Document:

Exhibit
      10.2

    FIRST
      AMENDMENT TO THE

    FOURTH
      AMENDED AND RESTATED 

    CERTIFICATE
      OF INCORPORATION

    OF

    DOV
      PHARMACEUTICAL, INC.

    

    Pursuant
      to Section 242

    of
      the
      General Corporation Law

    of
      the
      State of Delaware

      
        

      

    

    

    DOV
      Pharmaceutical, Inc., a corporation organized and existing under the laws of
      the
      State of Delaware (the “Corporation”), hereby certifies:

    

    The
      Board
      of Directors of the Corporation, by a vote of its members, duly adopted,
      pursuant to Section 242 of the Delaware General Corporation Law (the “DGCL”), an
      amendment to the Fourth Amended and Restated Certificate of Incorporation of
      the
      Corporation filed with the Delaware Secretary of State on May 1, 2002 and
      declared said amendment to be advisable. The amendment was duly adopted by
      the
      affirmative vote of the stockholders in accordance with the provisions of
      Section 242 of the DGCL:

    

    RESOLVED: 
      That the first paragraph of Article IV of the Fourth Amended and Restated
      Certificate of Incorporation be amended to read as follows:

    

    “The
      total number of shares of capital stock which the Corporation shall have
      authority to issue is Two Hundred-Sixty-Six Million, Nine Hundred Five Thousand
      (266,905,000) shares, of which (i) Two Hundred-Sixty Million (260,000,000)
      shares shall be a class designated as common stock, par value $.0001 per share
      (the “Common Stock”), (ii) Three Hundred Fifty Four Thousand Six Hundred
      Forty-Three (354,643) shares shall be designated as series B preferred stock,
      par value $1.00 per share (the “Series B Preferred”) and (iii) Six Million Five
      Hundred Fifty Thousand Three Hundred Fifty-Seven (6,550,357) shares shall be
      a
      class designated as undesignated preferred stock, par value $1.00 per share
      (the
“Undesignated Preferred Stock”, and together with the Series B Preferred, the
“Preferred Stock”).” 

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

     

     

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Corporation has caused this First Amendment to the Fourth
      Amended and Restated Certificate of Incorporation to be signed by its Chief
      Executive Officer this 11th
      day of
      May, 2007.

    

    

    
      	 	 	 
	 	DOV
              PHARMACEUTICAL, INC.
	 
 	 
 	 
 
	Date: 	By:  	/s/ Barbara
              Duncan
	 	
              
Name:
              Barbara Duncan
	 	Title:
              Chief Executive OfficerEXHIBIT
      4.3

     

    
      THIS
        WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
        NOT
        BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
        AND
        THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
        OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
        REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR AN OPINION OF
        COUNSEL REASONABLY SATISFACTORY TO ACORN FACTOR, INC. THAT SUCH REGISTRATION
        IS
        NOT REQUIRED.

      

      Void
        after 5:00 P.M. New York City time on the last day of the Exercise
        Period,

       

      as
        defined in the Warrant

       

      COMMON
        STOCK PURCHASE WARRANT

      OF

      ACORN
        FACTOR, INC.

       

      This
        is
        to certify that, FOR VALUE RECEIVED, ______________________________ (the
        “Holder”),
        is
        entitled to purchase, subject to the provisions of this warrant (the
“Warrant”),
        from
        ACORN FACTOR, INC., a Delaware corporation (the “Company”),
        at an
        exercise price per share of Four Dollars and Fifty Cents ($4.50), subject
        to
        adjustment as provided in this Warrant (the “Warrant
        Exercise Price”),
        __________________ (___________) shares of common stock, par value $0.01
        per
        share (the “Common
        Stock”).
        The
        shares of Common Stock deliverable upon such exercise, and as adjusted from
        time
        to time, are hereinafter sometimes referred to as the “Warrant
        Shares.”
        

       

      1. ISSUANCE
        OF WARRANT/DEFINITIONS.
        This
        Warrant is being issued pursuant to the Placement Agent Agreement dated as
        of
        March 8, 2007 between the Company and First Montauk Securities Corp. Capitalized
        terms used but not otherwise defined herein shall have the meanings ascribed
        thereto in the Subscription Agreement or the Memorandum (hereinafter defined).
        In addition, the following terms shall have the meanings set forth below:
        

       

      “Convertible
        Securities”
shall
        mean evidences of indebtedness, shares of stock or other securities, which
        are
        convertible into or exchangeable, with or without payment of additional
        consideration in cash and/or property, for shares of Common Stock, either
        immediately or upon the occurrence of a specified date or a specified
        event.

       

       

      “Debentures”
shall
        mean those 10% Convertible Redeemable Subordinated Debentures offered in
        the
        Placement (hereinafter defined) and described in the Memorandum. 

      

      “Exercise
        Period”
shall
        mean the period commencing on the date hereof and ending at 5:00 p.m., New
        York
        City time on March 30, 2012. 

       

      “Fair
        Market Value”
of
        a
        share of Common Stock as of a particular date (the "Determination
        Date")
        shall
        mean: 

      

      (a) If
        the
        Company's Common Stock is traded on an exchange, then the closing or last
        sale
        price, reported for the last business day immediately preceding the
        Determination Date. 

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (b) If
        the
        Company's Common Stock is not traded on an exchange but is traded on the
        NASD
        OTC Bulletin Board, the Pink Sheets, or other public trading market, then
        the
average
        of
        the
        closing high and low prices on such market reported for the last business
        day
        immediately preceding the Determination Date.

      

      “Memorandum”
shall
        mean the Company’s Confidential Private Placement Memorandum dated as of March
        8, 2007 (as amended or supplemented, together with all exhibits attached
        thereto). 

       

      “Permitted
        Issuances”
shall
        mean (i) Common Stock issuable or issued to employees, consultants, officers,
        directors, or advisors of the Company directly or pursuant to a stock purchase
        plan or other compensation arrangement approved by the Board of Directors
        of the
        Company which are granted or issued at fair market value as applicable, (ii)
        capital stock, debt instruments convertible into capital stock or warrants
        or
        options to purchase capital stock issued in connection with bona fide
        acquisitions, of other operating entities or businesses (including acquisitions
        of operating divisions or operating groups, mergers, corporate partnering
        agreements, joint ventures or
        similar transactions with unaffiliated third parties the terms of which are
        approved by the Board of Directors of the Company, (iii) Common Stock issuable
        upon the conversion of the Debentures or exercise of the warrants issued
        in
        connection with the Placement, (iv) Common Stock issued or issuable upon
        exercise or conversion of any warrants, options or any other securities
        exercisable or exchangeable for, or convertible into, shares of Common Stock
        outstanding as of March 8, 2007 or (v) Common Stock issuable in connection
        with
        the sale of securities by the Company, in one or more transactions, resulting
        in
        aggregate gross proceeds of not more than $1,000,000. 

       

      “Placement”
means
        the private placement by the Company of up to $6,900,000 of Debentures and
        warrants, including this Warrant, as described in the Memorandum.

       

      “Securities
        Act”
        means
        the Securities Act of 1933, as amended, and all rules and regulations
        promulgated thereunder.

       

      “Subscription
        Agreement” means
        the
        Subscription Agreement entered into between the Company and each of the
        investors in connection with the Placement, a form of which is attached to
        the
        Memorandum as Exhibit E.

      

      2. EXERCISE
        OF WARRANT.
        

      

      (a) This
        Warrant may be exercised in whole or in part at any time or from time to
        time
        from the date hereof until the end of the Exercise Period by presentation
        and
        surrender of this Warrant to the Company at its principal office, or at the
        office of its stock transfer agent, if any, with the Exercise Notice annexed
        hereto duly executed and accompanied by payment of the Warrant Exercise Price
        (or in certain events, by “cashless” exercise as provided in Sections 2(b) and
        2(c) below) for the number of shares of Common Stock specified in such form.
        If
        this Warrant should be exercised in part only, the Company shall, upon surrender
        of this Warrant for cancellation, execute and deliver a new Warrant evidencing
        the rights of the Holder to purchase the balance of the shares of Common
        Stock
        purchasable hereunder. Upon receipt by the Company of this Warrant at its
        office, or by the stock transfer agent of the Company at its office, in proper
        form for exercise, the Holder shall be deemed to be the holder of record
        of the
        shares of Common Stock issuable upon such exercise, notwithstanding that
        the
        stock transfer books of the Company shall then be closed or that certificates
        representing such shares of Common Stock shall not then actually be delivered
        to
        the Holder. As soon as practicable after each exercise of this Warrant, in
        whole
        or in part, and in any event within five (5) days thereafter, the Company,
        at
        its expense (including the payment by it of any applicable issue taxes),
        will
        cause to be issued in the name of and delivered to the Holder hereof or,
        subject
        to Section 10 hereof, as the Holder (upon payment by the Holder of any
        applicable transfer taxes) may direct, a certificate or certificates (with
        appropriate restrictive legends, as applicable) for the number of duly
        authorized, validly issued, fully paid and non-assessable shares of Common
        Stock
        to which the Holder shall be entitled upon exercise. All issuances of Common
        Stock pursuant to the exercise of this Warrant shall be rounded up to the
        nearest whole share. 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

         

      

      (b)
        If a
        Registration Statement (as defined in the Subscription Agreement) is effective
        and the Holder may utilize it to sell the Warrant Shares, this Warrant may
        be
        exercisable in whole or in part for cash only as set forth in Section 2 above.
        Commencing six months after the Closing Date, if no such Registration Statement
        is then effective, then commencing six months after the Closing Date, payment
        upon exercise may be made at the option of the Holder either in (i) cash,
        wire
        transfer or by certified or official bank check payable to the order of the
        Company equal to the applicable aggregate Warrant Exercise Price, (ii) by
        surrender of all or a portion of this Warrant in accordance with Sections
        2(b)
        and 2(c) below ("cashless exercise") or (iii) by a combination of any of
        the
        foregoing methods, for the number of shares of Common Stock specified in
        such
        form and the Holder shall thereupon be entitled to receive the number of
        duly
        authorized, validly issued, fully paid and nonassessable shares of Common
        Stock
        determined as provided herein.

      

      (c)
        If
        the Fair Market Value of one share of Common Stock is greater than the Warrant
        Exercise Price (at the date of calculation as set forth below) and no
        Registration Statement relating to the shares of Common Stock underlying
        this
        Warrant is effective, in lieu of exercising this Warrant for cash, the holder
        may elect to receive shares equal to the value (as determined below) of this
        Warrant (or the portion thereof being cancelled) by surrender of this Warrant
        at
        the principal office of the Company together with the properly endorsed Exercise
        Notice, attached hereto as Exhibit A, in which event the Company shall issue
        to
        the holder a number of shares of Common Stock computed using the following
        formula:

      

      
        	 	
                X=

              	
                Y

              	
                (A-B)

              	 
	 	 	 	
                A

              	 

      

      
         
Where
X=
          the
          number of shares of Common Stock purchasable under the Warrant or, if only
          a
          portion of the Warrant is being exercised, the portion of the Warrant being
          exercised (at the date of such calculation) the number of shares of Common
          Stock
          to be issued to the Holder

      

       

      

      
        
          Y=
            the
            number of shares of Common Stock purchasable under the Warrant or, if
            only a
            portion of the Warrant is being exercised, the portion of the Warrant
            being
            exercised (at the date of such calculation)

        

      

       

      
        
          A=
            the
            Fair
            Market Value of one share of the Company’s Common Stock (at the date of such
            calculation)

        

      

       

      

      B= Warrant
        Exercise Price (as adjusted to the date of such calculation)

       

      (d) Call
        Provision.
        If
        at
        anytime following the date that is nine months from the date of effectiveness
        of
        the Registration Statement the volume weighted average price of the Common
        Stock
        of the Company for each of 20 consecutive Trading Days (the "Measurement
        Period")
        exceeds $6.00 (subject to adjustment for forward and reverse stock splits,
        recapitalizations, stock dividends and the like) (the "Threshold
        Price"),
        then
        the Company may, within five Trading Days of the end of such period, call
        for
        cancellation of all or any portion of this Warrant for which a Exercise Notice
        has not yet been delivered (such right, a "Call"). To exercise this right,
        the
        Company must deliver to the Holder an irrevocable written notice (a
        "Call
        Notice"),
        indicating therein the portion of unexercised portion of this Warrant to
        which
        such notice applies. If the conditions set forth below for such Call are
        satisfied from the period from the date of the Call Notice through and including
        the Call Date (as defined below), then any portion of this Warrant subject
        to
        such Call Notice for which an Exercise Notice shall not have been received
        by
        the Call Date will be cancelled
        at 6:30 p.m. (New York City time) on the 20th Trading Day after the date
        the
        Call Notice is received by the Holder (such date, the "Call Date"). Any
        unexercised portion of this Warrant to which the Call Notice does not pertain
        will be unaffected by such Call Notice. In furtherance thereof, the Company
        covenants and agrees that it will honor all Exercise Notices with respect
        to
        Warrant Shares subject to a Call Notice that are tendered through 6:30 p.m.
        (New
        York City time) on the Call Date. The parties agree that any Exercise Notice
        delivered following a Call Notice shall first reduce to zero the number of
        Warrant Shares subject to such Call Notice prior to reducing the remaining
        Warrant Shares available for purchase under this Warrant. Subject to the
        provisions of this Section 2(f), the Company may deliver subsequent Call
        Notices
        for any portion of this Warrant for which the Holder shall not have delivered
        an
        Exercise Notice. Notwithstanding anything to the contrary set forth in this
        Warrant, the Company may not deliver a Call Notice or require the cancellation
        of this Warrant (and any Call Notice will be void), unless, from the beginning
        of the 20th consecutive Trading Days used to determine whether the Common
        Stock
        has achieved the Threshold Price through the Call Date, (i) the Company shall
        have honored in accordance with the terms of this Warrant all Exercise Notices
        delivered by 6:30 p.m. (New York City time) on the Call Date and (ii) the
        Registration Statement shall be effective as to all Warrant Shares and the
        prospectus thereunder available for use by the Holder for the resale of all
        such
        Warrant Shares. The Company's right to Call the Warrant shall be exercised
        ratably among the Holders based on each Holder's initial purchase of Debentures
        pursuant to the Subscription Agreement.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

         

      

      (e) Common
        Stock Legend.
        The
        Holder acknowledges and agrees that until such time as the Warrant Shares
        have
        been registered and sold in accordance with an effective registration statement,
        or pursuant to an exemption from registration, certificates and other
        instruments representing any of the Warrant Shares shall bear a restrictive
        legend in substantially the following form (and a stop-transfer order may
        be
        placed against transfer of any such securities):

      

      “THE
        SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED
        FOR
        SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
        STATEMENT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ACORN FACTOR,
        INC.
        THAT SUCH REGISTRATION IS NOT REQUIRED.”

      

      3. RESERVATION
        OF SHARES/FRACTIONAL SHARES.
        The
        Company hereby agrees that at all times there shall be reserved for issuance
        and/or delivery upon exercise of this Warrant such number of shares of Common
        Stock as shall be required for issuance and delivery upon exercise of this
        Warrant. No fractional shares or script representing fractional shares shall
        be
        issued upon the exercise of this Warrant. Instead, the Company will round
        up to
        the nearest whole share.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

         

      

      4. EXCHANGE,
        TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
        This
        Warrant is exchangeable, without expense, at the option of the Holder, upon
        presentation and surrender of this Warrant to the Company for other Warrants
        of
        different denominations entitling the Holder thereof to purchase in the
        aggregate the same number of shares of Common Stock purchasable hereunder.
        Upon
        surrender of this Warrant to the Company or at the office of its stock transfer
        agent, if any, with the Assignment Form annexed hereto duly executed and
        funds
        sufficient to pay any applicable transfer tax, the Company shall, without
        charge, execute and deliver a new Warrant in the name of the assignee named
        in
        such instrument of assignment and this Warrant shall promptly be canceled.
        This
        Warrant may be divided or combined with other Warrants which carry the same
        rights upon presentation of this Warrant at the office of the Company or
        at the
        office of its stock transfer agent, if any, together with a written notice
        specifying the names and denominations in which new Warrants are to be issued
        and signed by the Holder hereof. The term “this Warrant” as used herein includes
        any Warrants into which this Warrant may be divided or for which it may be
        exchanged. Upon receipt by the Company of evidence satisfactory to it of
        the
        loss, theft, destruction or mutilation of this Warrant, (and, in the case
        of
        loss, theft or destruction, of a reasonably satisfactory surety bond), and
        upon
        surrender and cancellation of this Warrant, the Company will execute and
        deliver
        a new Warrant of like tenor. Any such new Warrant executed and delivered
        shall
        constitute an additional contractual obligation on the part of the Company,
        whether or not this Warrant so lost, stolen, destroyed, or mutilated shall
        be at
        any time enforceable by anyone; provided, however, that if the original Warrant
        shall be presented for transfer by a protected purchaser (as defined in Section
        8-303 of the Uniform Commercial Code), then in addition to any rights on
        the
        surety bond or indemnity, the Company may recover the new Warrant in accordance
        with the provisions of Section 8-405 of the Uniform Commercial Code.

       

      5. RIGHTS
        AND OBLIGATIONS OF THE HOLDER.
        The
        Holder shall not, by virtue of this Warrant, be entitled to any rights of
        a
        stockholder of the Company, either at law or equity, and the rights of the
        Holder are limited to those expressed in this Warrant and are not enforceable
        against the Company except to the extent set forth herein. In addition,
        no
        provision hereof, in the absence of affirmative action by the Holder to purchase
        shares of Common Stock, and no enumeration herein of the rights or privileges
        of
        the Holder hereof shall give rise to any liability of such 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.

       

      6. ANTI-DILUTION
        PROVISIONS.
        

       

      The
        Warrant Exercise Price in effect at any time and the number and kind of
        securities purchasable upon exercise of each Warrant, shall be subject to
        adjustment as follows. The Company shall give each Holder notice of any event
        described below which requires an adjustment pursuant to this Section 6 at
        the
        time of such event:

       

      (a) Stock
        Dividends, Subdivisions and Combinations.
        If at
        any time the Company shall:

       

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

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

         

      

      (ii) subdivide
        or reclassify its outstanding shares of Common Stock into a larger number
        of
        shares of Common Stock, or 

       

      (iii) combine
        or reclassify its outstanding shares of Common Stock into a smaller number
        of
        shares of Common Stock or otherwise effect a reverse stock split, then:

       

      (A)
        the
        number of shares of Common Stock for which this Warrant is exercisable
        immediately after the occurrence of any such event shall be adjusted to equal
        the number of shares of Common Stock which a record holder of the same number
        of
        shares of Common Stock for which this Warrant is exercisable immediately
        prior
        to the occurrence of such event, would own or be entitled to receive after
        the
        happening of such event, and (B) the Warrant Exercise Price shall be adjusted
        to
        equal: (x) the Warrant Exercise Price immediately prior to such event multiplied
        by the number of shares of Common Stock for which this Warrant is exercisable
        immediately prior to the adjustment divided by (y) the number of shares for
        which this Warrant is exercisable immediately after such
        adjustment.

       

      (b) Certain
        Other Distributions and Adjustments.
        

       

      (i) If
        at any
        time the Company shall take a record of the holders of its Common Stock for
        the
        purpose of entitling them to receive any dividend or other distribution of:
        

       

      (A) 
        cash,

       

      (B) 
        any
        evidences of its indebtedness, any shares of its capital stock or any other
        securities or property of any nature whatsoever (other than Convertible
        Securities or shares of Common Stock), or

       

      (C)
        any
        warrants or other rights to subscribe for or purchase any evidences of its
        indebtedness, any shares of its stock or any other securities or property
        of any
        nature whatsoever (other than Convertible Securities or shares of Common
        Stock),
then,
        in
        the case of (A) the Warrant Exercise Price shall be reduced by the amount
        of
        such cash dividend when paid, or in the case of (B) or (C) the Warrant Holder
        shall be given notice as provided by Section 8 of this Warrant and the
        opportunity to exercise the Warrant prior to any such distribution.

       

      (ii) A
        reclassification of the Common Stock (other than a change in par value, or
        from
        par value to no par value or from no par value to par value) into shares
        of
        Common Stock and shares of any other class of stock shall be deemed a
        distribution by the Company to the holders of its Common Stock of such shares
        of
        such other class of stock and in such event the Holder shall be entitled
        to
        receive such distribution as if the Holder had exercised this Warrant and,
        if
        the outstanding shares of Common Stock shall be changed into a larger or
        smaller
        number of shares of Common Stock as a part of such reclassification, such
        change
        shall be deemed a subdivision or combination, as the case may be, of the
        outstanding shares of Common Stock within the meaning of Section
        6(a).

       

      (c) Issuance
        of Additional Shares of Common Stock.

       

      (i) Except
        in
        connection with Permitted Issuances, if, at any time prior to the date which
        is
        six months from the original issue date of this Warrant (the “Issuance
        Date”),
        the
        Company shall issue or sell any shares of Common Stock for no consideration
        or
        for consideration in an amount per share of Common Stock less than the Share
        Price (as defined in the Subscription Agreement) (a “Discounted
        Price”),
        the
        Warrant Exercise Price then in effect shall immediately, and without any
        further
        action by the Company or the Holder required, be adjusted, concurrently with
        such issuance, to a price equal to 118% of the Discounted Price.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

         

      

      (ii)
         The
        provision of paragraph (i) of this Section 6(c) shall not apply to any issuance
        of shares of Common Stock for which an adjustment is provided under Section
        6(a)
        or 6(b). No adjustment of the number of shares of Common Stock for which
        this
        Warrant shall be exercisable shall be made under paragraph (i) of this Section
        6(c) upon the issuance of any shares of Common Stock which are issued pursuant
        to the exercise of any warrants or other subscription or purchase rights
        or
        pursuant to the exercise of any conversion or exchange rights in any Convertible
        Securities, if any such adjustment shall previously have been made upon the
        issuance of such warrants or other rights or upon the issuance of such
        Convertible Securities (or upon the issuance of any warrant or other rights
        therefor) pursuant to Section 6(d). 

       

      (d) Issuance
        of Warrants or Other Rights.
        

       

      (i) Except
        in
        connection with any Permitted Issuances, if at any time prior to the date
        that
        which is six months from the Issuance Date, the Company shall distribute
        to the
        holders of its Common Stock for the purpose of entitling them to receive
        a
        distribution of, or shall in any manner (whether directly or by assumption
        in a
        merger in which the Company is the surviving corporation) issue or sell,
        any
        warrants or other rights to subscribe for or purchase any shares of Common
        Stock
        or any Convertible Securities, whether or not the rights to exchange or convert
        thereunder are immediately exercisable, and the price per share for which
        Common
        Stock is issuable upon the exercise of such warrants or other rights or upon
        conversion or exchange of such Convertible Securities shall be less than
        the
        Warrant Exercise Price then in effect, then the Warrant Exercise Price shall
        be
        adjusted to such price. No further adjustment of the Warrant Exercise Price
        shall be made upon the actual issue of such Common Stock or of such Convertible
        Securities upon exercise of such warrants or other rights or upon the actual
        issuance of such Common Stock upon such conversion or exchange of such
        Convertible Securities.

       

      (e) Superseding
        Adjustment.
        If at
        any time after any adjustment of the Warrant Exercise Price shall have been
        made
        pursuant to Section 6(d) as the result of any issuance of warrants, rights
        or
        other Convertible Securities, 

       

      (i) such
        warrants or rights, or the right of conversion or exchange in such other
        Convertible Securities, shall expire, and all or a portion of such warrants
        or
        rights, or the right of conversion or exchange with respect to all or a portion
        of such other Convertible Securities, as the case may be, shall not have
        been
        exercised, or

       

      (ii) the
        consideration per share for which shares of Common Stock are issuable pursuant
        to such warrants or rights, or the terms of such other Convertible Securities,
        shall be increased solely by virtue of provisions therein contained for an
        automatic increase in such consideration per share upon the occurrence of
        a
        specified date or event, then
        for
        each outstanding Warrant such previous adjustment shall be rescinded and
        annulled and the shares of Common Stock which were deemed to have been issued
        by
        virtue of the computation made in connection with the adjustment so rescinded
        and annulled shall no longer be deemed to have been issued by virtue of such
        computation made in connection with the adjustment so rescinded and annulled
        shall no longer be deemed to have been issued by virtue of such computation.
        Thereupon, a re-computation shall be made of the effect of the issuance of
        such
        rights or options or other Convertible Securities on the basis of: (A) treating
        the number of shares of Common Stock or other property, if any, theretofore
        actually issued or issuable pursuant to the previous exercise of any such
        warrants or rights or any such right of conversion or exchange, as having
        been
        issued on the date or dates of any such exercise and for the consideration
        actually received and receivable therefore, and (B) treating any such warrants
        or rights or any such other Convertible Securities which then remain outstanding
        as having been granted or issued immediately after the time of such increase
        of
        the consideration per share for which shares of Common Stock or other property
        are issuable under such warrants or rights or other convertible Securities;
        whereupon a new adjustment of the number of shares of Common Stock for which
        this Warrant is exercisable and the Warrant Exercise Price(s) shall be made,
        which new adjustment shall supersede the previous adjustment so rescinded
        and
        annulled.

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

         

      

      (f) No
        adjustment in the Warrant Exercise Price shall be required unless such
        adjustment would require an increase or decrease of at least One Cent ($0.01)
        in
        such price; provided, however, that any adjustments which by reason of this
        Section 6(f) are not required to be made shall be carried forward and taken
        into
        account in any subsequent adjustment. All calculations under this Section
        6(f)
        shall be made to the nearest cent or to the nearest one-hundredth of a share,
        as
        the case may be. 

      

      (g) The
        Company may retain a firm of independent public accountants of recognized
        standing selected by the Board (who may be the regular accountants employed
        by
        the Company) to make any computation required by this Section 6.

      

      (h) In
        the
        event that at any time, as a result of an adjustment made pursuant to Section
        6(a), (b) or (c) of this Warrant, the Holder of any Warrant thereafter shall
        become entitled to receive any shares of the Company’s capital stock, other than
        Common Stock, thereafter the number of such other shares so receivable upon
        exercise of this Warrant shall be subject to adjustment from time to time
        in a
        manner and on terms as nearly equivalent as practicable to the provisions
        with
        respect to the Common Stock contained in Sections 6(a) through (h), inclusive,
        of this Warrant.

      

      (i) Notwithstanding
        the foregoing, no adjustment pursuant to this Section 6 shall be effected
        due
        to, or as a result of, any Permitted Issuances.

      

      7. OFFICER’S
        CERTIFICATE.
        Whenever the Warrant Exercise Price(s) shall be adjusted as required by the
        provisions of Section 6 of this Warrant, the Company shall forthwith file
        in the
        custody of its Secretary or an Assistant Secretary at its principal office
        and
        with its stock transfer agent, if any, an officer’s certificate showing the
        adjusted Warrant Exercise Price(s) and the adjusted number of shares of Common
        Stock issuable upon exercise of this Warrant, determined as herein provided,
        setting forth in reasonable detail the facts requiring such adjustment,
        including a statement of the number of additional shares of Common Stock,
        if
        any, and such other facts as shall be necessary to show the reason for and
        the
        manner of computing such adjustment. Each such officer’s certificate shall be
        forwarded to the Holder in the manner provided in Section 12 hereof.

       

      8. NOTICES
        TO WARRANT HOLDERS.
        So long
        as this Warrant shall be outstanding, (a) if the Company shall pay any dividend
        or make any distribution upon Common Stock, or (b) if the Company shall offer
        to
        the holders of Common Stock for subscription or purchase by them any share
        of
        any class or any other rights, or (c) if any capital reorganization of the
        Company, reclassification of the capital stock of the Company, consolidation
        or
        merger of the Company with or into another entity, tender offer transaction
        for
        the Company’s Common Stock, sale, lease or transfer of all or substantially all
        of the property and assets of the Company, or voluntary or involuntary
        dissolution, liquidation or winding up of the Company shall be effected,
        at
        least ten (10) days prior to the date specified in clauses (a), (b), or (c),
        as
        the case may be, of this Section 8 a notice containing a brief description
        of
        the proposed action and stating the date on which (i) a record is to be taken
        for the purpose of such dividend, distribution or rights, or (ii) such
        reclassification, reorganization, consolidation, merger, tender offer
        transaction, conveyance, lease, dissolution, liquidation or winding up is
        to
        take place and the date, if any, is to be fixed, as of which the holders
        of
        Common Stock or other securities shall receive cash or other property
        deliverable upon such reclassification, reorganization, consolidation, merger,
        conveyance, dissolution, liquidation or winding up.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

         

      

      9. RECLASSIFICATION,
        REORGANIZATION OR MERGER.
        In case
        of any reclassification, capital reorganization or other change of outstanding
        shares of Common Stock of the Company, or in case of any consolidation or
        merger
        of the Company with or into another corporation (other than a merger with
        a
        subsidiary in which merger the Company is the continuing or surviving
        corporation and which does not result in any reclassification, capital
        reorganization or other change of outstanding shares of Common Stock of the
        class issuable upon exercise of this Warrant) or in case of any sale, lease
        or
        conveyance of all or substantially all of the assets of the Company, the
        Company
        shall, as a condition precedent to such transaction, cause effective provisions
        to be made so that (i) the Holder shall have the right thereafter by exercising
        this Warrant, to purchase the kind and amount of shares of stock and other
        securities and property receivable upon such reclassification, capital
        reorganization and other change, consolidation, merger, sale or conveyance
        by a
        holder of the number of shares of Common Stock which could have been purchased
        upon exercise of this Warrant immediately prior to such reclassification,
        change, consolidation, merger, sale or conveyance, and (ii) the successor
        or
        acquiring entity shall expressly assume the due and punctual observance and
        performance of each covenant and condition of this Warrant to be performed
        and
        observed by the Company and all obligations and liabilities hereunder (including
        but not limited to the provisions of Section 6 regarding the increase in
        the
        number of Warrant Shares potentially issuable hereunder). Any such provision
        shall include provision for adjustments which shall be as nearly equivalent
        as
        possible to the adjustments provided for in this Warrant. The foregoing
        provisions of this Section 9 shall similarly apply to successive
        reclassifications, capital reorganizations and changes of shares of Common
        Stock
        and to successive consolidations, mergers, sales or conveyances. In the event
        that in connection with any such capital reorganization or reclassification,
        consolidation, merger, sale or conveyance, additional shares of Common Stock
        shall be issued in exchange, conversion, substitution or payment, in whole
        in
        part, for a security of the Company other than Common Stock, any such issue
        shall be treated as an issuance of Common Stock covered by the provisions
        of
        Section 6 of this Warrant. 

       

      10. TRANSFER
        TO COMPLY WITH THE SECURITIES ACT.
        This
        Warrant, the Warrant Shares or any other security issued or issuable upon
        the
        exercise of this Warrant may not be sold or otherwise disposed of except
        as
        follows:

       

      (a) to
        a
        person who, in the opinion of counsel for the Company, is a person to whom
        this
        Warrant or Warrant Shares may legally be transferred without registration
        and
        without the delivery of a current prospectus under the Securities Act with
        respect thereto and then only against receipt by the Company of an agreement
        of
        such person to comply with the provisions of this Section 10 with respect
        to any
        resale or other disposition of such securities, which agreement shall be
        satisfactory in form and substance to the Company and its counsel;
        or 

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

         

      

      (b) to
        any
        person upon delivery of a prospectus then meeting the requirements of the
        Securities Act relating to such securities and the offering thereof for such
        sale or disposition.

       

      11. GOVERNING
        LAW; JURISDICTION.
        The
        corporate laws of the State
        of New
        York shall govern all issues concerning the relative rights of the Company
        and
        its stockholders. All issues concerning the construction, validity, enforcement
        and interpretation of this Warrant shall be governed by and construed in
        accordance with the internal laws of the State of New York without giving
        effect
        to the principles of conflicts of law thereof. The
        parties hereto agree that venue in any and all actions and proceedings related
        to the subject matter of this Warrant shall be in the state and federal courts
        in and for New York, New York, which courts shall have exclusive jurisdiction
        for such purpose, and the parties hereto irrevocably submit to the exclusive
        jurisdiction of such courts and irrevocably waive the defense of an inconvenient
        forum to the maintenance of any such action or proceeding. Service of process
        may be made in any manner recognized by such courts. This Warrant and any
        term
        hereof may be changed, waived, discharged or terminated only by an instrument
        in
        writing signed by the party against which enforcement of the change, waiver,
        discharge or termination is sought.

       

      12. NOTICES.
        Any and
        all notices or other communications or deliveries required or permitted to
        be
        provided hereunder shall be in writing and shall be deemed given and effective
        on the earliest of (a) the date of transmission, if such notice or communication
        is delivered via facsimile at the facsimile telephone number specified in
        this
        Section prior to 5:00 p.m. (New York City time) on a Business Day, (b) the
        Business Day after the date of transmission, if such notice or communication
        is
        delivered via facsimile at the facsimile telephone number specified in this
        Agreement later than 5:00 p.m. (New York City time) on any date and earlier
        than
        11:59 p.m. (New York City time) on such date, (c) the Business Day following
        the
        date of mailing, if sent by nationally recognized overnight courier service,
        or
        (d) upon actual receipt by the party to whom such notice is required to be
        given. The address for such notices and communications shall be as
        follows:

      

        
          	 	
                  If
                    to the Company:

                	
                  Acorn
                    Factor, Inc.

                
	 	 	
                  200
                    Route 17

                
	 	 	
                  Mahwah,
                    NJ 07430

                
	 	 	
                  Attn:
                    John A. Moore, Chief Executive Officer

                
	 	 	
                  (201)
                    529-3163

                
	 	 	 
	 	
                  With
                    a copy to: 

                	
                  Eilenberg
                    Krause & Paul LLP

                
	 	 	
                  11
                    East 44th Street, 19th
                    Floor

                
	 	 	
                  New
                    York, NY 10017

                
	 	 	
                  Attn:
                    Sheldon Krause, Esq.

                
	 	 	
                  (212)
                    986-2399

                
	 	 	 
	 	
                  If
                    to the Holder:

                	
                  To
                    the Address Set Forth In the Records of the
                    Company

                

        

      

      
        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

      

      

      13.  PAYMENT
        OF TAXES.
        The
        Company will pay the cost of all applicable documentary stamp taxes, if any,
        attributable to the issuance of shares of Common Stock underlying this Warrant
        upon exercise of this Warrant; provided,
        however,
        that
        the Company shall not be required to pay any tax which may be payable in
        respect
        of any transfer involved in the registration of any certificate for shares
        of
        Common Stock underlying this Warrant in a name other that of the Holder.
        The
        Holder is responsible for all other tax liability that may arise as a result
        of
        holding or transferring this Warrant or receiving shares of Common Stock
        underlying this Warrant upon exercise hereof.

       

      14. INCONSISTENCIES.
        To the
        extent there are any inconsistencies between the terms and provisions of
        this
        Warrant and the terms and provisions of the Subscription Agreement or the
        Memorandum, the terms and provisions of this Warrant shall govern and be
        controlling.

      

      

      [Signature
        Page Follows]

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF,
        this
        Warrant has been duly executed as of April 11, 2007.

       

      
        	 	 	 
	 	ACORN
                FACTOR,
                INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Name:
                John A. Moore
	 	Title:
                President and Chief Executive Officer

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      Exhibit
        A

      EXERCISE
        NOTICE

      (To
        be
        signed only on exercise of Warrant)

      

      TO:
        Acorn
        Factor, Inc.

      

      The
        undersigned, pursuant to the provisions set forth in the attached Warrant
        (No.____), hereby irrevocably elects to purchase (check applicable
        box):

      

      ___
        shares of the Common Stock covered by such Warrant; or

      

      ___the
        maximum number of shares of Common Stock covered by such Warrant pursuant
        to the
        cashless exercise procedure set forth in Sections 2(b) and (c) of this
        Warrant.

      

      The
        undersigned herewith makes payment of the full purchase price for such shares
        at
        the price per share provided for in such Warrant, which is $___________.
        Such
        payment takes the form of (check applicable box or boxes):

      

      ___ $__________
        in lawful money of the United States; and/or

      

      ___ the
        cancellation of such portion of the attached Warrant as is exercisable for
        a
        total of _______ shares of Common Stock (using a Fair Market Value of $_______
        per share for purposes of this calculation); and/or

      

      ___ the
        cancellation of such number of shares of Common Stock as is necessary, in
        accordance with the formula set forth in Section 2, to exercise this Warrant
        with respect to the maximum number of shares of Common Stock purchasable
        pursuant to the cashless exercise procedure set forth in Sections 2(b) and
        (c)
        thereof. 

      

      The
        undersigned requests that the certificates for such shares be issued in the
        name
        of, and delivered to __________________________________________________ whose
        address is ________________
        ____________________________________________________________________________________.

      

      The
        undersigned represents and warrants that all offers and sales by the undersigned
        of the securities issuable upon exercise of the within Warrant shall be made
        pursuant to registration of the Common Stock under the Securities Act of
        1933,
        as amended (the "Securities Act") or pursuant to an exemption from registration
        under the Securities Act.

      
        	 	 	 
	 	 
	 
 	 
 	 
 
	Dated: 	 	 
	 	
                
(Signature
                must conform to name of holder as   specified
                on the face of the Warrant)
	 	 
	 	 
	 	
                
(Print
                or Type Name)
	 	 
	 	 
	 	 
                
(Address)
	 	 
	 	 
	 	
                
(Social
                Security or Tax I.D. Number)

      

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

         

      

      ASSIGNMENT
        FORM

      

      FOR
        VALUE RECEIVED,
        _______________________________________ hereby sells, assigns and transfer
        unto:

      

      

      Name: _______________________________________________

      (Please
        typewrite or print in block letters)

       

      

       

      Address: _______________________________________________

       

       
        _______________________________________________

       

                                       
        _______________________________________________

       

      Social
        Security or Employer Identification No.:_____________________

       

      the
        right
        to purchase Common Stock represented by this Warrant to the extent of shares
        as
        to which such right is exercisable and does hereby irrevocably constitute
        and
        appoint __________________________________ as attorney to transfer the same
        on
        the books of the Company with full power of substitution.

       

      
        	
                Dated:
                  ______________________

              	Signature:___________________________

      

       

       

      Signature
        Guaranteed:

      

      

      ___________________________________

       

      
        
          
          

        

        
          14

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