other securities or property of any nature whatsoever (including warrants, options or other subscription or purchase rights) are to be received by or distributed to the holders of Common Stock of the Company in lieu of or in addition to common stock of the successor or acquiring corporation, there shall be either, at the Holder’s option:

(i)

an adjustment in the number of Warrant Shares to that number determined by multiplying the number of Warrant Shares immediately prior to such adjustment by a fraction (x) the numerator of which shall be the Exercise Price at the date of such merger, consolidation or disposition, and (y) the denominator of which shall be the Exercise Price minus the amount of any such cash and the Fair Market Value of any and all such shares of stock, securities or other property that the Holder would have been entitled to receive had the Holder owned one (1) Warrant Share of record immediately prior to the happening of such event, or

(ii)

a distribution to the Holder of such cash, shares of stock or other securities or property that the Holder would have been entitled to receive had the Holder owned the Warrant Shares of record immediately prior to the happening of such event.

(c)

Reclassification.  Should the Company’s Common Stock be reclassified into another class or series of capital stock (“Conversion Stock”), then the number of Warrant Shares for which this Warrant is exercisable shall immediately be that number of shares of Conversion Stock equal to the number of shares that the Holder would have been entitled to receive had the Holder owned the Warrant Shares of record immediately prior to such reclassification.

- 5 -

(d)

Qualified IPO.  To the extent that 26,879,946 shares (as such shares are presently constituted, subject to proportional adjustment for any stock split or combination or reclassification) (the “Assumed Equity Plan Shares”) exceeds the actual number of shares of the Company’s Common Stock (or options, warrants or rights therefor) that have been issued pursuant to the Company’s equity incentive or benefits plan prior to the occurrence of a Qualified IPO (excluding any such securities that are being issued upon consummation of such Qualified IPO, the “Actual Equity Plan Shares”), then the number of Warrant Shares for which this Warrant is exercisable shall be adjusted appropriately such that (excluding, only for the purposes of such calculation, the effects of any other adjustments to the number of Warrant Shares under this Section 4) one Warrant Share represents upon the Qualified IPO the same proportion of the fully-diluted equity of the Company that such Warrant Share would have represented on the date of issuance of this Warrant had the Actual Equity Plan Shares (rather than the Assumed Equity Plan Shares) been deemed issued on the date of issuance of this Warrant.

(e)

Certain Adjustments of Exercise Price.  If the number of Warrant Shares is adjusted pursuant to Section 4(a), Section 4(b), Section 4(c) or Section 4(d), the Exercise Price shall be proportionately increased or decreased, as applicable, as follows:  the Exercise Price following the adjustment to the number of Warrant Shares shall equal the Exercise Price prior to such adjustment multiplied by a fraction (i) the numerator of which is the number of Warrant Shares immediately prior to such adjustment and (ii) the denominator of which is the number of Warrant Shares immediately following such adjustment.

(f)

Sale of Shares Below Exercise Price.

(i)

Adjustment Formula.  Subject to the provisions of this Section 4(f), if at any time or from time to time after the Commencement Date the Company issues or sells, or is deemed by the provisions of this Section 4(f) to have issued or sold, Additional Shares of Common Stock, otherwise than in connection with a Common Stock Event as provided in Section 4(a), or a recapitalization, reclassification, reorganization, merger, consolidation, sale of assets or other change as provided in Section 4(b) or Section 4(c), for an Effective Price that is less than the Exercise Price for the Warrant Shares in effect immediately prior to such issue or sale (or deemed issue or sale), then, and in each such case, the Exercise Price for the Warrant Shares shall be adjusted, as of the close of business on the date of such issue or sale, to the amount obtained by multiplying such Exercise Price by a fraction:

(A)

the numerator of which shall be the sum of (x) the number of Common Stock Equivalents Outstanding immediately prior to such issue or sale of Additional Shares of Common Stock plus (y) the quotient obtained by dividing the Aggregate Consideration Received by the Company for the total number of Additional Shares of Common Stock so issued and/or sold (and/or deemed so issued and sold) by the Exercise Price in effect immediately prior to such issue or sale; and

(B)

the denominator of which shall be the sum of (x) the number of Common Stock Equivalents Outstanding immediately prior to such issue or sale (or deemed issue or sale) plus (y) the number of Additional Shares of Common Stock so issued or sold (and/or deemed so issued and sold).

(ii)

Deemed Issuances.  For the purpose of making any adjustment to the Exercise Price required under this Section 4(f), if the Company issues or sells any Rights or Options or Convertible Securities and if the Effective Price of the shares of Common Stock issuable upon exercise of such Rights or Options and/or the conversion or exchange of Convertible Securities (computed without reference to any additional or similar protective or antidilution clauses and assuming the satisfaction of any conditions to convertibility or exchangeability including, without limitation, the passage of time) is less than the Exercise Price then in effect, then the Company shall be deemed to have issued, at the time of the issuance of such Rights or Options or Convertible Securities, that number of Additional Shares of Common Stock that is equal to the maximum number of shares of Common Stock issuable upon exercise or conversion of such Rights or Options or 

- 6 -

Convertible Securities upon their issuance and to have received, as the Aggregate Consideration Received for the issuance of such shares, an amount equal to the total amount of the consideration, if any, received by the Company for the issuance of such Rights or Options or Convertible Securities, plus, in the case of such Rights or Options, the minimum amounts of consideration, if any, payable to the Company upon the exercise in full of such Rights or Options, plus, in the case of Convertible Securities, the minimum amounts of consideration, if any, payable to the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion or exchange thereof; provided that:

(A)

if the minimum amounts of such consideration cannot be ascertained, but are a function of antidilution or similar protective clauses, then the Company shall be deemed to have received the minimum amounts of consideration without reference to such clauses;

(B)

if the minimum amount of consideration payable to the Company upon the exercise of Rights or Options or the conversion or exchange of Convertible Securities is reduced over time or upon the occurrence or non-occurrence of specified events other than by reason of antidilution or similar protective adjustments, then the Effective Price shall be recalculated using the figure to which such minimum amount of consideration is reduced; and

(C)

if the minimum amount of consideration payable to the Company upon the exercise of such Rights or Options or the conversion or exchange of Convertible Securities is subsequently increased, then the Effective Price shall again be recalculated using the increased minimum amount of consideration payable to the Company upon the exercise of such Rights or Options or the conversion or exchange of such Convertible Securities.

No further adjustment of the Exercise Price, as adjusted upon the issuance of such Rights or Options or Convertible Securities, shall be made as a result of the actual issuance of shares of Common Stock upon the exercise of any such Rights or Options or the conversion or exchange of any such Convertible Securities.  If any such Rights or Options or the conversion rights represented by any such Convertible Securities shall expire without having been fully exercised, then the Exercise Price as adjusted upon the issuance of such Rights or Options or Convertible Securities shall be readjusted to the Exercise Price which would have been in effect had an adjustment been made on the basis that the only shares of Common Stock so issued were the shares of Common Stock, if any, that were actually issued or sold on the exercise of such Rights or Options or rights of conversion or exchange of such Convertible Securities, and such shares of Common Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise, plus the consideration, if any, actually received by the Company for the granting of all such Rights or Options, whether or not exercised, plus the consideration received for issuing or selling all such Convertible Securities actually converted or exchanged, plus the consideration, if any, actually received by the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion or exchange of such Convertible Securities.

(g)

Adjustment is Cumulative.  The provisions of this Section 4 shall similarly apply to successive Common Stock Events, mergers, consolidations, dispositions, reclassifications, sales of shares below the Exercise Price or other applicable events.

(h)

No Impairment.  The Company shall not, by amendment of its Certificate of Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution, issuance 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 under this Warrant by the Company, and shall at all times in good faith assist in carrying out of all the provisions of this Section 4 and in taking all such action as may be necessary or appropriate to protect the Holder’s rights under this Section 4 against impairment.

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Section 5.

Notice to the Holder.

(a)

Notice of Adjustment.  Whenever the number of Warrant Shares, or the Exercise Price shall be adjusted pursuant to Section 4, the Company shall promptly deliver to the Holder a certificate signed by an officer of the Company, setting forth, in reasonable detail, the event requiring the adjustment and the method by which such adjustment was calculated (including a statement of the Fair Market Value, as determined by the Board of Directors or by appraisal (if applicable), of any evidences of indebtedness, shares of stock, other securities or property or warrants or other subscription or purchase rights referred to in Section 4(b)) and specifying the number of Warrant Shares and (if such adjustment was made pursuant to Section 4(c)) describing the number and kind of any other shares of stock comprising the Warrant Shares, and any change in the Exercise Price thereof, after giving effect to such adjustment or change.  The Company shall keep at its office or agency, maintained for the purpose pursuant to Section 15, copies of all such certificates and cause the same to be available for inspection at said office during normal business hours, upon reasonable notice, by the Holder of this Warrant or any prospective purchaser of this Warrant designated by the Holder.

(b)

Notice of Certain Corporate Action.  In case the Company shall propose to (i) pay any dividend payable in stock of any class to the holders of its Common Stock or to make any other distribution to the holders of its Common Stock (other than a cash dividend), (ii) effect any capital reorganization, (iii) effect any consolidation, merger or sale, organic change, transfer or other disposition of all or substantially all of its property, assets or business, (iv) effect the liquidation, dissolution or winding up of the Company, (v) effect a Qualified IPO, then in each such case, at least thirty (30) days before such action (or, in the case of a Qualified IPO, at least thirty (30) days before the filing of a registration statement pertaining to such Qualified IPO), the Company shall deliver to the Holder a written notice of such proposed action, which shall specify the date on which a record is to be taken for the purposes of such stock dividend, distribution or rights, or the date on which such reclassification, reorganization, consolidation, merger, sale, organic change, transfer, disposition, liquidation, dissolution, winding up or Qualified IPO is to take place and the date of participation therein by the holders of Common Stock, if any such date is to be fixed, and shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action on the Warrant Shares and the number and kind of any other shares of stock which will comprise Warrant Shares, and the Exercise Price thereof, after giving effect to any adjustment which will be required as a result of such action.

Section 6.

Reservation of Warrant Shares.  The Company shall at all times reserve and keep available for issue upon the exercise of this Warrant such number of its authorized but unissued shares of Voting Common Stock or other stock comprising Warrant Shares as will be sufficient to permit the exercise in full of this Warrant.  All shares of Voting Common Stock or other stock which shall be so issuable, when issued upon exercise of this Warrant or upon such conversion, as the case may be, shall be duly and validly issued, fully-paid and nonassessable.

Section 7.

Taking of Record; Stock and Warrant Transfer Books.  In the case of all dividends or other distributions by the Company to the holders of its stock with respect to which any provision of Section 4 refers to the taking of a record of such holders, the Company will in each such case take such a record and will take such record as of the close of business on a Business Day.  The Company will not at any time, except upon dissolution, liquidation or winding up or as otherwise may be required by law, close its stock transfer books or Warrant transfer books so as to result in preventing or delaying the exercise or transfer of any Warrant.

Section 8.

Taxes.  The Company will pay all taxes (other than federal, state, local or foreign income taxes) which may be payable in connection with the execution and delivery of this Warrant or the issuance and sale of the Warrant Shares hereunder or in connection with any modification of any such securities and will indemnify and hold the Holder harmless without limitation as to time against any and all liabilities with respect to or resulting from any delay in paying, or omission to pay, such taxes; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder.  The obligations of the Company under this Section 7 shall survive any redemption, repurchase or acquisition of any such Warrant Shares by the Company.

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Section 9.

[Reserved].

Section 10.

Restrictions on Transferability.  The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are being acquired solely for the Holder’s own account and not as a nominee for any other party (other than an Affiliate of such Holder), and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act or any state securities laws.  Upon exercise of this Warrant, the Holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that the Warrant Shares so purchased are being acquired solely for the Holder’s own account and not as a nominee for any other party (other than an Affiliate of such Holder), for investment, and not with a view toward distribution or resale.

Section 11.

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

Section 12.

Loss or Destruction of Warrant Certificates.  Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same aggregate number of Warrant Shares.

Section 13.

Rights of Stockholders.  Subject to Section 4 of this Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of Voting Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised as provided herein.

Section 14.

Amendments.  The terms of this Warrant may be amended, and the observance of any term therein may be waived, but only with the written consent of the Holder of this Warrant.

Section 15.

Office of the Company.  So long as this Warrant remains outstanding, the Company shall maintain an office where this Warrant may be presented for exercise, transfer, division or combination as provided in this Warrant.  Such office shall be at 6800 Broken Sound Parkway, Suite 100, Boca Raton, FL 33487, unless and until the Company shall designate and maintain some other office for such purposes and deliver written notice thereof to the Holder of this Warrant.

Section 16.

Notices Generally.

(a)

All communications (including all required or permitted notices) pursuant to the provisions hereof shall be in writing and shall be sent,

(i)

if to the Initial Holder, to [                                                                                            Attn:                     , Facsimile:                               ] or at such other address as such Initial Holder may have furnished in writing to the Company, or

(ii)

if to any other Person who is the Holder of this Warrant or the Warrant Stock, to the address of such Holder as it appears in the stock or warrant ledger of the Company.

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(b)

Any notice shall be deemed effectively given:  (a) upon personal delivery to the party to be notified; (b) when sent by confirmed facsimile if sent during normal business hours of the recipient; if not, then on the next Business Day; (c) five Business Days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one Business Day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written notification of receipt.

Section 17.

Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of New York (without regard to the conflict of laws provisions thereof).

[signature page follows]

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its name by its duly authorized officer.

Dated:  December 6, 2007

PENTHOUSE MEDIA GROUP INC.,

a Nevada corporation

By:  /s/ Paul Asher                                                

Name: Paul Asher

Title: Secretary

EXHIBIT A

NOTICE OF EXERCISE

(to be executed only upon exercise of Warrant)

The undersigned registered owner of this Warrant irrevocably exercises this Warrant for and purchases                                Warrant Shares of Penthouse Media Group Inc., a Nevada corporation, purchasable with this Warrant, as follows:

(Initial applicable method:)

      

a.

The undersigned tenders herewith payment of the total purchase price of such Warrant Shares in full, pursuant to a check or wire transfer, in the amount of $                    .

      

b.

The undersigned hereby makes the net exercise election pursuant to Section 2(b) of the Warrant.  This conversion is exercised with respect to                    Warrant Shares covered by the Warrant, resulting in a net total of                        Warrant Shares being issued to the undersigned.

Please issue a certificate or certificates representing the Warrant Shares hereby purchased (and any securities or other property issuable upon such exercise) in the name of and delivered to                                                              whose address is                                                                         .

Dated:                   

                                                                        

(Signature of Registered Owner)

                                                                        

(Street Address)

                                                                        

       (City)       (State)       (Zip Code)

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EXHIBIT B

ASSIGNMENT FORM

FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned under this Warrant:

Name and Address of Assignee

and does hereby irrevocably constitute and appoint                                                        Attorney to make sure transfer occurs on the books of Penthouse Media Group Inc., a Nevada corporation, maintained for the purpose, with full power of substitution in the premises.

Dated:                   

                                                                              

Signature

                                                                              

Witness

NOTICE:

The signature to the assignment must correspond with the name as written upon the face of the Warrant in every particular instance, without alteration or enlargement or any change whatsoever.

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