Document:

exhibit_10-5.htm

EXHIBIT 10.5

 

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made as of January ___, 2009, by and between My Screen Mobile, Inc., a Delaware corporation (“Company”), and Maurizio Angelone, an individual (“Employee”).

 

RECITALS

 

A.           Company is engaged in the business of developing and commercializing, on a global basis, technology that provides direct incentive-based advertising to mobile telephone users (the “Business”), and
is seeking a Chief Executive Officer with experience in the global telecommunications industry.

 

B.           Employee has experience in the telecommunications business on a global basis.

 

C.           The parties are willing to enter into this Agreement with respect to Employee’s employment and services upon the terms and conditions hereinafter set forth.

 

AGREEMENT

 

In consideration of the foregoing recitals and the premises herein contained, the parties agree as follows:

 

I.

 

TERM

 

Subject to the provisions of Article V hereof, Company hereby employs Employee and Employee hereby accepts employment with Company for a period of three (3) years (the “Initial Term”). The Initial Term shall commence on the date on which Employee’s employment
with his current employer terminates, which date shall be confirmed in writing by written letter from Employee to the Company (the “Commencement Date”); provided, however, if the Initial Term has not commenced within 100 days from the “Approval Date” (as hereinafter defined), then this Agreement shall automatically terminate and neither party shall have any liability to the other party hereunder, except Employee shall immediately
return any portion of the Signing Bonus paid by Company and reimburse Company for all expenses paid to, or on behalf of, Employee, under Article III, Section 8 of this Agreement.  Employee shall use his good faith efforts to relocate to Miami as soon as possible after the Commencement Date, however, shall complete such relocation no later than 90 days after the Commencement Date.  For purposes of this Agreement, the term “Approval Date” shall mean the date the Company confirms
in writing to Employee (and provides reasonable documentation evidencing such approval) that this Agreement, including, without limitation, the grant and issuance of all of the equity incentive compensation set forth below, has been authorized and approved in accordance with all requisite corporate action, including the requisite approval from a majority of the stockholders of the Company, all in accordance with applicable law and the articles of incorporation, bylaws and all other documents governing the Company,
except for the formal establishment of the Plans and required filings with the SEC of Information Statements, Proxy Statements or other such filings required in connection with the Plans or the equity grants.

 

 

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II.

 

DUTIES

 

1.           General Duties. Unless otherwise directed by the Board of Directors of Company (the “Board of Directors”), and subject to its policies
and directives, Employee shall serve as the Chief Executive Officer of Company, manage the day to day global operations of Company and perform all duties customarily performed by the chief executive officer of a US publicly traded company of similar size, market capitalization and in a similar industry as the Company. Employee shall serve at the direction of the Board of Directors of Company (the “Board of Directors”), subject to its policies
and directives (provided that the Company hereby represents and warrants that no written policies or directives exist as of the date hereof, it being the intention of the parties that Employee, as a member of the Board of Directors and together with the other members of the Board of Directors, will help shape and set forth the strategies, policies and directives for the Company on a going-forward basis). Employee shall work from the Company’s world headquarters, which Company shall establish in Miami, Florida,
to where Employee shall relocate.

 

2.           Devotion of Time to Company’s Business. Employee agrees during the Term, to devote his best efforts, and all of his business time exclusively, to his employment with Company, and to perform such
duties as shall be reasonably requested by the Board of Directors of Company. Employee shall not, during Employee’s employment, unless otherwise agreed to in advance and in writing by Company, seek or accept other employment, become self-employed in any other capacity, or engage in any activities that are detrimental to the business of Company.

 

III.

 

COMPENSATION AND BENEFITS

 

As compensation for Employee’s services hereunder, the covenant-not-to-compete contained in Article VI of this Agreement (the “Covenant-Not-to-Compete”), and the other covenants and promises made by Employee hereunder, Company agrees to the following:

 

1.           Base Salary. During the Term, Employee shall receive an annual base salary of $350,000.00. The base salary shall be payable in U.S. Dollars at the times and in the installments consistent with Company’s
customary payroll practices. Company shall withhold federal and state taxes in accordance with applicable law.

 

2.           Signing Bonus. Company shall pay Employee a signing bonus of $300,000 (the “Signing Bonus”), which Signing Bonus shall be payable in
three equal installments of $100,000 each. The first installment of the Signing Bonus shall be paid within three (3) calendar days after both parties have executed this Agreement (the “Effective Date”); the second installment shall be paid within three (3) calendar days after the Commencement Date; and the third installment shall be paid within ninety (90) calendar days after the Commencement Date.  If Employee terminates this Agreement,
without cause, or if Company terminates this Agreement for “Cause” (as hereinafter defined), prior to the date any installment of the Signing Bonus is due under this Section, Company shall not be obligated to pay the remaining installments to Employee. In addition, if within one (1) year after the Commencement Date, Employee terminates this Agreement, without cause, or Company terminates this Agreement for Cause, Employee agrees to, within thirty (30) days after such termination, repay Company a pro
rata portion of the Signing Bonus calculated by multiplying: (A) the portion of the Signing Bonus actually paid to Employee; times (B) a fraction, the numerator of which is (i) 365 minus the number of days between the Commencement Date and the date of Employee’s termination, and the denominator of which is (ii) 365. (By way of example, if Employee has received the entire Signing Bonus and Employee is terminated by the Company
for Cause after having been employed by the Company for 250 days from the Commencement Date, then the portion of the Signing Bonus to be paid back by Employee would be $96,000, calculated by reference to the foregoing formula as: $300,000 x ((365-250) / 365) = $96,000).

 

 

 

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3.           Cash Incentive Bonus. During each twelve (12) month period of the Term, Employee shall be eligible to receive a cash bonus of up to $350,000 based on the achievement of milestones to be mutually agreed
upon by the Board of Directors and Employee, in good faith, within thirty (30) days after the commencement of each such twelve month period. Such milestones shall generally be based on some objective performance standards such as revenues or profitability of the Company that are reasonably achievable given the Company’s position in the market at the time the milestones are discussed and agreed upon.

 

4.           Equity Incentive Compensation. Company shall provide Employee with the equity incentives set forth below, subject to one or more employee equity compensation
plans (“Plans”) to be established by the Company within thirty (30) days from the Commencement Date, which Plans shall contain customary terms and provisions as contained in Plans for similarly situated US publicly traded companies.  Within thirty (30) days after the Commencement Date, (a) such Plans shall be established, (b) the equity incentives required hereunder shall be granted to Employee, and (c) the Company shall make any filing
with the Securities & Exchange Commission or other governmental authority, including, but not limited to, a proxy statement or information statement, required in connection with any such Plans.  In the event such Plans are not established, such equity incentives are not granted to Employee, or said filings are not made, within said thirty (30) day period, then Employee may provide written notice to Company of its failure, in which case, Company shall have 30 days from its receipt of such written
notice, to cure such failure.  If such failure is not cured within such 30 day period, Employee may resign from his position with the Company and, notwithstanding anything contained in this Agreement to the contrary, the Company shall be responsible to immediately pay to Employee, as agreed upon liquidated damages, the Employee’s annual base salary for the entire Initial Term, plus the entire Signing Bonus (such a resignation shall not be deemed a termination by Employee without cause and the
provisions for Employee to return a pro rata portion of the Signing Bonus under Section 2 of this Article III shall not be applicable.

 

(a)            Stock Grant. Company shall issue Employee 3,000,000 shares of Company’s common stock, par value $0.001 per share (the “Common
Stock”)(the grant of all such shares of Common Stock hereinafter collectively referred to as the “Stock Grant”) upon the Commencement Date, (i) 500,000 of which shall vest six (6) months after the Commencement Date if Employee is still employed by Company as of such date; (ii) 500,000 of which shall vest on the last day of the twelfth month following the Commencement Date, if Employee is still employed by Company as of such date;
(iii) 500,000 of which shall vest on the last day of the eighteenth month following the Commencement Date if Employee is still employed by Company as of such date; (iv) 500,000 of which shall vest on the last day of the twenty-fourth month following the Commencement Date, if Employee is still employed by Company as of such date; (v) 500,000 of which shall vest on the last day of the thirtieth month following the Commencement Date, if Employee is still employed by Company as of such date; and (vi) 500,000 of which
shall vest on the last day of the thirty-sixth month following the Commencement Date, if Employee is still employed by Company as of such date.  Notwithstanding the foregoing, if Company terminates Employee without Cause during any part of the Term, the entire Stock Grant shall automatically vest. For purposes of clarity, all unvested shares shall be cancelled and/or returned to Company, if Employee’s employment is terminated for Cause before the date such shares vest. Upon the Commencement Date, Company
shall issue six (6) share certificates in the name of Employee, each certificate representing 500,000 shares of the Company’s Common Stock.  The Company shall deliver such certificates to Company’s legal counsel, who, subject to the terms and conditions set forth herein, shall deliver one (1) certificate to Employee on each of the vesting dates set forth above. If the Company terminates Employee at any time during the Term without Cause, then legal counsel shall, and is hereby directed to,
immediately deliver to Employee any of such stock certificates not previously delivered to Employee.  Upon the termination of this Agreement for any other reason, Company’s legal counsel shall cancel any such stock certificates representing shares that have not vested as of such termination date  (provided that a termination as a result of death or Disability shall be governed by the terms of Article V, Section 4(c) below).

 

 

 

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(b)            Stock Option Grant. Upon the Commencement Date, Company shall grant Employee options to purchase an aggregate of 7,000,000 shares of Company’s
Common Stock, having an exercise price of $1.00 per share (the “Option Shares”). The Option Shares shall vest as set forth below, and be granted pursuant to the terms of an option agreement which shall comply and conform with the applicable Plans, which shall have customary terms and provisions as contained in Plans for similarly situated US publicly traded companies.  Upon a termination of Employee’s employment hereunder, for
any reason, (provided that a termination as a result of death or Disability shall be governed by the terms of Article V, Section 4(c) below), all Option Shares vested as of the date of termination shall remain vested and exercisable by Employee for the time periods and in accordance with the terms of the Plans, and all unvested Option Shares as of such date of termination shall terminate.  The Option Shares shall vest as follows:

 

(i)            750,000 of the Option Shares shall vest six (6) months after the Commencement Date if Employee is still employed by Company as of such date.

 

(ii)            750,000 of the Option Shares shall vest on the last day of the twelfth month following the Commencement Date, if Employee is still employed by Company as of such date.

 

(iii)            750,000 of the Option Shares shall vest on the last day of the twenty-fourth month following the Commencement Date, if Employee is still employed by Company as of such date.

 

(iv)            750,000 of the Option Shares shall vest on the last day of the thirty-sixth month following the Commencement Date, if Employee is still employed by Company as of such date.

 

(v)            4,000,000 of the Option Shares shall vest upon the achievement of milestones as follows:

 

(A)           1,000,000 Option Shares shall vest upon the Company: (i) launching its direct, incentive-based marketing and advertising platform for mobile devices in any country around the world, such that mobile device users
in such country begin receiving (or are eligible to receive upon signing up for the appropriate service) advertising to their mobile devices through the Company’s advertising platform; and (ii) generating any revenue from such launch in such country (whether from direct fees, licensing fees, sublicense fees or otherwise, provided, however, that license fees or sublicense fees received from a licensing arrangement in existence prior to the Commencement Date shall not be considered revenue for purposes of
meeting this milestone).

 

 

 

 

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           (B)           500,000 Option Shares shall vest upon the Company: (i) launching its direct, incentive-based marketing and advertising platform for mobile devices
in any second country around the world, such that mobile device users in such country begin receiving (or are eligible to receive upon signing up for the appropriate service) advertising to their mobile devices through the Company’s advertising platform; and (ii) generating any “Advertising Revenue” (as hereinafter defined) from such launch in such second country.  For purposes of this Agreement, “Advertising
Revenue” shall mean My Screen’s portion of revenue generated from the delivery of advertising or marketing to mobile devices through the Company’s mobile advertising platform, but excluding revenue generated through licensing or sublicensing fees.

 

(C)           500,000 Option Shares shall vest upon the receipt by the Company of an aggregate of $1,000,000 of Advertising Revenue.

 

(D)           500,000 Option Shares shall vest upon the Company: (i) launching its direct, incentive-based marketing and advertising platform for mobile devices in partnership with any Orascom-owned mobile operator around the
world; and (ii) generating any Advertising Revenue from such launch in such country;

 

(E)           500,000 Option Shares shall vest at the end of the first fiscal quarter during which the Company has positive Earnings Before Interest, Taxes Depreciation and Amortization; and

 

(F)           1,000,000 Option Shares shall vest at the end of the first fiscal year during which the Company has positive net annual income based on GAAP and on an audited basis.

 

                       (c)           Adjustments. The following adjustments shall apply to any portion
of the Stock Grant that is unvested at the time of the event described below and shall apply to the Option Shares:

 

(i)           Upon Recapitalization. If the outstanding shares of Common Stock of the Company are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities
of the Company by reason of any recapitalization, reclassification, reorganization, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in capital stock of the Company, or other increase or decrease in such shares effected without receipt of consideration by the Company, an appropriate and proportionate adjustment shall be made (A) in the number and kind of shares of Common Stock issuable to Employee as to the unvested portion of the Stock Grant;
(B) in the number and kind of shares of Common Stock issuable to Employee upon exercise of outstanding Option Shares granted to Employee hereunder; and (C) in the Option Price per share of outstanding Option Shares granted to Employee hereunder.

 

(ii)           Reorganization. In connection with a merger, consolidation, reorganization or other business combination of the Company with one or more other entities in which the Company is not the surviving entity,
each then unvested Stock Grant and each then outstanding Option Share shall, upon exercise thereafter, entitle the holder thereof to such number of shares of Common Stock or other securities or property to which a holder of shares of Common Stock would have been entitled to upon such merger, consolidation, reorganization or other business combination.

 

 

 

 

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(iii)           Dissolution or Liquidation. Upon the dissolution or liquidation of the Company, Employee shall have the right, immediately prior to the occurrence of such dissolution or liquidation to exercise all
Option Shares, whether or not such Option Shares were otherwise exercisable at the time such liquidation or dissolution occurs and without regard to any vesting or other limitation on exercise imposed under this Agreement. The Company shall give to Employee reasonable prior written notice before the record date of any such dissolution or liquidation in order to give Employee a reasonable amount of time to exercise such Option Shares, should Employee so elect.

 

(iv)           Fractional Shares. No fractional shares of Common Stock or units of other securities shall be issued pursuant to any of the adjustments set forth herein, and any fractions resulting from any such
adjustment shall be eliminated in each case by rounding upward to the nearest whole share or unit.  Any adjustment made pursuant to this Section 4(c) shall become effective retroactive to the record date, if any, for such event.

 

5.           Change of Control.

 

(a)            Subject to Article V below, upon a “Change of Control” (as defined below):

 

 (i)            Except as set forth below, all unvested Stock Grants and Option Shares granted pursuant to this Article III, Section 4, shall automatically vest and be issued (in the case of the Stock Grants) and become exercisable (in the case of the Option Shares).  The
Company shall give to Employee reasonable prior written notice before the record date of any such Change of Control event in order to give Employee a reasonable amount of time to exercise such Option Shares; and

 

(ii)            Employee shall receive the following additional compensation (payable as set forth below) (the “Change of Control Bonus”) if such Change of Control results in net proceeds to Company or its
stockholders, after payments of all debts, liabilities and other outstanding obligations of the Company (as shown in the Company’s financial statements as of the date of the Change of Control event, which financial statements shall be prepared in accordance with GAAP, consistently applied) (“Net Proceeds”), of more than $250,000,000:

 

(A)            One Percent (1%) of any Net Proceeds between $250,000,000 and $500,000,000, received by Company or its stockholders;

 

(B)            One and One-Half  Percent (11⁄2%) of any Net Proceeds between $500,000,001 and $750,000,000, received by Company or its stockholders;

 

(C)            Two Percent (2%) of any Net Proceeds between $750,000,000 and $1,000,000,000, received by Company or its stockholders;

 

(D)            Three Percent (3%) of any Net Proceeds between $1,000,000,001 and $1,500,000,000, received by Company or its stockholders; and

 

 

 

 

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(E)            Four Percent (4%) of any Net Proceeds over $1,500,000,001, received by Company or its stockholders.

 

(b)            For purposes of this Agreement, “Change of Control” means:

 

(i)           any transaction in which any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), becomes the Beneficial Owner (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then-outstanding securities; or

 

(ii)           any merger, consolidation or other business combination or reorganization in which the stockholders of the Company immediately prior to such consolidation, merger or other business combination or reorganization own less than 50% of the surviving or resulting entity’s
voting power immediately after the transaction.

 

(iii)           the sale, transfer, or other disposition of all or substantially all of Company’s assets.

 

Notwithstanding the foregoing, for purposes of Section 5(a)(i), any securities acquired by a Current Owner (as defined below), shall not be included within the calculation of the number of securities of which such Current Owner is or becomes the Beneficial Owner, directly or indirectly under Section 5(b)(i), if such securities are
acquired by such Current Owner from persons that are stockholders of the Company as of the date hereof, or the assignees of such persons, unless such Current Owner becomes the Beneficial Owner of securities of the Company representing 70% or more of the combined voting power of the Company’s then-outstanding securities.  In order to be excluded in the calculation of the number of securities of which such Current Owner is or becomes the Beneficial Owner, directly or indirectly under Section 5(b)(i),
a Current Owner must use its own funds entirely to acquire securities from other stockholders of the Company, it being agreed and acknowledged that if a Current Owner uses funds from a third party or in concert with other parties (even if a portion of the funds are from the Current Owner), to acquire securities from other stockholders of the Company, then such securities shall be included within such calculation.  A “Current Owner”
shall mean any person that, as of the date hereof, is the Beneficial Owner, directly or indirectly, of more than ten percent (10%) of the Company’s combined voting power, or such person’s assignee(s), excluding, Orascom Telecom Holdings, S.A.E.

 

A transaction shall not constitute a Change of Control if its sole purpose is to change the state of Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held Company’s securities immediately before such transaction.  In addition,
the provisions of this Section 5 shall only apply to the first Change of Control, and shall not apply to any subsequent Change of Control.

 

6.           Benefits Plans. Company shall provide Employee and his immediate family with medical benefits commensurate with the medical benefits provided to Employee by his current employer, Nokia.

 

7.           Other Benefit Plans. Employee will be eligible to participate in such disability insurance plans, life insurance plans, retirement plans and other employee welfare and benefit plans or programs which
may in the future be made available to Company’s senior-level U.S. executives.

 

 

 

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8.           Expenses. Employee shall be entitled to receive reimbursement, effective from the date of signing this Agreement, for all reasonable out-of-pocket travel
and other expenses (excluding ordinary commuting expenses) incurred by Employee in performing Employee’s services hereunder, provided that such expenditure is of a nature qualifying it as a proper business expenditure of Company; and Employee furnishes to Company adequate documentary evidence for the substantiation of such expenditures and Employee otherwise complies with Company policies with respect to expense reimbursement. In addition, Company shall pay all reasonable expenses incurred by Employee in
connection with the relocation of Employee and Employee’s immediately family from Madrid, Spain to Miami, Florida, which expenses shall be mutually agreed upon in advance, but which expenses shall specifically include any expenses incurred by Employee in terminating any lease for his primary residence that Employee currently has in Madrid and any expenses Employee incurs in connection with Employee’s children leaving their current school in Madrid prior to the end of the current school year. In addition,
the Company shall post a bond for the benefit of Employee in the amount of $25,000.00 for the purpose of paying Employee’s moving expenses to relocate from Florida to any other part of the world, payable to Employee if and only to the extent Employee is terminated by the Company without Cause, or, within twelve (12) months from the Commencement Date, the Company ceases its business operations or otherwise changes its core business so substantially such that the skills and expertise of Employee are no longer
required in connection with such changed business (each of such events hereinafter referred to as a “Trigger Event”). In the event a Trigger Event occurs and Employee does not relocate from Florida within one hundred eighty (180) days from the date of such Trigger Event, then the bond shall terminate.

 

9.           Automobile, telephone and housing allowance. Company shall reimburse Employee or otherwise provide Employee an automobile allowance in the amount of One
Thousand Five Hundred and No/100 Dollars ($1,500.00) per month and a reimbursement for all reasonable insurance, fuel, maintenance, cellular and mobile telephones, repairs and upkeep therefor.  Company shall provide Employee with a housing allowance of $3,500 per month for the first 12 months after Employee’s relocation to Miami, Florida, and at the end of such 12 month period the Company’s Board shall review the housing allowance and the amount thereof.

 

10.           Directors’ and Officers’ Insurance. Company shall use its best efforts to secure, on or before the Commencement Date, a directors’ and
officers’ insurance policy (the “Policy”) in sufficient amounts to insure against the personal liability of the Employee as an officer and/or director of the Company for certain losses resulting from claims brought against directors and officers because of their alleged wrongful acts.  Company’s failure to secure the Policy prior to the Commencement Date shall not constitute a breach of this Agreement, as long as Company
continues to diligently proceed with securing such Policy.

 

11.           Vacation. The Employee shall be entitled to a six (6) week vacation each calendar year during the Term.

 

12.           Board Seat. It is the intent of the parties that Employee shall be a member of the Board of Directors of the Company during the entire Term of his employment
with Company. In this regard, within thirty (30) days following the Commencement Date, the Company shall use its best efforts to cause a majority of its stockholders to enter into a voting agreement or other agreement pursuant to which such majority stockholders agree and consent to vote their respective shares for the purposes of electing and appointing Employee to the Board of Directors for so long as Employee remains employed by the Company. In the event, the foregoing agreement by the majority stockholders
is not fully executed and binding within thirty (30) days from the Commencement Date, then Employee may resign from his position with the Company, whereupon the parties shall be released of all liability or obligation, each to the other, under this Agreement, except that, notwithstanding anything contained in this Agreement to the contrary, the Company shall be responsible to immediately pay to Employee, as agreed upon liquidated
damages, the Employee’s annual base salary for the entire Initial Term, plus the entire Signing Bonus (such a resignation shall not be deemed a termination by Employee without cause and the provisions for Employee to return a pro rata portion of the Signing Bonus under Section 2 of this Article III shall not be applicable).

 

 

 

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IV.

 

REPRESENTATIONS AND WARRANTIES

 

1.           Representations and Warranties of Company. Company hereby represents and warrants to Employee, that Company’s authorized capital stock currently consists of 200,000,000 shares of Common Stock and
3,000,000 shares of preferred stock. As of December 15, 2008, there were approximately 133,695,637 shares of Common Stock issued and outstanding, and no shares of preferred stock issued and outstanding. As of December 15, 2008, there were warrants outstanding to purchase approximately 24,890,697 shares of Common Stock, 20,000,000 of which have an exercise price of $2.00 per share, and 4,890,697 of which are exercisable for $1.00 per share.  As of December 15, 2008, there were options outstanding to
purchase 6,250,000 shares of Common Stock, all of which have an exercise price of $1.00 per share.  The Company further represents and warrants to Employee that within five (5) days after the date of this Agreement,  this Agreement, including, without limitation, the grant and issuance of all of the equity incentive compensation set forth above, shall have been authorized and approved in accordance with all requisite corporate action, including the requisite approval from a majority of the
stockholders of the Company, all in accordance with applicable law and the articles of incorporation, bylaws and all other documents governing the Company and its right and authority to undertake any actions; except for the formal establishment of the Plans and required filings with the SEC of Information Statements, Proxy Statements or other such filings required in connection with the Plans or the equity grants. The Company represents and warrants to Employee that when shares of Common Stock are issued to Employee
pursuant to the Stock Grants Grant or exercise of the Option Shares, such shares shall be validly issued, fully paid (subject to payment for the Options Shares) and non-assessable shares of Company Common Stock, and Employee will have good and valid title to such Company Common Stock, free of all liens and encumbrances. Company covenants and agrees with Employee that it shall at all times during the Term, reserve for issuance the shares of Common Stock issuable as part of the Stock Grant and the exercise of the
Option Shares.

 

2.           Representations and Warranties of Employee. Employee hereby represents and warrants to Company, and agrees, that Employee has a visa or such other documentation required for Employee to legally work
in the United States. Employee also represents and warrants that Employee shall not disclose to Company or otherwise use in the course of performing his services for Company, any trade secrets or other confidential information obtained from any of Employee’s prior employers or other third parties, which Employee is restricted from disclosing or using. To the best of Employee’s knowledge, he is not presently involved in mobile advertising at Nokia, his present employer.  Employee further
represents and warrants to Company that Employee was subject to a non-compete covenant with his prior employer, Nokia, a true and correct copy of which has been previously provided to the Company by Employee.  If Employee’s prior employer, Nokia, files any action or claim or makes any threats against Employee based on Employee’s alleged violation of any non-compete covenant, Company agrees to pay all reasonable legal fees Employee incurs during the Term defending any such suit, claim or
threat, including, without limitation, all attorneys fees, paralegals’ fees and court costs and expenses through all negotiations, trials and appeals.

 

 

 

 

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V.

 

TERMINATION

 

Except as otherwise set forth in this Article V, upon termination of Employee’s employment hereunder, Employee shall not be entitled to any severance payments or severance benefits from Company or any payments from Company on account of any claim for wrongful termination, including, but not limited to, claims under any federal,
state or local human and civil rights or labor laws, except for any benefits which may be due to Employee in the normal course under any employee benefit plan or program of Company which provides for benefits after termination of employment.   Employee’s right to receive any severance payments or benefits under this Agreement upon termination of employment will cease if Employee breaches any provision of Articles VI or VII of this Agreement.

 

1.           Termination By Company – For Cause. The Company shall have the right to terminate the employment of Employee for “Cause” immediately upon written notice to Employee. For purposes of
this Agreement, “Cause” shall mean the occurrence of any of the following:

 

(a)           Employee’s failure to perform his material duties under this Agreement, which failure is not remedied or corrected within thirty (30) days following written notice from the Company, which written notice shall
specify the material duties the Company believes Employee has failed to perform and the actions deemed necessary by the Company for Employee to cure such failure;

 

(b)           Conduct on the part of Employee which constitutes a breach of any statutory or common law duty of loyalty to Company;

 

(c)           Employee’s commission of any illegal act which materially and adversely affects the business of Company or any of its affiliates or which involves acts of theft, fraud, misappropriation of funds, embezzlement,
moral turpitude or similar conduct;

 

(d)           Any violation by Employee of the terms of Articles VI or VII of this Agreement; or

 

(e)            Employee’s failure to relocate to Miami within 90 days after the Commencement Date, unless otherwise agreed to in writing by My Screen.

 

2.           By Company or Employee Without Cause. Either party may terminate this Agreement and Employee’s employment hereunder without cause, upon thirty (30) days prior written notice to the other party.

 

3.           Upon Death or Disability. Employee’s employment hereunder shall terminate upon Employee’s death or Disability (as hereinafter defined). For
purposes of this Agreement, Disability shall mean the Employee’s inability or failure, as a result of an incapacitating physical or mental condition, to perform Employee’s duties as required herein for a period of at least ninety (90) consecutive days. If there is any dispute as to whether Employee suffered a Disability, Employee shall submit to examination by a physician designated by Company and reasonably acceptable to Employee (or his spouse or other legal guardian).

 

 

 

 

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4.           Effect of Termination.

 

(a)           Termination by Company.  For Cause or by Employee without cause. If Employee’s employment hereunder is terminated by the Company for Cause,
or by Employee without cause, Employee shall not be entitled to any severance payments or severance benefits from Company, except for any benefits which may be due to Employee in the normal course under any employee benefit plan or program of Company which provides for benefits after termination of employment.

 

(b)           Termination Without Cause. If Company terminates this Agreement and Employee’s employment hereunder without Cause, then Company shall continue to
pay to Employee his base salary and provide all benefits under this Agreement (or in lieu of such benefits, pay Employee an equivalent dollar amount) for the greater of: (i) the remaining Term under this Agreement, or (ii) twelve (12) months following Employee’s last day of employment.  Employee’s right to receive any severance payments or benefits under this Agreement upon termination of employment will cease if Employee breaches any provision of Articles VI or VII of this Agreement.

 

(c)           Death or Disability. In the event Employee’s employment is terminated as a result of Employee’s death or Disability during the Term, Company
shall pay to Employee’s estate or Employee, as applicable, an amount equal to his then current annual base salary, which amount may be paid, at the Company's option, in a lump sum or in equal installments in accordance with the Company’s then standard payroll practices. In addition, Employee or Employee’s immediate family shall be entitled to receive the same medical/health care coverage benefits, at Company’s sole expense, received immediately prior to termination of this Agreement for
a period of twelve (12) months following the termination of Employee’s employment as a result of his death or Disability. In the event the Employee’s death or Disability occurs prior to a date that is twenty-four (24) months from the Commencement Date, then any unvested portion of the Stock Grant or the Option Shares shall terminate. In the event the Employee’s death or Disability occurs on a date that is twenty-four (24) months from the Commencement Date or any time thereafter, then any unvested
portion of the Stock Grant or the Option Shares shall immediately vest.  In addition, Employee, his estate or his surviving heirs, as applicable, shall be entitled to receive any other unpaid amounts (including, without limitation, vested equity incentives) earned by Employee through the date of termination of his employment as a result of his death or Disability.

 

For purposes of clarity, upon termination of this Agreement, Company shall be obligated to pay Employee all compensation and other amounts due under this Agreement prior to the date of such termination, relocation expenses pursuant to Article III, Section 8, if applicable, all compensation and other benefits to which Company is obligated
to pay Employee under this Article V, Section 4, and any other compensation which is specified in this Agreement to be due upon or in connection with a termination, and Company shall have no obligation to pay any other compensation to Employee.

 

VI.

 

COVENANT NOT-TO-COMPETE

 

For good and valuable consideration as set forth in Article III of this Agreement, Employee agrees to the following:

 

1.           General Covenant. During the “Restricted Period” (as defined below), Employee agrees that he shall not, anywhere within the world (the “Territory”),
engage or participate in the ownership, management, operation or control of, or be connected as an officer, employee, partner, director, agent, security holder, consultant or otherwise with, or aid or assist any other person or entity, in the conduct or operation of, any business involving direct advertising or marketing to mobile telephones, smart telephones or other handheld devices. For purposes of this Agreement, the term
“Restricted Period” shall mean the period commencing on the date of this Agreement and ending twenty-four (24) months after the termination of Employee’s employment under this Agreement; provided, however, if the Employee is terminated by Company without Cause, then the Restricted Period shall end eighteen (18) months after the termination of Employee’s employment under this Agreement.  This Section 1 shall not apply if
the Company does not pay any amounts to which Employee is due hereunder upon termination.

 

 

 

 

11

 

 

 

2.           Interpretation. The covenants contained in this Covenant-Not-to-Compete shall be construed to be a series of separate covenants, one for each geographical
location specified. Except for geographical coverage, each such separate covenant shall be deemed identical to the terms contained herein. If a court of competent jurisdiction deems any term, provision or geographical location of any covenant or provision contained this Covenant-Not-to-Compete, or in this Agreement to be invalid, illegal or unenforceable for any reason, the court may reduce or eliminate such term, provision or geographical location to conform to applicable law so as to be valid and enforceable,
or, if it cannot be so reduced or eliminated without materially altering the intention of the parties, the invalidity or unenforceability of such term or provision shall in no way affect (to the maximum extent permissible by law) the validity or enforceability of any other term, provision or geographical location of this Agreement, or the validity or enforceability of the remaining separate covenants.

 

3.           Limitation. Nothing in this Article shall prevent Employee from holding or acquiring common stock or other securities in any company which is publicly traded on any internationally recognized stock exchange
or on the National Market System of The NASDAQ Stock Market, provided that such holdings are less than five percent (5%) of the outstanding capital stock of such publicly-traded company.

 

4.           Agreement Not to Solicit. To ensure the protection of the trade secrets of Company and its “Affiliates” (as defined below) and to preserve the goodwill of Company and its Affiliates for the
benefit of Company and its shareholders, Employee agrees to not, and will cause each of his Affiliates to not, at any time during his employment with Company and for a period of twenty-four (24) months after the termination of his employment with Company; provided, however, if the Employee is terminated without Cause, then such period shall be reduced to eighteen (18) months after the termination of Employee’s employment under this Agreement:

 

(a)            Attempt in any manner to persuade any customer or partner of Company or any of Company’s Affiliates, or any other third party doing business with Company or any of its Affiliates, to cease to do business with, or to reduce the amount of business which
such customer, partner, or other third party has customarily done or contemplates doing, with Company or its Affiliates; or

 

(b)            Solicit for employment or consulting services or employ or engage any person who is an employee or consultant of Company or any of Company’s Affiliates.

 

For purposes of this Agreement, “Affiliate(s)” means any corporation, company, partnership, joint venture, firm and/or other entity which controls, is controlled by or is under common control with the person with respect to which the term “Affiliate”
is used. For purposes of this Agreement, “person” means an individual, corporation, partnership, limited liability company, trust or unincorporated organization, or a government or any agency or political subdivision thereof.

 

 

 

12

 

 

5.           Consideration; Reasonable Scope. Employee acknowledges and agrees that this Covenant Not-to-Compete and the compensation provided hereunder constitute good, valid and binding consideration for Employee’s
obligations and covenants contained in this Covenant Not-to-Compete. Employee acknowledges and agrees that the agreements and covenants of Employee contained in this Covenant Not-to-Compete are reasonable as to scope and time and necessary to protect the legitimate interests of Company and its Affiliates, and that any violation of such provisions would result in irreparable harm to Company. Accordingly, Employee consents and agrees that in the event of any violation of such provisions by Employee, Company shall
be entitled to, in addition to such other rights or remedies as Company may have at law, injunctive and other equitable relief. Furthermore, none of Company’s remedies at law or in equity shall be exclusive of any other remedy available to Company.

 

VII.

 

OTHER RESTRICTIVE COVENANTS

 

1.           Confidential and Proprietary Information. As an employee of Company, Employee shall have access to certain “Confidential and Proprietary Information” (as defined below) concerning Company
and its Affiliates. Employee agrees that he will not, either directly or indirectly, disclose to any person or use any of the Confidential and Proprietary Information in any way during the Term (except as required in the course of the performance of his duties to Company) or after the expiration of the Term.

 

For purposes of this Agreement, “Confidential and Proprietary Information” means any of the following information relating to the business of Company that is not generally known to competitors, suppliers and customers of Company: (i) any business or technical information,
design, process, procedure, formula, improvement, or any portion or phase thereof, that is owned by or has, at the time of determination, been used by Company; (ii) any information related to the development of products and production processes; (iii) any information concerning proposed new processes; (iv) any information concerning customer lists and other customer information, vendor lists and information, price data, cost data, profit plans, capital plans and proposed or existing marketing techniques or plans;
and (v) any other information which would constitute a trade secret.

 

The term “Confidential and Proprietary Information” shall not include any information that: (i) was in Employee’s possession prior to the Effective Date and without restriction as to confidentiality; (ii) is generally available to the public or becomes generally
available to the public through no breach of agreement or other wrongful act by Employee; (iii) Employee receives from a third party without restriction on disclosure and without breach of agreement by Employee; or (iv) is independently developed by Employee without regard to the Confidential and Proprietary Information. In addition, Employee may disclose Confidential and Proprietary Information without in any manner violating this Agreement as required to comply with binding orders of governmental entities or
authorities.

 

2.           Inventions and Improvements. Employee agrees that he will assign to Company, without further consideration, the exclusive rights and title to all inventions, discoveries, ideas, improvements, and other
intellectual property made or acquired by Employee during the Term, whether alone or jointly with others. Employee further agrees to execute any and all documents that are reasonably required in order to transfer or assign such property rights to Company.

 

 

 

13

 

VIII.

 

MISCELLANEOUS

 

1.           Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is declared by a court of competent jurisdiction to be illegal or invalid, such illegal or
invalid term or provision shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable.

 

2.           Notice. Any notice or communication required to be given hereunder may be delivered by hand, deposited with an overnight courier, sent by confirmed facsimile, or mailed by registered or certified mail,
if to Company, to its Board of Directors and Chief Financial Officer, at the Company’s corporate headquarters, and if to Employee, to his office, or to such other address or fax number as Employee shall provide in writing to the Chief Financial Officer and Board of Directors of the Company.  Notice shall be deemed received on the date sent if sent by facsimile or personal delivery; three days after the date sent if sent by registered or certified mail; and one day after the day it is sent if sent
by overnight courier.

 

3.           Entire Agreement; Modification. This Agreement contains the entire and complete understanding between the parties concerning its subject matter and all representations, agreements, arrangements and understandings
between or among the parties, whether oral or written, have been fully merged herein and are superseded thereby.

 

           4.           Equitable Relief. Employee acknowledges and agrees that his services are of a special, unique and extraordinary value to Company and its
Affiliates and that damages alone may be an inadequate remedy for any breach of this Agreement. Accordingly, in the event of the breach by Employee of any of the provisions of this Agreement, Company may, in addition and supplementary to other rights and remedies existing in its favor, apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions of this Agreement.

 

5.           Representation by Counsel. Employee acknowledges that he has been represented by independent legal counsel in connection with this Agreement and has consulted
with such legal counsel.

 

6.           Counterparts. This Agreement may be executed in counterparts, all of which taken together will constitute one instrument.

 

7.           Waiver. Either party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that party
thereafter from enforcing each and every other provision of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party’s right to assert all other legal remedies available to it under the circumstances.

 

8.           Dispute Resolution; Attorneys’ Fees. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to its principles regarding conflicts
of law; and the courts located in Miami, Florida shall have sole and exclusive jurisdiction over any action or proceeding brought under or pursuant to this Agreement. The parties hereby agree that any service of process may be affected on such party by delivering such process by hand, depositing it with an overnight courier, or mailing it by registered or certified mail to such party.  Upon default, the breaching party
agrees to pay to the non-breaching party’s reasonable attorneys' fees, plus all other reasonable expenses incurred by the non-breaching party in exercising any of the non-breaching party’s rights and remedies.

 

 

 

14

 

 

 

9.           Binding Effect. Except as otherwise provided in this Agreement, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs, and assigns.
Employee shall not assign, convey, or otherwise transfer, voluntarily or by operation of law, to any person or entity, this Agreement or any interest herein without the prior written consent of Company. Any attempt to do so without such consent shall be null and void.

 

10.           Amendment. This Agreement may not be modified and the rights and obligations of the parties contained herein may not be altered, except by a written instrument signed by both parties.

 

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

 

“Company”

 

MY SCREEN MOBILE, INC.,

A Delaware corporation

By:  /s/  Raghunath Kilambi

       Raghunath Kilambi, Chief Financial Officer

“Employee”

 

 

/s/  Maurizio Angelone

Maurizio Angelone

 

 

 

15American Lorain Corporation: Exhibit 4.1 - Prepared by TNT Filings
Inc.

  

Exhibit 4.1

NEITHER THIS SECURITY NOR THE SECURITIES FOR 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 AND, UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT, 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 SECURITY AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER BONA FIDE LOAN SECURED BY SUCH SECURITIES.

SERIES A COMMON STOCK PURCHASE
WARRANT

AMERICAN
LORAIN CORPORATION

  

	
 

	
 

	
Warrant Shares: _______

	
Issuance Date: October
  --, 2009

  

          THIS
SERIES A COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,
for value received, _____________ (the “Holder”) is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the six (6) month anniversary of the date
hereof (the “Initial Exercise Date”) and on or prior to the close of
business on the five year anniversary of the Initial Exercise Date (the “Termination
Date”) but not thereafter, to subscribe for and purchase from American
Lorain Corporation, a Delaware corporation (the “Company”), up to ______
shares (the “Warrant Shares”) of 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 “Purchase Agreement”),
dated October 27, 2009, among
the Company and the purchasers signatory thereto.

          Section 2. Exercise.

	
 

	
 

1

	
 

	
 

	
 

	
          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 (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 the Holder
appearing on the books of the Company) of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto; and, within three (3) 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, if available, pursuant to the cashless exercise
procedure specified in Section 2(c) below. 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 (3) 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 may not exercise this Warrant more than four times. 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 1 Business Day of receipt of
such notice. In the event of any dispute or discrepancy, the records of the
Holder shall be controlling and determinative in the absence of manifest error. 
The Holder and any assignee, by acceptance of this Warrant, acknowledge and
agree 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.

	
 

	
 

	
 

	
          b)
  Exercise Price. The
  exercise price per share of the Common Stock under this Warrant shall be $3.70,
  subject to adjustment hereunder (the “Exercise Price”).

	
 

	
 

	
 

	
          c)
  Cashless Exercise. If at any time after the Initial Exercise Date
  there is no effective Registration Statement registering, or no current
  prospectus available for, and exemption from registration under Rule 144
  would not then be available for, the resale of the Warrant Shares by the
  Holder, then this Warrant may also be exercised, in whole or in part, at such
  time by means of a “cashless exercise” in which the Holder shall be entitled
  to receive a certificate for the number of Warrant Shares equal to the
  quotient obtained by dividing [(A-B) (X)] by (A), where:

	
 

	
 

	
 

	
(A) = the VWAP on the
  Trading Day immediately preceding the date on which Holder elects to exercise
  this Warrant by means of a “cashless exercise,” as set forth in the
  applicable Notice of Exercise;

	
 

	
(B) = the Exercise
  Price of this Warrant, as adjusted hereunder; and 

	
 

	
(X) = the number of
  Warrant Shares that would be issuable upon exercise of this Warrant in
  accordance with the terms of this Warrant if such exercise were by means of a
  cash exercise rather than a cashless exercise.

          d)
Mechanics of Exercise. 

2

	
 

	
 

	
 

	
          i.
  Delivery of Certificates Upon Exercise. Certificates for shares
  purchased hereunder shall be transmitted by the Transfer Agent 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 then a participant in such system and either (A)
  there is an effective Registration Statement permitting the resale of the
  Warrant Shares by the Holder or (B) the shares are eligible for resale by the
  Holder without volume or manner-of-sale limitations pursuant to Rule 144, and
  otherwise by physical delivery to the address specified by the Holder in the
  Notice of Exercise by the date that is three (3) Trading Days after the
  latest of (A) the delivery to the Company of the Notice of Exercise Form, (B)
  surrender of this Warrant (if required), and (C) payment of the aggregate
  Exercise Price as set forth above (including by cashless exercise, if
  permitted) (such date, the “Warrant Share Delivery Date”). This
  Warrant shall be deemed to have been exercised on the first date on which all
  of the foregoing have been delivered to 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, with
  payment to the Company of the Exercise Price (or by cashless exercise, if permitted)
  and all taxes required to be paid by the Holder, if any, pursuant to Section
  2(d)(vi) prior to the issuance of such shares, having been paid. If the
  Company fails for any reason to deliver to the Holder certificates evidencing
  the Warrant Shares subject to a Notice of Exercise by the third Trading Day
  following the Warrant Share Delivery Date, the Company shall pay to the
  Holder, in cash, as liquidated damages and not as a penalty, for each $1,000
  of Warrant Shares subject to such exercise (based on the VWAP of the Common
  Stock on the date of the applicable Notice of Exercise), $10 per Trading Day
  (increasing to $20 per Trading Day on the fifth Trading Day after such
  liquidated damages begin to accrue) for each Trading Day after such Warrant
  Share Delivery Date until such certificates are delivered or Holder rescinds
  such exercise. Notwithstanding anything herein to the contrary, the Company
  shall not be obligated to pay liquidated damages following the date of a
  Buy-In (as hereinafter defined) by the holder. 

	
 

	
 

	
 

	
          ii.
  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.

3

	
 

	
 

	
 

	
          iii.
  Rescission Rights. If the Company fails to cause the Transfer Agent to
  transmit to the Holder a certificate or the certificates representing the
  Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery
  Date, then, the Holder will have the right to rescind such exercise.

	
 

	
 

	
 

	
          iv.
  Compensation for Buy-In on Failure to Timely Deliver Certificates Upon
  Exercise. In addition to any other rights available to the Holder, if the
  Company fails to cause the Transfer Agent to transmit to the Holder a
  certificate or the certificates representing the Warrant Shares pursuant to
  an exercise on or before the third Trading Day following the Warrant Share
  Delivery Date, and if after such date the Holder is required by its broker to
  purchase (in an open market transaction or otherwise) or the Holder’s
  brokerage firm otherwise purchases, shares of Common Stock to deliver in
  satisfaction of a sale by the Holder of the Warrant Shares which the Holder
  anticipated receiving upon such exercise (a “Buy-In”), then the
  Company shall , within three (3) Trading Days after the Holder’s request and
  in the Holder’s discretion, either (i) pay cash to the Holder in an amount
  [if any, by which (x) the Holders’ total purchase price (including brokerage
  commissions, if any) for the shares of Common Stock so purchased exceeds (y)
  the amount obtained by multiplying (1) the number of Warrant Shares that the
  Company was required to deliver to the Holder in connection with the exercise
  at issue times (2) the price at which the sell order giving rise to such
  purchase obligation was executed, and (B) at the option of the Holder, either
  reinstate the portion of the Warrant and equivalent number of Warrant Shares
  for which such exercise was not honored (in which case such exercise shall be
  deemed rescinded) or deliver to the Holder the number of shares of Common
  Stock that would have been issued had the Company timely complied with its
  exercise and delivery obligations hereunder. For example, if the Holder
  purchases Common Stock having a total purchase price of $11,000 to cover a
  Buy-In with respect to an attempted exercise of shares of Common Stock with
  an aggregate sale price giving rise to such purchase obligation of $10,000,
  under clause (A) of the immediately preceding sentence the Company shall be
  required to pay the Holder $1,000. The Holder shall provide the Company
  written notice indicating the amounts payable to the Holder in respect of the
  Buy-In and, upon request of the Company, evidence of the amount of such loss.
  Nothing herein shall limit a Holder’s right to pursue any other remedies
  available to it hereunder, at law or in equity including, without limitation,
  a decree of specific performance and/or injunctive relief with respect to the
  Company’s failure to timely deliver certificates representing shares of
  Common Stock upon exercise of the Warrant as required pursuant to the terms
  hereof.

4

	
 

	
 

	
 

	
          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 the 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.

	
 

	
 

	
 

	
          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.

	
 

	
 

5

	
 

	
 

	
 

	
          e)
  Holder’s Exercise Limitations. The Company shall not effect any
  exercise of this Warrant, and a Holder shall not have the right to exercise
  any portion of this Warrant, pursuant to Section 2 or otherwise, to the
  extent that after giving effect to such issuance after exercise as set forth
  on the applicable Notice of Exercise, the Holder (together with the Holder’s
  Affiliates, and any other Persons acting as a group together with the Holder
  or any of the Holder’s Affiliates), would beneficially own in excess of the
  Beneficial Ownership Limitation (as defined below). For purposes of the
  foregoing sentence, the number of shares of Common Stock beneficially owned
  by the Holder and its Affiliates shall include the number of shares of Common
  Stock issuable upon exercise of this Warrant with respect to which such
  determination is being made, but shall exclude the number of shares of Common
  Stock which would be issuable upon (i) exercise of the remaining,
  nonexercised portion of this Warrant beneficially owned by the Holder or any
  of its Affiliates and (ii) exercise or conversion of the unexercised or
  nonconverted portion of any other securities of the Company (including,
  without limitation, any other Common Stock Equivalents) subject to a
  limitation on conversion or exercise analogous to the limitation contained
  herein beneficially owned by the Holder or any of its Affiliates. Except as set
  forth in the preceding sentence, for purposes of this Section 2(e),
  beneficial ownership shall be calculated in accordance with Section 13(d) of
  the Exchange Act and the rules and regulations promulgated thereunder, it
  being acknowledged by the Holder that the Company is not representing to the 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(e) applies, the determination
  of whether this Warrant is exercisable (in relation to other securities owned
  by the Holder together with any Affiliates) and of which 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 together with any Affiliates) and of which
  portion of this Warrant is exercisable, in each case subject to the
  Beneficial Ownership 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(e), 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 (A)
  the Company’s most recent periodic or annual report filed with the
  Commission, as the case may be, (B) a more recent public announcement by the
  Company or (C) a more recent written notice by the Company or the Transfer
  Agent setting forth the number of shares of Common Stock outstanding. Upon
  the written or oral request of a 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 “Beneficial Ownership Limitation”
  shall be 4.99% of the number of shares of the Common Stock outstanding
  immediately after giving effect to the issuance of shares of Common Stock
  issuable upon exercise of this Warrant. The Holder may decrease or, upon not
  less than 61 days’ prior notice to the Company, may increase the Beneficial
  Ownership Limitation provisions of this Section 2(e), provided that the
  Beneficial Ownership Limitation in no event exceeds 9.99% of the number of
  shares of the Common Stock outstanding immediately after giving effect to the
  issuance of shares of Common Stock upon exercise of this Warrant held by the
  Holder and the provisions of this Section 2(e) shall continue to apply. Any such increase will not be
  effective until the 61st
  day after such notice is delivered to the Company. The provisions of
  this paragraph shall be construed and implemented in a manner otherwise than
  in strict conformity with the terms of this Section 2(e) to correct this
  paragraph (or any portion hereof) which may be defective or inconsistent with
  the intended Beneficial Ownership Limitation herein contained or to make
  changes or supplements necessary or desirable to properly give effect to such
  limitation. The limitations contained in this paragraph shall apply to a
  successor holder of this Warrant.

          Section
3. Certain Adjustments.

6

          a)
Stock Dividends and Splits. If the Company, at any time while this
Warrant is outstanding: (i) 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), (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, (iii) combines (including by way
of reverse stock split) outstanding shares of Common Stock into a smaller
number of shares or (iv) 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,
and the number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. 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 or any Subsidiary thereof, as
applicable, at any time while this Warrant is outstanding, shall sell or grant
any option to purchase, or sell or grant any right to reprice, 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 that 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 to a price
equal to the Base Share Price (but in no event below $3.00, adjusted for any
subsequent stock splits, reverse splits and similar capital adjustments). 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 the Trading Day following
the issuance of any Common Stock or Common Stock Equivalents subject to this
Section 3(b), indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing terms (such
notice, the “Dilutive Issuance Notice”).

7

          c)
Pro Rata Distributions. If the Company, at any time while this Warrant is
outstanding, shall distribute to all holders of Common Stock (and not to the
Holders) 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 or rights or warrants so distributed applicable to one
outstanding share of the Common Stock as determined by the Board of Directors 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.

          d)
Fundamental Transaction. If, at any time while this Warrant is
outstanding, (i) the Company, directly or indirectly, in one or more
related transactions effects any merger or consolidation of the Company
with or into another Person, (ii) the Company, directly or indirectly, effects
any sale of all or substantially all of its assets in one or a series of related
transactions, (iii) any, direct or indirect, purchase offer, tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by
the holders of 50% or more of the outstanding Common Stock, (iv) the Company,
directly or indirectly, in one or more related transactions effects any
reclassification, reorganization or recapitalization 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, (not
including a migratory merger) or (v) the Company, directly or indirectly, in one or
more related transactions consummates a stock or share purchase
agreement or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person (not including a
migratory merger) whereby such other Person acquires more than 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by the other
Person or other Persons making or party to, or associated or affiliated with
the other Persons making or party to, such stock or share purchase agreement or other business combination), (each
a “Fundamental Transaction”), then, upon any subsequent exercise of this
Warrant, 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
(without regard to any limitation in Section 2(e) on the 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 as a result of
such Fundamental Transaction by a holder of the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to such
Fundamental Transaction (without regard to any limitation in Section 2(e) on
the exercise of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration issuable in
respect of one share of Common Stock in such Fundamental Transaction, and the
Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. 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 effected 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. Notwithstanding anything to the contrary, in the event
of a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule
13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act or (3) a
Fundamental Transaction involving a Person not traded on a national securities
exchange, the Company or any successor entity shall pay at the Holder’s option,
exercisable at any time concurrently with or within 30 days after the
consummation of the Fundamental Transaction, an amount of cash equal to the
value of this Warrant as determined in accordance with the Black-Scholes option
pricing formula using an expected volatility equal to the 100-day historical
price volatility obtained from the HVT function on Bloomberg L.P. as of the
trading day immediately prior to the public announcement of the Fundamental
Transaction.

8

          e)
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.

          f)
Notice to Holder. 

	
 

	
 

	
 

	
          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 the Holder a notice setting forth the Exercise Price after such adjustment
  and setting forth a brief statement of the facts requiring such adjustment. 

	
 

	
 

9

	
 

	
 

	
 

	
          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, or any compulsory share exchange whereby the
  Common Stock is converted into other securities, cash or property, or (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. To the extent that any notice
  provided hereunder constitutes, or contains, material, non-public information
  regarding the Company or any of the Subsidiaries, the Company shall
  simultaneously file such notice with the Commission pursuant to a Current
  Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant
  during the period commencing on the date of such notice to the effective date
  of the event triggering such notice except as may otherwise be expressly set
  forth 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 Purchase Agreement, this Warrant and all rights hereunder
(including, without limitation, any registration rights) are transferable, in
whole or in part, upon five (5) days written notice to the Company and the
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, as applicable, 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. The Warrant, if
properly assigned in accordance herewith, may be exercised by a
new holder for the purchase of Warrant Shares without having a new Warrant
issued. 

10

          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. All Warrants issued on transfers or
exchanges shall be dated the Issuance Date and shall be identical with this
Warrant except as to the number of Warrant Shares issuable pursuant thereto. 

          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.

          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 either (i) registered pursuant to an effective registration
statement under the Securities Act and under applicable state securities or
blue sky laws or (ii) eligible for resale without volume or manner-of-sale
restrictions or current public information requirements pursuant to Rule 144,
the Company may require, as a condition of allowing such transfer, that the
Holder or transferee of this Warrant, as the case may be, comply with the
provisions of Section 4.1 of the Purchase Agreement.

          e)
 Representation by the Holder.
Unless the Holder exercises this Warrant by cashless exercise pursuant to
Section 2(c), the Holder, by the acceptance hereof, represents and warrants
that it is acquiring this Warrant and, upon any exercise hereof, will acquire
the Warrant Shares issuable upon such exercise, for its own account and not
with a view to or for distributing or reselling such Warrant Shares or any part
thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.

Section
5. Miscellaneous.

          a)
No Rights as Stockholder Until Exercise. This Warrant does not entitle
the Holder to any voting rights, dividends or other rights as a stockholder of
the Company prior to the exercise hereof as set forth in Section 2(d)(i). 

11

          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. 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 and payment for such Warrant Shares in accordance herewith, 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).

	
 

	
 

	
 

	
          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 (i) 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, (ii) 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
  (iii) use reasonable best 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.

12

	
 

	
 

	
 

	
 

	
 

	
          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 Purchase Agreement.

          f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired
upon the exercise of this Warrant, if not registered and the Holder does not
utilize cashless exercise, 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
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.

          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 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. The 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.

13

          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 and permitted assigns of the
Company and the successors and permitted assigns of Holder. The provisions of
this Warrant are intended to be for the benefit of any Holder from time to time
of this Warrant and shall be enforceable by the 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.

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

(Signature Pages Follow)

14

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

	
 

	
 

	
 

	
AMERICAN LORAIN CORPORATION

	
 

	
 

	
By:

	
 

	
 

	 

	
 

	
Name:

	
 

	
Title:

15

NOTICE OF EXERCISE

TO: AMERICAN LORAIN
CORPORATION

                    (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  [if permitted] the cancellation of
  such number of Warrant Shares as is necessary, in accordance with the formula
  set forth in subsection 2(c), to exercise this Warrant with respect to the
  maximum number of Warrant Shares purchasable pursuant to the cashless
  exercise procedure set forth in subsection 2(c).

                    (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. Unless the undersigned exercises this Warrant by
cashless exercise pursuant to Section 2(c) of the Warrant, the undersigned
hereby represents and warrants that it is an “accredited investor” as defined
in Regulation D promulgated under the Securities Act of 1933, as amended, and
satisfies the criteria set forth in Rule 501(a) therein.

                    (5)
Legend. Unless otherwise permitted under the Securities Purchase
Agreement, dated October __, 2009, by and between the Company and each
purchaser signatory thereto, the certificates representing these securities
will bear a legend restricting transfer under the Securities Act and applicable
state securities laws.

[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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