Document:

Exhibit
      10.2

     

    EXHIBIT
      A

    

    THIS
      DEBENTURE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
      OR
      THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY. THIS DEBENTURE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
      ACCOUNT OR OTHER LOAN SECURED BY THIS DEBENTURE.

     

    Original
      Issue Date: July 25, 2008

     

    $1,125,000.00

    

    $1,125,000
      SECURED ORIGINAL ISSUE DISCOUNT DEBENTURE

    

    THIS
      DEBENTURE is a duly authorized and validly issued Debenture of Syzygy
      Entertainment, Ltd., a Nevada corporation, having its principal place of
      business at The Rotunda, 4201 Congress Street, Suite 145, Charlotte, NC 28209
      (the “Company”),
      designated as its $1,125,000 Secured Original Issue Discount Debenture (the
      “Debenture”).

    

    FOR
      VALUE
      RECEIVED, the Company promises to pay to Shelter Island Opportunity Fund, LLC
      or
      its registered assigns (the “Holder”),
      or
      shall have paid pursuant to the terms hereunder, the principal sum of
      $1,125,000.00 (the “Face
      Value”)
      by the
      Maturity Date, and to pay interest to the Holder on the aggregate outstanding
      principal amount of this Debenture in accordance with the provisions hereof.
      This Debenture is subject to the following additional provisions:

    

    Section
      1. Definitions.
      For the
      purposes hereof, in addition to the terms defined elsewhere in this Debenture,
      (a) capitalized terms not otherwise defined herein shall have the meanings
      set
      forth in the Securities Purchase Agreement and (b) the following terms shall
      have the following meanings:

    

    “Bankruptcy
      Event”
means
      any of the following events: (a) the Company or any Significant Subsidiary
      (as
      such term is defined in Rule 1-02(w) of Regulation S-X) of the Company commences
      a case or other proceeding under any bankruptcy, reorganization, arrangement,
      adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
      or
      similar law of any jurisdiction relating to the Company or any Significant
      Subsidiary thereof; (b) there is commenced against the Company or any
      Significant Subsidiary thereof any such case or proceeding that is not dismissed
      within 60 days after commencement; (c) the Company or any Significant Subsidiary
      thereof is adjudicated insolvent or bankrupt or any order of relief or other
      order approving any such case or proceeding is entered; (d) the Company or
      any
      Significant Subsidiary thereof suffers any appointment of any custodian or
      the
      like for it or any substantial part of its property that is not discharged
      or
      stayed within 60 calendar days after such appointment; (e) the Company or any
      Significant Subsidiary thereof makes a general assignment for the benefit of
      creditors; (f) the Company or any Significant Subsidiary thereof calls a meeting
      of its creditors with a view to arranging a composition, adjustment or
      restructuring of its debts; or (g) the Company or any Significant Subsidiary
      thereof, by any act or failure to act, expressly indicates its consent in
      writing to, approval of or acquiescence in any of the foregoing or takes any
      corporate or other action for the purpose of effecting any of the
      foregoing.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Change
      of Control Transaction”
means
      the occurrence after the date hereof of any of (i) an acquisition by an
      individual or legal entity or “group” (as described in Rule 13d-5(b)(1)
      promulgated under the Exchange Act), of effective control (whether through
      legal
      or beneficial ownership of capital stock of the Company, by contract or
      otherwise) of in excess of 35% of the voting securities of the Company, or
      (ii)
      the Company merges into or consolidates with any other Person, or any Person
      merges into or consolidates with the Company and, after giving effect to such
      transaction, the stockholders of the Company immediately prior to such
      transaction own less than 50% of the aggregate voting power of the Company
      or
      the successor entity of such transaction, or (iii) the Company sells or
      transfers all or substantially all of its assets to another Person, whether
      in
      one transaction or in a series of related transactions.

    

    “Event
      of Default”
shall
      have the meaning set forth in Section 5.

    

    “Maturity
      Date”
means
      the earlier of (i) July 23, 2009 and (ii) the date this Debenture is permitted
      or required to be paid in accordance with the terms hereof (whether as a result
      of a prepayment, acceleration or otherwise).

    

    “Original
      Issue Date”
means
      the date of the first issuance of this Debenture, regardless of any transfers
      of
      this Debenture and regardless of the number of instruments which may be issued
      to evidence this Debenture.

    

    Permitted
      Lien”
means
      the individual and collective reference to the following: (a) Liens for taxes,
      assessments and other governmental charges or levies not yet due or Liens for
      taxes, assessments and other governmental charges or levies being contested
      in
      good faith and by appropriate proceedings for which adequate reserves (in the
      good faith judgment of the management of the Company) have been established
      in
      accordance with GAAP; (b) Liens on property that was purchased with the proceeds
      of, and that secures only, indebtedness in an aggregate principal amount not
      to
      exceed $50,000 that was incurred solely to purchase such property; and (c)
      Liens
      imposed by law which were incurred in the ordinary course of the Company’s
      business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory
      landlords’ Liens, and other similar Liens arising in the ordinary course of the
      Company’s business, and which (x) do not individually or in the aggregate
      materially detract from the value of such property or assets or materially
      impair the use thereof in the operation of the business of the Company or (y)
      are being contested in good faith by appropriate proceedings, which proceedings
      have the effect of preventing for the foreseeable future the forfeiture or
      sale
      of the property or asset subject to such Lien.

     

    
      
        
        

      

      
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    “Securities
      Purchase Agreement”
means
      the Securities Purchase Agreement between the Company and the original Holder,
      dated as of the Original Issue Date, as amended, modified or supplemented from
      time to time in accordance with its terms.

    

    Section
      2. Interest
      and Payments.

     

    a) Interest
      Rate.
      Interest shall accrue each day on the aggregate outstanding Face Value at the
      rate per annum equal to 13.00%.

    

    b) Payments
      of Principal and Interest.
      The
      outstanding Face Value, and all accrued interest thereon, will be payable in
      14
      equal monthly installments, each in the amount of $75,000, commencing on October
      15, 2008 and
      continuing on the last day of each month thereafter until the Maturity Date.
      The
      unpaid Face Value, and all accrued interest thereon, will be paid in full on
      the
      Maturity Date.

    

    c) Method
      of Payment.
      All
      payments hereunder shall be made in immediately available funds on the date
      the
      same is due in such manner as directed by the Holder, including by direct debit
      from the Company’s checking account.

    

    d) Interest
      Calculations.
      Interest shall be calculated on the basis of a 360-day year and shall accrue
      daily commencing on the Original Issue Date until payment in full of the Face
      Value, together with all accrued and unpaid interest and other amounts which
      may
      become due hereunder, has been made. 

    

    e) Prepayment.
      The
      Company may prepay all or any portion of the Face Value upon at least two
      Trading Days’ notice to the Holder by paying the amount desired to be prepaid
      together with a payment equal to 10% of the amount being prepaid. All
      prepayments of Face Value hereunder shall be applied to the payment obligation
      of the Company under Section 2(b) in inverse order of maturity. At the option
      of
      the Holder upon notice to the Company, the Face Value and all accrued and unpaid
      interest thereon, shall become due and payable on the date on which a Change
      of
      Control Transaction shall have been consummated. 

    

    

    Section
      3.  Registration
      of Transfers and Exchanges.
      

     

    a) Different
      Denominations.
      This
      Debenture is exchangeable for an equal aggregate principal amount of Debenture
      of different authorized denominations, as requested by the Holder surrendering
      the same. No service charge will be payable for such registration of transfer
      or
      exchange.

     

    b) Investment
      Representations.
      This
      Debenture has been issued subject to certain investment representations of
      the
      original Holder set forth in the Securities Purchase Agreement and may be
      transferred or exchanged only in compliance with the Securities Purchase
      Agreement and applicable federal and state securities laws and regulations.
      

    
      
        
        

      

      
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    c) Reliance
      on Debenture Register.
      Prior
      to due presentment for transfer to the Company of this Debenture, the Company
      and any agent of the Company may treat the Person in whose name this Debenture
      is duly registered on the Debenture Register as the owner hereof for the purpose
      of receiving payment as herein provided and for all other purposes, whether
      or
      not this Debenture is overdue, and neither the Company nor any such agent shall
      be affected by notice to the contrary.

    

    Section
      4. Covenants.
      As long
      as any portion of this Debenture remains outstanding, the Company agrees as
      follows:

    

    a) it
      shall
      not (and shall cause each Subsidiary not to) enter
      into, create incur,
      assume, guarantee or suffer to exist any indebtedness for borrowed money of
      any
      kind (other than as contemplated in clause (b) of the definition of “Permitted
      Lien” contained in this Debenture), including but not limited to, a guarantee,
      unless the obligations of the Company (or such Subsidiary) with respect thereto
      are not secured, directly or indirectly, by any assets of the Company (or such
      Subsidiary) or are subordinated to the obligations of the Company hereunder
      and
      under any Additional Debenture on terms satisfactory to the Holder;

     

    b) other
      than Permitted Liens or as permitted by Section 4(a), it shall not enter into,
      create, incur, assume or suffer to exist any Liens of any kind, on or with
      respect to any of its (or any Subsidiary’s) property or assets now owned or
      hereafter acquired or any interest therein or any income or profits
      therefrom;

    

    c) it
      shall
      not amend its (or any Subsidiary’s) charter documents, including without
      limitation, the certificate of incorporation and bylaws, in any manner that
      materially and adversely affects any rights of the Holder;

    

    d) it
      and
      the Subsidiaries shall not engage in any business that is materially different
      from that described in its SEC Reports filed with the Commission prior to the
      Original Issue Date and all activities related thereto; 

    

    e) it
      shall
      not enter into any agreement with respect to any of the foregoing;
      

    

    f) it
      shall
      permit the Holder, or its representative, at the Company’s expense, to review
      and inspect the Company’s and each Subsidiary’s books, records, assets and
      operations; and

    

    g) it
      shall
      retain and utilize the services of two investor relations firms satisfactory
      to
      the Holder.

     

    
      
        
        

      

      
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    Section
      5. Events
      of Default.
      

    

    a) “Event
      of Default”
means,
      wherever used herein, any of the following events (whatever the reason for
      such
      event and whether such event shall be voluntary or involuntary or effected
      by
      operation of law or pursuant to any judgment, decree or order of any court,
      or
      any order, rule or regulation of any administrative or governmental
      body):

    

    i. any
      default in the payment of (A) the principal amount of this Debenture or (B)
      interest or other amounts owing to the Holder on this Debenture within one
      Trading Day as and when the same shall become due and payable (whether on the
      Maturity Date or by acceleration or otherwise);

     

    ii. the
      Company or any Subsidiary shall fail to observe or perform any other covenant
      or
      agreement contained in this Debenture or any other Transaction Document to
      which
      it is a party which failure is not cured, if possible to cure, within the
      earlier to occur of (A)
      two
Trading
      Days after notice of such failure sent by the Holder
      and
      (B) three Trading Days after the Company has become or should have become aware
      of such failure;

    

    iii. a
      default
      or event of default (subject to any grace or cure period provided in the
      applicable agreement, document or instrument) shall occur under (A) any of
      the
      Transaction Documents or (B) any other material agreement, lease, document
      or
      instrument to which the Company or any Subsidiary is obligated (and not covered
      by clause (vi) below);

    

    iv. any
      representation
      or warranty made in this Debenture, any other Transaction Documents, any written
      statement pursuant hereto or thereto or any other report, financial statement
      or
      certificate made or delivered to the Holder or any other Holder shall
      be
      untrue or incorrect in any material respect as of the date when made or deemed
      made;

    

    v. the
      Company or any Significant Subsidiary shall be subject to a Bankruptcy
      Event;

     

    vi. the
      Company or any Subsidiary shall default on any of its obligations under any
      mortgage, credit agreement or other facility, indenture agreement, factoring
      agreement or other instrument under which there may be issued, or by which
      there
      may be secured or evidenced, any indebtedness for borrowed money or money due
      under any long term leasing or factoring arrangement that involves an obligation
      greater than $50,000, whether such indebtedness now exists or shall hereafter
      be
      created; or

    

    vii. any
      monetary judgment, writ or similar final process shall be entered or filed
      against the Company, any Subsidiary or any of their respective property or
      other
      assets for more than $50,000, and such judgment, writ or similar final process
      shall remain unvacated, unbonded or unstayed for a period of 45 calendar
      days.

    
      
        
        

      

      
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    b) Remedies
      Upon Event of Default.
      If any
      Event of Default hereunder occurs, the outstanding Face Value plus accrued
      but
      unpaid interest and other amounts owing in respect thereof through the date
      of
      acceleration, shall become, at the Holder’s election, immediately due and
      payable. Commencing after the occurrence of any Event of Default hereunder
      and
      during its continuance, the interest rate on this Debenture shall accrue at
      an
      interest rate equal to 18.00% per annum. In connection with such acceleration
      described herein, the Holder need not provide, and the Company hereby waives,
      any presentment, demand, protest or other notice of any kind, and the Holder
      may
      immediately and without expiration of any grace period enforce any and all
      of
      its rights and remedies hereunder and all other remedies available to it under
      applicable law and the Transaction Documents. Such acceleration may be rescinded
      and annulled by Holder at any time prior to payment hereunder and the Holder
      shall have all rights as a holder of the Debenture until such time, if any,
      as
      the Holder receives full payment pursuant to this Section 5(b). No such
      rescission or annulment shall affect any subsequent Event of Default or impair
      any right consequent thereon.

    

    Section
      6. Miscellaneous.
      

    

    a) Notices.
      Any and
      all notices or other communications or deliveries to be provided by the Holder
      hereunder shall be delivered as set forth in the Securities Purchase Agreement.
      

    

    b) Absolute
      Obligation.
      Except
      as expressly provided herein, no provision of this Debenture shall alter or
      impair the obligation of the Company, which is absolute and unconditional,
      to
      pay the principal of, and accrued interest, as applicable, on this Debenture
      at
      the time, place, and rate, and in the coin or currency, herein prescribed.
      This
      Debenture is a direct, unconditional and secured debt obligation of the Company.
      

     

    c) Lost
      or Mutilated Debenture.
      If this
      Debenture shall be mutilated, lost, stolen or destroyed, the Company shall
      execute and deliver, in exchange and substitution for and upon cancellation
      of a
      mutilated Debenture, or in lieu of or in substitution for a lost, stolen or
      destroyed Debenture, a new Debenture for the principal amount of this Debenture
      so mutilated, lost, stolen or destroyed, but only upon receipt of evidence
      of
      such loss, theft or destruction of such Debenture, and of the ownership hereof,
      reasonably satisfactory to the Company.

    

    d) Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Debenture shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflict of laws thereof. 

    

    e) Waiver.
      Any
      waiver by the Holder of a breach of any provision of this Debenture shall not
      operate as or be construed to be a waiver of any other breach of such provision
      or of any breach of any other provision of this Debenture. The failure of the
      Holder to insist upon strict adherence to any term of this Debenture on one
      or
      more occasions shall not be considered a waiver or deprive that party of the
      right thereafter to insist upon strict adherence to that term or any other
      term
      of this Debenture. Any waiver by the Holder must be in writing.

    
      
        
        

      

      
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    f) Severability.
      If any
      provision of this Debenture is invalid, illegal or unenforceable, the balance
      of
      this Debenture shall remain in effect, and if any provision is inapplicable
      to
      any Person or circumstance, it shall nevertheless remain applicable to all
      other
      Persons and circumstances. If it shall be found that any interest or other
      amount deemed interest due hereunder violates the applicable law governing
      usury, the applicable rate of interest due hereunder shall automatically be
      lowered to equal the maximum rate of interest permitted under applicable law.
      

    

    g) Next
      Business Day.
      Whenever any payment or other obligation hereunder shall be due on a day other
      than a Business Day, such payment shall be made on the next succeeding Business
      Day.

    

    h) Headings.
      The
      headings contained herein are for convenience only, do not constitute a part
      of
      this Debenture and shall not be deemed to limit or affect any of the provisions
      hereof.

    

    (Signature
      Page Follows)

    
      
        
        

      

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

     

    
      	
              SYZYGY
                ENTERTAINMENT, LTD.

            
	 	 	 
	
              By:

            	
              Sean
                Sullivan

            
	 	
              Name:

            	
              Sean
                Sullivan

            
	 	
              Title:

            	
              President

            

    

     

    
      
        
        

      

      
        8Exhibit
      10.3 

     

    EXHIBIT
      B

     

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

    

    COMMON
      STOCK PURCHASE WARRANT

    

    To
      Purchase 1,334,813 Shares of Common Stock of

     

    SYZYGY
      ENTERTAINMENT, LTD.

     

    THIS
      COMMON STOCK PURCHASE WARRANT (the “Warrant”)
      certifies that, for value received, Shelter Island Opportunity Fund, LLC or
      its
      registered assigns (the “Holder”),
      is
      entitled, upon the terms and subject to the conditions hereinafter set forth,
      at
      any time on or after the date hereof (the “Initial
      Exercise Date”)
      and on
      or prior to the close of business on the fifth anniversary of the Initial
      Exercise Date (the “Termination
      Date”)
      but
      not thereafter, to subscribe for and purchase from Syzygy Entertainment, Ltd.,
      a
      Nevada corporation (the “Company”),
      up to
      1,334,813 shares (the “Warrant
      Shares”)
      of
      Common Stock, par value $0.001 per share, of the Company (the “Common
      Stock”).
      The
      purchase price of one share of Common Stock under this Warrant shall be equal
      to
      the Exercise Price, as defined in Section 2(b). 

     

    Section
      1. Definitions.
      Capitalized terms used and not otherwise defined herein shall have the meanings
      set forth in that certain Securities Purchase Agreement (the “Securities
      Purchase Agreement”),
      dated
      as of July 15, 2008, as heretofore and hereafter amended, between the Company
      and the initial Holder.

     

    Section
      2. Exercise.

     

    a)
      Exercise
      of Warrant.
      Exercise of the purchase rights represented by this Warrant may be made, in
      whole or in part, at any time or times on or after the Initial Exercise Date
      and
      on or before the Termination Date by delivery to the Company of a duly executed
      facsimile copy of the Notice of Exercise Form annexed hereto (or such other
      office or agency of the Company as it may designate by notice in writing to
      the
      registered Holder at the address of such Holder appearing on the books of the
      Company); and, within five Trading Days of the date said Notice of Exercise
      is
      delivered to the Company, the Company shall have received payment of the
      aggregate Exercise Price of the shares thereby purchased by wire transfer or
      cashier’s check drawn on a United States bank. Notwithstanding anything herein
      to the contrary, the Holder shall not be required to physically surrender this
      Warrant to the Company until the Holder has purchased all of the Warrant Shares
      available hereunder and the Warrant has been exercised in full, in which case,
      the Holder shall surrender this Warrant to the Company for cancellation within
      three Trading Days of the date the final Notice of Exercise is delivered to
      the
      Company. Partial exercises of this Warrant resulting in purchases of a portion
      of the total number of Warrant Shares available hereunder shall have the effect
      of lowering the outstanding number of Warrant Shares purchasable hereunder
      in an
      amount equal to the applicable number of Warrant Shares purchased. The Holder
      and the Company shall maintain records showing the number of Warrant Shares
      purchased and the date of such purchases. The Company shall deliver any
      objection to any Notice of Exercise Form within two Business Days of receipt
      of
      such notice. The Holder, by acceptance of this Warrant, acknowledges and agrees
      that, by reason of the provisions of this paragraph, following the purchase
      of a
      portion of the Warrant Shares hereunder, the number of Warrant Shares available
      for purchase hereunder at any given time may be less than the amount stated
      on
      the face hereof. 

     

    
      
        
        

      

      
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    If
      at any
      time after the date of the issuance of this Warrant there is no effective
      registration statement registering, or no current prospectus available for,
      the
      resale of the shares issuable upon exercise of this Warrant, in lieu of the
      payment of the aggregate Exercise Price, the Holder shall have the right (but
      not the obligation), to require the Company to convert up to 50% of this
      Warrant, in whole or in part, into shares of Common Stock (the “Cashless
      Exercise”).
      Upon
      the occurrence of a Cashless Exercise, the Company shall deliver to the Holder
      (without payment of the Exercise Price) that number of shares of Common Stock
      equal to the quotient obtained by dividing (i) the value of this Warrant or
      portion thereof at the time of the Cashless Exercise (determined by subtracting
      the aggregate Exercise Price at the time of the Cashless Exercise from the
      VWAP
      of the shares of Common Stock issuable at the time of the Cashless Exercise)
      by
      (ii) the VWAP of one share of Common Stock at the time of the Cashless Exercise.
      The Cashless Exercise may be exercised by surrendering this Warrant to the
      Company, with an executed Notice of Exercise with the conversion section
      completed, selecting the Cashless Exercise and specifying the total number
      of
      shares of Common Stock that the Holder will be issued pursuant to such Cashless
      Exercise.

     

    b)
      Exercise
      Price.
      The
      exercise price per share of the Common Stock under this Warrant shall be $1.01
      (the “Exercise
      Price”).
      

     

    c)
      Mechanics
      of Exercise.
      

     

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

     

    
      
        
        

      

      
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    ii. Delivery
      of Certificates Upon Exercise.
      Certificates for shares purchased hereunder shall be transmitted by the transfer
      agent of the Company to the Holder by crediting the account of the Holder’s
      prime broker with the Depository Trust Company through its Deposit Withdrawal
      Agent Commission (“DWAC”)
      system
      if the Company is a participant in such system, and otherwise by physical
      delivery to the address specified by the Holder in the Notice of Exercise within
      10 Trading Days from the delivery to the Company of the Notice of Exercise
      Form,
      surrender of this Warrant (if required) and payment of the aggregate Exercise
      Price as set forth above (“Warrant
      Share Delivery Date”).
      This
      Warrant shall be deemed to have been exercised on the date the Exercise Price
      is
      received by the Company. The Warrant Shares shall be deemed to have been issued,
      and Holder or any other person so designated to be named therein shall be deemed
      to have become a holder of record of such shares for all purposes, as of the
      date the Warrant has been exercised by payment to the Company of the Exercise
      Price and all taxes required to be paid by the Holder, if any, pursuant to
      Section 2(c)(vi) prior to the issuance of such shares, have been paid.

     

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

     

    iv. Rescission
      Rights.
      If the
      Company fails to cause its transfer agent to transmit to the Holder a
      certificate or certificates representing the Warrant Shares pursuant to Section
      2(c)(ii) by the Warrant Share Delivery Date, then the Holder will have the
      right
      to rescind such exercise.

     

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

     

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

     

    
      
        
        

      

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

     

    
      	 	
              d)

            	
              Exercise
                Limitations.
                The Company shall not affect any exercise of this Warrant and a Holder
                shall not have the right to exercise any portion of this Warrant,
                pursuant
                to Section 2(a) or otherwise, to the extent that after giving effect
                to
                such issuance after exercise, such Holder (together with such Holder’s
                Affiliates, and any other person or entity acting as a group together
                with
                such Holder or any of such Holder’s Affiliates), as set forth on the
                applicable Notice of Exercise, would beneficially own in excess of
                9.99%
                of the number of shares of the Common Stock outstanding immediately
                after
                giving effect to such issuance.  For purposes of the foregoing
                sentence, the number of shares of Common Stock beneficially owned
                by such
                Holder and its Affiliates shall include the number of shares of Common
                Stock issuable upon exercise of this Warrant with respect to which
                the
                determination of such sentence is being made, but shall exclude the
                number
                of shares of Common Stock which would be issuable upon (A) exercise
                of the
                remaining, nonexercised portion of this Warrant beneficially owned
                by such
                Holder or any of its Affiliates and (B) exercise or conversion of
                the
                unexercised or nonconverted portion of any other securities of the
                Company
                (including, without limitation, any Warrants) subject to a limitation
                on
                conversion or exercise analogous to the limitation contained herein
                beneficially owned by such Holder or any of its Affiliates.  Except
                as set forth in the preceding sentence, for purposes of this Section
                2(d),
                beneficial ownership shall be calculated in accordance with Section
                13(d)
                of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
                and the rules and regulations promulgated thereunder, it being
                acknowledged by the Holder that the Company is not representing to
                such
                Holder that such calculation is in compliance with Section 13(d)
                of the
                Exchange Act and the Holder is solely responsible for any schedules
                required to be filed in accordance therewith. To the extent that
                the
                limitation contained in this Section 2(d) applies, the determination
                of
                whether this Warrant is exercisable (in relation to other securities
                owned
                by such Holder) and of which a portion of this Warrant is exercisable
                shall be in the sole discretion of the Holder, and the submission
                of a
                Notice of Exercise shall be deemed to be the Holder’s determination of
                whether this Warrant is exercisable (in relation to other securities
                owned
                by the Holder) and of which portion of this Warrant is exercisable,
                in
                each case subject to such aggregate percentage limitation, and the
                Company
                shall have no obligation to verify or confirm the accuracy of such
                determination. In addition, a determination as to any group status
                as
                contemplated above shall be determined in accordance with Section
                13(d) of
                the Exchange Act and the rules and regulations promulgated thereunder.
                For
                purposes of this Section 2(d), in determining the number of outstanding
                shares of Common Stock, a Holder may rely on the number of outstanding
                shares of Common Stock as reflected in (x) the Company’s most recent Form
                10-QSB or Form 10-KSB, as the case may be, (y) a more recent public
                announcement by the Company or (z) any other notice by the Company
                or the
                Company’s Transfer Agent setting forth the number of shares of Common
                Stock outstanding.  Upon the written or oral request of the Holder,
                the Company shall within two Trading Days confirm orally and in writing
                to
                the Holder the number of shares of Common Stock then outstanding.  In
                any case, the number of outstanding shares of Common Stock shall
                be
                determined after giving effect to the conversion or exercise of securities
                of the Company, including this Warrant, by the Holder or its Affiliates
                since the date as of which such number of outstanding shares of Common
                Stock was reported. The provisions of this Section 2(d) may be waived
                by
                the Holder, at the election of the Holder, upon not less than 61
                days’
                prior notice to the Company, and the provisions of this Section 2(d)
                shall
                continue to apply until such 61st
                day (or such later date, as determined by such Holder, as may be
                specified
                in such notice of waiver).

            

    

     

    
      
        
        

      

      
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    Section
      3. Certain Adjustments.

     

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

     

    b) Subsequent
      Equity Sales.
      If the
      Company at any time while this Warrant is outstanding, except for issuances
      contemplated by Section 2(c) and except for any Exempt Issuances, shall sell
      or
      grant any option to purchase or sell or grant any right to reprice its
      securities, or otherwise dispose of or issue (or announce any offer, sale,
      grant
      or any option to purchase or other disposition) any Common Stock or Common
      Stock
      Equivalents entitling any Person to acquire shares of Common Stock, at an
      effective price per share less than the then Exercise Price (such lower price,
      the “Base
      Share Price”
and
      such issuances collectively, a “Dilutive
      Issuance”)
      (if
      the holder of the Common Stock or Common Stock Equivalents so issued shall
      at
      any time, whether by operation of purchase price adjustments, reset provisions,
      floating conversion, exercise or exchange prices or otherwise, or due to
      warrants, options or rights per share which are issued in connection with such
      issuance, be entitled to receive shares of Common Stock at an effective price
      per share which is less than the Exercise Price, such issuance shall be deemed
      to have occurred for less than the Exercise Price on such date of the Dilutive
      Issuance), then the Exercise Price shall be reduced and only reduced to equal
      the Base Share Price. Such adjustment shall be made whenever such Common Stock
      or Common Stock Equivalents are issued. Notwithstanding the foregoing, no
      adjustments shall be made, paid or issued under this Section 3(b) in respect
      of
      an Exempt Issuance. The Company shall notify the Holder in writing, no later
      than two Trading Days following the issuance of any Common Stock or Common
      Stock
      Equivalents subject to this section, indicating therein the applicable issuance
      price, or applicable reset price, exchange price, conversion price and other
      pricing terms (such notice the “Dilutive
      Issuance Notice”).
      For
      purposes of clarification, whether or not the Company provides a Dilutive
      Issuance Notice pursuant to this Section 3(b), upon the occurrence of any
      Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
      entitled to receive a number of Warrant Shares based upon the Base Share Price
      regardless of whether the Holder accurately refers to the Base Share Price
      in
      the Notice of Exercise.

     

    
      
        
        

      

      
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    c) Subsequent
      Rights Offerings.
      If the
      Company, at any time while the Warrant is outstanding, shall issue rights,
      options or warrants to all holders of Common Stock (and not to Holders)
      entitling them to subscribe for or purchase shares of Common Stock at a price
      per share less than the VWAP at the record date mentioned below, then the
      Exercise Price shall be multiplied by a fraction, of which the denominator
      shall
      be the number of shares of the Common Stock outstanding on the date of issuance
      of such rights or warrants plus the number of additional shares of Common Stock
      offered for subscription or purchase, and of which the numerator shall be the
      number of shares of the Common Stock outstanding on the date of issuance of
      such
      rights or warrants plus the number of shares which the aggregate offering price
      of the total number of shares so offered (assuming receipt by the Company in
      full of all consideration payable upon exercise of such rights, options or
      warrants) would purchase at such VWAP. Such adjustment shall be made whenever
      such rights or warrants are issued, and shall become effective immediately
      after
      the record date for the determination of stockholders entitled to receive such
      rights, options or warrants. 

     

    d) Pro
      Rata Distributions.
      If the
      Company, at any time prior to the Termination Date, shall distribute to all
      holders of Common Stock (and not to Holders of the Warrants) evidences of its
      indebtedness or assets (including cash and cash dividends) or rights or warrants
      to subscribe for or purchase any security other than the Common Stock (which
      shall be subject to Section 3(b)), then in each such case the Exercise Price
      shall be adjusted by multiplying the Exercise Price in effect immediately prior
      to the record date fixed for determination of stockholders entitled to receive
      such distribution by a fraction of which the denominator shall be the VWAP
      determined as of the record date mentioned above, and of which the numerator
      shall be such VWAP on such record date less the then per share fair market
      value
      at such record date of the portion of such assets or evidence of indebtedness
      so
      distributed applicable to one outstanding share of the Common Stock as
      determined by the Board of Directors of the Company in good faith. In either
      case the adjustments shall be described in a statement provided to the Holder
      of
      the portion of assets or evidences of indebtedness so distributed or such
      subscription rights applicable to one share of Common Stock. Such adjustment
      shall be made whenever any such distribution is made and shall become effective
      immediately after the record date mentioned above.

     

    
      
        
        

      

      
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    e) Fundamental
      Transaction.
      If, at
      any time while this Warrant is outstanding, (A) the Company effects any merger
      or consolidation of the Company with or into another Person, (B) the Company
      effects any sale of all or substantially all of its assets in one or a series
      of
      related transactions, (C) any tender offer or exchange offer (whether by the
      Company or another Person) is completed pursuant to which holders of Common
      Stock are permitted to tender or exchange their shares for other securities,
      cash or property, or (D) the Company effects any reclassification of the Common
      Stock or any compulsory share exchange pursuant to which the Common Stock is
      effectively converted into or exchanged for other securities, cash or property
      (in any such case, a “Fundamental
      Transaction”),
      then,
      upon any subsequent exercise of this Warrant and payment of the exercise price,
      the Holder shall have the right to receive, for each Warrant Share that would
      have been issuable upon such exercise immediately prior to the occurrence of
      such Fundamental Transaction, at the option of the Holder, (a) upon exercise
      of
      this Warrant, the number of shares of Common Stock of the successor or acquiring
      corporation or of the Company, if it is the surviving corporation, and any
      additional consideration (the “Alternate
      Consideration”)
      receivable upon or as a result of such reorganization, reclassification, merger,
      consolidation or disposition of assets by a Holder of the number of shares
      of
      Common Stock for which this Warrant is exercisable immediately prior to such
      event or (b) if the Company is acquired in an all cash transaction, cash equal
      to the value of this Warrant as determined in accordance with Black Scholes
      option pricing formula. If holders of Common Stock are given any choice as
      to
      the securities, cash or property to be received in a Fundamental Transaction,
      then the Holder shall be given the same choice as to the Alternate Consideration
      it receives upon any exercise of this Warrant following such Fundamental
      Transaction. To the extent necessary to effectuate the foregoing provisions,
      any
      successor to the Company or surviving entity in such Fundamental Transaction
      shall issue to the Holder a new warrant consistent with the foregoing provisions
      and evidencing the Holder’s right to exercise such warrant into Alternate
      Consideration. The terms of any agreement pursuant to which a Fundamental
      Transaction is affected shall include terms requiring any such successor or
      surviving entity to comply with the provisions of this Section 3(e) and insuring
      that this Warrant (or any such replacement security) will be similarly adjusted
      upon any subsequent transaction analogous to a Fundamental
      Transaction.

     

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

     

    
      
        
        

      

      
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    g) Voluntary
      Adjustment By Company.
      The
      Company may at any time during the term of this Warrant reduce the then current
      Exercise Price to any amount and for any period of time deemed appropriate
      by
      the Board of Directors of the Company.

     

    h) Notice
      to Holders.
      

     

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

     

    ii. Notice
      to Allow Exercise by Holder.
      If (A)
      the Company shall declare a dividend (or any other distribution in whatever
      form) on the Common Stock; (B) the Company shall declare a special nonrecurring
      cash dividend on or a redemption of the Common Stock; (C) the Company shall
      authorize the granting to all holders of the Common Stock rights or warrants
      to
      subscribe for or purchase any shares of capital stock of any class or of any
      rights; (D) the approval of any stockholders of the Company shall be required
      in
      connection with any reclassification of the Common Stock, any consolidation
      or
      merger to which the Company is a party, any sale or transfer of all or
      substantially all of the assets of the Company, of any compulsory share exchange
      whereby the Common Stock is converted into other securities, cash or property;
      (E) the Company shall authorize the voluntary or involuntary dissolution,
      liquidation or winding up of the affairs of the Company; then, in each case,
      the
      Company shall cause to be mailed to the Holder at its last address as it shall
      appear upon the Warrant Register of the Company, at least 20 calendar days
      prior
      to the applicable record or effective date hereinafter specified, a notice
      stating (x) the date on which a record is to be taken for the purpose of such
      dividend, distribution, redemption, rights or warrants, or if a record is not
      to
      be taken, the date as of which the holders of the Common Stock of record to
      be
      entitled to such dividend, distributions, redemption, rights or warrants are
      to
      be determined or (y) the date on which such reclassification, consolidation,
      merger, sale, transfer or share exchange is expected to become effective or
      close, and the date as of which it is expected that holders of the Common Stock
      of record shall be entitled to exchange their shares of the Common Stock for
      securities, cash or other property deliverable upon such reclassification,
      consolidation, merger, sale, transfer or share exchange; provided that the
      failure to mail such notice or any defect therein or in the mailing thereof
      shall not affect the validity of the corporate action required to be specified
      in such notice. The Holder is entitled to exercise this Warrant during the
      20-day period commencing on the date of such notice to the effective date of
      the
      event triggering such notice.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    iii. Notice
      of Subsequent Issuance.
      The
      first time after the Initial Exercise Date that the Company issues shares of
      Common Stock or Common Stock Equivalents, other than pursuant to an Exempt
      Issuance or to an Affiliate of the Company, and the aggregate amount of net
      proceeds received by the Company therefrom is not less than the aggregate
      outstanding principal amount of the Debenture, the Company shall mail to each
      Holder a notice within two Trading Days thereof and shall provide evidence
      therewith of the price per share at which such issuance was made. 

     

    iv. Effect
      of Failure to Give Notice.
      The
      failure of the Company to give any notice required under this section or any
      inaccuracy or other defect therein shall not affect the determination of the
      Exercise Price that shall be in effect as provided herein. 

     

    Section
      4. Transfer
      of Warrant.

     

    a) Transferability.
      Subject
      to compliance with any applicable securities laws and the conditions set forth
      in Section 4(d) hereof and to the provisions of Section 4.1 of the Securities
      Purchase Agreement, this Warrant and all rights hereunder (including, without
      limitation, any registration rights) are transferable, in whole or in part,
      upon
      surrender of this Warrant at the principal office of the Company or its
      designated agent, together with a written assignment of this Warrant
      substantially in the form attached hereto duly executed by the Holder or its
      agent or attorney and funds sufficient to pay any transfer taxes payable upon
      the making of such transfer. Upon such surrender and, if required, such payment,
      the Company shall execute and deliver a new Warrant or Warrants in the name
      of
      the assignee or assignees and in the denomination or denominations specified
      in
      such instrument of assignment, and shall issue to the assignor a new Warrant
      evidencing the portion of this Warrant not so assigned, and this Warrant shall
      promptly be cancelled. A Warrant, if properly assigned, may be exercised by
      a
      new holder for the purchase of Warrant Shares without having a new Warrant
      issued. 

     

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

     

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

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

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

     

    Section
      5. Miscellaneous.

     

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

     

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

     

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

     

    d) Authorized
      Shares.
      

     

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

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    e) Jurisdiction.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be determined in accordance with the provisions of the
      Securities Purchase Agreement.

     

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

     

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

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    h) Notices.
      Any
      notice, request or other document required or permitted to be given or delivered
      to the Holder by the Company shall be delivered in accordance with the notice
      provisions of the Securities Purchase Agreement.

     

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

     

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

     

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

     

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

     

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

     

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

     

    ********************

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
      officer thereunto duly authorized.

    

    Dated:
      July 25, 2008

     

    
      	
              SYZYGY
                ENTERTAINMENT, LTD.

            
	 
	
              By:
                

            	
                   /s/
                Sean Sullivan

            
	 	
              Name:
                Sean Sullivan

              Title:
                President

            

    

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    NOTICE
      OF EXERCISE

    

    TO: SYZYGY
      ENTERTAINMENT, LTD.

    

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

     

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

     

    o
      in lawful money of the
      United States; or

     

    o
      the issuance of ______ shares of Common
      Stock in accordance with the formula set forth in Section 2(a) pursuant to
      the
      Cashless Exercise procedure set forth in Section 2(a).

     

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

     

    _______________________________

    

    The
      Warrant Shares shall be delivered to the following DWAC Account Number or by
      physical delivery of a certificate to:

    

    _______________________________

     

    _______________________________

     

    _______________________________

    

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

    

    [SIGNATURE
      OF HOLDER]

     

    Name
      of
      Investing Entity:
      ________________________________________________________________________

    Signature
      of Authorized Signatory of Investing Entity:
      _________________________________________________

    Name
      of
      Authorized Signatory:
      ___________________________________________________________________

    Title
      of
      Authorized Signatory:
      ____________________________________________________________________

    Date:
      ________________________________________________________________________________________

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ASSIGNMENT
      FORM

    

    (To
      assign the foregoing warrant, execute

    this
      form
      and supply required information. 

    Do
      not
      use this form to exercise the warrant.)

    

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

    

    _______________________________________________
      whose address is

    

    _______________________________________________________________.

    

    _______________________________________________________________

    

    Dated:
      ______________, _______

    

    Holder’s
      Signature: _____________________________

    

    Holder’s
      Address: _____________________________

    
       
        

       _____________________________

    

    

    Signature
      Guaranteed: ___________________________________________

    

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

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