Document:

Unassociated Document

    

     

    

     

    

    THIS
      WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
      BEEN
      REGIS-TERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS OTHERWISE
      SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF MAY 11,
      2007,
      NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED
      IN THE ABSENCE OF AN EFFECTIVE REGISTRA-TION STATEMENT FOR SUCH SECURITIES
      UNDER
      SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY
      FOR
      OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT
      REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S
      UNDER SUCH ACT.

     

    
      
        	 	
                Right
                  to 

                Purchase
                  

                10,000,000
                  

                Shares
                  of 

                Common
                  

                Stock,
                  $.005 

                par
                  value per 

                share

              

      

    

     

    STOCK
      PURCHASE WARRANT

     

    THIS
      CERTIFIES THAT,
      for
      value received, AJW OFFSHORE, LTD. or its registered assigns, is entitled to
      purchase from GlobalNet Corporation, a Nevada corporation (the “Company”), at
      any time or from time to time during the period specified in Paragraph 2
      hereof, 10,000,000 fully paid and nonassessable shares of the Company’s Common
      Stock, $.005 par value per share (the “Common Stock”), at an exercise price per
      share equal to $.0002 (the “Exercise Price”). The term “Warrant Shares,” as used
      herein, refers to the shares of Common Stock purchasable hereunder. The Warrant
      Shares and the Exercise Price are subject to adjustment as provided in Paragraph
      4 hereof. The term “Warrants” means this Warrant and the other warrants issued
      pursuant to that certain Securities Purchase Agreement, dated May 11, 2007,
      by
      and among the Company and the Buyers listed on the execution page thereof (the
      “Securities Purchase Agreement”), including any additional warrants issuable
      pursuant to Section 4(l) thereof. 

     

    This
      Warrant is subject to the following terms, provisions, and conditions:

     

    1. Manner
      of Exercise; Issuance of Certificates; Payment for Shares. 
Subject
      to the provisions hereof and Stockholder Approval (as defined in Section 4(k)
      of
      the Securities Purchase Agreement), this Warrant may be exercised by the holder
      hereof, in whole or in part, by the surrender of this Warrant, together with
      a
      completed exercise agreement in the form attached hereto (the “Exercise
      Agreement”), to the Company during normal business hours on any business day at
      the Company’s principal executive offices (or such other office or agency of the
      Company as it may designate by notice to the holder hereof), and upon (i)
      payment to the Company in cash, by certified or offi-cial bank check or by
      wire
      transfer for the account of the Company of the Exercise Price for the Warrant
      Shares specified in the Exercise Agreement or (ii) if the resale of the Warrant
      Shares by the holder is not then registered pursuant to an effective
      registration statement under the Securities Act of 1933, as amended (the
“Securities Act”), delivery to the Company of a written notice of an election to
      effect a “Cashless Exercise” (as defined in Section 11(c) below) for the Warrant
      Shares specified in the Exercise Agreement. The Warrant Shares so purchased
      shall be deemed to be issued to the holder hereof or such holder’s designee, as
      the record owner of such shares, as of the close of business on the date on
      which this Warrant shall have been surrendered, the completed Exercise Agreement
      shall have been deliv-ered, and payment shall have been made for such shares
      as
      set forth above. Certifi-cates for the Warrant Shares so purchased, representing
      the aggregate number of shares specified in the Exercise Agreement, shall be
      delivered to the holder hereof within a reasonable time, not exceeding three
      (3)
      business days, after this Warrant shall have been so exercised. The certificates
      so delivered shall be in such denominations as may be requested by the holder
      hereof and shall be registered in the name of such holder or such other name
      as
      shall be designated by such holder. If this Warrant shall have been exercised
      only in part, then, unless this Warrant has expired, the Company shall, at
      its
      expense, at the time of delivery of such certificates, deliver to the holder
      a
      new Warrant representing the number of shares with respect to which this Warrant
      shall not then have been exercised. In addition to all other available remedies
      at law or in equity, if the Company fails to deliver certificates for the
      Warrant Shares within three (3) business days after this Warrant is exercised,
      then the Company shall pay to the holder in cash a penalty (the “Penalty”) equal
      to 2% of the number of Warrant Shares that the holder is entitled to multiplied
      by the Market Price (as hereinafter defined) for each day that the Company
      fails
      to deliver certificates for the Warrant Shares. For example, if the holder
      is
      entitled to 100,000 Warrant Shares and the Market Price is $2.00, then the
      Company shall pay to the holder $4,000 for each day that the Company fails
      to
      deliver certificates for the Warrant Shares. The Penalty shall be paid to the
      holder by the fifth day of the month following the month in which it has
      accrued.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

     

    Notwithstanding
      anything in this Warrant to the contrary, in no event shall the holder of this
      Warrant be entitled to exercise a number of Warrants (or portions thereof)
      in
      excess of the number of Warrants (or portions thereof) upon exercise of which
      the sum of (i) the number of shares of Common Stock beneficially owned by the
      holder and its affiliates (other than shares of Common Stock which may be deemed
      beneficially owned through the ownership of the unexercised Warrants and the
      unexercised or unconverted portion of any other securities of the Company
      (including the Notes (as defined in the Securities Purchase Agreement)) subject
      to a limitation on conversion or exercise analogous to the limitation contained
      herein) and (ii) the number of shares of Common Stock issuable upon exercise
      of
      the Warrants (or portions thereof) with respect to which the determination
      described herein is being made, would result in beneficial ownership by the
      holder and its affiliates of more than 4.9% of the outstanding shares of Common
      Stock. For purposes of the immediately preceding sentence, beneficial ownership
      shall be determined in accordance with Section 13(d) of the Securities Exchange
      Act of 1934, as amended, and Regulation 13D-G thereunder, except as otherwise
      provided in clause (i) of the preceding sentence. Notwithstanding anything
      to
      the contrary contained herein, the limitation on exercise of this Warrant set
      forth herein may not be amended without (i) the written consent of the holder
      hereof and the Company and (ii) the approval of a majority of shareholders
      of
      the Company.

     

    
      
         

      

      
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    2. Period
      of Exercise.  
      This
      Warrant is exercisable at any time or from time to time on or after the date
      on
      which this Warrant is issued and delivered pursuant to the terms of the
      Securities Purchase Agreement and before 6:00 p.m., New York, New York time
      on
      the seventh (7th)
      anniversary of the date of issuance (the “Exercise Period”).

     

    3. Certain
      Agreements of the Company.  The
      Company hereby covenants and agrees as follows:

     

    (a) Shares
      to be Fully Paid.
      All
      Warrant Shares will, upon issuance in accordance with the terms of this Warrant,
      be validly issued, fully paid, and nonassessable and free from all taxes, liens,
      and charges with respect to the issue thereof.

     

    (b) Reservation
      of Shares.
      Subject
      to Stockholder Approval (as defined in Section 4(k) of the Securities Purchase
      Agreement), during the Exercise Period, the Company shall at all times have
      authorized, and reserved for the purpose of issuance upon exercise of this
      Warrant, a suf-ficient number of shares of Common Stock to provide for the
      exercise of this Warrant.

     

    (c) Listing.
      The
      Company shall promptly secure the listing of the shares of Common Stock issuable
      upon exercise of the Warrant upon each national securities exchange or automated
      quotation system, if any, upon which shares of Common Stock are then listed
      (subject to official notice of issuance upon exercise of this Warrant) and
      shall
      maintain, so long as any other shares of Common Stock shall be so listed, such
      listing of all shares of Common Stock from time to time issuable upon the
      exercise of this Warrant; and the Company shall so list on each national
      securities exchange or automated quotation system, as the case may be, and
      shall
      maintain such listing of, any other shares of capital stock of the Company
      issuable upon the exercise of this Warrant if and so long as any shares of
      the
      same class shall be listed on such national securities exchange or automated
      quotation system.

     

    (d) Certain
      Actions Prohibited.
      The
      Company will not, by amendment of its charter or through any re-organi-zation,
      transfer of assets, consolidation, mer-ger, dissolution, issue or sale of
      securities, or any other voluntary action, avoid or seek to avoid the observance
      or performance of any of the terms to be observed or performed by it hereunder,
      but will at all times in good faith assist in the carrying out of all the
      provisions of this Warrant and in the taking of all such action as may
      reasonably be requested by the holder of this Warrant in order to protect the
      exercise privilege of the holder of this Warrant against dilu-tion or other
      impairment, consistent with the tenor and purpose of this Warrant. Without
      limiting the general-ity of the foregoing, the Company (i) will not increase
      the
      par value of any shares of Common Stock receivable upon the exercise of this
      Warrant above the Exercise Price then in effect, and (ii) will take all such
      actions as may be necessary or appropriate in order that the Company may validly
      and legally issue fully paid and nonassessable shares of Common Stock upon
      the
      exercise of this Warrant.

     

    (e) Successors
      and Assigns.
      This
      Warrant will be binding upon any entity succeeding to the Company by merger,
      consolidation, or acquisition of all or sub-stantially all the Company’s
      assets.

     

    4. Antidilution
      Provisions.   During
      the Exercise Period, the Exercise Price and the number of Warrant Shares shall
      be subject to adjustment from time to time as provided in this Paragraph
      4.

     

    
      
         

      

      
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    In
      the
      event that any adjustment of the Exercise Price as required herein results
      in a
      fraction of a cent, such Exercise Price shall be rounded up to the nearest
      cent.

     

    (a) Adjustment
      of Exercise Price and Number of Shares upon Issuance of Common
      Stock.
      Except
      as otherwise provided in Paragraphs 4(c) and 4(e) hereof, if and whenever on
      or
      after the date of issuance of this Warrant, the Company issues or sells, or
      in
      accordance with Paragraph 4(b) hereof is deemed to have issued or sold, any
      shares of Common Stock for no consideration or for a consideration per share
      (before deduction of reasonable expenses or commissions or underwriting
      discounts or allowances in connection therewith) less than the Market Price
      on
      the date of issuance (a “Dilutive Issuance”), then immediately upon the Dilutive
      Issuance, the Exercise Price will be reduced to a price determined by
      multiplying the Exercise Price in effect immediately prior to the Dilutive
      Issuance by a fraction, (i) the numerator of which is an amount equal to the
      sum
      of (x) the number of shares of Common Stock actually outstanding immediately
      prior to the Dilutive Issuance, plus (y) the quotient of the aggregate
      consideration, calculated as set forth in Paragraph 4(b) hereof, received by
      the
      Company upon such Dilutive Issuance divided by the Market Price in effect
      immediately prior to the Dilutive Issuance, and (ii) the denominator of which
      is
      the total number of shares of Common Stock Deemed Outstanding (as defined below)
      immediately after the Dilutive Issuance. 

     

    (b) Effect
      on Exercise Price of Certain Events.
      For
      purposes of determining the adjusted Exercise Price under Paragraph 4(a) hereof,
      the following will be applicable:

     

    (i) Issuance
      of Rights or Options.
      If the
      Company in any manner issues or grants any warrants, rights or options, whether
      or not immediately exercisable, to subscribe for or to purchase Common Stock
      or
      other securities convertible into or exchangeable for Common Stock (“Convertible
      Securities”) (such warrants, rights and options to purchase Common Stock or
      Convertible Securities are hereinafter referred to as “Options”) and the price
      per share for which Common Stock is issuable upon the exercise of such Options
      is less than the Market Price on the date of issuance or grant of such Options,
      then the maximum total number of shares of Common Stock issuable upon the
      exercise of all such Options will, as of the date of the issuance or grant
      of
      such Options, be deemed to be outstanding and to have been issued and sold
      by
      the Company for such price per share. For purposes of the preceding sentence,
      the “price per share for which Common Stock is issuable upon the exercise of
      such Options” is determined by dividing (i) the total amount, if any, received
      or receivable by the Company as consideration for the issuance or granting
      of
      all such Options, plus the minimum aggregate amount of additional consideration,
      if any, payable to the Company upon the exercise of all such Options, plus,
      in
      the case of Convertible Securities issuable upon the exercise of such Options,
      the minimum aggregate amount of additional consideration payable upon the
      conversion or exchange thereof at the time such Convertible Securities first
      become convertible or exchangeable, by (ii) the maximum total number of shares
      of Common Stock issuable upon the exercise of all such Options (assuming full
      conversion of Convertible Securities, if applicable). No further adjustment
      to
      the Exercise Price will be made upon the actual issuance of such Common Stock
      upon the exercise of such Options or upon the conversion or exchange of
      Convertible Securities issuable upon exercise of such Options.

     

    (ii) Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any Convertible Securities, whether or
      not
      immediately convertible (other than where the same are issuable upon the
      exercise of Options) and the price per share for which Common Stock is issuable
      upon such conversion or exchange is less than the Market Price on the date
      of
      issuance, then the maximum total number of shares of Common Stock issuable
      upon
      the conversion or exchange of all such Convertible Securities will, as of the
      date of the issuance of such Convertible Securities, be deemed to be outstanding
      and to have been issued and sold by the Company for such price per share. For
      the purposes of the preceding sentence, the “price per share for which Common
      Stock is issuable upon such conversion or exchange” is determined by dividing
      (i) the total amount, if any, received or receivable by the Company as
      consideration for the issuance or sale of all such Convertible Securities,
      plus
      the minimum aggregate amount of additional consideration, if any, payable to
      the
      Company upon the conversion or exchange thereof at the time such Convertible
      Securities first become convertible or exchangeable, by (ii) the maximum total
      number of shares of Common Stock issuable upon the conversion or exchange of
      all
      such Convertible Securities. No further adjustment to the Exercise Price will
      be
      made upon the actual issuance of such Common Stock upon conversion or exchange
      of such Convertible Securities.

     

    
      
         

      

      
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    (iii) Change
      in Option Price or Conversion Rate.
      If there
      is a change at any time in (i) the amount of additional consideration payable
      to
      the Company upon the exercise of any Options; (ii) the amount of additional
      consideration, if any, payable to the Company upon the conversion or exchange
      of
      any Convertible Securities; or (iii) the rate at which any Convertible
      Securities are convertible into or exchangeable for Common Stock (other than
      under or by reason of provisions designed to protect against dilution), the
      Exercise Price in effect at the time of such change will be readjusted to the
      Exercise Price which would have been in effect at such time had such Options
      or
      Convertible Securities still outstanding provided for such changed additional
      consideration or changed conversion rate, as the case may be, at the time
      initially granted, issued or sold.

     

    (iv) Treatment
      of Expired Options and Unexercised Convertible
      Securities.
      If, in
      any case, the total number of shares of Common Stock issuable upon exercise
      of
      any Option or upon conversion or exchange of any Convertible Securities is
      not,
      in fact, issued and the rights to exercise such Option or to convert or exchange
      such Convertible Securities shall have expired or terminated, the Exercise
      Price
      then in effect will be readjusted to the Exercise Price which would have been
      in
      effect at the time of such expiration or termination had such Option or
      Convertible Securities, to the extent outstanding immediately prior to such
      expiration or termination (other than in respect of the actual number of shares
      of Common Stock issued upon exercise or conversion thereof), never been
      issued.

     

    (v) Calculation
      of Consideration Received.
      If any
      Common Stock, Options or Convertible Securities are issued, granted or sold
      for
      cash, the consideration received therefor for purposes of this Warrant will
      be
      the amount received by the Company therefor, before deduction of reasonable
      commissions, underwriting discounts or allowances or other reasonable expenses
      paid or incurred by the Company in connection with such issuance, grant or
      sale.
      In case any Common Stock, Options or Convertible Securities are issued or sold
      for a consideration part or all of which shall be other than cash, the amount
      of
      the consideration other than cash received by the Company will be the fair
      value
      of such consideration, except where such consideration consists of securities,
      in which case the amount of consideration received by the Company will be the
      Market Price thereof as of the date of receipt. In case any Common Stock,
      Options or Convertible Securities are issued in connection with any acquisition,
      merger or consolidation in which the Company is the surviving corporation,
      the
      amount of consideration therefor will be deemed to be the fair value of such
      portion of the net assets and business of the non-surviving corporation as
      is
      attributable to such Common Stock, Options or Convertible Securities, as the
      case may be. The fair value of any consideration other than cash or securities
      will be determined in good faith by the Board of Directors of the
      Company.

     

    
      
         

      

      
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    (vi) Exceptions
      to Adjustment of Exercise Price.
      No
      adjustment to the Exercise Price will be made (i) upon the exercise of any
      warrants, options or convertible securities granted, issued and outstanding
      on
      the date of issuance of this Warrant; (ii) upon the grant or exercise of any
      stock or options which may hereafter be granted or exercised under any employee
      benefit plan, stock option plan or restricted stock plan of the Company now
      existing or to be implemented in the future, so long as the issuance of such
      stock or options is approved by a majority of the independent members of the
      Board of Directors of the Company or a majority of the members of a committee
      of
      independent directors established for such purpose; or (iii) upon the exercise
      of the Warrants.

     

    (c) Subdivision
      or Combination of Common Stock.
      If the
      Company at any time subdivides (by any stock split, stock dividend,
      recapitalization, reorganization, reclassification or otherwise) the shares
      of
      Common Stock acquirable hereunder into a greater number of shares, then, after
      the date of record for effecting such subdivision, the Exercise Price in effect
      immediately prior to such subdivision will be proportionately reduced. If the
      Company at any time combines (by reverse stock split, recapitalization,
      reorganization, reclassification or otherwise) the shares of Common Stock
      acquirable hereunder into a smaller number of shares, then, after the date
      of
      record for effecting such combination, the Exercise Price in effect immediately
      prior to such combination will be proportionately increased.

     

    (d) Adjustment
      in Number of Shares.
      Upon
      each adjustment of the Exercise Price pursuant to the provisions of this
      Paragraph 4, the number of shares of Common Stock issuable upon exercise of
      this
      Warrant shall be adjusted by multiplying a number equal to the Exercise Price
      in
      effect immediately prior to such adjustment by the number of shares of Common
      Stock issuable upon exercise of this Warrant immediately prior to such
      adjustment and dividing the product so obtained by the adjusted Exercise
      Price.

     

    (e) Consolidation,
      Merger or Sale.
      In case
      of any consolidation of the Company with, or merger of the Company into any
      other corporation, or in case of any sale or conveyance of all or substantially
      all of the assets of the Company other than in connection with a plan of
      complete liquidation of the Company, then as a condition of such consolidation,
      merger or sale or conveyance, adequate provision will be made whereby the holder
      of this Warrant will have the right to acquire and receive upon exercise of
      this
      Warrant in lieu of the shares of Common Stock immediately theretofore acquirable
      upon the exercise of this Warrant, such shares of stock, securities or assets
      as
      may be issued or payable with respect to or in exchange for the number of shares
      of Common Stock immediately theretofore acquirable and receivable upon exercise
      of this Warrant had such consolidation, merger or sale or conveyance not taken
      place. In any such case, the Company will make appropriate provision to insure
      that the provisions of this Paragraph 4 hereof will thereafter be applicable
      as
      nearly as may be in relation to any shares of stock or securities thereafter
      deliverable upon the exercise of this Warrant. The Company will not effect
      any
      consolidation, merger or sale or conveyance unless prior to the consummation
      thereof, the successor corporation (if other than the Company) assumes by
      written instrument the obligations under this Paragraph 4 and the obligations
      to
      deliver to the holder of this Warrant such shares of stock, securities or assets
      as, in accordance with the foregoing provisions, the holder may be entitled
      to
      acquire.

     

    
      
         

      

      
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    (f) Distribution
      of Assets.
      In case
      the Company shall declare or make any distribution of its assets (including
      cash) to holders of Common Stock as a partial liquidating dividend, by way
      of
      return of capital or otherwise, then, after the date of record for determining
      shareholders entitled to such distribution, but prior to the date of
      distribution, the holder of this Warrant shall be entitled upon exercise of
      this
      Warrant for the purchase of any or all of the shares of Common Stock subject
      hereto, to receive the amount of such assets which would have been payable
      to
      the holder had such holder been the holder of such shares of Common Stock on
      the
      record date for the determination of shareholders entitled to such
      distribution.

     

    (g) Notice
      of Adjustment.
      Upon the
      occurrence of any event which requires any adjustment of the Exercise Price,
      then, and in each such case, the Company shall give notice thereof to the holder
      of this Warrant, which notice shall state the Exercise Price resulting from
      such
      adjustment and the increase or decrease in the number of Warrant Shares
      purchasable at such price upon exercise, setting forth in reasonable detail
      the
      method of calculation and the facts upon which such calculation is based. Such
      calculation shall be certified by the Chief Financial Officer of the
      Company.

     

    (h) Minimum
      Adjustment of Exercise Price.
      No
      adjustment of the Exercise Price shall be made in an amount of less than 1%
      of
      the Exercise Price in effect at the time such adjustment is otherwise required
      to be made, but any such lesser adjustment shall be carried forward and shall
      be
      made at the time and together with the next subsequent adjustment which,
      together with any adjustments so carried forward, shall amount to not less
      than
      1% of such Exercise Price.

     

    (i) No
      Fractional Shares.
      No
      fractional shares of Common Stock are to be issued upon the exercise of this
      Warrant, but the Company shall pay a cash adjustment in respect of any
      fractional share which would otherwise be issuable in an amount equal to the
      same fraction of the Market Price of a share of Common Stock on the date of
      such
      exercise.

     

    (j) Other
      Notices.
      In case
      at any time:

     

    (i) the
      Company shall declare any dividend upon the Common Stock payable in shares
      of
      stock of any class or make any other distribution (including dividends or
      distributions payable in cash out of retained earnings) to the holders of the
      Common Stock;

     

    (ii) the
      Company shall offer for subscription pro rata to the holders of the Common
      Stock
      any additional shares of stock of any class or other rights;

     

    (iii) there
      shall be any capital reorganiza-tion of the Company, or reclassification of
      the
      Common Stock, or consolidation or merger of the Company with or into, or sale
      of
      all or substan-tially all its assets to, another corporation or entity;
      or

     

    (iv) there
      shall be a voluntary or involun-tary dissolution, liquidation or winding up
      of
      the Company;

     

    
      
         

      

      
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    then,
      in
      each such case, the Company shall give to the holder of this Warrant (a) notice
      of the date on which the books of the Company shall close or a record shall
      be
      taken for determining the holders of Common Stock entitled to receive any such
      divi-dend, distribution, or subscription rights or for determining the holders
      of Common Stock entitled to vote in respect of any such reorganization,
      reclassification, consolidation, merger, sale, dissolution, liquidation or
      winding-up and (b) in the case of any such reorganization, reclassification,
      consolidation, merger, sale, dissolution, liquidation or winding-up, notice
      of
      the date (or, if not then known, a reasonable approximation thereof by the
      Company) when the same shall take place. Such notice shall also specify the
      date
      on which the holders of Common Stock shall be entitled to receive such dividend,
      distribution, or subscription rights or to exchange their Common Stock for
      stock
      or other securities or property deliverable upon such reorganization,
      re-classification, consolidation, merger, sale, dissolution, liquidation, or
      winding-up, as the case may be. Such notice shall be given at least 30 days
      prior to the record date or the date on which the Company’s books are closed in
      respect thereto. Failure to give any such notice or any defect therein shall
      not
      affect the validity of the proceedings referred to in clauses (i), (ii), (iii)
      and (iv) above.

     

    (k) Certain
      Events.
      If any
      event occurs of the type contemplated by the adjustment provisions of this
      Paragraph 4 but not expressly provided for by such provisions, the Company
      will
      give notice of such event as provided in Paragraph 4(g) hereof, and the
      Company’s Board of Directors will make an appropriate adjustment in the Exercise
      Price and the number of shares of Common Stock acquirable upon exercise of
      this
      Warrant so that the rights of the holder shall be neither enhanced nor
      diminished by such event.

     

    (l) Certain
      Definitions. 

     

    (i) “Common
      Stock Deemed Outstanding”
      shall
      mean the number of shares of Common Stock actually outstanding (not including
      shares of Common Stock held in the treasury of the Company), plus (x) pursuant
      to Paragraph 4(b)(i) hereof, the maximum total number of shares of Common Stock
      issuable upon the exercise of Options, as of the date of such issuance or grant
      of such Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the
      maximum total number of shares of Common Stock issuable upon conversion or
      exchange of Convertible Securities, as of the date of issuance of such
      Convertible Securities, if any. 

     

    (ii) “Market
      Price,”
      as of
      any date, (i) means the average of the last reported sale prices for the shares
      of Common Stock on the OTCBB for the five (5) Trading Days immediately preceding
      such date as reported by Bloomberg, or (ii) if the OTCBB is not the principal
      trading market for the shares of Common Stock, the average of the last reported
      sale prices on the principal trading market for the Common Stock during the
      same
      period as reported by Bloomberg, or (iii) if market value cannot be calculated
      as of such date on any of the foregoing bases, the Market Price shall be the
      fair market value as reasonably determined in good faith by (a) the Board of
      Directors of the Company or, at the option of a majority-in-interest of the
      holders of the outstanding Warrants by (b) an independent investment bank of
      nationally recognized standing in the valuation of businesses similar to the
      business of the corporation. The manner of determining the Market Price of
      the
      Common Stock set forth in the foregoing definition shall apply with respect
      to
      any other security in respect of which a determination as to market value must
      be made hereunder.

     

    (iii) “Common
      Stock,”
      for
      purposes of this Paragraph 4, includes the Common Stock, par value $.005 per
      share, and any additional class of stock of the Company having no preference
      as
      to dividends or distributions on liquidation, provided that the shares
      purchasable pursuant to this Warrant shall include only shares of Common Stock,
      par value $.005 per share, in respect of which this Warrant is exercisable,
      or
      shares resulting from any subdivision or combination of such Common Stock,
      or in
      the case of any reorganization, reclassification, consolidation, merger, or
      sale
      of the character referred to in Paragraph 4(e) hereof, the stock or other
      securities or property provided for in such Paragraph.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

     

    5. Issue
      Tax.  The
      issuance of certificates for Warrant Shares upon the exercise of this Warrant
      shall be made without charge to the holder of this Warrant or such shares for
      any issuance tax or other costs in respect thereof, provided that the Company
      shall not be required to pay any tax which may be payable in respect of any
      transfer involved in the issuance and delivery of any certificate in a name
      other than the holder of this Warrant.

     

    6. No
      Rights or Liabilities as a Shareholder. 
      This Warrant shall not entitle the holder hereof to any voting rights or other
      rights as a shareholder of the Company. No provision of this Warrant, 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 or as
      a
      shareholder of the Company, whether such liability is asserted by the Company
      or
      by creditors of the Company.

     

    7. Transfer,
      Exchange, and Replacement of Warrant.

     

    (a) Restriction
      on Transfer.
      This
      Warrant and the rights granted to the holder hereof are transferable, in whole
      or in part, upon surrender of this Warrant, together with a properly executed
      assignment in the form attached hereto, at the office or agency of the Company
      referred to in Paragraph 7(e) below, pro-vided, however, that any transfer
      or assignment shall be subject to the conditions set forth in Paragraph 7(f)
      hereof and to the applicable provisions of the Securities Purchase Agreement.
      Until due presentment for registration of transfer on the books of the Company,
      the Company may treat the registered holder hereof as the owner and holder
      hereof for all purposes, and the Company shall not be affected by any notice
      to
      the con-trary. Notwithstanding anything to the contrary contained herein, the
      registration rights described in Paragraph 8 are assignable only in accordance
      with the provisions of that certain Registration Rights Agreement, dated May
      11,
      2007, by and among the Company and the other signatories thereto (the
“Registration Rights Agreement”).

     

    (b) Warrant
      Exchangeable for Different Denomina-tions.
      This
      Warrant is exchange-able, upon the surrender hereof by the holder hereof at
      the
      office or agency of the Company referred to in Paragraph 7(e) below, for new
      Warrants of like tenor representing in the aggregate the right to purchase
      the
      number of shares of Common Stock which may be purchased hereunder, each of
      such
      new Warrants to represent the right to purchase such number of shares as shall
      be designated by the holder hereof at the time of such surrender.

     

    (c) Replacement
      of Warrant.
      Upon
      receipt of evi-dence reasonably satisfactory to the Company of the loss, theft,
      destruction, or mutilation of this Warrant and, in the case of any such loss,
      theft, or destruc-tion, upon delivery of an indemnity agreement reason-ably
      satisfactory in form and amount to the Company, or, in the case of any such
      mutilation, upon surrender and cancellation of this Warrant, the Company, at
      its
      expense, will execute and deliver, in lieu thereof, a new Warrant of like
      tenor.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

     

    (d) Cancellation;
      Payment of Expenses.
      Upon the
      surrender of this Warrant in connection with any trans-fer, exchange, or
      replacement as provided in this Paragraph 7, this Warrant shall be promptly
      canceled by the Company. The Company shall pay all taxes (other than securities
      transfer taxes) and all other expenses (other than legal expenses, if any,
      incurred by the holder or transferees) and charges payable in connection with
      the preparation, execution, and delivery of Warrants pursuant to this Paragraph
      7.

     

    (e) Register.
      The
      Company shall maintain, at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to the holder hereof),
      a
      register for this Warrant, in which the Company shall record the name and
      address of the person in whose name this Warrant has been issued, as well as
      the
      name and address of each transferee and each prior owner of this
      Warrant.

     

    (f) Exercise
      or Transfer Without Registration.
      If, at
      the time of the surrender of this Warrant in connection with any exercise,
      transfer, or exchange of this Warrant, this Warrant (or, in the case of any
      exercise, the Warrant Shares issuable hereunder), shall not be registered under
      the Securities Act of 1933, as amended (the “Securities Act”) and under
      applicable state securities or blue sky laws, the Company may require, as a
      condition of allowing such exercise, transfer, or exchange, (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 and counsel are acceptable to the
      Company, to the effect that such exercise, transfer, or exchange may be made
      without registration under said 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)
      promulgated under the Securities Act; provided that no such opinion, letter
      or
      status as an “accredited investor” shall be required in connection with a
      transfer pursuant to Rule 144 under the Securities Act. The first holder of
      this
      Warrant, by taking and holding the same, represents to the Company that such
      holder is acquiring this Warrant for investment and not with a view to the
      distribution thereof. 

     

    8. Registration
      Rights.  
      The initial holder of this Warrant (and certain assignees thereof) is entitled
      to the benefit of such registration rights in respect of the Warrant Shares
      as
      are set forth in Section 2 of the Registration Rights
      Agreement.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

     

    9. Notices. 
      All notices, requests, and other communications required or permitted to be
      given or delivered hereunder to the holder of this Warrant shall be in writing,
      and shall be personally delivered, or shall be sent by certified or registered
      mail or by recognized overnight mail courier, postage prepaid and addressed,
      to
      such holder at the address shown for such holder on the books of the Company,
      or
      at such other address as shall have been furnished to the Company by notice
      from
      such holder. All notices, requests, and other communications required or
      permitted to be given or delivered hereunder to the Company shall be in writing,
      and shall be personally delivered, or shall be sent by certified or registered
      mail or by recognized overnight mail courier, postage prepaid and addressed,
      to
      the office of the Company at 2616 South Loop West, Suite 670, Houston, Texas
      77054, Attention: Chief Executive Officer, or at such other address as shall
      have been furnished to the holder of this Warrant by notice from the Company.
      Any such notice, request, or other communication may be sent by facsimile,
      but
      shall in such case be subsequently confirmed by a writing personally delivered
      or sent by certified or registered mail or by recognized overnight mail courier
      as provided above. All notices, requests, and other communications shall be
      deemed to have been given either at the time of the receipt thereof by the
      person entitled to re-ceive such notice at the address of such person for
      purposes of this Paragraph 9, or, if mailed by registered or certified mail
      or
      with a recognized overnight mail courier upon deposit with the United States
      Post Office or such overnight mail courier, if postage is prepaid and the
      mailing is properly addressed, as the case may be.

     

    10. Governing
      Law. 
      THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
      THE
      LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
      ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
      LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
      UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO
      ANY
      DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO IN CONNECTION
      HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES
      IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
      SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS
      UPON
      A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
      SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN
      SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
      BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH
      SUIT
      OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
      BY
      SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
      PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR
      ALL
      FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY
      IN CONNECTION WITH SUCH DISPUTE.

     

    11. Miscellaneous.

     

    (a) Amendments.
      This
      Warrant and any provision hereof may only be amended by an instrument in writing
      signed by the Company and the holder hereof.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

     

    (b) Descriptive
      Headings.
      The
      descriptive headings of the several paragraphs of this Warrant are in-serted
      for
      purposes of reference only, and shall not affect the meaning or construction
      of
      any of the provisions hereof.

     

    (c) Cashless
      Exercise.
      Notwithstanding anything to the contrary contained in this Warrant, if the
      resale of the Warrant Shares by the holder is not then registered pursuant
      to an
      effective registration statement under the Securities Act, this Warrant may
      be
      exercised by presentation and surrender of this Warrant to the Company at its
      principal executive offices with a written notice of the holder’s intention to
      effect a cashless exercise, including a calculation of the number of shares
      of
      Common Stock to be issued upon such exercise in accordance with the terms hereof
      (a “Cashless Exercise”). In the event of a Cashless Exercise, in lieu of paying
      the Exercise Price in cash, the holder shall surrender this Warrant for that
      number of shares of Common Stock determined by multiplying the number of Warrant
      Shares to which it would otherwise be entitled by a fraction, the numerator
      of
      which shall be the difference between the then current Market Price per share
      of
      the Common Stock and the Exercise Price, and the denominator of which shall
      be
      the then current Market Price per share of Common Stock. For example, if the
      holder is exercising 100,000 Warrants with a per Warrant exercise price of
      $0.75
      per share through a cashless exercise when the Common Stock’s current Market
      Price per share is $2.00 per share, then upon such Cashless Exercise the holder
      will receive 62,500 shares of Common Stock.

     

    (d) Remedies.
      The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the holder, by vitiating the intent and purpose of the
      transaction contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for a breach of its obligations under this Warrant will be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of the provisions of this Warrant, that the holder shall be entitled,
      in
      addition to all other available remedies at law or in equity, and in addition
      to
      the penalties assessable herein, to an injunction or injunctions restraining,
      preventing or curing any breach of this Warrant and to enforce specifically
      the
      terms and provisions thereof, without the necessity of showing economic loss
      and
      without any bond or other security being required.

     

    

     

    

     

    

     

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

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

     

    
      	 	
              GLOBALNET
                CORPORATION

            
	 	 	 
	 	 	 
	 	 	 
	 	
              By:

            	
                
                

            
	 	 	
              Mark
                Schaftlein

            
	 	 	
              Chief
                Executive Officer

            

    

    

     

    Dated
      as
      of May 11, 2007

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    FORM
      OF EXERCISE AGREEMENT

     

    

     

    Dated:
      ________ __, 200_  

     

    

     

    To: ______________________

     

    

     

     

    The
      undersigned, pursuant to the provisions set forth in the within Warrant, hereby
      agrees to purchase ________ shares of Common Stock covered by such Warrant,
      and
      makes pay-ment herewith in full therefor at the price per share provided by
      such
      Warrant in cash or by certified or official bank check in the amount of, or,
      if
      the resale of such Common Stock by the undersigned is not currently registered
      pursuant to an effective registration statement under the Securities Act of
      1933, as amended, by surrender of securities issued by the Company (including
      a
      portion of the Warrant) having a market value (in the case of a portion of
      this
      Warrant, determined in accordance with Section 11(c) of the Warrant) equal
      to
      $_________. Please issue a certificate or certifi-cates for such shares of
      Common Stock in the name of and pay any cash for any fractional share
      to:

     

    

     

    
      	 	
              Name:
                

            	
               

            
	 	 	 
	 	 	 
	 	
              Signature:

            	 
	 	
              Address:

            	
               

            
	 	 	
               

            
	 	 	 
	 	 	 
	 	
              Note:

            	
              The
                above signature should correspond exactly with the name on the face
                of the
                within Warrant, if applicable.

            

    

    

     

    and,
      if
      said number of shares of Common Stock shall not be all the shares purchasable
      under the within Warrant, a new Warrant is to be issued in the name of said
      undersigned covering the balance of the shares purchasable thereunder less
      any
      frac-tion of a share paid in cash.

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    FORM
      OF ASSIGNMENT

     

    

     

    FOR
      VALUE RECEIVED,
      the
      undersigned hereby sells, assigns, and transfers all the rights of the
      undersigned under the within Warrant, with respect to the number of shares
      of
      Common Stock covered thereby set forth hereinbelow, to:

    

     

    
      	
              Name
                of Assignee

            	
              Address

            	
              No
                of Shares

            

    

    

     

    

     

    

    ,
      and
      hereby irrevocably constitutes and appoints ___________________________________
      as agent and attorney-in-fact to trans-fer said Warrant on the books of the
      within-named corporation, with full power of substitution in the
      premises.

     

    

     

    Dated: ________
      __, 200_

     

    

     

    
      	
              In
                the presence of:

            	 	
               

            
	 	
              Name:

            	
               

            
	 	 	 
	 	
              Signature:

            	
               

            
	 	
              Title
                of Signing Officer or Agent (if any):

            
	 	
               

            	
               

            
	 	
              Address:

            	
               

            
	 	 	
               

            
	 	 	 
	 	 	 
	 	
              Note:

            	
              The
                above signature should correspond exactly with the name on the face
                of the
                within Warrant, if applicable.Exhibit
      4.18

    

    THE
      SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR WITH THE SECURITIES COMMISSIONER
      OF ANY STATE AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO,
      OR IN
      CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. EXCEPT AS OTHERWISE SET
      FORTH
      IN THIS NOTE, NO SUCH SALE OR DISTRIBUTION
      MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
      RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY
      TO THE MAKER THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS.

    

    

    CONVERTIBLE
      PROMISSORY NOTE

     

    
      	
              $400,000.00

            	
              Los
                Angeles, California 

              November
                3, 2006

            

    

    

    FOR
      VALUE
      RECEIVED, Patient Safety Technologies, Inc., a Delaware corporation (the
“Maker”),
      with an office located at 1800 Century Park East, Suite 200, Los Angeles, CA
      90067, hereby promises to
      pay to
      the order of Charles J. Kalina III (the “Noteholder”), the principal sum of four
      hundred thousand
      dollars ($400,000.00) plus accrued but unpaid interest thereon in
      lawful
      money of the United States on January 31, 2008 (the “Maturity
      Date”).

    

    The
      following is a statement of the other terms and conditions to which this
      promissory note (the “Note”) is subject and to which the Noteholder by the
      acceptance of this Note agrees:

    

    This
      Note
      shall commence on the date hereof and shall continue until January 31, 2008,
      the
      Maturity Date, unless extended or sooner terminated by mutual agreement of
      the
      parties hereto.

    

    Maker
      promises to pay interest on the unpaid principal balance hereof at twelve
      percent (12%)
      per
      annum, due and payable on a quarterly basis commencing on February 3, 2007
      and
      continuing on the 3rd
      day of
      each quarter thereafter until the Maturity Date. Interest shall commence
      accruing on the issue date and shall
      be
      calculated on the basis of a 365-day year and actual days elapsed. In no event
      shall the interest charged hereunder
      exceed the maximum permitted under the laws of the State of
      California.

    

    At
      the
      option of Noteholder, and upon two (2) business days’ notice, all or any portion
      of the principal
      amount on this Note may be converted into shares of Maker’s Common Stock.
The
      number of shares of Common Stock to be issued upon such conversion shall be
      equal to the quotient obtained
      by dividing (i) the portion of the amount owing under this Note to be converted
      plus (if so elected by Noteholder)
      by (ii) $1.25 (the “Conversion Price”), rounded to the nearest whole shares, as
      adjusted for any stock dividends or splits as provided hereinbelow. Interest
      on
      this Note shall cease to accrue with respect to any portion of the Note that
      is
      converted into Common Stock on the date that such Common Stock is issued to
      Noteholder.

    

    If
      Maker,
      at any time while this Note is outstanding (i) pays a stock dividend on its
      Common Stock
      or
      otherwise makes a distribution on any class of capital stock that is payable
      in
      shares of Common Stock, (ii) subdivides outstanding shares of Common Stock
      into
      a larger number of shares, or (iii) combines outstanding shares
      of
      Common Stock into a smaller number of shares, then in each such case the
      Conversion Price shall be multiplied
      by a fraction of which the numerator shall be the number of shares of Common
      Stock 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 clause (i) of
      this
      paragraph shall become
      effective immediately after the record date for the determination of
      stockholders entitled to receive such dividend
      or distribution, and any adjustment pursuant to clause (ii) or (iii) of this
      paragraph shall become effective immediately after the effective date of such
      subdivision or combination.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    No
      fractional shares of Common Stock will be issued upon conversion of this Note.
      In lieu of any
      fractional shares to which Noteholder would otherwise be entitled, Maker shall
      pay Noteholder in cash the amount
      of
      the unconverted principal balance of this Note that would otherwise be converted
      into such
      fractional share. Upon conversion of this Note pursuant hereto, Noteholder
      shall
      surrender this Note, duly endorsed, at the principal office of Maker or any
      transfer agent of Maker. At its expense, Maker will, as soon as practicable
      thereafter, issue and deliver to Noteholder, at such principal office, a
      certificate or certificates for the number
      of
      shares to which Noteholder is entitled upon such conversion, together with
      any
      other securities and property to which Noteholder is entitled upon such
      conversion under the terms of this Note, including a check payable
      to Noteholder for such cash amounts payable as described herein. Upon conversion
      of this Note, Maker will
      be
      released from all of its obligations and liabilities under this Note with regard
      to that portion of the principal amount being converted.

    

    Notwithstanding
      anything to the contrary contained herein, the number of shares of Common
Stock
      that may be acquired by Noteholder upon any conversion of this Note (or
      otherwise in respect hereof) shall be
      limited to the extent necessary to insure that, following such exercise (or
      other issuance), the total number of shares of Common Stock then beneficially
      owned by Noteholder and its affiliates and any other persons whose beneficial
      ownership of Common Stock would be aggregated with the Noteholder’s for purposes
      of Section 13(d) of the Exchange Act does not exceed 9.999% of the total number
      of issued and outstanding shares of Common
      Stock (including for such purpose the shares of Common Stock issuable upon
      such
      conversion). For such
      purposes, beneficial ownership shall be determined in accordance with Section
      13(d) of the Exchange Act and
      the
      rules and regulations promulgated thereunder. The provisions of this paragraph
      may be waived by Noteholder,
      at the election of Noteholder, upon not less than 61 days’ prior notice to
      Maker, and the provisions of this paragraph shall continue to apply until such
      61st
      day (or
      such later date, as determined by Noteholder, as may
      be
      specified in such notice of waiver).

    

    Unless
      permitted by the applicable rules and regulations of the principal securities
      market on which
      the
      Common Stock is then listed or traded, in no event shall Maker issue upon
      conversion of or otherwise pursuant
      to this Note and upon exercise of or otherwise pursuant to the Warrant issued
      in
      connection with this Note
      more
      than the maximum number of shares of Common Stock that Maker can issue pursuant
      to any rule of the
      principal securities market on which the Common Stock is then traded (the
“Maximum Share Amount”), which
      the
      parties agree is, as of the date of this Note, 19.99% of the total shares of
      Common Stock outstanding. In
      the
      event that the sum of (x) the aggregate number of shares of Common Stock that
      remain issuable upon conversion of this Note and upon exercise of the Warrant
      plus (y)
      the
      aggregate number of shares of Common Stock that remain issuable upon conversion
      of this Note and exercise of the Warrant, represents at least one hundred
      percent (100%) of the Maximum Share Amount (the “Triggering Event”), Maker will
      use its best efforts to
      seek
      and obtain Stockholder Approval (or obtain such other relief as will allow
      conversions hereunder in excess
      of
      the Maximum Share Amount) as soon as practicable following the Triggering Event.
      As used herein, “Stockholder
      Approval” means approval by the shareholders of Maker to authorize the issuance
      of the full number of shares of Common Stock that would be issuable upon full
      conversion of this Note and upon full exercise of the Warrant but for the
      Maximum Share Amount.

     

    Notwithstanding
      any of the foregoing, Maker shall have the right, at any time, to prepay without
      penalty, in whole or in part, the unpaid principal and interest due on this
      Note
      as of the date of such prepayment. In the event that SurgiCount Medical, Inc.
      (“SM”), a wholly-owned subsidiary of Maker, is sold, acquired or any
other
      transaction in which there is a change of control of SM (i.e. third party
      acquiring greater than 50% in voting
      rights in one or a series of related transactions) , then Maker agrees to pay
      Noteholder the entire amount (unpaid
      principal and interest) due herein within five (5) days of such transaction
      closing; provided, however Noteholder shall have the option to convert the
      principal amount owed to it herein into shares of Common Stock pursuant to
      the
      terms and
      condition of herein.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    The
      entire unpaid principal balance and interest on this Note shall be immediately
      due and payable upon the occurrence of any of the following (each, an “Event of
      Default”); provided, that Maker has failed to cure the default as set forth
      herein:

    

    a. Filing
      of
      any petition, or commencement of any proceeding, under the Bankruptcy
      Act, as amended, or under any other insolvency act or law, state or federal,
      against Debtor,
      or appointment of any receiver or trustee, now or hereafter existing, and the
      continuance thereof for sixty (60) days undismissed, unbonded, or
      undischarged;

    

    b. The
      filing of a lien, the issuance of a levy or execution, or the seizure,
      attachment or garnishment, or the entry of judgment on or against Maker or
      any
      of Maker’s property which shall not be released,
      satisfied of record or bonded within twenty (20) days thereafter, except liens
      which exist as of the date hereof
      or
      liens to which the Noteholder shall consent;

    

    c. The
      Maker
      has failed to pay any installment of the principal and/or any accrued and
unpaid
      interest on the Maturity Date; provided, however, Maker shall have a grace
      period of twenty (20) days.

    

    Subject
      to Maker’s Shareholders’ and Board of Directors’ approval, in the event Maker
      files a registration statement pursuant to the Securities Act of 1933, as
      amended, the shares of Common Stock issuable
      on the conversion of this Note may at the option of the Noteholder, and subject
      to the approval of the
      managing underwriter if the registration statement is filed in connection with
      an underwritten public offering, be included for resale in such registration
      statement.

    

    All
      rights and remedies available to the Noteholder pursuant to the provisions
      of
      applicable law and
      otherwise are cumulative, not exclusive, and are enforceable alternatively,
      successively and/or concurrently after
      default by Maker pursuant to the provisions of this Note.

    

    The
      Maker
      waives demand, presentment, protest and notice of any kind and consents to
      the
extension
      of time of payments, the release, surrender or substitution of any and all
      security or guarantees for the obligations
      evidenced hereby or other indulgence with respect to this Note, all without
      notice.

    

    Noteholder
      acknowledges that Maker has received a notice that the American Stock Exchange
      intends
      to delist the Maker, and Maker has currently appealed the exchange’s
      determination.

    

    This
      Note
      may not be changed, modified or terminated orally, but only by an agreement
      in
      writing, signed by the party to be charged.

    

    The
      Noteholder may not assign either the right to receive payment under this Note,
      or any other right conferred upon the Noteholder under the terms hereof, to
      any
      other party without the consent of the Maker. Any transferee or transferees
      of
      this Note, by their acceptance hereof, agree to assume the obligations
      of the holder of this Note as set forth herein and shall be deemed to be the
      “Noteholder” for all purposes
      hereunder.

    

    This
      Note
      contains the entire understanding between the Maker and the Noteholder with
      respect
      to this Note and supersedes any prior written or oral agreement between them
      respecting the subject matter hereof.

    

    This
      Note
      shall be governed by and construed in accordance with the laws of the State
      of
California
      and shall be binding upon the successors and assigns of the Maker and inure
      to
      the benefit of the Noteholder,
      its successors, endorsees, and assigns.

    

    In
      the
      event this Note shall be in default, and placed with an attorney for collection,
      then the Maker
      agrees to pay all reasonable attorney fees and costs of collection of
      Noteholder.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    This
      Note
      shall be binding upon the successors, assigns, heirs, administrators and
      executors of the
      Maker
      and inure to the benefit of the Noteholder, its successors, endorsees, assigns,
      heirs, administrators and executors.

    

    If
      any
      term or provision of this Note shall to any extent be invalid or unenforceable,
      the remainder
      of this Note shall not be affected thereby, and each term and provision of
      the
      Note shall be valid and enforced
      to the fullest extent permitted by law.

    

    The
      parties hereto agree to make, execute and deliver or cause to be made, executed
      and delivered, to the requesting party such other instruments or documents,
      and
      to take such other actions as the requesting party may reasonably require to
      carry out the terms of this Note and the transactions contemplated
      hereby.

    

    This
      Note
      may be signed (including by facsimile) in any number of counterparts, each
      of
      which, shall be deemed to be an original and all of which together shall be
      deemed to be one and the same instrument.

    

    If
      any
      term or provision of this Note shall be held invalid, illegal or unenforceable,
      the validity of
      all
      other terms and provisions hereof shall in no way be affected
      thereby.

    

    As
      of the
      first date written above, Maker and Noteholder each acknowledges and agrees
      that
      the certain Convertible Promissory Note dated 7/12/06 (attached hereto as
      Exhibit A) is terminated and cancelled, and
      each
      of Maker and Noteholder has no further obligation pursuant to such Convertible
      Promissory Note.

    

    

    [Signatures
      on following page]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, Maker
      and
      Noteholder have each caused this Note to be executed
      by their respective duly authorized representatives as of the date set forth
      above.

    

     

    
      	 	
              PATIENT
                SAFETY TECHNOLOGIES, INC.

              

              

              By:                                                                         
                

              Name:
                Milton “Todd” Ault, III

              Title:
                Chief Executive Officer

            

    

    

    

    CONSENTED
      TO AND AGREED:

    

    

                                                                            

    Charles
      J. Kalina, III

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